... Personally I think the cost of the gun is reasonable considering the workmanship and materials and would be fine spending more for it. I want to see this company around for a long time and am encouraged that they are doing what's needed to make a buck ...
I obviously don't know anything about the financials of the company or how much it is costing them to make a gun or what their profit margin is but I do know a bit about economics (
I've got a Masters in the field of business administation) and here are a few observations along with some conclusions based on those observations ...
- The more you make of something (in this case, the R9 & R9S) , the cheaper each individual piece will cost to make which is why many places offer volume discounts if you buy a lot of something.
A simple example will help to illustrate what I mean. If Rohrbaugh decided to make only one gun, that gun would cost a fortunate because all of the cost of designing, buying specialized machines for making the various parts, etc.; would go into the cost of that one gun.
If they made two guns instead of one, all of that cost would be spread across two guns and each gun would cost half as much.
If they made four guns, the cost would be spread across four guns and the price would be reduced in half again.
The bottomline is that the more guns you selll, the more you can spread your costs across all of those guns and the cost per gun should go down until you reach break-even point. For Rohrbaugh, that break-even point seemed to be around $900 ... give or take.
- At around $900 per gun, they have either already sold enough guns to cover their initial investment or they haven't.
In either event, raising price at this time might not be such a good idea. There is something called a supply & demand curve ...
... If the price, as indicated by the light blue line is too high, nobody will buy the product as shown in the above red zone. As the price slides down that blue line, an interest for the product begins to happen as indicated by the light green line.
As the price continues to drop, the demand for the product begins to rise. And that only makes sense -- the cheaper you offer something, the more it will be desired by people until you get to the point where you are almost giving it away and everybody wants one.
Notice that as your blue price line drops, your green demand line increases.
Ideally, you want to be selling something at the point where the two lines cross because that will MAXIMIZE the profit on the product. If you try selling at a higher price, you hurt your sales and thereby reduce income. If you sell it for less, then you've reduced your profit margin when you didn't have to do that.
- As I said in the beginning, I don't know the financial details but most people that I have been in contact with believe that the R9 & R9S are too pricey. This would mean that the present day price MIGHT be a little bit to the left of where the two lines intersect indicating that it's a bit too high.
By raising the price further, it could potentially reduce the amount of guns sold. What they should be doing instead is decreasing the price which will then have the effect of increasing demand and they can make up what they are losing on the extra volume.
Again, this is all just my opinion. [/list] Having said all of that, I think that I am going to contact Eric before 15th and order a second one before the price increase
