P10 C What a total disappointment 😐

[Double Tap]

Well if you're so knowledgeable about the costs of manufacturing, in your highly educated and informed opinion, how much does it cost the manufacturer of a gun with a msrp of $1000?

First of all, tread lightly, sir. Very lightly.


This is a pure semantics game. When you say "manufacture", are you talking about the cost to make and assemble gun No.10,000 ? Or are you talking about the cost to bring gun No.1 to market ? Big difference.

It's true, the cost to make a gun after all the "bugs" are worked out is probably in the $200 region. But the cost to place gun No.1 in the gun store is probably between $5M and $7M US... IF you totally ignore the cost of tooling (that is to say, assuming you don't need to buy any new machine tools). It's the difference between those 2 numbers that pays for all the research, design, testing, materials, production, marketing, and sales of the rest of the lot. Which is the reason companies go out of business when they have several bad products in a row.

What your "proof" article does is completely gloss over the costs to GET TO gun No.10,000. It doesn't consider the cost of developing 6 prototypes before the first production gun is ever made. It ignores the cost of making all he changes suggested by 100's of testers both inside and outside the company. It ignores all the cost of all the lunches and dinners it takes to get big name reviews to try the gun. It totally ignores the 2-3 YEARS of production it takes to finally "break even" with the accounting.

Sure, machining costs ARE dropping, but other costs don't magically disappear because of that.

This article sounds like some politician saying, "because a CAT scan only takes 10 minutes it should only cost $45", while completely ignoring the cost of the $5M machine that makes the scan possible.

And what you are overlooking is the accounting that allows for the first 10,000 to show a cost of $0. Tax credits and depreciation and other incentives will allow all the costs you refer to to be recuperated very rapidly and if the gun is successful in the market pure profit will flow for a number of years before any taxes need to be paid on the revenue from the sale of gun.

By the way I never tread carefully because I have no need to do so. I am quite judicious in the choice of words I use.

Sent from my Moto G (5) Plus using Tapatalk

[Phlyers13]

Give me a break ! That article is so simplistic, as to be a whitewash of the entire subject. It's an insult. Anyone who believes it, will also believe "if you like your doctor, you can keep him."

Well if you're so knowledgeable about the costs of manufacturing, in your highly educated and informed opinion, how much does it cost the manufacturer of a gun with a msrp of $1000?

No need to be rude. Guns are a lot different than eyeglasses. I can tell you for a 100% fact that your article is grossly overestimating the markup between wholesale distributor and dealer. Actual margins are closer to 7-12% on firearms depending on the manufacture and type, not 20-25%. No one outside of the manufacturer is making that kind of profit on firearms.

[MadDuner]

Pure profit. Bwahahahahahahaa

Like Wobbly said, because everything else relating to the design, materials, overhead, liability insurance, manufacturing, testing, documentation, licensing, taxation, packaging, marketing, sales, shipping, customer service and warranty is free?

[Double Tap]

Pure profit. Bwahahahahahahaa

Like Wobbly said, because everything else relating to the design, materials, overhead, liability insurance, manufacturing, testing, documentation, licensing, taxation, packaging, marketing, sales, shipping, customer service and warranty is free?

All these costs are tax write offs, so yes they are free if the gun is a success. If the gun is a failure the manufacturer eats it all

Sent from my Moto G (5) Plus using Tapatalk

[MadDuner]

Pure profit. Bwahahahahahahaa

Like Wobbly said, because everything else relating to the design, materials, overhead, liability insurance, manufacturing, testing, documentation, licensing, taxation, packaging, marketing, sales, shipping, customer service and warranty is free?

All these costs are tax write offs, so yes they are free if the gun is a success. If the gun is a failure the manufacturer eats it all

Sent from my Moto G (5) Plus using Tapatalk

A tax write off does not mean free.  It simply means you do not pay additional tax on the parts the tax code allows you to write off.

If sales were $12 million for the year, and that stuff costs $10 million dollars a year.... it still COSTS them the $10 million dollars.  The government does refund them that money.  It’s still $10, million dollars out of pocket. It just doesn’t penalize them for ADDITIONAL taxes on whatever they were able to depreciate or write off.

[Double Tap]

Pure profit. Bwahahahahahahaa

Like Wobbly said, because everything else relating to the design, materials, overhead, liability insurance, manufacturing, testing, documentation, licensing, taxation, packaging, marketing, sales, shipping, customer service and warranty is free?

All these costs are tax write offs, so yes they are free if the gun is a success. If the gun is a failure the manufacturer eats it all

Sent from my Moto G (5) Plus using Tapatalk

A tax write off does not mean free.  It simply means you do not pay additional tax on the parts the tax code allows you to write off.

If sales were $12 million for the year, and that stuff costs $10 million dollars a year.... it still COSTS them the $10 million dollars.  The government does refund them that money.  It’s still $10, million dollars out of pocket. It just doesn’t penalize them for ADDITIONAL taxes on whatever they were able to depreciate or write off.

https://itep.org/60-fortune-500-companies-avoided-all-federal-income-tax-in-2018-under-new-tax-law/

I believe you're misinterpreting the tax code. A manufacturer can devise and enact a scenario where it pays zero tax on the profit for years. While there are out of pocket costs if the gun is successful they are fully recovered and no tax is paid for years on profits.

God bless America and its wonderful tax code.

Please view the the above link.

Sent from my Moto G (5) Plus using Tapatalk

[MadDuner]

Which part of that direct overhead cost is the free part that makes the gun cost zero to manufacture?

[Double Tap]

Which part of that direct overhead cost is the free part that makes the gun cost zero to manufacture?

Direct Overhead. Costs of business that result directly from having and maintaining a business. Rent is a primary (and expensive) example of direct overhead, as are office supplies and raw material from which to make products.

All of the above is a tax write off, when combined other tax incentives you have "free" production costs. You can have profits and no taxes.

Sent from my Moto G (5) Plus using Tapatalk

[MadDuner]

And if there were no profits - there would be no guns manufactured.

But again, not paying taxes on what it costs to manufacture and sell an item - does not make it free or all profit.  You are confusing the government penalty on success vs the costs to manufacture and sell.

And moderators - this was my last response in this thread, as I realize it’s gone completely off the tracks when compared to original intent.

[Grendel]

And we're done.

[Wobbly]

First of all, tread lightly, sir. Very lightly.

Gun expert, manufacturing expert, tax expert.

I'm glad this one's over.