Initial cost to manufacture a new product is fairly high these days. Concept art, CAD drawings, prototypes, T&E (testing & evaluation), machinery, materials, training employees to run said machinery, more T&E, QC, advertising, and I'm sure I missed something but this stuff adds up fast. After you finally get to the point that you've sold enough of the product to pay for the initial costs, you gain a certain freedom. You can keep the price at the original point and you'll probably do okay, breaking even on an initial investment is hard enough these days and doing so is a big win in it's own right. You can also sell at a slightly lower point which may cause the consumer to regain interest and maybe you sell more than you would have actually making more money on an older product. Streamlining is a valid reason for dropping prices also. After a product has been manufactured for awhile a company learns all the ins and outs of making it. Machine settings, mold temps, material properties, etc. are perfected making the product faster and sometimes cheaper to produce.
All this of course can give you extra capital to spend on new product developments and the cycle starts all over again. Manufacturers are always trying to build a better mousetrap and trade shows (like Shot Show for instance) are important for garnering interest in new products. Handguards are a prime example, almost everybody makes them now and new ones come out on a seemingly monthly basis. What can you do to raise customer interest when major trade shows are months away? A common choice is to start an advertising campaign promoting lower prices on products that are selling or have sold well.
Is competition a possible reason for lowering the price on products to stay competitive? Sure, but it's far from the only reason.
Appeasement is never the answer in the face of naked aggression.
It always amazes me the number of people who get wrapped around the axle when .gov engages in a redistribution of wealth but when Magpul does it, well, it's just awesomeness. They pulled this crap when the MOE Carbine Stock was released and lowered the price on the CTR's. I'd hate to be a dealer sitting on a bunch of their carbine stocks.
Stick
Board policy mandates I state that I shoot for BCM. I have also done work for 200 or so manufacturers within the firearm community. I am prior service, a full time LEO, firearm instructor, armorer, TL, martial arts instructor, and all around good guy.
I also shoot and write for various publications. Let me know if you know cool secrets or have toys worthy of an article...
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This was done according to plan on a long timeline in order to prevent exactly the problem you are talking about, and we take care of our dealer network. We don't generally just wake up and announce a price decrease to the world, although it may appear that way. Due to the nature and complexity of our distribution channels, it may not make its way to everyone, but we try to keep everyone happy, even if it's after the fact.
Duane Liptak, Jr.
Executive Vice President
Magpul Industries
info@magpulcore.com
This is a personal account linked to a personal e-mail. Company affiliation and titles are provided purely for transparency requirements of the host site. Although factual company information may be shared through this account, any opinions expressed are solely those of the account holder, and not necessarily those of Magpul Industries or subsidiaries.
Just like mastiffhound said, once you amortize out the initial investments, which are large, we have the opportunity to pass the ongoing savings on to our customers, so we do. Additional savings occur from sheer volume. We make a lot of stocks, and we use a lot of polymer. It also aligns our prices in a manner that better prepares our product line for some new additions. We certainly aren't resting or stopping development on new products, and having a whole bunch of items at the same price point is just messy. Our buttstock sales continue to grow, and we welcome competition.
Duane Liptak, Jr.
Executive Vice President
Magpul Industries
info@magpulcore.com
This is a personal account linked to a personal e-mail. Company affiliation and titles are provided purely for transparency requirements of the host site. Although factual company information may be shared through this account, any opinions expressed are solely those of the account holder, and not necessarily those of Magpul Industries or subsidiaries.
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