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Well, thats what Glock admitted in court trial officially.

Admition/confession under oath. Lets assume they have an margin of 75% today instead of 68%.

You should be able to buy a Glock retail at 175$.
This includes 30% win for Glock and about 30% win for the retailer.
 
Yup I added when I should have subtracted and confused markup with profit margin.

http://www.calculatorsoup.com/calculators/financial/margin-calculator.php

Where G is the Gross Profit Margin, P is Profit, R is Revenue, and C is Cost:

G = P / R = ( R - C ) / R

0.8 = ($550-C) / $550

440 = $550 - C

C = $110

/Sigh. Just one of those days.

Fair enough. I think you're still missing the additional cost that comes from the middlemen, namely the distributor and the retailer. I'm not sure if the court numbers include that or not, but there's likely another 44% there (20% from each) since you're not buying direct. While we do have the profit margin, it doesn't really give us the direct cost because we don't have those other figures that factor in to the final street price.

In fact if you do that and assume the distributor and retailer both had a profit margin of 20% in that $550 total then the cost comes out to $70.40. That's really something :eek:

If the argument is that Glock makes a lot of money that's definitely true. Could they make less money? Sure. But people keep buying them at the current prices. So until people stop, that change likely won't happen.

You should be able to buy a Glock retail at 175$.
This includes 30% win for Glock and about 30% win for the retailer.
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Almost, but I think you made a mistake of doing $110 + $33 + $33 = $176.

But it should be
$110 + $33 + $43 = $186.

The $43 comes from the fact that it should be 30% of ($110+$33) which is $43. The 30% markup changes with each step in the chain since that person's cost is higher than the person before.
 
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Let's say the production cost of an Glock is 120$ for Glock. 78% margin earnings. Including this is DAP (Delivered at Place of the retailer).

Based on the base Price Glock gets an 25% of mark up and the retailer as well based on the production cost an 25% of Mark Up.

That is 120$ (Productioncost & retailer DAP) + 30$ (Glock Mark Up) + 30$ (retailer mark up) = 180$ as an Endprice for the Glock pistol.

For about 200$ or well under you should be able to buy a Glock pistol.
 
Good luck being able to pay employees on such a low margin. Profit margin is a great tool to look at but it doesn't have to do with net income. Just revenue and cost. I'm betting they'd be shut down in a week operating on $15-$20 profit per pistol.
 
TheGuyOfSouthamerica said:
Let's say the production cost of an Glock is 120$ for Glock. 78% margin earnings. Including this is DAP (Delivered at Place of the retailer).

Based on the base Price Glock gets an 25% of mark up and the retailer as well based on the production cost an 25% of Mark Up.

That is 120$ (Productioncost & retailer DAP) + 30$ (Glock Mark Up) + 30$ (retailer mark up) = 180$ as an Endprice for the Glock pistol.

For about 200$ or well under you should be able to buy a Glock pistol.
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I think you're still doing the second markup wrong. For both Glock and the retailer to make 25% it's $120+$30+$37.50 =$187.50. The 25% for the retailer comes off the price the retailer paid for the pistol, which is $150 and not the $120 it cost for Glock to produce. The retailer is going to base his markup on what he paid for it, not what it cost Glock to produce.

And yea I think we all get your argument at this point. But when people keep buying their pistols for $500 and Glock is running from all accounts at full production, why would Glock change their pricing?


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Let's say you sell 263000 Glocks per year worldwide according to the info by 2013 the 10th Million Glock was produced and assuming they started in 1975.

263000/12 x 180$ per Glock = 3.944.880$ per month.
Let's assume you have 200 employees (main factory) at 2500$ each per month = 500000$ per month in salaries (biggest expense).

Glock makes a HUGE margin still earning about 4 Million $ per month with a retail Price of 180$.
If the Price is 500$ per Glock than they earn about 11 Million $ per Month. Humongous net earnings.

Source: http://listings.findthecompany.com/l/12224596/Glock-Inc-in-Smyrna-GA
https://www.quora.com/How-many-pistols-has-Glock-sold-worldwide
 
But their production numbers now are significantly higher than when they first started so just averaging doesn't make sense. It's likely far more pistols than that.

So you're ignoring their cost to run their facilities, insurance for employees, any payments on land they owe, the list goes on. That's also not exactly a great salary but maybe it's realistic idk. My point is there's a lot more to running a business than the cost of raw materials and base salaries. How much of that is included in the profit margin figure we got before is a good question.

Again if your argument is Glock is making a lot of money, well yea. But it's not quite as simplistic as you make it. And again, people keep buying them at the current prices. Why should they lower prices? You have a degree in economics and I assume you studied microeconomics. It's not just the manufacturer that sets the final price. The market comes in to play in terms of demand.


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margin is margin. If they say 68% margin that means all included. If that number is correct is another Thing but that stems from court papers.

The big mistery called: THE MARKET.

Have you seen Mr. Market once in your life?

Many open minded Economy professors confess the MARKET is nothing else then an fake ghost rich People have invented to impose hefty Prices to the consumer. Like Mr. Glock.

THE MARKET does not exist.
 
margin is margin. If they say 68% margin that means all included.
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If it means all included, then shouldn't that have been wages as well? Why then did you bother to calculate and subtract those?

Edit: I see you just calculated them but didn't subtract them.

263000/12 x 180$ per Glock = 3.944.880$ per month.
Let's assume you have 200 employees (main factory) at 2500$ each per month = 500000$ per month in salaries (biggest expense).

Glock makes a HUGE margin still earning about 4 Million $ per month with a retail Price of 180$.
If the Price is 500$ per Glock than they earn about 11 Million $ per Month. Humongous net earnings.
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Also this is incorrect. Glocks doesn't receive:
263000/12 x 180$ per Glock = 3.944.880$ per month
Because that's the retail price of those pistols and all that doesn't go to Glock because it includes the markup that goes to the retailer. For the revenue just for Glock would be the price they sell to the retailers so:
263000/12 x 150$ per Glock = 3287500$ per month
But that's also revenue, not income, because it isn't subtracting the cost per pistol. The income would be:
263000/12 x 30$ per Glock = 657500$ per month
 
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Have you seen Mr. Market once in your life?

Many open minded Economy professors confess the MARKET is nothing else then an fake ghost rich People have invented to impose hefty Prices to the consumer. Like Mr. Glock.

THE MARKET does not exist.
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Lol. I'll keep that in mind the next time some anti-gun legislation appears and everything with a magazine flies off the shelves. I've seen the market first hand. It's called people.

I notice you continue to ignore this question: why should Glock lower prices when people seem more than willing to pay $500?
 
Prices have nothing to do with demand.

Offer the Glock for all 40 years of production for 200$ and you will see they "fly off the shelves" not because of Prices but due to political law changes.

Besides that the US is an first world Country with high income People. For them it is easier to "squeeze off" 500 bucks.

Example: Mr. Bill Gates would not even realise they debit his credit Card with 2000$ for a Glock purchase but any low end income latino could maybe not even pay 300$ for the same gun.
Watch a Little the film series Las Vegas (Montecito Casino, Resort & Spa). Prices are imposed by rich People. It is Kind of an tax applied to the customers from the manufacturer.
 
The book stated each Glock cost about $100 to make. Gaston Glock was personally making $200,000 per day. So yes there is a lot of profit for the Glock company.

But in the hey day of the Beatles empire, about 1967, they were generating $64,000. Per minute!
 
Lol. Prices have nothing to do with demand? Wow. That's the most ridiculous thing I've read in some time. What school is your degree from again?

As for the politics comment, why can't politics be part of demand? When these political events happen people assume the supply is going to decrease dramatically even if they're incorrect. They want to get something before they can't and the demand increases. Then in the short term the supply can't really increase and all of this affects the price and it rises.

These are basic tenets of economics. You weren't taught these, or is this some kind of new age rejection of markets and how they've functioned for most of civilization that you're spouting?

BOY has this thread ever gone off the rails.
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I know right? I'm riding it until it crashes.

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TunnelRat said:
Lol. Prices have nothing to do with demand? Wow. That's the most ridiculous thing I've read in some time.
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I have a feeling that "open minded" in this context is actually a euphemism for "avowed anti-capitalist." :rolleyes:
TunnelRat said:
...is this some kind of new age rejection of markets...?
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Not new-age. It actually sounds awfully familiar and late 19th-century to me.
...the MARKET is nothing else then an fake ghost the bourgeoisie have invented to impose hefty Prices to the proletariat.
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Fixed for terminology.
 
BOY has this thread ever gone off the rails.
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Yep.

And if you want to talk about insane mark ups for products look at the mark up on eye glasses frames. Its crazy. They can have a 1000% mark up.
 
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