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 Post subject: Re: Profit margin?
PostPosted: Fri May 29, 2020 7:28 am 
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There is no way to know what profit is unless you know what your costs are. No one knows, precisely, and as a result all you have are projections, estimates, and forecasts. Estimates are invariably wrong. They were really wrong for everyone this year.

Assumptions are made that what is produced will be sold, but it often isn't. assumptions are made about packaging, shipping costs, warranty costs, rebate / promotional costs, and so forth. Assumptions are made about the market itself, assumptions that after the election of DJT couldn't have been more wrong.



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 Post subject: Re: Profit margin?
PostPosted: Fri May 29, 2020 8:35 am 
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mea culpa wrote:
We’ve always been our own worst enemy. Firearms in particular and all consumer goods in general, US consumers have lost the capacity to distinguish between cost and value. In the chase for a “deal” we readily told corporations to offshore production where cheap labor and lax regulations abound. Now, we’re squealing about the bed we chose to make for ourselves.

IMO, if quality and hence value truly matters, go out tomorrow and buy a (domestic production) Remington, Mossberg, Ithaca or Ruger product. This will clearly tell the manufacturer’s what and where to make it.

Think this is hyperbole? Look at the numbers (and, prices they’re commanding) of 30+ YO Browning Auto-5’s, Remington 1100/870’s, Mossberg 500’s et al still in service and going bang each time the trigger is pulled.


This is partially true, and partially false.

I completely agree that the globalization of markets have resulted in consumers just choosing to buy whatever meets their minimum needs at the lowest cost. However, this is no change. The difference is that the vast improvements in supply chain, technology and communications have taken our physical borders which used to be significant barriers to low cost trade, and destroyed them. Before, consumers had no choice. Now they do. There is no doubt that because they have to compete with other low cost providers, in a very large percentage, quality has degraded a ton.

However, the opposite is also true. Back in the late 70s and 80s, the "buy American" auto mantra also helped to destroy the big 3. While Japan (and subsequently Korea) was taking notes, and learning how to produce efficiently, with excellent engineering and quality control, Detroit and the UAW were stuck in the past. Had consumers held Detroit accountable by voting with the wallets sooner , it is at least possible that market demands would have forced the Big 3 and the UAW to really look at themselves in the mirror.

They didn't. My father is a retired UAW worker of 43 years. He now refuses to buy anything other than a Honda.

The point is - quality isn't really about where it's made. It 's about HOW it's made. It's a Global market. Not gonna change. Adapt or die.


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 Post subject: Re: Profit margin?
PostPosted: Fri May 29, 2020 8:54 am 
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So how many $$$$ from a $329 gun.
Only the Federal govt can spend more than it takes in and stay in business!


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 Post subject: Re: Profit margin?
PostPosted: Fri May 29, 2020 9:08 am 
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When I had my shop, pretty much all guns had a PUBLISHED Wholesale Cost of 25% off Retail. Wasn't called MSRP in those days. Standard Distributor cost was 40% off Published Retail. BUT I don't know of any knowledgeable dealer or distributor who did not get INSIDE Discounts. Small dealer might get 7% more to larger dealers getting 10 or more off. Then there were "buy in" deals for say Pre-Hunting Season Inventory build that may or may not have had DATING terms where you could pay in 90 days or pay earlier and get an additional discount at 60, 30 or 10 days. You could sell a firearm retail at 15% off and do ok and even sell at 25% off / wholesale and make something. In those days there were no Internet Sales, but there were lots of Large Box Stores pre-Walmart that had gun and sporting goods departments and sold guns. In those days, my experience was also that distributors protected their dealers even when they had a retail operation attached to their wholesale operation like Parker Brothers, Jovino's, Enoric's etc.

There were a lot of giveways too. I had a store full or Locking Steel and Glass Gun Display Cases, Ammo Bases, all supplied as an add one for purchases of certain quantities of guns or ammo.

Like Randy said, the actual gross margin left on a firearm, might be totally eroded way by all the added costs of running the operations by the time to you get what they really made net.

Bob

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 Post subject: Re: Profit margin?
PostPosted: Fri May 29, 2020 9:22 am 
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Dr Duk wrote:
So how many $$$$ from a $329 gun.


It is a question that is impossible to answer for anyone here, and likely anyone on the planet except for possibly an accountant at Remington, and I'll bet even they could only give you a guesstimate number.

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 Post subject: Re: Profit margin?
PostPosted: Fri May 29, 2020 12:30 pm 
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wmhjr wrote:
mea culpa wrote:
We’ve always been our own worst enemy. Firearms in particular and all consumer goods in general, US consumers have lost the capacity to distinguish between cost and value. In the chase for a “deal” we readily told corporations to offshore production where cheap labor and lax regulations abound. Now, we’re squealing about the bed we chose to make for ourselves.

IMO, if quality and hence value truly matters, go out tomorrow and buy a (domestic production) Remington, Mossberg, Ithaca or Ruger product. This will clearly tell the manufacturer’s what and where to make it.

Think this is hyperbole? Look at the numbers (and, prices they’re commanding) of 30+ YO Browning Auto-5’s, Remington 1100/870’s, Mossberg 500’s et al still in service and going bang each time the trigger is pulled.


This is partially true, and partially false.

I completely agree that the globalization of markets have resulted in consumers just choosing to buy whatever meets their minimum needs at the lowest cost. However, this is no change. The difference is that the vast improvements in supply chain, technology and communications have taken our physical borders which used to be significant barriers to low cost trade, and destroyed them. Before, consumers had no choice. Now they do. There is no doubt that because they have to compete with other low cost providers, in a very large percentage, quality has degraded a ton.

However, the opposite is also true. Back in the late 70s and 80s, the "buy American" auto mantra also helped to destroy the big 3. While Japan (and subsequently Korea) was taking notes, and learning how to produce efficiently, with excellent engineering and quality control, Detroit and the UAW were stuck in the past. Had consumers held Detroit accountable by voting with the wallets sooner , it is at least possible that market demands would have forced the Big 3 and the UAW to really look at themselves in the mirror.

They didn't. My father is a retired UAW worker of 43 years. He now refuses to buy anything other than a Honda.

The point is - quality isn't really about where it's made. It 's about HOW it's made. It's a Global market. Not gonna change. Adapt or die.


I agree with some of what you said but disagree with other aspects.

Using automobiles is a flawed analogy as (IMO) people went to foreign automobiles because they were better built and not intentionally designed with inherent obsolescence baked into the cake. Firearms built up until the ~mid-1980's were of an overall better quality than much of today's current production. Browning (A500, G500, early BGH, et al), Remington (887, R51, Cti105, et al) as examples, all laid eggs in almost a systematic fashion.

Domestic vehicles QC and engineering had been steadily going into the crapper which created an opening for the Japanese, especially after Prof. Deming taught them how to work (management & labor) together to establish and maintain both quality and efficiency. The Big Three were so hidebound by UAW contracts (started in the 50's with Chrysler & UAW) they could only watch and bitch. Their later response was to purchase stakes (Ford/Mazda, GM/Isuzu, Chrysler/Mitsubishi) in Japanese manufacturers.

IMO, the culprit was Big Three management and not labor as evidenced by the fact Honda, Toyota, Nissan, Hyundai, Kia, BMW, Daimler-Benz build vehicles in this country using American labor. Is your Dad's Honda built in the Marysville, OH plant?

Price primarily forced out US firearms manufacturers and not necessarily the quality.

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 Post subject: Re: Profit margin?
PostPosted: Fri May 29, 2020 12:41 pm 
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That’s not correct.

In the US, the firearms industry with respect hit rock bottom in the early 80’s. In recent years, there has been a resurgence, in some cases, huge.

Also, before politics entered the ‘gun culture’, sakes had been declining primarily due to shooting sports, specifically hunting was on the decline.


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 Post subject: Re: Profit margin?
PostPosted: Fri May 29, 2020 12:47 pm 
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Mea Culpa,

I can tell you with absolute certainty that big Labor (ie, the UAW) was in FACT just as complicit in the demise of the big 3 as management. When I say "Labor", I mean "organized labor". For the most part, none of the manufacturers you mention have UAW organized labor. I have a very very significant amount of insight through my father into the UAW management, contract negotiation, union management, the previous impact for example of Fisher Body on GM, and frankly the effective socialization of organized labor as it applied to manufacturing. My father started as a tool and die maker, but moved into UAW management. His experience with the UAW and the ineffectiveness of the union is exactly what turned him from a strong Democrat to a hard line Republican. His description of UAW labor quality post about 1970 is that it is poor quality, poor attention to detail, poor work ethic, and focused on getting as much as possible for doing as little work as possible. He said that some of the people he had to represent and "defend" made him sick to his stomach. I am just repeating what his observations and experience are and not applying that description to anyone. I wasn't there. He was. Both as a skilled tradesman, and then as a UAW representative. Note I said "complicit", as without a doubt arrogance within GM Management and engineering is what brought shoddy materials and shoddy designs.

I have no idea where my dads Honda Pilot was manufactured. Nor where my daily driver CRV was manufactured. I know where my Dodge Ram Cummins was manufactured. But I describe it as a wonderful drivetrain surrounded by a piece of ****.


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 Post subject: Re: Profit margin?
PostPosted: Fri May 29, 2020 1:56 pm 
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Our Dad's followed somewhat of a similar career path in that mine (after enlisting at age 16 in the USN in 1942) returned home in 1947 and met mom who said although he didn't have any money, he was good looking and they married. Grandfather Davis got him on the IBEW apprentice program through TVA (Tennessee Valley Authority) in 1948. He got his GED and Engineering degree via the GI Bill as did ~11+ million other returning GI's from WWII so in the early years, I didn't see him much because of work and night school. He retired from TVA in the late 1980's as Supt. of Power Service in Muscle Shoals, Alabama. He was responsible for keeping electrical power production going with TVA's ~3 dozen hydroelectric dams, ~40 coal-fired steam plants and three nuclear plants with a total of 9 reactors. His crew was ~600 electricians, machinists and fitters.

He often said the guys in the shop, while there were a few slackers, were a good group to work with and I think him having come up through the ranks had something to do with that relationship. His biggest headaches were with upper management in Chattanooga and/or Knoxville. He kept his IBEW card up to date until the day he passed and that pension never missed a beat (for mom) at his passing. I ultimately had to get on the phone with Knoxville and have a come-to-Jesus meeting with them three months later to get that pension going for mom. He too went from a registered democrat to republican later in life.

BTW, he went to a Nissan 260ZX and Toyota PU after retirement.

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 Post subject: Re: Profit margin?
PostPosted: Fri May 29, 2020 2:26 pm 
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This thread has taken a good turn! My dad fought in the Philippines, came home and worked in a post office until retirement. Always hated that union membership was required and never voted Democrat in his life. Traded in his Ford in ‘93 for a Honda and I think it pi$$ed him off that it was more reliable than anything from the big three.

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 Post subject: Re: Profit margin?
PostPosted: Fri May 29, 2020 2:34 pm 
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I have a Honda Ridgeline - - - "The most American-made truck. https://news.pickuptrucks.com/2019/06/2 ... truck.html

But how much profit did Honda make from it? :lol: :lol: :lol:

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 Post subject: Re: Profit margin?
PostPosted: Fri May 29, 2020 2:55 pm 
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Mea culpa, your turn.


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 Post subject: Re: Profit margin?
PostPosted: Fri May 29, 2020 8:18 pm 
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RandyWakeman wrote:
I have a Honda Ridgeline - - - "The most American-made truck. https://news.pickuptrucks.com/2019/06/2 ... truck.html

But how much profit did Honda make from it? :lol: :lol: :lol:


Does that truck play the Univ. of Alabama fight song when you honk the horn?

I would bet Honda is making a profit otherwise they would not make the next one come tomorrow.

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 Post subject: Re: Profit margin?
PostPosted: Sat May 30, 2020 8:31 am 
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mea culpa wrote:
RandyWakeman wrote:
I have a Honda Ridgeline - - - "The most American-made truck. https://news.pickuptrucks.com/2019/06/2 ... truck.html

But how much profit did Honda make from it? :lol: :lol: :lol:


Does that truck play the Univ. of Alabama fight song when you honk the horn?

No, they are Auburn fans!

I would bet Honda is making a profit otherwise they would not make the next one come tomorrow.


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 Post subject: Re: Profit margin?
PostPosted: Sat May 30, 2020 9:05 am 
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rkittine wrote:
a PUBLISHED Wholesale Cost of 25% off Retail. b


And that has nothing to do with a manufacturer's profit margin on anything they make. That information is all entirely internal company information and they do not publicize that. We can speculate all we want, but we don't know and won't know unless we have access to their finances and can drill down into them. And that won't happen unless they employee us or we steal that information.

Period.


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 Post subject: Re: Profit margin?
PostPosted: Sat May 30, 2020 9:36 am 
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Dr Duk wrote:
mea culpa wrote:
RandyWakeman wrote:
I have a Honda Ridgeline - - - "The most American-made truck. https://news.pickuptrucks.com/2019/06/2 ... truck.html

But how much profit did Honda make from it? :lol: :lol: :lol:


Does that truck play the Univ. of Alabama fight song when you honk the horn?

No, they are Auburn fans!

I would bet Honda is making a profit otherwise they would not make the next one come tomorrow.


There’s a 12-Step Program for that!

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 Post subject: Re: Profit margin?
PostPosted: Sat May 30, 2020 10:48 am 
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RandyWakeman wrote:
I have a Honda Ridgeline


I thought you said you have a truck?


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 Post subject: Re: Profit margin?
PostPosted: Sat May 30, 2020 10:54 am 
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wmhjr wrote:
RandyWakeman wrote:
I have a Honda Ridgeline


I thought you said you have a truck?


:lol:

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 Post subject: Re: Profit margin?
PostPosted: Sat May 30, 2020 2:12 pm 
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Not sure how the thread go onto this, but my Ex-Father-in-Law was in the Bataan Death March and survived being in prisoner of war camps in many land China. In 1980 I bought my first Japanese car, a Toyota Supra. I thought he was going to kill me.

Bob

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 Post subject: Re: Profit margin?
PostPosted: Sat May 30, 2020 2:58 pm 
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Bob,

A client (the late Mr. Pendley) sat in my office years ago and recounted his survival of the Bataan Death March. First, he wasn’t impressed with the Japanese soldiers performance on the battlefield. Said they (Japanese) were being racked and stacked like cordwood until our guys ran out of food, then medicine and then ammunition. The first thing the Japanese did was lash our officers to trees and use them for bayonet practice. The Japanese commander spoke English and told them he hated Americans and did not care if any survived. If you stumbled or fell, they’d bayonet you in the back. No food or water (guys would fall out when passing a mud hole but get bayonets while trying to drink the putrid water) until the third day when they received a tennis ball size chunk of rice. Said if two buddies from Michigan hadn’t carried him the last day he too would have been executed by bayonet. He wound up in the coal mines in northern Japan for the duration. Said at least it was 55 degrees inside versus the snow outside as they were still wearing what was left of their jungle uniforms in August of 1945. For some reason their former guards didn’t last very long thereafter. In the 90’s President Clinton made a deal with the Japanese government to abort any reparations for the slave labor of those prisoners.



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