Defiance price increase rumor?

[Eric Stecker]

Knowing him as I do, if you sat down with Bob and talked hunting, you'd walk away from the discussion with a different opinion of the man.

 

[Eric Stecker]

For anyone who wants to know more about Bob Beck's back story and how things developed with McMillan and Defiance, watch or listen to the podcast linked below.

LRO Podcast Bob Beck and Eric Stecker.

There has been alot of questions flying around, so we sat down with Eric and Bob to ask them what you all wanted to know and see what the future holds for both Mcmillan as well as the newly acquired Defiance Machine

www.longrangeonly.com

 

[gbflyer]

Thank you Mr. Stecker. I can’t believe you can build them for $1600 retail or whatever it is and do anything but break even. There’s real money in machine work not involving firearms. Folks need to go check and see what the shop rate is at a machine shop before they decide the action or the barrel is too expensive. I appreciate companies that still do it, I don’t care who’s name is on the sign.

Edit:

Now go build us a damn scope we can drop!

 

[SDHNTR]

As someone who runs a business, I'm sure you can read between the lines that the conditions we face/d did not develop overnight. There was a real race against closure which we could do nothing about until we owned the company. When we did, we were compelled to act fast, or else.

I know the story you refer to. Do you have all the details or just the headline? There is a big difference between unlawful and unethical actions and what actual happened.

I'll offer that because I know the truth and can respond with it quickly, doesn't mean that I've "prepared" for anything. I just share what I know.

I’ve seen all I need to see in a handful of YouTube videos. There are certain personalities I know I will not jive with. Nor actions I wish to condone.

 

[Eric Stecker]

I can’t believe you can build them for $1600 retail or whatever it is and do anything but break even. There’s real money in machine work not involving firearms. Folks need to go check and see what the shop rate is at a machine shop before they decide the action or the barrel is too expensive. I appreciate companies that still do it, I don’t care who’s name is on the sign.

You can call me Eric. Thank you for your point and I'll add one thing to help people understand the situation. Defiance stopped taking retail orders mid last year. (This has changed as we are accepting retail orders now)

90%+ of the actions that were shipped and are still being shipped today go to builders who get 22% off. I get why people look at the retail sticker price and wince. $1,600 is a lot of money to anyone. If we sold all the actions at retail, they would be cheaper.

Getting the right mix so you can price products fairly across all customers is a real challenge for all manufacturers. When all products go to the biggest volume, deepest discount customers it makes it very difficult if your costing or pricing is off.

 

[Eric Stecker]

I’ve seen all I need to see in a handful of YouTube videos. There are certain personalities I know I will not jive with. Nor actions I wish to condone.

I respect your opinion and will politely disagree with your perspective. Holding fast to an opinion in spite of having new, different or more facts is a choice everyone is free to make. Happens every day. It doesn't necessarily reflect the truth, but it is certainly your choice.

 

[Clark33]

Was losing customers like GA the desired outcome?

 

[Eric Stecker]

Was losing customers like GA the desired outcome?

Certainly not but it was necessary. As I posted a bit ago, 90%+ of Defiance customers are getting the deepest discounts and until a few days ago, an individual shooter couldn't purchase a Defiance action even when they can afford it.

We are compelled to reduce the number of actions we send to builders if we are to supply any actions to individual shooters. We are also compelled to reduce the number of actions we send to builders if we are to minimize price increases into the future.

We are making tough choices during tough times. We wish GA the best. They won't be the only builder that stops using Defiance because we can't continue to supply them all.

We've also stopped all sales outside the USA for the same reason. We will fill existing orders, but we aren't accepting any more.

 

[SDHNTR]

I respect your opinion and will politely disagree with your perspective. Holding fast to an opinion in spite of having new, different or more facts is a choice everyone is free to make. Happens every day. It doesn't necessarily reflect the truth, but it is certainly your choice.

Due to your respectful post, I’m going to drop the matter, but suffice it to say there’s more to my opinion than just the poaching conviction.

 

[Eric Stecker]

I’m going to tell two stories. Both are true. I’ll try to make it brief.

A guy starts dating a girl. He’s 18 and she’s 17. The parents find out. They don’t like the guy, so they have him arrested for statutory rape. He is convicted, does time and is registered as a convicted rapist.

That guy ends up marrying that girl, they have 2 kids together and are still happily married. Holidays are awkward for sure but even her parents and anyone reasonable wouldn’t call this guy a rapist based on these circumstances.

A guy hunts 26 weeks (26 individual hunts) a year for 14 years all over the world. Hunts can be for 1 or multiple animals. Over this entire time and all these hunts, there is 1 paperwork mix up that finds them on a planned hunt for 2 animals but with only 1 tag.

The moment the guy realizes the mistake he turns himself in to the local warden and accepts whatever outcome is a result because he admits he made a mistake. The officials clear up the matter with no fanfare since there was no intent to do harm.

Some time passes and a reporter combing the records finds something he can spin into a juicy story to sell advertisement. He reports the headline “TV Host is a Poacher!”.

The guy immediately calls all the sponsors of the TV show (one of which was me) and tells them exactly what happened with all back up evidence and facts. His sponsors reviewed the situation, considered the facts and regarding what happened as a non-issue. He didn’t lose a single sponsor due to the facts of the situation.

Is this guy a convicted poacher? Technically yes. Does it mean that he acted with the malicious intent of a true poacher? Anyone reasonable including all the people who supported Bob’s TV show knows that he’s not.

To be a true rapist or poacher you must be a specific type of person with genuine intent to do harm knowingly. To put that label on someone who is clearly not that person, does them and their reputation a serious disservice that is unwarranted.

People can hold any opinion they want. I don’t see the world as simply black and white. My opinions change as the world changes and new facts emerge. I let people’s character and behavior tell me who they truly are, not the labels that others who don’t know the whole story thrust upon them.

 

[yej0001]

This is how greed ruins a good company

 

[woods89]

Thank you Mr. Stecker. I can’t believe you can build them for $1600 retail or whatever it is and do anything but break even. There’s real money in machine work not involving firearms. Folks need to go check and see what the shop rate is at a machine shop before they decide the action or the barrel is too expensive. I appreciate companies that still do it, I don’t care who’s name is on the sign.

Edit:

Now go build us a damn scope we can drop!

This is worth quoting. The general public is highly naive to what it takes to have and maintain a location, tooling, hire and retain good help, do some R&D, take care of warranty issues, insurance, taxes, and on and on.

I'm part owner of a small construction company. Way less overhead than a manufacturing facility, but it still would surprise most people.

There's a reason they say 90% of businesses fail in the first 5 years, and out of the 10% that survive, 90% of the those are gone in the next 5 years.

 

[Go West Old Man]

@Eric Stecker , I don’t usually talk up the hunting gear purchase decisions I’ve made or and what they cost me although I do enjoy this forum for the various first hand experience, advice, “research”, & opinions. Undeniably, I have been influenced by input here from others and thus I’ll share that in the past month I have ordered both a Defiance action and a McMillan stock (first build). My thought was that I was treating myself to some of the better build components available, and I placed orders irrespective of knowing corporate ownership, who bought a company, who the principals are, company news, etc. No clue as to who owns/runs McMillan & Defiance & now read just hours ago they have a commonality. Most I usually research is I’ll read the “About Us” on any company’s website. Always glowing, of course.

So, yes I did hear of the Defiance price increase but as poor of a decision as it may seem to some & with a lot of consternation I did not change my mind. Didn’t want to start over. Having said all of this, I’ll keep my fingers crossed and reserve judgement and opinion until I have the action and stock in hand. Hopefully this will be in a reasonable period of time and hopefully I won’t be disappointed! Whether your statement here or elsewhere is received well or not, thanks for stepping up to communicate.

 

[Kimber7man]

Certainly not but it was necessary. As I posted a bit ago, 90%+ of Defiance customers are getting the deepest discounts and until a few days ago, an individual shooter couldn't purchase a Defiance action even when they can afford it.

We are compelled to reduce the number of actions we send to builders if we are to supply any actions to individual shooters. We are also compelled to reduce the number of actions we send to builders if we are to minimize price increases into the future.

We are making tough choices during tough times. We wish GA the best. They won't be the only builder that stops using Defiance because we can't continue to supply them all.

We've also stopped all sales outside the USA for the same reason. We will fill existing orders, but we aren't accepting any more.

I will respectfully disagree with your first paragraph because individual shooters COULD purchase a Defiance action, through great dealers like Altus, J&A Outdoors, Piercision Rifles, Front Range Precision, and others. I know this because I did it...
Perhaps they couldn't purchase directly from Defiance, but other dealers were still selling.

 

[Flyjunky]

This is worth quoting. The general public is highly naive to what it takes to have and maintain a location, tooling, hire and retain good help, do some R&D, take care of warranty issues, insurance, taxes, and on and on.

I'm part owner of a small construction company. Way less overhead than a manufacturing facility, but it still would surprise most people.

There's a reason they say 90% of businesses fail in the first 5 years, and out of the 10% that survive, 90% of the those are gone in the next 5 years.

Amen to that. My dad retired a couple years ago as a machinist in the aerospace industry after 35 years and has done some consulting to a few big and small shops. Just the price increase in materials alone, let alone the upkeep on machines, and wage increases is huge. Retaining help is a big one right now as well in these smaller towns out west with the increase in housing prices. Many of these employees are getting priced out of their towns and getting new people in is almost impossible.

 

[Flyjunky]

This is how greed ruins a good company

How is it greed, please explain.

Would you rather have a good company shut its doors?

 

[Reburn]

I will respectfully disagree with your first paragraph because individual shooters COULD purchase a Defiance action, through great dealers like Altus, J&A Outdoors, Piercision Rifles, Front Range Precision, and others. I know this because I did it...
Perhaps they couldn't purchase directly from Defiance, but other dealers were still selling.

90%+ of the actions that were shipped and are still being shipped today go to builders who get 22% off. I get why people look at the retail sticker price and wince. $1,600 is a lot of money to anyone. If we sold all the actions at retail, they would be cheaper.

Its pretty easy to see what is going on here with some critical thinking using erics own numbers.
@Eric Stecker tell me if this is completely wrong.

Quick math is defiance was selling those actions at 22% less to the dealers at $1150 with 22% off for $897. With the dealers making $250 on the action.

Those dealers were selling to the public at deficance listed prices or more.

The dealers were basically making all the profit and getting all the actions since defiance has a set capacity and the dealers were ordering more actions then defiance had capacity. The dealer discount was probably rolled out when raw material was cheaper. Now that the profit margin has gotten much thinner they can no longer continue to operate at the agreed to dealer margins and need to make rapid and extreme changes to maintain the viability of the company.

They have raised the prices back to $1150 plus a $130 cost of material and labor increase.
Since $1645 less 22% = $1283.10
This is the real amount the action should cost.

This effects a 2 step program which is free capacity for direct to retail market that has better profit margin that they havent had capacity for by cutting dealer alotment.

If you dont like the action cost you 22% more then the dealers tell them. I personally think direct to consumer market is the now/future. I think jason hairston had it right long ago with that model.

Problem is with the down turn with the economy now is not the time to cut dealer ties and make a single price structure direct to consumer jump in an industry that direct to consumer isnt exactly possible due to the processes required to aquire a firearm.

Time will tell.

 

[Eric Stecker]

I will respectfully disagree with your first paragraph because individual shooters COULD purchase a Defiance action, through great dealers like Altus, J&A Outdoors, Piercision Rifles, Front Range Precision, and others. I know this because I did it...
Perhaps they couldn't purchase directly from Defiance, but other dealers were still selling.

Good point. You are absolutely correct. Individual shooters could and can purchase Defiance actions from our resellers. These resellers also get the 22% discount. My point in bringing it up related to product discount mix, the price we sell those products for directly and the impact it has on a company's financial health.

If every action Defiance had sold directly was at full retail (or even a good portion of them) we would not be the new owners.

 

[Eric Stecker]

Retaining help is a big one right now as well in these smaller towns out west with the increase in housing prices. Many of these employees are getting priced out of their towns and getting new people in is almost impossible.

You make several great points. The one I've highlighted above is a huge problem. Defiance is in an area that has a small population and is a regional hot spot for summertime vacations. The result is extraordinarily high housing costs and too few people nearby to fill all the jobs that the area has due to these circumstances. We are compelled to recruit nationwide for entry level roles. Tough challenge.

 

[Eric Stecker]

Its pretty easy to see what is going on here with some critical thinking using erics own numbers.
@Eric Stecker tell me if this is completely wrong.

Quick math is defiance was selling those actions at 22% less to the dealers at $1150 with 22% off for $897. With the dealers making $250 on the action.

Those dealers were selling to the public at deficance listed prices or more.

The dealers were basically making all the profit and getting all the actions since defiance has a set capacity and the dealers were ordering more actions then defiance had capacity. The dealer discount was probably rolled out when raw material was cheaper. Now that the profit margin has gotten much thinner they can no longer continue to operate at the agreed to dealer margins and need to make rapid and extreme changes to maintain the viability of the company.

They have raised the prices back to $1150 plus a $130 cost of material and labor increase.
Since $1645 less 22% = $1283.10
This is the real amount the action should cost.

This effects a 2 step program which is free capacity for direct to retail market that has better profit margin that they havent had capacity for by cutting dealer alotment.

If you dont like the action cost you 22% more then the dealers tell them. I personally think direct to consumer market is the now/future. I think jason hairston had it right long ago with that model.

Problem is with the down turn with the economy now is not the time to cut dealer ties and make a single price structure direct to consumer jump in an industry that direct to consumer isnt exactly possible due to the processes required to aquire a firearm.

Time will tell.

You nailed it. Maintaining the right product discount mix balance is a serious challenge when it comes to a company's financial health.

The thing that makes going totally direct difficult in my opinion in the Amazon affect. People want everything now and delivered to their door. In the moment the buying decision is made, if a product brand is not nearby and easy to get quickly then they switch to another product brand that is easier to get at the time. Quality and performance curbs this affect but it doesn't eliminate it. This is where our resellers earn their margin. They invest in the inventory so they can connect more quickly with those we can't.