by Tom Gaylord
Writing as B.B. Pelletier
This report covers:
- The order-takers
- Little Joe
- A gun of their own
- Home grown
- What about a great idea?
Today I will address a question that has come up several times in recent times. How are airguns made? For a number of different reasons, I have been exposed to a lot of this over the past 25 years and today I would like to share it with you.
There are a number of different ways guns get made, so let’s give each of them a name to keep them separate. These are names I am dreaming up as I write. No one in the industry refers to them this way and most people don’t even think about it.
The order-takers approach other companies with catalogs of things they are able to make. Most of these things are already being made, but each year they will add a few new things to their catalog.
They visit all the trade shows like the SHOT Show, IWA and others (yes, there are other trade shows in this industry). These days the order-takers are mainly Chinese companies. Some that are smaller or less clued-in will try to sell via the internet, though direct emails. They don’t have the money to travel and they don’t understand the market, plus they usually haven’t done their due diligence to learn. Now, let’s look at the companies that buy their airguns this way.
Little Joe has a 10 foot by 10 foot booth at the SHOT Show. It cost him $4,500, when everything was said and done. He thought that was quite expensive, but the SHOT Show actually cut him a deal just to help him get started. Add money for travel, hotel and meals and Joe will spend another $1,500 per person in his booth. The wife and a buddy are his cheapest help, so that’s how Joe rolls.
Chinese Company number 16 approaches Joe at the show and asks if he would like to have airguns of his own to sell. He currently sells guns he buys from wholesale suppliers like Air Venturi, and he is fascinated by the thought of selling his own branded airgun.
He looks in their catalog and selects something that resembles a lot of other breakbarrel springers, but the salesman tells him the factory can give him a wide range of choices for finishes, stocks, barrel lengths and sights. They will laser Joe’s company artwork on the spring tube, along with whatever model name he choses. Joe paws through the options and puts together a gun he thinks will sell. They are almost done.
The rifle Joe wants to sell will cost him $119, delivered, if he agrees to buy 100 pieces. They will be shipped at two different times in the coming year, four months apart. Each shipment will require his wire transfer of money prior to the start of production.
Joe wants a better price, because he figures this gun should retail for $189. It just looks like that to him. He has studied the airgun market for the past several years and is fairly familiar with what things cost.
He knows he will be holding the guns until they sell, plus there are other costs involved — things like advertising and so on. He knows some things, but he is missing the big picture, because he isn’t going to make enough money to break even on this transaction., But this is his first time and he doesn’t know that yet. To sell for $189 Joe needs to get these rifles in his store for about $89, if he wants to make a profit. He is overlooking returns, the cost for spares and repairs, and, if the guns don’t sell (which they won’t, and I will explain why in a moment), he will have to discount them deeply.
The salesman tells him he can cut the delivered cost as low as $103 per rifle, if Joe agrees to buy 600 pieces in the coming year. That will require a credit check that Joe will have to supply before anything can happen.
This is a tough decision for Joe. He’s looking at a minimum expense of $11,900.00 that will be broken into two equal payments over the coming year — just to put his name on an airgun.
Let’s page forward and see what happens if he does decide to “produce” the airgun. The first 20 go out from his store pretty quickly and then someone gets on a chat form with something that looks like this: “I just received my Little Joe War Hammer today. It’s a .22 because that’s all they are selling at this time. It looks pretty nice but I can’t get over how much it resembles the Frauhoken 900 that Kartoffelwaffen sells for $30 less.”
In minutes there is a response. “Yeah, it’s a Frauhoken for sure! I saw a War Hammer at my gun dealer’s and I didn’t think it was finished as well as the Frauhoken. Besides — $30 can buy you a lot of pellets! Ha, ha!”
With that remark and several like it, Little Joe’s sales will dry up to a trickle, and he’s still looking at paying for shipment number two! That is a $12,000 life lesson in the School of Hard Knocks.
The same salesman paid a visit to Kartoffelwaffen at the same show. Kartoffelwaffen has a 100 foot by 100 foot booth that cost the company $300,000. They also brought along 21 employees at a tremendous cost. But they have money to burn, because the FBI just signed a $45 million contract for their new 9mm StealthBlaster hideout pistol, plus they are still working on a 7-year Army support contract that pays them $150 million each year.
Kurt Koenig is their principal buyer. He was hired away from Thimble Archery last year, and he’s still learning the American gun trade, but he understands that in the U.S. airguns are only for kids, so what’s to know? He signed a deal with the salesman for 2,000 of the same air rifle that his advisory team decided should be called the Frauhoken 900. He was advised to get a high polish on the gun that cost $2 more per gun, because the Frauhoken name has a long history for quality arms. His delivered price is $87 per gun because of the quantity he purchased. He has the option of ordering more than 2,000 pieces and the price for those will drop to $81 — as low as it can go.
Kurt lives with his family in Virginia, but he is originally from Bermerhaven, Germany, and he loves to golf. He’s not a shooter, per se, but he did serve in the Bundeswehr, where he was exposed to firearms. I tell you that because:
He isn’t spending his own money.
He has a lot more money to spend.
Nothing bad will happen to him if this rifle fails to sell well.
A gun of their own
Westchester Firearms wants to go about it differently. They want an airgun of their own that will not resemble any other airgun. They approach a Turkish manufacturer that’s known for airguns and the two parties conduct several meetings over the course of two years. During these meetings, the design of a new airgun comes together.
The design is driven by several factors:
The Turkish manufacturer’s capabilities
Westchester wants a quality precharged rifle that will sell near the lower end of the market. When the project started in 2016, that was around $500, but the price point PCPs and economy PCPs have changed the market in 2018. Without changing a thing on their rifle they are now looking at selling a mid-priced rifle that’s positioned at the lower end of the midrange price scale.
The Turks can give them most of what they want because Westchester is willing to buy 3000 pieces a year for the next 4 years. Westchester wants to build an airgun group within their company, because they see the airgun market expanding in the coming years. So, they are committed to this project that will be the beginning of their airgun group.
The Turkish manufacturer they are dealing with is known for making accurate barrels, supplying attractive figured wood stocks and for finishing the metal very well.
The issues they are still discussing are the trigger, the power, the shot count and the price. The Turks want to use their own trigger that they make for all of their own branded airguns. It’s adjustable and they feel it does everything shooters want. Westchester disagrees and has asked for a trigger with a lot of features not found in the Turkish factory trigger. It would be a completely new trigger design that the Turks have told them will be as difficult to develop as the entire rest of the airgun.
Westchester wants a rifle that develops 18 foot-pounds in .177 and 26 foot-pounds in .22. If they go to .25 caliber the estimate is it will produce 33 foot-pounds. The Westchester team is led by a project manager who is a serious airgunner.
The Turks have a valve that produces 24 foot-pounds in .177, 33 foot-pounds in .22 and 45 foot-pounds in .25. They want to use this valve, though they agree that it can be changed relatively easily. But producing a new valve will mean they have to manage more parts in production plus implement more and different quality control measures — things they are trying to avoid.
The shot count will be tied to whatever power is selected, so it’s up in the air at present.
If Westchester makes a mistake on this rifle the company is in no danger, but the project manager will be terminated. This project is considered a high priority one by the company because they want to break into the airgun market.
The final scenario we will examine is the one most people think is done by all companies — building it yourself. Windgate Industries has been making airguns for 50 years and they make them all in their plant. They do source some parts from outside the company, but only the ones they can’t make in-house.
Unlike all the previous scenarios, Windgate builds airguns according to a corporate model. That model is stated in their mission statement.
Affordable airguns combining an ideal blend of accuracy, power and style.
They define each term:
Affordable means priced within the current market range for guns with similar features and abilities.
Accuracy means the reliable ability to hit a likely airgun target.
Power means the airgun is able to perform like an airgun should without trying to be something it isn’t — i.e. a rimfire.
Style means adhering to a conservative traditional style without including faddish trends.
When Windgate decides to build a new airgun they have studied the market, as well as trends that seem to be developing. They seek a design that will appeal to 80 percent of the serious buyers, plus one that will also attract the new buyer who comes from a background in firearms.
A Windgate development can take from one to three years, with the average taking 21 months. They have a development model that looks like this:
1. Build something that meets the performance requirement. This is the clean sheet of paper.
2. Refine the design to make it easy to manufacture.
3. While doing number 2, try to use as many parts as can be used from designs already being produced. Don’t use a clean sheet of paper at this point unless you have to.
4. Build several prototypes for testing. Test for performance and for failure.
5. Enter production before locking down the final design. Allow a year of production during which the design is finalized. Allow for this flexibility in the manufacturing process — no steps that cannot be easily reversed or changed.
6. Key production rates to sales and forecasts. Invest in tooling for the expected run of the product.
Windgate invests a lot of time and money in every new product they design. They have limited amounts of each resource, so each new product development is viewed as a “bet the company” project.
What about a great idea?
Where do great ideas from outside the company come into play? What happens when a guy with a great idea approaches these companies?
Little Joe will do nothing. He hasn’t got the resources and he knows it.
Kartoffelwaffen won’t be interested. They make firearms — not airguns. Despite having their name on some airguns there is nobody in the company who knows airguns, plus they don’t manufacture them and aren’t interested in learning how.
Westchester will not be interested in a great new idea. They are several years behind the market and won’t be able to see the greatness in an idea that’s not mainstream yet.
Windgate could be interested, but before they will discuss it they will want to know the answers to all the same questions they ask themselves when starting new projects. It may be a great idea but if it doesn’t fit their culture, they won’t be interested.
Where is the place where somebody says, “Let’s get the gang together and we’ll make some airguns.” Sorry to disappoint, but that place just doesn’t exist. I know a lot of folks believe that if they have a great idea, someone in the business who is able to implement it will be so glad to hear it. But they overlook two truths. The first truth is what you have just read in this report. This is how the industry works.
There are variations and permutations on everything. Sometimes there are personnel factors that are just as influential as anything. One company may have a rainmaker around whom their entire company revolves. Another company may have a poison pill in a position of influence who can snatch defeat from the jaws of victory every time.
The second truth is the people inside the companies also have brilliant ideas — just like yours. They may have already thought of the same thing you have, or something even better. They may be looking for ways to implement those ideas right now, or they may know why those ideas won’t work for their company.
The airgun business is not just about airguns. It’s also about business.