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AR-15 Private Label

7.62x39Lover7.62x39Lover Member Posts: 3,936 ✭✭✭
edited June 2015 in Ask the Experts
A mighty fine member of this forum has suggested that an alternative to opening a factory would be to have a manufacturer build me a line of rifles. Perhaps I would assemble them?

Can any of you guys offer some insight on how that would work? How much it would cost. Who could do it. I'm guessing Del-ton.

How much money can a guy make per rifle on something like this?

Minimum orders, etc.

Comments

  • MobuckMobuck Member Posts: 13,050 ✭✭✭✭
    edited November -1
    I've heard of some places doing custom stamping on AR lowers.
    Sounds like doing a cannon ball off the high board into a pool with people already standing shoulder to shoulder.
  • geeguygeeguy Member Posts: 1,047
    edited November -1
    I have introduced new products into markets for about 40+ years, and timing is everything. As Mobuck said, that market is already full with Mfg'rs that can only make about 17% total on std. AR-15 models. If you are buying parts you need to mark up at least 30% to cover the cost of money and inventory, then determine how "yours" differs from the big names. Do the ATF stuff and then be competitive with a big mfg'r doing everything and only making 17% or less.

    About 15 years ago I tried to get my company to make special AR-15 plastic parts (add on). There were few in the market and we could have made a good profit (30-60%), but now everyone is making add-on parts and there's no profit in it. Same for the AR-15 model guns at this point in time. To many builders and to few buyers.

    Spend some time costing out the assembly (many, many suppliers available for parts) and it will become evident "if" you should do this.
  • beantownshootahbeantownshootah Member Posts: 12,776 ✭✭✭
    edited November -1
    quote:Originally posted by 7.62x39Lover
    A mighty fine member of this forum has suggested that an alternative to opening a factory would be to have a manufacturer build me a line of rifles. Perhaps I would assemble them?

    I think what Mark said was that instead of buying the tooling to manufacture your own PARTS, you subcontract out that part of the process to one of the existing bigger manufacturers.

    You'd still be 'building' (ie assembling) the guns and marketing them, you just wouldn't be fabricating the parts in house. Most of the small AR makers do it this way. While a few make SOME parts in house, most just assemble parts made by others.

    While I suppose its *possible* for you to just stick your name on guns entirely manufactured by someone else then market them, that is a tough row to hoe. What are you offering here that is going to make people want to buy your marked up guns, vs similar ones from a dozen other makers with more established reputations?

    IE if you're buying them wholesale then selling them retail at market prices, you're going to be making LESS margin then the manufacturers just selling the same guns themselves.

    quote:
    Can any of you guys offer some insight on how that would work? How much it would cost. Who could do it. I'm guessing Del-ton.

    How much money can a guy make per rifle on something like this?

    Minimum orders, etc.

    See above. How it works is, you figure out exactly what you want Del Ton to do for you, you pick up the phone, and speak with the CEO of Del Ton and see if he'll do it for you, then you negotiate a price. I'm sure he'll be delighted to sell you 1000 completed guns at a nice wholesale price, if you like. Do you have a plan on how to market and distribute them? If not, I think you might need to start there! (Oh, having a manufacturing FFL probably isn't optional here, either).

    I can't give you the exact numbers (since I'm not privvy to Del Tons per-gun manufacturing costs), but again, this is a pretty competitive market. I doubt they're making much more than $100-150 per rifle MAX. Highest per-gun markup is going to be on premium specialty builds. . .not Del Ton mass-produced entry level guns. . .and the individuals plunking down the big bucks for those types of guns tend to be knowledgeable and picky. IE, if you want to "last" you'd have to deliver. . .you can't "fake it".

    Ultimately, if you want someone else to entirely manufacture your rifles, you can do that, but then you're basically just a retailer. IE you buy the guns wholesale, put your "label" on them then sell retail.

    Unless you're adding something super-duper special to the mix here in terms of branding, I don't think this is a viable business model.

    IE, you've got to add something here that will cause buyers to pick YOUR rifles over those of 15 other more well established, well known competitors. Ideally, you'll add something that will make them want to pay MORE for yours. . .and that something will have to be something that a. doesn't exist in the marketplace already, and b. isn't easily copied by a competitor. Do you have an idea of what that could be?

    IE, maybe R, Lee Ermey or Jerry Miculek can get away selling their own lines of AR-15s. . .purely based on the strength of their names. . .not sure that you can. Miculek does have certain name parts he markets (eg compensators, grips, etc). But even that guy doesn't build his own guns!

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  • MG1890MG1890 Member Posts: 4,649
    edited November -1
    Simple answer... no money to be made. The market is oversupplied now.

    You might better be in the accessory market. Although it is overcrowded, innovation would still sell.
  • rsnyder55rsnyder55 Member Posts: 2,525 ✭✭✭
    edited November -1
    If you are making something specialized, you may be able to make a go at it. As an example for accuracy, we are talking about competing against Noveske, Clark, Baer, Stag, LWRC, HK, etc. But then how much would it cost to market this? You would be competing against well known names with successful competitors and/or a dedicated customer base in their stable. Check out the forums of some of these manufacturers and see how fanatical they get about the loyalty to a manufacturer.

    On the other side, you can get a quality usable AR from a known manufacturer retail in the neighborhood of $600.00.

    When you consider marketing, insurance, distribution, warranty costs, etc, how low would your cost of parts have to be to compete if you chose this market?
  • fordsixfordsix Member Posts: 8,722
    edited November -1
    the other day one of my distributors offerd a complete AR flate top with front sight fore 459.00[:0]
  • MgderfMgderf Member Posts: 907 ✭✭
    edited November -1
    Don't think this idea will fly too far today.
    If you had started the process and been on your feet running when the Sandy Hook school shooting happened you could have been sitting pretty today.
    The AR15 market is all but saturated now. This is why you're seeing brand new entry rifles for sale for less than $500. The entire rifle, not just an upper.

    No room for a profit margin today.
  • 7.62x39Lover7.62x39Lover Member Posts: 3,936 ✭✭✭
    edited November -1
    Thanks guys! You are always a wealth of knowledge!
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