rman wrote:Unfortunately, most of these companies are more interested in making a profit than they are satisfying their customers.
True enough, but as a business person myself, I know that in the long run, satisfying my customers IS the most profitable way; you can only 'rip-off' people so long, then the gravy train goes elsewhere.
So, when you praise Henry or CMMG - keep in mind that they are just as "profit-driven", but they are at a point where they can budget for the increased costs of satisfied customers, and they know that in the process of doing that, they will LOSE customers just looking for the 'most affordable' product. Right now, Rossi is having to cater to many of us who ARE looking for the 'most affordable' product, and has to please enough of us to gradually enter the 'best made' arena later on (if they choose to target that consumer base), once they have some momentum.
It is a rational decision, in that there are already several sources of 'expensive, but very well made' leverguns, and they would be hard to beat, especially since some have century-old and well-recognized brand names (even if now made in Japan or wherever in some cases, or not the same 'company' as the original of same name, in others). Rossi knows that there are LOTS of new shooters out there who want 'cheap but functional' leverguns, and even lots of old ones (like me), who want field-grade 'shooters' and don't care much about cosmetics, and/or are comfortable fixing stuff like loose screws, burred parts, and so on ourselves, and will probably replace the sights and follower within 24 hours of opening the box.
Still, it seems like one employee could handle each firearm prior to shipping, and go through a minimal check-list for basics like "is the barrel on straight", and "are any screws broken or loose", and perhaps even cycle five or six dummy rounds through it, and probably process a hundred guns per day per employee, which would add only a couple dollars to the price of production, minus the cost of 'rejects' (which are going to likely be rejected ultimately anyway by the consumer). Some of the rejects with purely cosmetic issues could be likely sold on a discounted 'blemish' basis for less dollar loss than repairing them (i.e. if there is a deep scratch on the receiver), others could have a part swapped that would cost less than the loss of a blemish-sale, and yes, a few would be not cost-effective to fix, but I'm betting that would be less than one percent, given the huge numbers of "positive" reviews of Rossi's, vs. the negative ones. That would add perhaps $5.00 to the per-unit-shipped cost.
So, for maybe $10 more on a $400 gun, it seems feasible to 'catch' MOST (some would still slip through) of the really bad 'rejects', and it would go a long way to help their reputation.
The improvement in customer service and communication could cost more, depending on what changes they needed to make. Some would be cheap.
Having said "only $10" though, I know that the actual 'margin' per gun might be not a lot more than that, so they could truly be asking shareholders or owners to take a 50% pay cut with just that 'minor' change. In my office (family physician), our average per-visit charge is $150 or so, and insurance only allows us to collect maybe $100 total, of which they will make the patient pay about half - so we get $100 for what typically is a 30 minute appointment. The problem is that our overhead is typically between $3.00 and $4.00 a minute (and our office is NOT at all fancy), so on a good day, if we're efficiently operating at $3/minute, and the patient's visit is only 30 minutes long, we've used $90 to net $10. If that patient says "Oh yeah, I wanted to ask about my knee pain...", and we manage to 'only' spend another 4 minutes getting the additional history, examining their knee, and invoking some treatment plan, it changes to having spent $102 to net a NEGATIVE $2.00 (due to the 'cap' of 99214 office-visit coding, meaning we will be paid that same $100 unless the visit extends to over 40 minutes, and we can 'prove' we really needed that time, at which we may be allotted $120 - so we will still lose money). Thus I know from my own experience that that "tiny extra service" - spending a mere 4 minutes dealing with a sore knee - literally can bankrupt me, because it would be a 120% pay cut if I allowed that to happen consistently...!!! (Now you know why doctors make you take another day off work and return, or order some test you don't really need, just so they can justify getting you back 'to go over test results' and actually be PAID for the time it takes to thoroughly evaluate and treat your problem - at least the doctors who still 'accept' insurance.) Now at least Rossi, unlike us, has the option of simply raising prices $10, if they think the market will support that. (We are stuck with government/Medicare-proportioned fee schedules, and aren't even allowed to offer the patient the option followup via telephone for a reduced charge after-hours, so people don't have to miss work.) The question is - would we all pay $10 or $20 more for our Rossi's, if 99.9% of them were fine, vs. 99% - how many fewer sales would result...??? It's enough to keep the bean-counters speculating, for sure.
Anyway, just some thoughts on the economics of Rossi and their business. I hope they hone off some of the rough edges (literally and figuratively), and that they can manage to do it and still be profitable.