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Old April 20, 2014, 03:23 AM   #1
The_Meteorologist
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Handgun Prices vs. Rifles

This is largely an observational curiosity, but something I never fully understood. Why are handguns so costly in comparison to rifles, in general. While I am fully aware both can span a rather large spectrum of MSRPs, most handguns these days retail for 400-600 dollars, with some "higher tier" pistols such as the Sig P226, for instance, pushing 900 dollars. On the other hand, relatively inexpensive hunting rifles can be had for 700 dollars or less, and AK47's and AR-15s can be had for 500 dollars.
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Old April 20, 2014, 12:09 PM   #2
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I'd have to disagree for the most part. Rifles at the top end of the price spectrum can get quite a bit more expensive than handguns without going into custom built territory.

If you look at companies like Sig, FN, HK, and Springfield, you'll see that their rifles are generally quite a bit more expensive than their handguns. On the other hand, if you look at Ruger or S&W the prices seem to match up slightly better.

I suppose it has to do with what what people are willing to pay for the quality of a given product though.
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Old April 20, 2014, 12:43 PM   #3
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Around here, if you are selling new AKs & ARs for $500 you'd have a line outside your door, probably 24/7!

Lots of things go into the answer, its not just a question of "hey, its the same thing, only smaller".

one thing is that guns that are made in large numbers, such as for military/police use can sell cheaper than guns made for sporting use, because the manufacturing investment is paid for by bulk contracts.

Another thing is the intended market. People buy sporting rifles for, well, sport. People buy handguns for other reasons as well as sport. The market is different. Lots of people with no interest in rifles will have a defensive handgun.

Market saturation also has an effect. Pistol makers are all in direct competition for the market. Rifle makers tend to specialize a bit more, aiming for more of the niche markets. Its a bit more competitive these days, but not everyone makes all the same action types and calibers in rifles.

There a lot more things involved, of course, I just mention a couple of them.
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Old April 20, 2014, 12:59 PM   #4
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2 things dictate price of guns. (Or anything else that is made in machine shops)

1st is machining and fabricating materials, time and tooling.

2nd is what the market will bear. That will be the price over and above the cost of the metal and wood, and the machine time.

Good quality ordnance steel costs about $4.50 a pound. So if we look at a Freedom Arms 454 Casull at a list price of $2200 it has about $13.50 worth of steel in it.

ALL the rest is (A) machining and (B) mark-up to make a profit.

The issue becomes complex. If we look at a top of the line production grade CNC multi axis machine, fully tooled, with all DROs and coolant system in place, and we rig it with evacuators and all necessary coolant and power inputs, the total price for the one machine to get it up and running is just about $600,000 So if you have $14 of steel but you pay for the building, the machinist wage, the coolant, the cutting tools and every other goodie you need to make a gun on your $600,000 machine and do the math you can see that you’ll need to not only make a lot of guns but also sell them, and the selling is something that you have only some choice in. If the cost is quite high the market becomes much more limited. Making a complex gun (like lets say a Mauser Broom handle C-96 pistol) is going to take much more time and precision than it would for you to make a blowback 22 rim fire. Rifles barrels take more time and more care to make than stamped parts and so on.

Having an “excited market” is the “all American way” of doing marketing. If Clint Eastwood makes the M-29 S&W 44 mag popular the demand goes up. It will only stay up until the fad wears off.
On the other hand there are some designs that seem to never loose their appeal. The 1911 for example. There is not craze to buy 1911s, and never has been to my knowledge, but the design is so popular that it can be made by at least 12 companies and the market is large enough to support them all at one time.

Colt
S&W
Kimber
Springfield
Rock River
Remington
Rock Island
Ruger
Taurus,
SIG
Brown
Night Hawk.
And I am sure I am missing a few more.

New designs on the market are always a risk. Some niches are far larger than the “experts” believe. They are as yet untapped. The availability will produce the sales of a market that has not been recognized.

An example is the Black powder Sharps reproductions. In the early 70s all the experts said that the new Sharps company in N.Y. would die an economic death within it’s first year. They were wrong
Same with Ruger and his #1 single shot.
“No one wants a single shot rifle” was the cry from the “experts”
Again they were wrong.

But in contrast we see the S&W M52 22 jet.
FLOP!

The Ruger Hawkeye 256 Mag
FLOP!

So the price of handguns is no different than the price of rifles when you look at the 2 factors.

Production price + markup = total price

Total price must be accepted by the buying public or the gun will flop. Even troublesome guns would sell if they sold cheap enough, but as a rule the manufacturer can’t stay in business doing that. Not for very long anyway. Remember the Raven 25 autos of the 1970s?
They sold at a Retail price of $39.95. Everyone knew they were pretty cheap, but they were not expecting high quality for $39.95 so they were in business for quite some time.

Value is really a function of what people accept in balance to what they are willing to pay.

Clever "flash" and sensationalism along with “Emperors New Cloths Syndrome” will always sell $500 items for $2000, but only to some whereas most folks will not be fooled and such marketing tactics are short lived.

Last edited by Wyosmith; April 20, 2014 at 01:05 PM.
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Old April 20, 2014, 03:06 PM   #5
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The cost of materials and process is such an insignificant factor in actual selling price it barely needs mentioning.

A Sig pistol costs what it does because people will buy them for that much.

A basic AR-15 costs less, but was probably more expensive to make.

The difference in production costs between a $900 gun and a $300 gun is likely to be less than $10, and it may be $10 in the wrong direction.


If factory guns were priced like other consumer goods that are as difficult to make, they'd cost $200, tops. Your typical gun is less difficult to make than a gas powered chain saw.
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Old April 20, 2014, 06:44 PM   #6
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Wyosmith: has covered the basics, material cost production cost, labor cost, and demand.

One thing that's missing is supply. There are more used rifles than hand guns. The back log of used rifles is enormous compared to that of hand guns, so the relative price of a starter rifle is going to be lower than a starter hand gun to compete with the used market.

Another aspect of demand is that currently hand guns are more popular than rifles.
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Old April 22, 2014, 09:25 PM   #7
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Pretty much what Wyosmith said. It's all in labor (machining, measuring, testing, QC, etc.)
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Old April 22, 2014, 11:03 PM   #8
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The cost of production of a mass production rifle is less than that of a comparable handgun. More labor and time is involved in the production of the one than of the other. A bolt action rifle is a simple thing. Few parts.

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Old April 23, 2014, 01:14 AM   #9
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Which fails to explain why a Mini-14 or AR-15 is so cheap. Just as complicated, more materials, larger forgings.

This is simple supply and demand.


The replacement cost on government contract for an M9 pistol is $263. An M-16A2 is $586. Do you think the US govt is grossly overpaying for a rifle it has a 50 year history with, or that Beretta is selling M9s below cost? Neither. Those prices reflect real costs, not market premiums.

http://www.fas.org/man/dod-101/sys/land/m16.htm
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Old April 23, 2014, 02:01 AM   #10
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I'd be inclined to agree with the OP, but then I live in a different market to the US.

To give you an example. For the price of a Glock, I can buy a Saiga semi, 2 CZ .22 bolts, a .223 CZ bolt etc.

For the price of a Sig, I can buy a decent .308 bolt from Ruger or CZ, a Vepr .308 semi.

For a revolver in .357 - .454, depending on the shop, I can buy a Sig or DMPS 5.56 AR or two CZ 858s (VZ85s).

Lb for lb, over here at least, rifles are way better value unless you stretch to really high end rifles...
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Old April 23, 2014, 03:59 PM   #11
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Plus, I suspect polymer handguns are much cheaper to make than a steel or aluminum version. You'd think prices would reflect that, but not so much.
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Old April 23, 2014, 05:01 PM   #12
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Looking at an $800.00+ Smith it makes one wonder how we can produce even an econo-car in this country for less than $500k.
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Old April 23, 2014, 05:03 PM   #13
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Quote:
The replacement cost on government contract for an M9 pistol is $263. An M-16A2 is $586. Do you think the US govt is grossly overpaying for a rifle it has a 50 year history with, or that Beretta is selling M9s below cost? Neither. Those prices reflect real costs, not market premiums.
The cost of guns to the military often includes the cost of replacement and spare parts, on going service, etc. To this is often added discounts for volume, etc. So it's not, imho, comparable to the cost of commercial firearms.

The cost of AR type weapons varies greatly from maker to maker. It varies from the cost of a decent handgun to a custom piece. The cost of production of all of these is usually less than that of some handguns. Demand though is high, particularly now days. The rate of profit on these guns is high and so they are made by a wide variety of makers and there are 3 or 4 times as many "builders".

It's inexpensive to manufacture a polymer gun, the rate of return is high. So they are also common.

It's hard to make a sweeping generalization about the price of long guns versus short.

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Old April 23, 2014, 07:15 PM   #14
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I think the military buys more rifles than pistols, so I'm puzzled how an M-16 cost would be double that of the M9.
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Old April 24, 2014, 06:01 AM   #15
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Thanks for the replies. From a business and marketing standpoint, I agree with the points made by Amp, Wyosmith, and RX-79G, but I also tend to agree with Pond, Chris, and Fiream29. If supply and demand and manufacturing/costs of materials told the whole story, I would expect even the "cheapest" AR-15s to retail no less than 2000 dollars given the complexities of manufacturing, the mass of materials, and their current popularity. I still find most handguns seemingly overpriced, but perhaps that is only because I tend to choose from the popular and highly reviewed. It could also be incredibly good marketing and advertising campaigns. Perhaps it could be the very nature of the intended use of handguns, self defense. Perhaps people are more willing to pay a premium for perceived quality when it comes to their well-being. I do believe there are other intangibles that dictate the handgun markets somewhat high prices. Supply and demand is huge, but the psychology of personal self defense (which I will admit is eventually inherently tied to supply and demand) seems to add an artificial premium, IMHO.
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Old April 24, 2014, 10:19 AM   #16
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Seems to me rifles and dbl action revolvers have increased more than say most center fire pistols. 700 Rem, Marlin levers, Ruger 77 and any S&W or Ruger dbl action come to mind. While Glocks, Berettas, Sigs etc. seem about what there were a few years back.
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Old April 24, 2014, 10:37 AM   #17
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Quote:
I think the military buys more rifles than pistols, so I'm puzzled how an M-16 cost would be double that of the M9.
If the prices quoted were accurate. Were they? When the deal was struck and what else was a part of the deal are also a factor. Guns sold to the military, and to a lesser extent law enforcement, are not just a gun and a box.

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Old April 24, 2014, 11:24 PM   #18
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Quote:
2 things dictate price of guns. (Or anything else that is made in machine shops)

1st is machining and fabricating materials, time and tooling.

2nd is what the market will bear. That will be the price over and above the cost of the metal and wood, and the machine time.

You have to factor overhead into the cost of the product. That includes:

Insurance (workman's comp, liability, fire, etc.)
Rent / mortgage
Employee benefits
Maintenance
Marketing / advertising / promotion
Research & design
Product development
Tooling
Fixtures
CNC program development
Machinery
Utilities
Training
Supplies / expendables
Office costs, including personnel and equipment
Accounting
Legal
Janitorial / cleaning / supplies
Maintenance and supplies
Taxes (local, state, federal)
Inventory costs
Cost of money
Machinery / equipment / tools replacement costs
Incidentals

Profit has to include a percentage markup for all of those costs. The cost of a product is more than simply materials and labor.

As an example, for engineering work, the multiplier on my raw hourly rate to cover all of the overhead at an engineering company is 2.75 before profit is added.

Quote:
The replacement cost on government contract for an M9 pistol is $263. An M-16A2 is $586. Do you think the US govt is grossly overpaying for a rifle it has a 50 year history with, or that Beretta is selling M9s below cost? Neither. Those prices reflect real costs, not market premiums.
If the company is smart, they have a completely different overhead structure for government sales or government work. You cannot equate government costs to civilian sector costs.

Again, as an example, the hourly multiplier for my engineering time for government work is 2.12 instead of 2.75 used for commercial work because the cost structure for government work is totally different.

By federal law, the US Government always pays the lowest price. You cannot charge or sell a product at a lower cost or rate than you charge the Federal Government. If you do, and the company is audited by the Defense Contract Auditing Agency (DCAA) - you get to REFUND the overcharge back to the Federal Government plus a penalty if the DCAA decides the penalty is warranted.

Last edited by buckhorn_cortez; April 25, 2014 at 12:18 AM.
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Old April 24, 2014, 11:47 PM   #19
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And don't forget:
The Company boat.
The Company beach house.
The Company plane/planes.
The Company lease and lodge.
The Company vehicles.
All the expenses associated with the above.
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Old May 16, 2014, 11:58 AM   #20
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I pay $500.00 to $800.00 for my centerfire rifles and paid $800.00 for my two AR's. I own three CZ handguns that cost less than $650.00 so I have to disagree. When you buy a Savage Axis for $300.00 you are buying the bottom of the line. Not to say they aren't good rifles because they are. You can purchase a Zastava pistol for the same price as an Axis and it will be good quality also but it is also an economy brand in my opinion. I think that sometimes you are just paying for a name. My Sig P232 cost me almost twice as much as my CZ 83 but I think now they are the same quality.
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Old May 16, 2014, 04:14 PM   #21
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Quote:
The cost of materials and process is such an insignificant factor in actual selling price it barely needs mentioning.
I disagree. There is a reason Glock dominates the LEO market, and it's because they can manufacture and sell their pistols for so cheap. It costs far more for Sig for example to machine and finish aluminum frames than it does for Glock to mold plastic frames.
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Old May 18, 2014, 08:51 PM   #22
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My Kimber 8400 Advanced Tactical cost me more than my Kimber Desert Warrior that is in the same case as it.
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Old May 18, 2014, 10:17 PM   #23
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A major factor not mentioned is liability insurance. There are folks out there who are determined to use liability suits to put handgun makers out of business, and handgun makers are more exposed than makers of rifles or shotguns. In fact, due to pressures on insurance companies, most handgun makers cannot even obtain insurance and are self-insured. That means that a part of the gross profit on every gun they sell is put in a special fund to cover damages assessed when some doofus blows off his own toes and the gun control gang persuades him to sue the gun maker for a billion bucks (and give them half!).

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