Every once in awhile we get an email that asks a question so universal that it needs to be answered on the site in the form of “Ask SSD.” Since the subject of this “Ask SSD” comes up over and over again in the comments section, we thought we’d address it here as a stand alone article.
Right up front, we’ve got to acknowledge manufacturing costs, particularly here in the US as the most significant contributor to sales price. Special fabrics, construction techniques, and innovation, cost money. It’s that simple. But, there’s also another issue afoot; one that is not well known and that’s what we’ll concentrate on today.
Often, that issue is government pricing. While we won’t go so far as to call it a dirty little secret, pricing computed primarily for the government customer isn’t openly acknowledged. Having said that, we are sure there is going to be some handwringing over our discussion of this issue, but it’s important for everyone to understand.
Government at all levels insists that it receives the best possible pricing from a vendor. After all, they are generally buying at the wholesale level and paying commensurate prices. That makes complete sense. For products that are designed and built primarily for government use, you’re going to see wholesale pricing that more closely reflects what you and I would expect for retail. This is especially true of specialized, high quality, low demand items such as those intended for SOF. These products often incorporate special materials and construction. Unfortunately, the market remains small for them due to their specialized nature. There won’t be as many individual units to amortize the total costs of development and production driving prices up.
What many would consider a subsequent high retail price was set to substantiate that wholesale/government pricing that we mentioned earlier. In these cases there was never any real intent that the product would sell at the retail level. This is why those vendors generally offer a special discount to credentialed individual customers. Unfortunately, for those not eligible for special pricing, it’s best to look for sales or to purchase the item used.
We hope this will help you understand why some products cost so darned much. They’re generally high quality low demand items, built primarily for government purchase.
I applaud you for attempting to shed light on this subject.
Again, they may fall on deaf ears.
Prettttyyyyy much.
Huh?
So in other words tax payers pay for the gear thats sold to the govt and then those of us that would like to own the same gear that our tax dollars paid for get to also swallow the tab for the privilege of wearing some of the kit that SOCOM uses?
Sorry that just doesn’t make sense. What items are you talking about that are so high speed that only the Special Ops uses it but so little in demand that it must be made up for in the civilian market? We all know who the gucci outdoor sporting makers are and all you’re paying for is a brand (admittedly quality of materials plays a part but not to the extreme of some of the prices I’ve seen).
Its a matter of taste and brand. But to blame production costs on high prices is not telling the real story. They sell products at the price they do because they can and people will buy. Its as simple as that.
Personally I don’t gripe and b**ch about the price of items. If I want it and can’t afford it, I save. If I like it but don’t want to save, I grab a picture off the internet…it’ll last longer. Keep it simple. Get it or save for it or don’t.
You have completely missed what SSD is saying man… in order to make a profit from the gov (who insists that if wholesale is say 30% off retail then they want 35% off) they calculate what that absolute minimum price is. If the company needs to sell at let’s say $100 to make a profit of the gov contact then retail is going to be 35% more than that because that’s the discount the gov demanded. Sucks for you paying $135 retail but there’s no other way to stay in business.
And yes you do get to shell out your tax dollars so the men who have trained their entire lives can have the “privilege” of being properly equipped when they take down OBL or the thousands of other missions that you will never hear about. If you think you need gear that high speed then realize the realities that SSD is pointing out, stop making contradictory Internet comments and pinch your pennies (or print out gear porn for your man cave as the case may be…)
Sorry, $154 retail. 154 x .65 = 100 because math and stuff…
Long Story Short (as I read it):
Stuff costs money to design, manufacture, pay for the people doing the manufacturing, test, etc.
Lots of this stuff is developed to government standards and is marketed for the government. Civilians sales are an after thought.
Pricing reflects that. They design, choose materials and costs, etc. based on selling to the government and the price they will give the government. Any sales to civilians are of stock that isn’t earmarked for the government and the prices are not as competitive as the government whole sale prices (because they’re not fighting for big contracts, they’re giving prices to you the buyer of a single item).
Imagine getting a contract to sell 100 pouches in Coyote to the government. They want a good price and you want a sale so you give them the wholesale price, yeah? Now imagine your neighbor Dave wants to buy the same pouch but in Ranger Green. Also, since your contract was for Coyote, you’ve got limited stock of this pouch (and others) in various colors. Constructing them is not a priority to you when there are government contracts to produce for. Are you really going to give him the same discount for the single pouch in a different color? No.
This is my supposition but anything that isn’t available from a commercial retailer (ie. SKD Tac, OP Tac, Tactical Distributors, etc.) and available only through the company’s site or catalog is going to be this way, right? Tactical Tailor’s popular selling stuff like MBITR pouches or backpacks that are available from certain sites are going to have better prices than TYR Tactical’s Huron pack. Tactical Tailor knows these items sell well so they have a certain amount of production geared for civilian sales through these retail sites like SKD Tac and others. As a result they can lower prices a bit. But for items available only through the company itself, items that are pretty much made to order/for government contracts, you won’t get so lucky huh?
I get manufacturing costs, but 1000d nylon is 1000d nylon. No reason a backpack should be 500 bucks. 40 yards of 1000d is on ebay for a hundred dollars. How many packs can be made from that?
At least 15
lol wow you have no clue on how a pack is put together. Time = money.
I can buy 2500lbs of aluminum, why does my car cost so much? I can buy cheap aluminum from the scrap yard…
Stick to carrying a potato sack.
Oh man, +1 on that. Well said.
It isn’t like they’re making one, then discarding all the production equipment and buying new equipment for the second one.
And my LBT and Emdom equipment works just fine, plz go.
Apparently, the whole running a business thing is lost on you.
“CRYE PRECISION!!!!!!” – MBEST11x
arcteryx defined by this article. Although most of their lineup including LEAF is outsourced to China and the Dominican.
For their Berry Compliant stuff, absolutely true.
Arcteryx Alpha LT jacket (mine says made in Canada).
Tactical Distrtributors, $589 USD
Dave’s Tactical $600 CD
Civi version in happy bright colours; $500 USD.
Yes there’s a markup. You can find the civi version for closing on $450 if you get a discontinued colour at blowout but then you’re in a weird purple jacket.
I guess blame folks in Vancouver that shell out big bucks for outdoor gear who’ve legitimized jackets that cost as much as a good used K-Car.
All Arc’teryx LEAF Gore-Tex products are manufactured in Canada. The biggest mistake people make is assuming that because a commercially available (civilian) model is “Made in China” that the LEAF version is as well. The countries listed below are trade friendly countries to the United States which allows the GSA holders that distribute the LEAF line to sell the product on GSA Advantage. The current LEAF catalog has all the part numbers that apply to trade friendly items. If the product you own is not in that catalog (or previous), it’s not Arc’teryx LEAF.
Alpha (Top/Bottom), Alpha LT (Top/Bottom), Mattock Sock & Fussion- COO Canada.
Naga, Combat, Minotaur & Bravo- COO El Salvador.
Atom LT & Atom SV- COO Bangladesh.
X350a LEAF Harness, HS150 Riggers Belt, E220 Rigger Harness- COO Canada
Few people in my world understand this. Know what you want (research), save your money, and buy quality. Ive seen too many buy cheap condor (and others) and complain about it not fitting right, i sure could use a real sized pocket there, or can you sew this piece back together?…
There is another reason that everyone seems to forget. The “special” customers, and the government in general are a VERY small market. Meaning you aren’t going to sell 1million of these jackets. You are going to maybe sell 10k or 100k. Your cost of doing business is relatively fixed, regardless of who you are selling to or almost what your business is. Meaning if you have 10 employees, and office, sales and marketing expenses, business insurance, etc. etc. It’s going to cost the same regardless of wether you sell 10 units or 10 million.
So lets say you have 10 employees at $100k/yr total sunk cost (thats on the low side). That’s $1mil just in labor. You sell 10,000 units a year (optimistic for many special market products) you need to add $100 to each unit just to cover salary. Figure another $500k/yr in G&A and $100k in marketing, sales, and closing costs (thats REALLY low) and now you need to add $160 to the product. Lets say it’s a simple item and costs $10 to make. Guess how much you need to sell it for just to stay in business? People look at it and say “WTF? that’s pretty easy to make. That shouldn’t cost more than $20!”.. This is a universal kinda thing and not limited to defense or government world. If you are in to competitive rowing or any niche sport where the customer base isn’t large, you’ll see the exact same equation.
And I love the way everyone on here thinks it’s some conspiracy theory that people design a product for government end user and then price it accordingly. Just because a lot of these people will run around in civilian life in their tactical tuxedos doesn’t mean that the larger market will. You can’t design a product for one market and then price it for a different market that doesn’t exactly need the product.
I’m a little touchy about this because I design products for myself, my team, and our customers that work in conditions that almost no civilian finds themselves in. I focus on the absolute best solution and don’t think about costs because my team, my customers, and me personally NEED better performance than the broader civilian market in our theaters of operation. So why would I price it for people that aren’t my core customers? Damn right they are an afterthought, their mission and lives don’t depend on it.
You don’t get Cadillac quality at Walmart prices. If you want the best, you’re have to pay for it. Buy once, cry once. If it’s a piece of gear you’re going to potentially bet your ass on, don’t skimp. What’s your life worth?
Eric,
Great little glimpse into the price abyss.
As a very small business gear builder I have learned a few things since 2006.
1-People want the Best at the Cheapest.
2-Tacticool is almost as important than overall quality.
3-People generally know nothing about what actually constitutes quality, and what only looks awesome.
4-SOF units have sexy gear, but it often only needs to last 1 deployment cycle.
5-Barry Compliant adds significant costing to making it fit into govt requirements. Off shore is FAR cheaper, but quality also goes to hell.
6-Guys want 3 things: Cheap, Light, Top Quality. You can have 2. You pick.
7-Guys also buy cheap on the net, and when it fails epically they become sad and angry, sometimes despondent.
8-Buy reputable quality, from source who stands behind it, and you will be a happy shooter!
Pay the price or buy twice.
😉
I think a worthy side discussion here would be related to the idea that “stuff for SF units is underbuilt because it can fall apart after on mission and they can draw another one”; there’s no way to predict what will happen off the grid and you can’t call time out and get a new one over lunch.
That’s not really the issue that some would make it out to be.
True but it’s come up in the past that gear has fallen apart for no real reason other than it was cheap and light was tagged with that excuse instead of the reality.
It’s a mental bad-aid some people use to validate bargain gear that wasn’t really a bargain.
Good sh!t ain’t cheap.
The attitude I run into all the time is “I can get the same thing for $20” because they completely ignore the host of features that don’t add value for their particular use but add a factor of 10 to the production cost. If you don’t need cool arm pockets and berry compliance you can use a plastic garbage bag to keep the rain off, but don’t assume a company is price gouging just because they happen to make the most complex rain jacket on the market. Diminishing returns is a cruel mistress.
If it’s to expensive to buy there are 2 options. Save up OR buy your cordura on ebay for $20. Then buy your Juki 2210n7 for $3500 and the your Juki LK1900ahs for $4900 and a Juki 5550N7 $1000, a air compressor $1000, Snap press and dies $1000 (that’s used new is $3200) and all the other associated materials such as hardware-(3 colors and 1000’s of sizes in metal and plastic)webbing -(there are 7 common widths and milspecs normally)snaps,grommets -(at least 2 sizes),Velcro -(in 5 different widths and thread. Now for all those materials x that by at least 3 and if your doing gov work add 5 times more on that due to every service having their own camo. Oh shit I forgot to mention this awesome part, Minimums. That means you can’t just buy one roll of webbing. You have to buy a case per size which is normally 1000 yards. Oh then there is material. Check out the cost of Hypalon or Multicam tweave ($45.00) per yard with a 5 yard minimum. And those awesomely fancy cobra buckles everyone love so dearly $25.00 each. And I’m being very generous as I’m leaving a ton of odd and ends out. Then the biggie. The knowledge on how to use all of it. So when we go buy a expensive chainsaw or car, hell even a expensive dinner out. We don’t instantly go online to bitch about the price (DO WE?). American made costs plain and simple. If we weren’t poisioned by the Tsuami of cheap shitty Overseas garbage we would all have a different opinion I think. And yes I do think there is expensive good quality stuff and Outrageously priced stuff that’s expensive just because the company president needs a new house or ring for his old lady. If it’s to expensive do the research and buy the best you can afford. Honestly is does a Bently cost that much more to make than a corvette? No but exclusivity has a price tag. And those that can’t have it want it and when they can’t have it what’s the next best thing? Go online and rant and rave about how they are Fu[king people on the price. 😉 just my .02 from the inside looking out.
THIS.
TA-DAHHH
Well said. Give me a link to your air compressor though, I’d love to get a reliable one for that price! 😉
Minimums for multicam are, erm, up substantially…
Then you can add the cost of developing the craziest materials on the planet for a market of how many users?
Most of the gear I own is exceptionally designed, executed and….priced. I appreciate all of it but freely admit that I would not have my grubby hands on it if it were not issued.
One of the most clear and concise explanations I have ever seen on SSD. I would not consider this information to be a trade secret, but its obviously difficult for some to comprehend.
And this does not even take in to consideration the “zombie killer” or “prepper” who will call in with what they think is an absolutely incredible idea that they want developed and built JUST FOR THEM. When you tell them that development costs will be $XXXX they damn near have a heart attack.