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The Range
Firearms Chat
Are suppressors over priced?
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<blockquote data-quote="POKE1911" data-source="post: 2877890" data-attributes="member: 24536"><p>Its all about the ROI. At what point does it become "worth it" to invest in research and development, get patents, develop manufacturing processes, invest in equipment, purchase raw goods, market the product, sell to the dealer, pay the mortgage and light bill, pay for all of the fixed overhead. Sure you can use economy of scale and find ways to make a good product cheaper but why? Decreasing your net profit margin only makes sense if you are increasing your net profit dollars. To that end you have to look at the customer. They are selling at that price so why would you move the price down? If someone is unwilling to pay $1000 for a suppressor then they will probably be unwilling to pay $800. That is a 20% reduction in net revenue, probably with a very small increase in market share. Sure there are manufacturers like Thompson that come in with a great product at half the price and sell a lot of product. They found a niche of people willing to spend less but do not necessarily care about the brand, high-end performance etc. That's the other twist to the gun world, many people are brand loyal and/or brand snobs. A perfect example of this is the stripped lower world (and I am as guilty as anyone) paying 2x-5x the price of one forged lower just because it has a cooler roll mark or the brand is associated with excellence. People will be willing to spend the extra money to be associated with the brand. So why cut your profits without increasing sales? Also, if you cut your price to match the low price competitors , then you are saying that you are equal and you lose some of that brand prestige (making us snobs and brand whores lose interest). Its a sad truth but its a reality.</p></blockquote><p></p>
[QUOTE="POKE1911, post: 2877890, member: 24536"] Its all about the ROI. At what point does it become "worth it" to invest in research and development, get patents, develop manufacturing processes, invest in equipment, purchase raw goods, market the product, sell to the dealer, pay the mortgage and light bill, pay for all of the fixed overhead. Sure you can use economy of scale and find ways to make a good product cheaper but why? Decreasing your net profit margin only makes sense if you are increasing your net profit dollars. To that end you have to look at the customer. They are selling at that price so why would you move the price down? If someone is unwilling to pay $1000 for a suppressor then they will probably be unwilling to pay $800. That is a 20% reduction in net revenue, probably with a very small increase in market share. Sure there are manufacturers like Thompson that come in with a great product at half the price and sell a lot of product. They found a niche of people willing to spend less but do not necessarily care about the brand, high-end performance etc. That's the other twist to the gun world, many people are brand loyal and/or brand snobs. A perfect example of this is the stripped lower world (and I am as guilty as anyone) paying 2x-5x the price of one forged lower just because it has a cooler roll mark or the brand is associated with excellence. People will be willing to spend the extra money to be associated with the brand. So why cut your profits without increasing sales? Also, if you cut your price to match the low price competitors , then you are saying that you are equal and you lose some of that brand prestige (making us snobs and brand whores lose interest). Its a sad truth but its a reality. [/QUOTE]
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