"Gun companies want to make profits, not create great products"

[Ben_G]

This is a tremendously complicated topic that varies wildly from company to company based on their ownership structure, sales strategy, and then wildly again from segment to segment or product to product.

Publicly traded companies have quarterly obligations to the shareholders, companies that are owned by a financial investment groups have variable goals based on if they're just building capital or prepping to sell that asset, and private companies have very different targets based on the objectives of their respective owners.

Quality and marketing are critical to maintain or improve in general to keep a company's brand perception positive. Taurus or example has been taking great strides to improve their perception. Ruger is remarkably consistent in that field, and you can set your watch on how predictable Glock is (and I mean that as a compliment). Springfield is highly effective at marketing to the masses.

Plus there's the sales channel strategy and how to set that mix, which is a wildly complicated subject that I'm not qualified to lecture anyone on save for noting that between direct dealers, distributors, chains, and direct to consumer options, you can wildly swing the needle by playing with you mixes and pricing strategy there alone.

For my bread and butter, the product line side; practically speaking, all gun companies will always have payroll and operations overhead we need to absorb. Some product lines might exist with a structure that's objective is to keep the lights on; it's not sexy, but it's a critical requirement some years just to keep hands busy and machines running. Some iterations of a product exist to cover for material or overhead inflation; so practically the product components shouldn't really cost more one model to another, but steel/polymer/electricity/shipping went bumped out cost up and we need to reconfigure or repackage the item to the customer in a way that allows us to increase price to maintain our margin requirements. Bespoke items have a strong individual margin on paper, but when you factor in the infrastructure you need to maintain to produce them and the units sold count, it gets to be a special kind of complicated. Military contract items are special because often the actual guns fulfill more of that overhead absorption role (legitimate MILSPEC delivered items have very tight tolerances) while any margin opportunity is more in parts, and the attached marketing lift. Then you get major innovation NPD for true incremental growth (think P365 redefining a market segment), and things get really complicated. I wouldn't be surprised if those took a minute to pay back the investments to turn a profit, and optimize but owning a critical segment means go go go. Also, all those items often take years to get done right; so timing the resource availability, development lead time, and the market trend for when something finally lands is like hitting a bullet with a smaller bullet whilst riding a horse (though that challenge is what makes it so rewarding to land stuff).

In my opinion, to really play this game well, a company needs to be orchestrating all of those parts together. A robust operations and quality system to keep things on the level. A cohesive marketing strategy to message correctly to the end customers that dovetails with your cleverly mixed channel strategy (aka the people we actually have to sell to). A product plan that can mix several of the types of product opportunities to get growth and operations stability and be insulated from over relying on any single segment in case that product fails or the segment goes in an unpredictable direction (legislation, don't win a contract, a vendor leaves the network, etc).

There's so much more that has to happen behind the curtain to consistently make all of that work together to provide stable and long term success.

In my opinion as an industry insider, if I had to isolate one thing to drive success for profit and product? It simply comes down to having the right people in the company. You need the right balance of passion and prudence at every corner of the organization from top to bottom to drive innovation without betting the farm. You need people who know and care about the product enough to ask all the right questions years ahead of everyone else, but who aren't such hardcore fans they can't step back and pivot if its just not the right time to dedicate those resources at that time. You need people who communicate well internally so good ideas or red flags on issues don't get bottlenecked, discarded, or swept under a rug. Critically, it takes a special kind of crazy. You get enough people together who can do all that and give them enough resources? They'll take over the world, or a % of the world commensurate to the resources provided.

Beretta specifically? I can say our standing orders currently are to plan on how to celebrate our 500yr anniversary with a roadmap to keep us around for 500 more, and the passion is certainly there across a ton of the global org.

[Joe in PNG]

There's the famous story of post WWI Ford, where production wizard Bill Knudson wanted to convert a plant to make something other than Model T's. When Henry found out that it was easier and quicker to just keep making model T's, he decided to just keep making model T's. Which then led to Knudson moving on to GM & kicking Ford's butt, plus a longer conversion time to the Model A.

Sometimes, it's just easier to keep doing things the same way they've always been done. It hurts in the long run, but tomorrow is just another time.

[TAZ]

Welcome to corporate anything. Guns, cars, shoes, shovels… irrelevant. The goal is to sell stuff folks want at the highest price they are willing to pay. Not rocket surgery. Folks get lost when they forget that the business coin has 2 sides. Short and long. In recent times folks refuse to see past their noses aka the quarterly review and nothing beyond that. That’s how you end up with stagnation in development. Or in cases sporadic development. Or shut doors as others surpass.

Businesses need to address both sides of the coin. They need to be making money today to keep doors open, but always have an eye on development to keep customers hooked for decades. It’s a hard balance.


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[Borderland]

I agree.

But you are in a jam once ignorant shareholders (who only care about profiting short term) demand better profits NEXT quarter, not next year or five years from now.

I think that was the philosophy of companies like GM and Chrysler in the 70's. Then Japan figured out how to build cars that Americans wanted without the quarter by quarter profit scheme.

I saw the change having purchased a 78 Hilux PU after trying to keep a 73 Dodge PU on the road for 5 years. I think it took about 10 years for US companies to catch on.

[Totem Polar]

If one wants to see a company succeed wildly as a result of pure enthusiast passion aimed at both innovation AND selling a product people want at a price that gives the competition the shakes, just look at Royal Enfield motorcycles.

Old, staid company, with an ancient pedigree and famous brand that made the same thing for decades—right up until a 26-year old gen-X CEO took over, launching an ambitious attempt to all at once modernize production; tackle the American market; and build bikes that the new CEO wanted to ride himself. They went from making 100K bikes a year in 2013 to making a million bikes in 2023 (after being in business since 1901), largely by building exactly what the consumer wants, at a price point that’s almost impossible to believe for the quality.

They did it because they had both the capital infusion, along with a CEO who personally does the QC checks on the first new bikes off the line on any new product extension, and involves himself in every step of product development and testing. I just rode the guy’s most major step forward for the company back over snoqualmie pass last weekend, and I’m here to tell you that there is no substitute for having a Jason, Darryl, or Ted doing the product development if one wants to put out stuff that sets the bar for value. Assuming that leadership will listen to the experts.

Build what passionate consumers want, harnessing modern technology and expertise, at a fair price. JMO.

Let’s see how these Lipsey UC wheelies show on the bottom line. Here’s hoping that they pull an “LCP,” and set the course for future offerings by S&W.

[Borderland]

If one wants to see a company succeed wildly as a result of pure enthusiast passion aimed at both innovation AND selling a product people want at a price that gives the competition the shakes, just look at Royal Enfield motorcycles.

Old, staid company, with an ancient pedigree and famous brand that made the same thing for decades—right up until a 26-year old gen-X CEO took over, launching an ambitious attempt to all at once modernize production; tackle the American market; and build bikes that the new CEO wanted to ride himself. They went from making 100K bikes a year in 2013 to making a million bikes in 2023 (after being in business since 1901), largely by building exactly what the consumer wants, at a price point that’s almost impossible to believe for the quality.

They did it because they had both the capital infusion, along with a CEO who personally does the QC checks on the first new bikes off the line on any new product extension, and involves himself in every step of product development and testing. I just rode the guy’s most major step forward for the company back over snoqualmie pass last weekend, and I’m here to tell you that there is no substitute for having a Jason, Darryl, or Ted doing the product development if one wants to put out stuff that sets the bar for value. Assuming that leadership will listen to the experts.

Build what passionate consumers want, harnessing modern technology and expertise, at a fair price. JMO.

Let’s see how these Lipsey UC wheelies show on the bottom line. Here’s hoping that they pull an “LCP,” and set the course for future offerings by S&W.

I didn't know they were still in business. Line up looks a lot like the Brit bikes we were buying in the late 60's. We had access to Triumph and BSA in Spain. I had a TR-6 Tiger. More T-100 Bonneville's were purchased than anything else though. Glad to see sensible motorcycles are being built again. 650 cc was always the right combination of power to weight for me. Mine was about 45 hp/400 lbs. They probably don't publish the top end on bikes these days but I'm guessing over 100 mph.

Very cool.

[Totem Polar]

I didn't know they were still in business. Line up looks a lot like the Brit bikes we were buying in the late 60's. We had access to Triumph and BSA in Spain. I had a TR-6 Tiger. More T-100 Bonneville's were purchased than anything else though. Glad to see sensible motorcycles are being built again. 650 cc was always the right combination of power to weight for me. Mine was about 45 hp/400 lbs. They probably don't publish the top end on bikes these days but I'm guessing over 100 mph.

Very cool.

47hp at the crank, 435 lbs. Good for a hair over the ton, these new fangled ones, but 90 comes up quickly and regularly. Same simple, air-cooled feel and sound, only with fuel injection and ABS brakes—the only modern conveniences that I wanted. Plus, the suspensions are better. The motor tolerances, too, most likely.

[Borderland]

47hp at the crank, 435 lbs. Good for a hair over the ton, these new fangled ones, but 90 comes up quickly and regularly. Same simple, air-cooled feel and sound, only with fuel injection and ABS brakes—the only modern conveniences that I wanted. Plus, the suspensions are better. The motor tolerances, too, most likely.

Great specs. The Brits weren't quite there with electrical and tight cases in 1969. Honda chased them down and killed them there with the CB 750. Triumph was oil every where and valve covers that would shake off in 3 days. No loctite in those days. FI and disk brakes was the very best thing to happen to motorcycles. My last was a BMW 80 RT. Not quite the same as my Triumph. That one was a real sweetheart. Nothing like an air cooled twin. Unfortunately my riding days are over but I have some great memories.

[DDTSGM]

I saw reference to this in a thread today, and it comes up periodically.

Gun companies, like other companies, want to earn profits. That is what corporations do. The question is how do you best "make profits." Some think that the best way to maximize profit is to short change quality or not invest in new products. My belief, is that the best way to maximize profits is to make great products and continue to make new great products. When companies cut quality and fail to innovate, I view that as a failure of leadership, and not some crafty profit maximization scheme.

Thoughts?

I don't know if this is responsive to the question asked, I hope so.

My very first thought is that it depends on the company's business model.

I'm going to use an example I've used on M4C several times.

BCM as a company seems to be focused on a model which suggests fewer sales with higher prices as compared to PSA which seems to be focused on a model with lower prices and more sales.

If company A sells two hundred thousand widgets for $500.00 at $10.00 a widget profit that comes to $2,000,000. If company B sells twenty thousand widgets for $1000.00 at $100.00 a widget profit that also comes to $2,000,000 profit. They just used different business models to get to the same location.

PSA's model relies on economies of scale much more than BCM's does. Obviously you expect more quality from an item costing twice as much. The point of contention seems to be how much more quality and how do you measure quality.

I think it depends on where you want to place yourself in the market to make your money.

We saw a good example of that thinking in the Forgotten Weapons video with the guy from Gideon Optics which was posted a couple days ago.

[jh9]

First, the videos show a LOT of hand work forging frames, which could be completely automated in a more modern facility. If they’re hand-forging frames, then they’re also doing a lot of other hand work that could be automated

There's a cost to modernizing that may not be worth it. Especially with the projected move to Tennessee and the sales trajectory of what's actually selling.

S&W made 232,357 revolvers in 2021 (most recent data) over half of which were .38s (mostly Js I assume). Meanwhile, they made 1,648,885 automatics and 427,368 rifles. That process is already much more automated. They sold 7 automatic pistols for every wheelgun. Revolvers at large account for ~10% of guns made.

515,000 automatics in 2019. 83,246 revolvers in 2019. So, 6 automatics for every wheelgun they made. Honestly the sort of trajectory I'd expect even if 2021 was an outlier year because... reasons.

2021 ATF numbers: https://www.atf.gov/resource-center/...t-report-afmer
2019 ATF numbers: https://www.atf.gov/resource-center/...afmer/download

I just spot checked those two years. The ratio certainly fluctuates year by year, but it's hard for me to articulate why S&W The Business should stop focusing most of their efforts on auto pistols and AR-15s. I'm not sure it's even necessarily short-term-thinking that revolvers cater to a shrinking part of their customer base.

It's great that Lipsey's is willing to listen to people who know what makes a J-frame good... but them rolling up with a fat check and betting money on it is probably the sort of thing it's going to take to get S&W to pay attention. (Assuming this is the sort of deal where Lipseys-The-Distributor is essentially bankrolling the whole thing and they're the ones on the hook if it flops because S&W gets their regardless.)

Smith semi-autos have worn Novak sights for decades. How tough is it to dovetail a revolver frame for those sights?

The Classic/DX setup is better for front sights because it doesn't require a hammer and punch. Some of them with limber springs had issues, but I think that was a fixed problem by the end of the 1980s or early 1990s.

For rear sights it's an expense. The bog standard 442/642's rear sight trench is cut as part of the CNC-frame-machining. The dovetail rear sights are a separate part (more cost) with a separate CNC program (terminology? either way, even more cost) and installed by hand (yet more cost). If you want better sights, they also sell much more expensive J-frames. Lipsey's is the one gambling that there's a market in between those spaces. I hope-- and think-- they're right.