The Demise of Local Shops


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HarryRod
July 2, 2003, 07:00 PM
After spending part of my day off today browsing through my two local gun shops i realized why more and more people, including myself, are turning to the internet to buy their firearms.
They were so overpriced as to not even be funny. I can deal with that if they are willing to haggle a little bit but they act as if you are asking them to trade throw their first born in on the deal.

The first that i went to is known to be high on their prices so I expected very little. They had a NIB S&W/Walther PPK/S in the cabinet for $599. I almost fell over when i saw the tag. After talking to them for a few mintues the lowest i could get them too was $579 and "that was at their price". They also had a Rock Island .45 Govt. model for $439.

After walking out of there in disgust i went to our other local shop which has a much larger selection but i think i must have "please screw me" tattooed on my head when i walk in there.
The first thing that i saw was an Custom Eclipse II....i thought that had potential till i saw that they wanted $900 and wouldnt budge on that price.
I searched some more and found a decent looking CS45 but gasped when i saw that they were wanting $599 for it. I was told that they would sell it to me for their price of $549 plus tac and that was as low as they would go.
I see these things regularly going for around $400 on gun broker and this one had a half inch of dust on it from sitting there for so long.

It is things like this combined with the monkeys that they have working the counter, One shop here has a salesperson who is fond of spinning the cylinder and flicking it shut on revolvers, that are the reasons i have all but quit doing business with our local shops here in N. Alabama. Is this the same kind of things that you guys are seeing in other locations? I know that this is a hard business to run but come on, how can you expect to be taken seriously and sell ANYTHING when you do business like this?

Sorry bout that, i just had to rant for a bit.

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BallisticTip
July 2, 2003, 07:17 PM
Have to agree with you to a point of the gun monkeys, went to a big local shop, and asked to check out a 1911 .45, when the gun monkey took it out of the case he cleared and checked the weapon, while pointing it at my chest !!! I unloaded on that gun monkey about safe gun handling, and I will not go back to that shop.

On the other hand I try and support the small local dealers.

4v50 Gary
July 2, 2003, 08:17 PM
Most guns I buy, even from a dealer, are used. Affordable and I can work on it myself.

euclid
July 2, 2003, 09:00 PM
I have found that once you add in shipping and ffl fees the price difference between the online auction houses and my local dealers gets considerably smaller. The local shops still charge more but at least I can paw the firearm I am interested in over and take it back more easily if something goes wrong. Also, local shops will allow me to place something I am interested in on lay-away. An online broker typically wont do that.

That said, I still purchase some of my firearms online.

cheers

bad_dad_brad
July 2, 2003, 09:23 PM
I live in a community of about 120,000 thousand people. We have only one really reputable local gun dealer. All the rest have died out. He is competitive, has knowledgeable staff, and it is a small store that also delves in fishing and archery. Last of breed, because they are service oriented, I am very loyal.

We got big Gander Mountains and Gaylans close by, but I will stick with what I know. And the price, even online, is not that different and not worth the extra hassle.

MoNsTeR
July 2, 2003, 10:02 PM
If the internet price plus shipping and transfer becomes competitive with the local price plus tax, you don't have it so bad. On the other hand...

Beretta 92G Elite II
'net NIB price: $725+$25+$25= $775
local NIB price: $850+7.3%= $912.05

STI Eagle 5.0
'net NIB price: $1615+$25+$25= $1665
local NIB price: $1800+7.3%= $1931.40

Colt 1991A1 new rollmark blued
'net NIB price: $550+$25+$25= $600
local NIB price: $630+7.3%= $675.99

SIG P226
'net NIB price: $650+$25+$25= $700
local NIB price: $750+7.3%= $804.75

CZ 75B
'net NIB price: $340+$25+$25= $390
local NIB price: $430+7.3%= $461.39
(though I have seen these on sale for $300 once or twice)

Never mind the stuff that no one around here bothers to sell at all...

Then add the plethora of great used guns listed on the various forums, GunsAmerica, GunBroker, and AuctionArms, and compare those to what I typically find locally. S&W 686 with no M stamp that looks like it was run over by a truck, $400. Rebuilt G19 with one 10rd mag, $450. Colt King Cobra with a bent ejector rod and lockup so loose it rattles, $350. Remingon 1100 LT-20 with a broken sight rib and the bead gouged off, $400.

Yeah. HOORJ FOR THE INTARWEB!!!

Zundfolge
July 2, 2003, 10:06 PM
"that was at their price"

I hate shops that pull that crap ... NOBODY SELLS AT "THEIR PRICE" EXCEPT AT GOING OUT OF BUSINESS SALES, even then there's usualy a couple of percent markup.

Don't pee on me and tell me its raining. :scrutiny:

Arub
July 2, 2003, 11:22 PM
I'm in Lower Alabama (Dothan area). Most of the smaller dealers are highly competitive (Howell's, SOS, Hardens[Newton], Pawn City, The Outpost). I have bought almost all my handguns for Hardens and Howell's. We also have the "Den of Theives", a relatively new gun shop, selection excellent, which prices their wares about $100 more than the others. They survive, I guess, because of their availability of both handguns and long guns. People who aren't willing to wait for the other, more reasonably priced, dealers buy to satisfy a craving.

I have had no need to buy ala net. Add shipping and handling plus FFL to the net advertised prices, and I can definately save by buying local.

Standing Wolf
July 2, 2003, 11:54 PM
Most of my local gun shops seem to think I'm stupid enough to pay sucker prices. I think they're stupid enough to go out of business.

Penforhire
July 2, 2003, 11:58 PM
I don't mind paying maybe 10% more than mail-order-plus-shipping to support a local retail shop. There's a tiny shop near my work that gave me a free 38 Special A-Zoom snap cap (my 686+ takes 7) rather than sell me the whole package I was willing to buy. They don't know me at all but I'm certain to buy my next 'something' from them for that gesture of good will.

But you also got that monkey comment right. A kid at another shop was showing me a folding knife I was interested in and ended up closing it on his finger. He was tough though. Didn't make much noise but I winced. Not too smart though. I could tell right away it was a deep cut but it took one of the female employees to convince him to wash and bandage it (he was starting to drip and must've thought it was macho).

jims98z28
July 3, 2003, 12:43 AM
I know what you are talking about. I've been shoping around for a Ruger for the past week and I've been to 3 local shops. The first shop was selling a used all blue P89 for $325 and a used all blue P95 for $350. The 2nd store had a stainless used P95 for $315. Both stores were selling them new well over $400. I went to the 3rd store and got a brand new P89T for $329. About $100 less than the other 2 stores and about the same price as the used ones.
I guess I am lucky that we have that one store that seems to have fair pricing.

makdaddy03
July 3, 2003, 02:23 AM
My local gun shop closed its doors 6-30-03. The owner didnt drop his prices at all. Now there is only one shop in my county and its a pawn shop that sells "New and Used Guns" at reasonible prices. But I have a feeling that that is about to change with no competition in the neighborhood any more.:(

capt_happypants
July 3, 2003, 06:06 AM
FWIW, the Internet allows customers to snag some incredible deals, and local gun shops can use the FFL transfers to generate new business.

Some THR members use Blast-O-Rama to receive FFL transfer guns. It's quick, easy, and the $25 covers our expenses. The smart shops use this opportunity to add on holsters, ammo, spare magazine, books, or gunsmithing. Eventually, the customers who buy over the Internet will buy locally, too - the opportunity exists.

I happen to know of the King Cobra with the bent ejector rod. Let's just say that it will be a permanent resident in the Blast-O-Rama display case.

Spot77
July 3, 2003, 07:07 AM
What is Blast O Rama?


I've had great luck on prices in my area, considering Maryland is ALWAYS higher than most other states.

We have a lot of choices within driving distance. I just have to be patient and not "jump the gun" (nice pun, huh?) when looking to seriously buy.

MoNsTeR
July 3, 2003, 10:51 AM
Admittedly that King Cobra is on consignment, and I'm sure the staff at Blast-O-Rama informed the poor misguided soul that it wouldn't sell. Consignment prices seem to be much more sane on average, although there are still a significant number of wackjob prices.

Classified00
July 3, 2003, 10:55 AM
Hello all,

This thread is timely. I spent yesterday shopping for a new Glock 19. The prices I found ran about $100, or so, more than what I'd pay at a show. I'm a "knife guy" too and it's the same in that industry. Brick and morter stores, unfortunately, are pricing themselves out of business.

I realize that B&M's have significantly more overhead but in this age of the internet where customers know dealer costs and have literally unlimited options for buying, the B&M's will have to eventually evolve or perish.

The truely sad thing is that if just one of the stores I visited had dropped the price to about $40, or so, above rock bottom they could have had my money. I would have been willing to pay a bit extra to support a local dealer and have my gun now. Instead they made $0 profit off me.

The good news is, I may have found what I'm looking for at the right price :)

Brent...
:scrutiny:

tetchaje1
July 3, 2003, 11:19 AM
I buy both ways -- frequenting both the shops and the internet when I am interested in purchasing a new toy. In the end I have purchased at least half (probably more like 75%) of my guns from local shops when they have had good deals. Then again, I live in Utah so there is no shortage of shops to frequent. :p

Some gun stores are consistantly more expensive than others, and as a result I don't buy from them. I would give all shops an equal shake if they were willing to price their firearms competitively with other local shops, but if they don't, and they are unwilling to haggle, they don't get my business. I will buy accessories or ammunition from them, though. (With the exception of two local shops here who also charge $3-4 more per box of ammo than everybody else... :rolleyes: )

foghornl
July 3, 2003, 11:47 AM
I tend to poke aound a bit on the 'net, to get an idea of what's available at what price.

But then I get it at my local gunshop. Why? While prices are a bit higher than the 'net, I prefer to keep my local guys going. And my local guys are courteous, professional, and will be around to help me if I have any issues with said guns.

Last time I looked, NIB Ruger KP-90 was $429 in local shop.

dav
July 3, 2003, 12:02 PM
foghornl wrote:
But then I get it at my local gunshopThat's how I usually do it, too. My local shop is also my indoor range. I know them now, after dealing with them for almost two years. They know me, and what I need. I can't buy used, don't know enough about what to look for. But some of them do, and steer me clear of the consignment junk.
I tell 'em upfront I'll pay their prices, just because I want them to stay in business. It can be really hard to find somewhere to shoot here in the PRK.

But not ammo. I couldn't afford to shoot if I bought all my ammo from them.

braindead0
July 3, 2003, 12:09 PM
A shop up in Cleveland had $399 marked on a hi-point carbine, must be catering to idiots at that store.

Boats
July 3, 2003, 12:45 PM
Here in Salem, Oregon it was Sportsman's Warehouse, not the internet, doing in the overpriced locals. Four that I know have gone under in the year and a half since SW did the Wal-Mart thing on them.

Of course if one does not diversify to carry that which a big box retailer does not and then prices unrealistically in a market where the wholesale prices are pretty much a known commodity, one deserves to perish for gouging and inflexibility.

My problem with the internet and warehouses blowing away competitors is that it gets harder to find FFLs for internet transfers.

Sheslinger
July 3, 2003, 01:00 PM
if we are looking at something C&R that you can only find online, we go that route. Also, I don't mind paying a bit extra to keep the local shop open but it really depends on the price difference. With 9.75% sales tax, when you are looking at $700-$1000 gun that is overpriced at a local shop, it matters. The average price difference on Kimbers we looked at after all said and done was around $200-$250. That's way too much, don't you think?

Now, if we are looking at something in $300-$400 price range, $30-$50 price difference is acceptable.

Sheslinger

W Turner
July 3, 2003, 04:44 PM
Hey Harry...... I don't know where you are in AL, but there is a good shop in Florence that has been there for quite a while. Prices on new glocks are kinda high, but with shipping and transfer fee match up well with the internet guys. There is also one in Decatur that is decent, just don't ask the counter guys for advice.....:barf:

LiquidTension
July 3, 2003, 07:02 PM
In another thread on here a few weeks ago, there were some people complaining about customers that come into their shops wanting a deal. My response was similar to those here - I'll spend a little more to support the local guys, but not excessively more.

Dealers that say "that's our price" are either lying or don't know about computers and the internet. If I can get the same thing for cheaper withOUT an FFL, how come they can't get it WITH an FFL??? Like I've said before, the shops here in Columbia all know me now, and they know that they can either cut a deal and make some money, or not cut a deal and I'll walk. Sometimes they just can't give me the price I want, and I understand that. There is one store in town that isn't willing to negotiate (Wateree Arms on Garners Ferry) with me, and they're also the only shop I haven't bought a gun from. EVER. I've bought at least 3 firearms since Wateree opened. That's three chances they've missed to make some money, just because they want ALL the money instead of SOME money :rolleyes:

If store owners would get it through their heads that lower profit margin = more sales (enough to make up the difference and then some), they wouldn't go out of business. Besides, just like in any other retail store, the real money is in ACCESSORIES, not in the main product.

michiganfan
July 3, 2003, 09:05 PM
Bought a glock 33 this week at Galyans. It was 494 with tx. they got a deal where you sign up for thier credit card and get 10% off. The same gun at my local gun shop is $619.

SodaPop
July 3, 2003, 10:33 PM
I can't handle the price of ammo at my gunshops. I see boxes of 45acp going for $18-$20 (winchester, American Eagle,Magtech) and about fall over.

I'd buy ammo from my local shops if they didn't double the cost of ammo. I'm sure these dealers can get AE ammo for about $8-$9 a box but marking it up to $18 is absurd. I would have bought cases of ammo from these guys if they had reasonable prices.

Instead, they get NOTHING!

JOE MACK
July 3, 2003, 10:38 PM
HeeHeeHee, I can buy any firearm off the net (Ca. DOJ approved or exempt), for shipping and DROS fees aside from the price of the firearm. I've known the people for 25+/- years, hunted with them, and have a meal at their place about once a week. Can't beat that with a big stick! :neener: RKBA!

six 4 sure
July 4, 2003, 12:39 AM
WOW. I guess I'm one of the lucky ones. My local shop is great. I know they've gotten me for $10 here or there on trades, but that's acceptable for me. However, I've spent enough time an money there they let me behind the counter to play with anything I want.

I have found over the years the more business I do the better deals I get. I've done really well on multiple gun purchses, and buying this time of year when things are a little slow.

six

dksck
July 4, 2003, 01:15 AM
I wish that I could explain the situation in a manner that you folks would believe and accept, but I've tried before and failed. I'll try one more time and maybe find some success. I've worked for both large sporting goods chains and small private shops, all but one of which have gone broke. Here is the real story from the inside. There are essentially two routes for a retailer, large or small, to acquire new firearms: 1) from the manufacturer; or 2) a distributor. Buying from a manufacturer has several problems. First, you probably will have to provide the manufacturer a complete financial statement, regardless of how you are going to pay for the merchandise. Second, you will required to purchase a specific amount of merchandise to qualify as a direct dealer, and that may be divided into catagories so you are required to include merchandise you know you can't sell. Third, even if you qualify as a direct dealer, you will be placed into a catagory depending on how much you sell, and will be offered new items and discounts accordingly. Fourth, some manufacturers have protected areas which means that you might not qualify no matter how much you want try because somebody else already has that area. Fifth, just because you're direct with a manufacturer doesn't mean you will get good prices, because you will find distributors sometimes underselling manufacturers. Yes, I know it's hard to believe but it happens all the time. This leads to the second route for purchasing new firearms--distributors. In ther entire US, there are only about a dozen large firearms wholesellers and maybe two or three dozen medium or small wholesellers. First, that means your options are pretty limited. If you are a small shop and a customer wants a specific firearm, it isn't unusual to call all of them. Yes, you have to call them. That leads to the second problem. Even if you are linked to the distributor by computor, there is no guarentee that the inventory shown on the computer is actually there. Third, even if you find distributor with the lowest price for you, that doesn't mean it is the lowest price for other dealers. Distributors have a price and availabity structure that ranks dealers. The distributor may have the item you want but it's on "allocation" which means only the biggest dealers get it and then often they have to buy lots of other stuff. Fourth, if you find what the customer wants, unless your order reaches a certain dollar amount, you'll probably have to pay for shipping and most of the distributors use UPS or FedX which means at least $25 to the cost of a single pistol. Fifth, the small dealer can't compete with places like Wally World, Dick's and Bass Pro on things like ammunition because the big places use them as loss leaders. The big places often sell ammunition for significantly less than the wholesale cost from the distributor even before shipping.

What all this boils down to is this. Let's look at a new Glock. The last shall shop I worked for operated on a 10% margin, but in reality it was less than that. We were a master Glock dealer, but we seldom bought from Glock because of price and quotas. The cheapest we could find new Glocks was was between $410 and $430. Distributors would call and tell you they had a hot sale on Golcks which would mean $407. To them three dollars was supposed to be a big deal!!!! Well, if we bought some for $407 and some for $430 and marked them each up 10%, there would be different prices on the same item. To be consistent we usually sold Golcks for $430 + 10% + rounded to the nearest $9.95 = $479.95. The first problem was that people would always want us to come down. Generally they would offer $450 and expect us to be happy making $20. When we we honest and told them that would leave us with only $20, they thought we were lieing. Then they would say, well, at least don't charge tax. That was another 6.5% which meant our profit was something like 3.5%. The second problem with that is you can't make enough even at 10% to cover the overhead of a shop but if you charge more the customers think you're too high because "we got computers too ya' know!" During the summer months, Glocks dry up and you may have to pay $465 wholesale. But our customers knew we sold them the rest of the year for $479 so they either wouldn't buy or buy and never come back because we "robbed them." At one time we actually paid more than $479 for some and tried to sell them for $529. They just sat there and we eventually sold them for less than we paid for them. In another case, a good customer quit using our shop when we refused to give him the manufacturers coupon that came with a special pistol he had ordered. The coupon clearer said it was for the retailer to use, not the consumer, but this guy had a friend who had purchased one from a kitchen talbe dealer and that guy left the coupon with the gun, so our guy wanted it too. The point is, even when the manufacturers try to give the dealer a break, it often doesn't work. The bottm line is that unless you find a local dealer with whom you can develop an honest, fair relationship, the small dealers will continue to disappear until there aren't any and you won't have any body to receive your great internet buys. I hope that helps make things a little clearer. If you have any questions you think I might be able to answer, please ask.

smokshwn
July 4, 2003, 02:44 AM
Just to chime in I am in wholehearted favor of supporting the smaller shop that offers me support. The problem is that in my experience the small shops that offer good service and selection are very few. Most seem to be populated by various types of idiots, ie. the tactical wannabe who is outclassed in stupidity only by a rock, the single minded oppressor who doesn't want to sell you what you want only what he thinks you should have ("you can't possibly defend yourself w/ anything less than a .45") , the know it all who doesn't ("Glocks dont have safeties") and the many other irritating personalities who hinder your experience. That being said the only difference between either large stores or the net becomes price. I would love to have a small shop to go visit, shoot the poop, and hang out in, but there aren't any in my neck of the woods.

S_O_Laban
July 4, 2003, 02:49 AM
Dksck, interesting post, and welcome to THR:) I have wondered too about the lack of good local shops and would be very interested in hearing from other industry "insiders" on their take on the current state of running a gun shop ect... Maybe I should start a new thread on the current state of gun shops ect...?

pinetree64
July 4, 2003, 07:23 AM
To work at many of the shops around metro Atlanta, you have to have a large chip on your shoulder. I buy most my guns at gun shows. I also just applied for my C&R license.

tjg

Spot77
July 4, 2003, 08:18 AM
Dksck raises some good points, however the pricing/distribution problems described are inherent in many retail trades, not just the firearm trade. I'm not a business expert by any means, but I have worked in retail, wholesale and commercial/government sales for over 15 years and I've gained quite a bit of perspective.

Here's an example of how my employer's (a Fortune 200 company) distribution works.

1. We manufacture 98% of our own goods in our own plants.

2. The plants then mark up the product 40+ percent to OUR OWN distribution centers.

3. The DSC then marks th products up another 40 percent before shipping to the retail and wholesale stores.

4. At the retail/wholsale stores, we are expected to sell in high volume at 30 to 50 percent markup.

And guess what? Our SERVICE and QUALITY of employees lets us sell to over 70 percent market share in most of the United States even though our prices are higher and competitors constantly try to lowball our customers.

BUT, don't EVER think that that is what you HAVE to pay. Distributors CAN and WILL give you (retailers, small stores) price breaks if you demand hard enough. Sales is a competitve business, and no manufacturer or distributor wants to lose business because of price. Even if they don't want to discount the item, they can usually find an accessory to throw in for free, or some other way of making the deal a little sweeter.

I realize firearms have a lot of taxes and fees imposed on them and there's nothng we can do about that. But I really believe that demand would increase incredibly if prices weren't so outrageous. I'm ready to buy a new 9mm soon, but I won't untill I find the perfect deal. In the meantime, I'm already aching for a new revolver. So there's two guns I'm ready to buy, but I probably won't even get one in the next two months.

This gives me a headache. I'd rather shoot with no ear protection. :confused:

pesticidal
July 4, 2003, 09:47 AM
I've bought a half-dozen new handguns over the past year or so. I frequent two differnt in-town shops, and I've given them every opportunity to "sell" me on their products. I wasn't looking at having them match the web pricing. I did, however, wanted to be treated like a qualified customer.

When I was looking for a SW1911, one store told me they weren't available yet, and wouldn't even give me a price. The other store was at least honest, and told me they were having a hard time getting them in. Their price was $849.00!

I got one off of a web auction for $631.00, plus $43.00 for shipping and FFL transfers. That's quite a difference, and I couldn't justify the gap to buy locally, which I'd prefer to do. I didn't even figure on the difference of the sales tax.

I also saved about $125.00 on a Glock 17. The local stores wanted $575.00 for one, and I got a NIB 17 for $435.00, plus transfer/shipping.

I figured I've saved enough to get another handgun for "free". Now, what to get? Hmm. I'm turing 50 this year. Maybe a SW500!

:D

Nando Aqui
July 4, 2003, 10:09 AM
I have worked in the manufacturing industry for 40 years at seven different companies, ranging from General Electric (largest - revenues of around 40 billion?) to the smallest with revenues of about $3 million. Their profit margins usually have been between 3% and 10%.

Example of what 'we' normally are not aware of:
My washing machine motor failed after 13 years (supposed to last 10), so I called the repairman. He said $120 for the motor plus labor of about $50. I said, "no thanks, I'll fix the motor." To which he responded, "they can't be fixed."

Well, I knew better. I had designed the equipment that manufactured the motor, and had designed parts of the motor. So I fixed it.

BUT, that motor that he wanted to charge me $120 for was sold by my company to the distributor for $20 with a profit of $1 to $2. So someone(s?) made a lot of money in between.

About My Gun Dealer:
I buy my guns almost exclusively at Mike's Gun Shop in St. Charles, MO. It is not a large shop, but it has excellent selection and very knowleadgeable and courteous people.

I have not been able to find a lower price on any new gun, and when I compare his used gun prices, he is always about 5% to 10% lower than anything I may see listed in the web, any publication, or at the shows.

If I order a gun from another dealer (such as 'that special' M1 Garand), Mike charges me $20 and that is it. His prices couldn't fairer, and yet his business is doing well (I think.)

Remember, McDonald's profit on the billions of hamburgers the have sold is a penny or two; but billions of pennies do add up to millions of dollars...

Alex

dksck
July 5, 2003, 04:04 AM
Dear Folks:
Thanks for your replies and thoughts about local gun shops. I've even thought about writing a book, "Great Gun Ships I Have Known" or something like that.

The firearms business is unlike any other retail business. In fact, one large chain I worked for went broke soon after hiring a bunch of "big box" business types who were going to show us how it should be done. I can remember one of these guys standing at my counter looking at the hand guns and telling me that it was just like selling washers, dryers and refrigerators. It isn't. First, firearms are largely seasonal. I can't speak for most areas, but in my part of the country the season begins to pick up in September and peaks in the days before hunting season opens and then again immediately before Christmas. This cycle leads directly to the second problem for the small shop. That is the period of peak demand doesn't match the period of availability. Generally, the way it works is all the manufacturers gear up for the SHOT Show in January or February each year. All the sales people for each manufacturer have the distributors and large retailers who want to buy their products line up. Now you have to realize that the production numbers and schedules have already been set and that information isn't always shared with the sales department. Let's say, for example, you're a small shop and believe that over the course of the coming year you can sell 25 unites of a new model from Brand X. That is such a small order, it's doubtful that it will be filled, but you won't be told that. Once again, generally what happens is Brand X has already determined that a total of, for instance, only 1000 units will be produced. It's possible that a large distributor will buy them all. This often happens with the result being that the distributor who gets them has a monopoly and gets to set the wholesale price. Buy Brand X won't tell you that so you keep telling your customers that your shipment should arrive any day. They never do arrive and you have just made your customers made your customers mad. If some big retailer or distributor doesn't get theirs first, you might get yours, but here comes another problem. When you ordered them, the salesperson said they were to be manufactured in May for June delivery. Well, May comes and goes as does June and July. After dozens of calls to the salesman, you're reassured to learn the shipment will arrive before hunting season. Hunting season comes and goes and still no shipment. You make more calls and are again reassured they will arrive before Christmas. The weeks before Christmas see your customers panic because the item still hasn't arrived but their Uncle George in Walla Walla just saw the item at Cabela's. They finally arrive January 4th which means nobody wants them and you have to pay inventory tax!!! Now let's try the same purchase through a distributor. You're too small to purchase from Brand X directly, and Distributor Z has the entire current production. MSRP on the item is, let's say $500. You call Dist. Z and are asked for your account number. Let's say things go well and you actually have an account number, but your a small dealer so your account shows only $100,000 in purchases in the last year. Your salesman the explains that the item you want is "allocated" and you're not a big enough account to get the chance to buy one at this time. Forget about price, you simply can't have one. But when some more come in and they are more readily avalible, he'll call you. In spite of your frustration, there is nothing you can do. So you wait and two months later you get a call. Your salesman has one or two units and he can let you have them for $469. Well, remember MSRP is $500 which means you have to sell it at full price and still won't make your 10%. Not to mention the fact that the customer who has been waiting for this thing has already told you one of his relatives saw the item at the big store near his home for $439. Being bold, you mention this to the salesman, and ask him if he can't do better on the price. He laughs and hangs up. This sort of thing happens all the time in the firearms industry. I can't think of any other retail business that has the same problems.
1. Production and availability extremely limited
2. Production and distribution cyclical
3. Demand seasonal
4. No coorelation between advertising, production, distribution within each manufacturer
5. No correlation between production and demand cycles
6. Some manufacturers demand direct sales, reserved sales territory
7. Some manufacturers discourage direct sales, no reserved territory
8. Extremely small profit margins in most cases
9. Federal, state & local laws require compliance for shipping, sales and storage
10. Nationwide chain stores competing with single shops.
11. Liability insurance unrealistic -- cost prohibitive in most cases
12. Low pay for employees without benefits means poor cust. service

And there are probably things that I'm forgetting. Hope this offers some insight.

Spot77
July 5, 2003, 08:07 AM
Wow...that was some great insight.

So I guess to sum up two of the major points:

Gun Manufacturers are making TONS of money. Possibly stockpiling money to defend against these idiotic lawsuits, I suppose. The manufacturers are taking so much of the profit that the market won't bear prices any higher than they are now, leaving the retailer with little room for profit margin.

Supply can't meet demand. Again, could this be because of the lawsuits claiming that manufacturers have flooded the market with handguns in the past? Or has the demand increased dramatically ? (I suspect it has since the new world order after 9-11-01)

I never thought much about the seasonal conditions. I assumed we were mostly speaking of handguns since I can get a rifle virtually anywhere.

I think I'll celebrate our independence today and buy me a new firearm.

God Bless the USA.

Traveler
July 5, 2003, 10:07 AM
Just to add a couple of points...

1. Looking at corperate net profits as a point of comparison is flat out stupid. Yes, most companies run at 3% - 10% profit margin. The point is
that a 10% gross profit is not enough for a company to survive on. As a point of fact the average manufacturers cost (worldwide) is usually 1/5th of their price. (It goes without saying that such a margin on firearms would give the majority of this board a coronary).

2. Federal law prevents firearms manufacturers from owning distributors (just like alcohol). It also states very specific regulations which limit direct purchase.

3. Anyone who thinks that firearms manufacturers are making tons of money should take a look at their financial statements. At a time when corperations are paying Billion dollar fines it took over a year to find anyone who would buy S&W for a lousy $26 Million. (And that was with government assistance).

4. Those shipping costs that everyone thinks are just for ffl transfers also apply to your dealer; and he has to pay them up front whether anyone buys or not. And yes, he has a right to expect some profit on that expense.

5. Supply can and does meet demand. In fact the only real limit to the sales of new guns is the point where it becomes profitable. When a company says it can produce a product at such and such a price and the market says that the cost is too high, than it is demand that is the problem, not supply.

Folks, it's real simple. The retail cost of handguns has gone up approximately 20% in the past 30 years. (Don't believe me? Look at the suggested retail in the back of a Shooters Bible.) At the same time the cost of an automobile has gone up over 400% on average. In that time 4 out of 5 gun dealers in this country have quit business because it wasen't profitable enough. The writing is on the wall.

telewinz
July 5, 2003, 11:19 AM
Years ago I was angry if the gunstore sold at or near full retail or "book" value as I think it's wishfull thinking on their part. Now days more than a few retailers are asking for ABOVE retail prices for new and used firearms. At the last PA gunshow a dealer was demanding $20 over new retail for a used CZ40, its a nice pistol but not that nice.:uhoh:

Desert Dog
July 5, 2003, 11:49 AM
I guess I am spoiled. My bestfriend is a FFL. :D :D :D

The one gunshop I do frequent though is well staffed with very knowledgeable guys. There are no "monkeys" in this store. A couple of them are a little curmudgeonly but honest, and will not steer you to something you do not want. Granted they cannot beat prices that my friend can get weapons for, but they are very competitive with what I can buy on-line. They also have do very competent gunsmiths (one is the owner) on staff and I can depend on their advice and expertise.

With that said though, there are some shops here in ABQ that are completely and totally ridiculous on prices. I go in there just to look at and handle a potential purchase, pay my respects and leave. Even accessories are sky high there.

I count myself lucky.

Mike

Ala Dan
July 5, 2003, 11:59 AM
Harry Rod, I don't know what part of Alabama
you are in; but if it is convenient for you, Simmons
Sporting Goods 2001 2nd Ave North in Bessemer,
AL seems to have some of the best prices around.
They are a major supplier of firearms, as made by all
manufactuer'ers. I've been buying firearms from them
for well over 30 years, and have always been completely
satisfied. PX number is (205) 425-4720, and ask for Dale
Smith, Ray Grubbs, Johnny Bodiford; even Barry or Clay
Simmons. Be sure and tell them that I sent you; and
you may qualify for a "brother-in-law price, or preachers
discount" (LOL)!:D :) :uhoh:

Best Wishes,
Ala Dan, N.R.A. Life Member

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