Best way to make money buying and selling guns?


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joey93turbo
August 8, 2005, 06:50 PM
I've been thinking about this quite a bit, and I'm kind of afraid to ask this question because I think there might be quite a few negative responses for some reason. Well I'm going to ask anyway, since I've been thinking about it more and more lately.

I've been thinking about maybe starting a side business buying and selling guns. I've done a bit of research on the topic and from what I understand, if I wanted to purchase guns then say, setup a table at a gun show and sell them, it'd be legal. Now I'm not sure this is the way I'd like to go about this, I'm just saying. Might even like to get my FFL and start an LLC.

This would be more like a hobby for me than a business. I'm not out to make alot of money, just do something I enjoy. I sorta do this in my spare time anyway, but maybe only one or two guns per couple months.

I've thought about ordering a few guns from CDNN, AIM, ect. and selling them at a table at the local gun show once a month. You can't find a Sig around here for under $550 and if I were to only make $30-$50 per gun while giving someone a good deal, I'd be more than satisfied.

I'm just kinda thinking outloud here, and I'd like to hear peoples comments and suggestions. If I could do something I enjoy and offer a service to a community of people like myself, I don't see why I wouldn't.

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LiquidTension
August 8, 2005, 06:53 PM
Best way? Buy low, sell high :neener:

You might run into the problem of getting a whole bunch of people mad at you if you start undercutting the ridiculously high prices at gun shows. But then, who cares? If you can do it for that price, there's no reason they can't as well...except for poor business skillz.

Ian
August 8, 2005, 06:54 PM
I have no credentials to offer a reply, but it seems to me that there's more money to be made in ammo and accessories than in guns themselves. In addition, I believe you are required to get an FFL if you make any profit selling firearms. With ammo and accessories, you can avoid that regulation.

Greg L
August 8, 2005, 06:54 PM
:what:

Make sure that the ATF doesn't consider you an unlicensed dealer (& from what I've heard it is hard to get a FFL (01) w/o doing it as a full time business).

That said, I hope that you can.

rritter
August 8, 2005, 07:03 PM
Whether you consider it a hobby or a side business, if you're planning to regularly buy guns and sell them, you must have a firearms dealer license (Type 01 FFL). Otherwise the BATF is likely to shut you down, confiscate your inventory, arrest you, and charge you with several Federal felonies. It won't be a fun time.

Profit is irrelevant. It's OK to occasionally sell firearms from your personal collection, but if it even looks like you're dealing then the ATF folks are likely to charge you with being an unlicensed dealer. Whether you beat the charges or not, you'll spend more on lawyers than you could possibly have made selling guns.

If you want to do this, get the FFL first.

jefnvk
August 8, 2005, 07:13 PM
Two things to think about.

1) I believe that the ATF says a gun-show only dealer won't get a license
2) Can you make enough to pay for the table fees at a gunshow?

joey93turbo
August 8, 2005, 07:16 PM
Excellent advice, I'll look into getting the FFL first.

I see so many of these goobers at gun shows with HORRIBLE business and customer service skills, I know I could do much, much better. I'm not too worried about upsetting these people as long as I make the consumer happy, not the type of person I'd like to befriend anyway.

jefnvk - I believe it's only like $150/weekend.

itgoesboom
August 8, 2005, 07:18 PM
Joey,

While it is legal to sell a firearm within the state of Oregon to another person without a FFL, it isn't legal to do so at a gunshow, afaik.

If you intend to do this, and are trying to make money, you are going to need a FFL to stay legal, and to avoid complications.

I.G.B.

hobbeeman
August 8, 2005, 07:26 PM
I think it sounds like fun, even if you don't make money. I enjoy everyone that I meet, especially at gun shows. I do have a word of warning though. I met one of the unlicensed dealers at the last gun show that I attended that related to me his experience of the day. Apparently, a person from the State Comptroller's office threatened to fine him for unpaid sales taxes for the last year if he did not cough up several hundred $$ on the spot. I told him that it sounded like a con but he was convinced by her credentials and gave the "loot" to her. I am sure that there are many pitfalls, but we learn a little more every day.

Cesiumsponge
August 8, 2005, 07:38 PM
Keep in mind I have no experience at all and these are merely my observations.

I would look into buying firearms that will become discontinued, or will no longer be imported, or the company goes kaput. Guns like Saiga-12's, Steyr AUGs, Calicos have historically shown price jumps once you could no longer purchase them. Even things like Mateba, available in small quantities, went from $500 to asking prices to over $1500 from some individuals (which others occasionally pay). Buy at current market prices, and sell later when people wish to pay a premium for them and the surplus dries up.

You wouldn't be price gouging people. You'd just be offering the firearm at fair market value (post-unavailability). Sometimes, you'll find places like CDNN liquidating them and others dumping the remaining stock on the market, making them cheaper than usual. Give it a few years (or even in the event of the Saiga-12, 6-8 months) and prices can more than double, and continue to grow.

The latest one I can think of is the closing of the Ithaca company. Their firearms might go up in value shortly or they might just fade into oblivion.

You can also do the same thing with ammunition. 30-06 AP, Black Talons, and 7.62x39mm steel core stuff is selling at a premium...though they won't reap as much cash unless you have a huge quantity of ammo to liquidate.

Smokey Joe
August 8, 2005, 08:15 PM
Joey--One of my wife's great-uncles made his living for several yrs. dealing @ gun shows. It can definitely be done. Considerations:

1. First, get the 01 FFL. Uncle in any of his forms is the guy you do NOT want on your back. Next, get all yr Federal paperwork in order from the git-go and keep it that way. KEEP Uncle off yr back.

2. Establish yourself in your state as a business, and stay legal with the state, too. That means collecting sales tax, etc, if yr state does that, and paying business taxes, etc, on time and with complete records. Your State in all its glory, and Attorney General, Tax dept, etc, etc, is the second thing that you do NOT want on your back. Again, keep all your paperwork in order.

3. If you go into it to make a killing you will get killed, business-wise. They say, bears make money, and bulls make money, but pigs just get slaughtered. Cover yr expenses. Make a reasonable profit.

4. KNOW YOUR PRODUCT, inside and out, backwards and forwards. Then know your competition's product, better than he does. When Mr. Gunshow Expert comes to you with granddad's shotgun for sale, you have to be able to tell him where he's wrong on the value, show him the difference, and cite the reference books to back up your point. And do it with a smile.

5. Customer service will get you sales. Do you live near a Nordstrom's clothing store? Go there and buy something. They wrote the book on customer service. I've been in retail, working for the local 800-lb gorilla, and it got to be 800 lbs by knocking the socks off the customers with SERVICE! We outsold everybody else in our metro area, and got bigger every year, and the competition hated us but they couldn't touch us, because we treated the customer right, and the customers knew it. 35 yrs in business and still going strong.

If it sounds like I think there's a lot to it besides just standing around with people talking guns all day long, you're right, I do think that. And there are a LOT of unhappy people trying to sell at gun shows who it seems to me don't know the facts of life about running a business.

Oh, I forgot to mention the hard labor of setting up and tearing down every weekend, and driving 300 miles through the rain on a Friday afternoon and back on a Sunday the same distance. But that's part of the game, too.

Having said all those discouraging things, if you love firearms, or one kind of firearm, sure. You can make a living at it. Just go into the business with both eyes wide open. Enjoy your trip. Hope to see you at the next gun show I attend. :)

CaCrusin
August 8, 2005, 08:16 PM
The recent changes in federal law now allow someone who does not make a living or substantial profit from the sale of firearms to possess an FFL. Previosly, weekend and table-top dealers had to prove that they were "in the business" with formal business hours, etc.

You do incur some increased liability and exposure as an FFL hilder. The BATFE can enter your home (place of business) during certain hours without a warrant and inspect your records and inventory. They can do this during off hours after notification or with a warrant also. Congress has creaeted hoops that the BATFE must jump through to prosecute dealers but there is no shortage of eagerness on the part of some agents to "bust" a dealer for some error or mistake. You must comply with all federal, state and local laws. If you are found to be in violation of a local or state law or ordinance, you can be prosecuted federally.

Someone suggested that you buy guns and ammo that will be discontinued or from companies that are going to go out of business. If you are prescient enough to know which products and companies those are, then you don't need to sell guns for extra money. You would simply bet on a few horse races, buy a few stocks, and head for Las Vegas. Occasionally, you may find a big winner but most of the time, you sell a few guns and make a few bucks. Your money is tied up in inventory and your profut is sucked up in shipping and the time-value of the money invested.

Bottom line. If it's something that you would enjoy as a hobby and include your wife/family...go for it. If it's just another way to make a buck, you'll probably end up hating the gun business.

Been there...I was a dealer for 31 years.

CaCrusin :cool:

Sunray
August 8, 2005, 08:29 PM
"...ordering a few guns from CDNN, AIM, ect. and selling them at a table at the local gun show..." You won't make any money paying retail prices for your stock.

Standing Wolf
August 8, 2005, 09:00 PM
I see so many of these goobers at gun shows with HORRIBLE business and customer service skills, I know I could do much, much better.

I think you'd probably have to work at it to do worse. That saidô, I'd have to wonder whether there's enough profit in firearms, ammunition, and accessories to make it worth your while. If you're any good as a salesman, you could make lots more money elsewhere.

jefnvk
August 8, 2005, 09:02 PM
jefnvk - I believe it's only like $150/weekend.

That is not too bad, then. But still, you have to sell 3 guns to break even.

I could see a market for affordable C&R's there. When I see $149 retail Russian capture K98's going for $250, I cringe. If there were some $199 Russian capture K98's I could look at in person at the gunshow, I'd probably buy one.

logical
August 8, 2005, 10:19 PM
A few random thoughts:

Not sure if it's federal law, state law or show venue policy....but around here a non-FFL can't set up a table and sell guns at a show.

If you don't have an FFL, you would need to use a FFL every time you restocked which would wipe out any profit.

If you are buying with the intent to sell....you are dealing...and that requires an FFL.

I don't think getting an FFL is so easy without a physical store. even if you designate it as a home business, they require you to get a local business license...and not all municipalities will license a home-based gun dealer.

saddlebum
August 8, 2005, 10:31 PM
guns are more fun as a hobby than they are as a job.

Pilgrim
August 8, 2005, 10:39 PM
I've thought about ordering a few guns from CDNN, AIM, ect. and selling them at a table at the local gun show once a month. You can't find a Sig around here for under $550 and if I were to only make $30-$50 per gun while giving someone a good deal, I'd be more than satisfied.
I suggest you develop a good idea what it costs you per weekend to engage in this gunshow business so that you know how much you have to make per sale to at least break even. Don't forget the hidden costs such as increased wear and tear on your automobile, meals on the road and lodging.

You will be self-employed, even if it is a sideline of your life. Make your quarterly estimated tax payments, and don't forget self-employment (Social Security) tax. If you have to collect sales tax, make those payments too.

Pilgrim

pete f
August 8, 2005, 10:46 PM
same as farming

if you want to be a millionare at farming, start with two million.

pete f
August 8, 2005, 10:51 PM
seriously you also need to learn what it costs you to get a table, liability insurance etc. you add it up you all of a sudden find out you need to sell 19 20 guns just to break even

CentralTexas
August 8, 2005, 11:01 PM
or research this on their website. I'm pretty sure if you are buying guns JUST to sell for a profit you would have to be an FFL holder.
CT

DCR
August 9, 2005, 01:58 AM
Forget the Blue Book or other so-called "reference" material; they don't tell you what a gun is "worth." The market dictates that, and having been in the game for 30 years, I can tell you nothing is more annoying than an "expert" who packs the blue book around and tries to argue the relative worth of guns, particularly at a gun show. Reading a book on how to play tennis doesn't qualify you for Wimbledon.

Study the market: what are guns wholesaling for? What are the "dealer to dealer" prices? What have they gone for on Auction Arms or Gunbroker? Go to gun shows Friday nights as dealers are setting up, note their prices, check again Saturday and Sunday to see if they've sold their guns. Figure they'd probably allowed 10% off their prices if the guns are gone; that's pretty typical.

Stick to used, older models - there's more money to be made in used Winchesters and Remingtons (discontinued .22's and bolt-action hunting rifles pre-64) than in new stuff. Don't buy or sell a gun considering the value of a scope if it comes with one. Buy it low, strip the scope off, and sell them separately. Learn the ins and outs of every gun you're going to have in inventory. Build guns from parts, but don't expect your labor to make the finished gun worth more than its market value. Stay away from super custom stuff; straight-vanilla guns outsell custom or fancy stuff 20 to 1. Oddball calibers are only worthwhile if they're from a well-known manufacturer (Winchester, Ruger, Savage, Remington, and the like). Stick to basics, cheap (relatively) to shoot and easily-obtainable ammo make it easier to sell a gun to anyone but an afficionado or collector. Foreign stuff is a niche market; don't expect it to fly off the tables.

Remember the names of everyone who buys from you and what gun(s) you've sold or traded with them. Reward repeat buyers with a better deal. And don't EVER be afraid to say no and walk away from a transaction.

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