Opening a gun shop: Heaven or Hell?


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BigBlock
January 18, 2009, 10:23 PM
As they say, if you love what you do you'll never work a day in your life. I love guns. I love being in the gun store and just staring at all the things I can't afford on the wall.

The problem, there is only ONE gun shop in my area worth going to. It's about 10 miles away and leaves something to be desired. I can't imagine how many other gun owners in my area must feel the same way. The only other thing close are sporting goods stores that only sell long guns and overpriced ammo.

So, on comes the thought about opening my own gun shop. :eek: I have found a PERFECT peice of property about 3 miles from my house, 5 acres to do whatever I want with, for a good price, and in a high traffic area. I'm a business man, I've run several businesses before, so I know what I'm doing in that regard. The main issue I see is with the ATF and getting a FFL. I have no question that I could get business in this particular area.

So, before I even start doing a lot of reasearch....is owning your own gunshop something GREAT for a gun geek like myself? Or is it more trouble than it's worth? Anybody here own a shop? Is getting a FFL like pulling teeth?

PS - 10% off and $10 transfers to THR members! :)

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greenr18
January 18, 2009, 10:25 PM
from all the dealers ive talked to with storefronts, its hell.

Grassman
January 18, 2009, 10:27 PM
What would your liability insurance be?

Impureclient
January 18, 2009, 10:28 PM
"from all the dealers ive talked to with storefronts, its hell."

Who wants competition?

Eightball
January 18, 2009, 10:29 PM
Something tells me that deciding to open up a gunshop now, with Barry-O coming into office, would be quite the unwise business move.

conw
January 18, 2009, 10:33 PM
Frankly your run-of-the-mill gunshop customer around here prefers to lean on the counter and talk about how Hydra-shoks can make someone's torso explode, guns will be banned Jan 20th, etc...more than they like to buy guns.

I know a lot of gun shops do brisk business and probably make decent money after overhead...but I wouldn't consider it personally.

jm
January 18, 2009, 10:33 PM
If you are a smart enough businessman to run a successful business, you are smart enough not to open a gun shop. Or so I read somewhere.

tinygnat219
January 18, 2009, 10:35 PM
Just stop and think. Guns are a fun hobby, but retail is a down and dirty business. You have to make money to survive. If you want 80 hour weeks, then owning a retail establishment is for you.

tpaw
January 18, 2009, 10:37 PM
Eightball is right. With BHO coming in, I'd wait a spell and see just what action he and his liberal friends will try to do. As it stands now, he only wants the military and police to have guns if he could have his way. Oh yes! I forgot! Criminals as well.......:cuss:

Frank Ettin
January 18, 2009, 10:42 PM
Retail is a tough business. It doesn't matter what you sell. And selling guns isn't all about guns. It's about running a retail business. It's about watching your cash flow and capitalization. It's about deciding what to stock and how much capital you can afford to tie up in inventory. It's about deciding how much money you can take out of the business to put food on your table and generally support yourself. It's about stocking what people want to buy, not necessarily what you like. It's about dealing with the needs/demands of sometimes unreasonable customers. It's about paying bills and maintaining your store. It's about hiring help and paying attention to the labor, tax and workers' compensation laws. It's about figuring out when and how you can take vacations and what to do if you're sick.

Some folks like retail. They like the challenges. They like selling and marketing, growing their business and making it prosper. They like the idea of creating something for themselves and their family. If those things appeal to you, you might like owning a gun store. But it's really not about guns.

Some years ago, I was in retail. And I found that for me, trying to mix a hobby with business really wasn't all that much fun.

Haywood
January 18, 2009, 10:43 PM
I work at a Gun Shop. From what I see If you are a good business man and know your product , you should be OK. You must make sure your paper work is in perfect order. Your Gun Inventory Book must have every gun that comes in and goes out recorded. Name of gun, model, serial no., caliber, action, type of gun, and ware or who it came from with full address. The 4473 form that each buyer must fill out has to be filled out correctly and kept on file. The ATF can come in at any time and ask to see your book and 4473s. I here they are strict about screw ups and books that are not up to date. I am in the Cleveland, Ohio Suburbs. The shops that have a Shooting Range seem to do well and there are are a few shops with Two or Three Stores that appear to do good. The Store I work at is just a little hole in the wall hang out that has limited hours and everybody working there is retired. We don't have to worry about making a living from sales. If you have been or are in your own business then you know about the 26 hour days and the 8 day weeks. You gotta love it.

BigBlock
January 18, 2009, 10:44 PM
Yeah, it certainly wouldn't be until after Osama *cough* I mean obama comes into office. But there's no way he can possibly ban guns outright...so whatever is still legal, is what I'd sell.

What I base most of my idea on is what I see at the other local shop. What I do know for sure, it makes enough profit for at least 3 full time employees and an expensive retail storefront. It is a very small store, and every time I'm in there it is CROWDED, and there's always at least 1 or 2 people counting out hundreds and doing paper work.

What kind of profit percentage does a normal small gun shop usually make from a brand new gun?

BigBlock
January 18, 2009, 10:47 PM
Retail is a tough business.
I agree, but I'm mostly interested in how guns compare to other retail settings - like a pet store or a clothing store. I do have some capital to invest and I would be building my own building. Gun buyers seem like more of a captive audience for me since the stores are so few and far between.

My other business model that I ALWAYS follow is to sell things for as cheaply as I can and give the best customer service that I can. It has worked well for me in the past. I also like the fact that while our economy is failing, gun business is still through the roof.

scrat
January 18, 2009, 10:53 PM
For sure i would wait until the economy gets a little better. the initial start up cost on opening up a gun shop could get into your pockets a little deep and with not a lot of people spending money right now. I would think twice about opening one. However if you are really serious about it the best thing to do is start to figure out all of the financials and whats needed on opening up the business this is going to be where you need to put in the serious leg work. come up with a good business plan and find out what you want to tailor too. you dont want to just sell guns. you will need accessories galore as well as you need to figure out how much you want to put in. being a reloader as well as a shooter i can tell you us reloaders are always looking for places to purchase supplies. The hunter as well hunting clothing and maybe even fishing would draw in more sporters. However it will require a bigger start up.

Prince Yamato
January 18, 2009, 11:01 PM
I don't have an FFL, so take this with a grain of salt. I honestly believe that opening a FFL is a massive undertaking. Obama conspiracies aside, we're in a crap economy. You're going to spend a lot of money stocking your storefront and building your business and you're not going to be able to recoup your losses. The one exception may be if you form your business model off of aimsurplus or something like that. Some of the online retailers seem to do quite well and there's only a handful of the "great ones".

Tyrannosaurus
January 18, 2009, 11:05 PM
By opening a gun range as well as a gun storefront, you can significantly increase your revenue.

Especially if you rent guns. If you have the capital, as well as the appropriate paperwork, you can rent out automatic weapons as well.

(This might depend on which state you're setting up in, I'm not sure about state policies on rentals/automatics).

mljdeckard
January 18, 2009, 11:34 PM
Once I went into a store with my dad for supplies to tie his flies, and I remember him having a conversation with the owner about how he never has time to fish anymore.

Just remember, if you have a gun store, you have to be open when your customers are preparing for and going hunting. Which means YOU can't be hunting. And like someone said above, it means stocking what sells, NOT what you like.

I got the bug out of me when I sold guitars for a couple of different stores. I had a lot of fun opening and setting up the store, but it imploded gloriously when it never made a dime, the whole national chain went belly-up. And I was just a $10 an hour guy, I didn't have to deal with the stress of looking at the books every day.

Having been in Impact's retail location many times, I don't think broad expertise has much to do with success.

mnrivrat
January 18, 2009, 11:39 PM
I also like the fact that while our economy is failing, gun business is still through the roof.

A one time shot more than a regular occurence . It's about over .

Location, Location, Location , like most other retail business ,that is the most important, and you need to study the area very carefully. Not only the competition, but the firearms and spending habits of the populace. You won't have a lot of competition selling freezers to the Eskimo's , but might not have a great market .

Overhead cost is another big factor now, and internet compitition is strong - mark up on guns are low in comparison to many other products.

All that said, and a weak economy , I would approach the whole idea with a lot of caution . My friend has been in the business for 30 years and did a major upscale about 18 months ago - there is no picnic getting enough sales to pay the overhead.

chris in va
January 18, 2009, 11:40 PM
Couple things come to mind.

I talked with a guy that opened a shop in VA. He had to fork over a WAD of cash to make his store relatively secure. Big vault in the back, alarm system, steel reinforced mesh on the windows, posts on the pavement out front etc etc.

Then there's the constant paranoia of someone robbing the place, believe it or not. Criminals are stupid.

He said one of his biggest peeves was people coming in, fondling the hardware then telling him they could get it cheaper somewhere else and trying to talk him down to within 1-2% profit margin.

You'll be there all the time with little time off unless you can find a business partner. But then you'll have to split the profits as well.

I'd call around to various stores across the country and see what they think. Chances are they'll give you some horror stories.

Just something to chew on.

Kind of Blued
January 18, 2009, 11:41 PM
I'd suggest asking yourself if you could handle running a retail shop selling, fish, shoes, whatever else, because I imagine having guns around won't be endlessly exciting.

The guy that owns a LGS here hasn't shot a gun in three years, not by choice.

MachIVshooter
January 19, 2009, 12:20 AM
What kind of profit percentage does a normal small gun shop usually make from a brand new gun?

15-25%. Same for ammo (at best). The profit comes from used guns and accessories (50-100% mark up).

Like others have mentioned, it's running a retail business. As an owner, you're not going to be enjoying the guns. You'll be running a business with some of the most demanding protocols you can imagine.

zoom6zoom
January 19, 2009, 05:12 AM
And no matter how well you run your shop, how accurately you answer questions, and how great the deals and service....


....somebody's gonna post on at least one forum about what a d*ck you are.

Kragax
January 19, 2009, 06:31 AM
My friend owns a gun shop and is also a gunsmith. Although I don't know the exact details I do know the markup on new stuff is not as much as most people seem to think. The sale of used and/or consignment pieces does work out better. A side of the shooting/reloading supplies help as do lighters, bumper stickers,candy bars, anything else to get the cash:eek:. Actually he is trying to sell the shop and just stick to gunsmithing. He WAS an avid shooter, but in the store all the time now. Guns are my favorite interest, but I learned from him that business is business no matter how much you love the inventory.

SCKimberFan
January 19, 2009, 07:41 AM
http://thehighroad.org/showthread.php?t=420968

Based on this thread, I would say: Hell.

Bubba613
January 19, 2009, 08:47 AM
And no matter how well you run your shop, how accurately you answer questions, and how great the deals and service....


....somebody's gonna post on at least one forum about what a d*ck you are.
Amen to that one.

It's a business. A lot of guys who love guns fantasize about owning a shop. You get over your love of guns to some degree when you handle them all day long.
That said, I am three years into my own retail gun shop. I actually love it. I hate days like Thanksgiving and Xmas when I have to be closed. I am constantly emailing people about guns, looking up prices, searching for ammo etc etc. I've worked harder on this than anything else but I love it, so it isn't really work.
I frequently post about the bozos I get in the shop. They don't bother me so much as make for good posting material and amusing stories. But most of the customers I get are actually decent people and most transactions go just fine. Make money? WHat's that? I have yet to bring home a dime. It is paying my health insurance and some other things. I am hopeful this year I will start drawing a salary.
As for a range, can you really handle a bunch of "da boyz" coming in to rent/shoot their Glock 40s, etc etc? The idea of some of my customers with loaded guns in their hands gives me chills.

heron
January 19, 2009, 09:21 AM
I think you should go for it. You can put up your own secure building, a range if you want it, tailor your inventory to the local market. I think now is a good time to be starting new things.

You didn't say if any of your business experience is in retail, but I think you'd be happy overall. Some customers are going to be a royal pain, but your enthusiasm will make it a place they'll like, as long as you have the patience to deal with them. You might also enjoy introducing newbies to the shooting sports.

pmeisel
January 19, 2009, 09:42 AM
You mention that you have business experience. Take the time to do a pro-forma business plan -- just to have a pretty good idea of how much capital you will tie up, and how much business you will have to do to breakeven, and to make a reasonable target income. That will be the roadmap that tells you if you are heading the right direction.

Good luck.

bonza
January 19, 2009, 10:19 AM
Never owned my own store, but have worked in the firearms industry for about ten years combined. Started off working for a Jobber (Remington, Marlin, Burris, Bonanza, & others), then went to retail/wholesale. On the whole, looking back, I'd say I enjoyed the experience, but the novelty of being around guns all the time does wear a bit thin. Being a very keen competition shooter, I managed to maintain my level of 'extra-curricular' shooting time, but I'd say most of the people I worked with didn't spend a whole lot of time around guns in their spare time. Made good friends of some of the customers I had over the years, but you have to deal with all kinds & I came to the realization that the average 'Joe' out there ain't too bright.

tradja
January 19, 2009, 12:24 PM
In the past, I have worked both mom-and-pop and corporate retail. In both situations, I have seen that a little professionalism goes a LONG way.

I hear you on gun shops. I am pretty thoroughly dismayed by the level of service at my local half-dozen gun counters. Sure, owning a mom-n-pop would mean a lot of long, thankless hours, and considerable financial risk, but I say look into it and go for it.

Politics aside, it's still legal. Let's stop pretending like it's not. Be scrupulous with your books (BATFE and financial), do your homework, provide a fun shopping environment, research your local untapped market segments (Cowboy action, women, 1st time owners, ranchers, etc), be respectful of your clients, and I bet you'll do fine.

seale
January 19, 2009, 01:05 PM
As they say, if you love what you do you'll never work a day in your life. I love guns. I love being in the gun store and just staring at all the things I can't afford on the wall.Well it SHOULD be heaven, but the thing calling itself the federal "government" has made it hell.

rainbowbob
January 19, 2009, 02:09 PM
If you have the capital, and if the locals will support it, and if there is nothing like it in the area - open a state-of-the-art range that includes reactive steel and a video simulation room.

Renting a variety of guns and selling guns, accesories and equipment will naturally go right along with it.

Duke of Doubt
January 19, 2009, 02:20 PM
Instead of actually opening your own new store, consider approaching an existing store/licensee with additional capital as an investment partner, to fund expansion to a second location or just to expand operations.

You get to participate in business decisions and reap the profits without holding the license or, worse, working as a dang retail clerk selling guns you hate to goobers who won't buy anything else. You can steer the business in directions you support and which will bring profit to the company, while participating in those aspects you enjoy -- trade shows, dealer meetings, demonstrations, and sales support for limited areas such as military or vintage guns, but not hunting or ammunition which may not interest you, or paperwork other than the legal stuff you can do better than the old codger with the name on the door and the funny reputation.

Do I sound like I know a little about this?

mgkdrgn
January 19, 2009, 03:23 PM
1) Build it like Fort Knox

2) Prepare to be broken into at least once a year.

Duke of Doubt
January 19, 2009, 03:25 PM
The break-in comment is no joke. Here's a tip: if you must have air conditioning, reinforce the air conditioner aperture better than the windows, as that's where the burglars will try to get in, by forcing in the air conditioner and wriggling through the aperture.

RPCVYemen
January 19, 2009, 05:07 PM
From a customer's perspective, I can tell what I look for, and what I don't find in most local shops:


I have one local shop that lets me order a gun for less than I can buy it from any of the Internet sites (when I add in shipping and FFL fees for the Internet sites). I don't know how they do that. Note this isn't for guns on the shelf - it's only for ordered guns, and they get the cash up front. Maybe the cash up front makes it work. The cost is basically their cost plus some dollar amount or percent - there is no inventory cost for those items. I guess that they can do it because their only cost (for those items) is paperwork.
Think a lot about service. I am willing to pay somewhat of a premium for service - but to be honest, a lot of the shops that complain about Internet competition don't offer and actual service that I can detect. I don't know how to solve this problem, but I am not willing to pay a premium for a lack of service from a local shop. :)
Think about hours. I know one local shop that has everything - except the right hours. I guess I was a bartender too long, but expected in that business, to be working while other people played. The local shop I am thinking of is open 9-5 and Saturday morning. Those hours are great - if your clientele is exclusively retired folks. While the economy is doing it's darnedest to give all of us a little more leisure time, those of us not yet laid off work most of those hours. Why not 12 til 10? I have definitely bought stuff off the Internet not because the price was better or service was better, but because the local gun shop isn't open any hours I can get there. Notice how many of the "big box" electronics retailers lock their doors at 5 pm? There's a reason for that.


Mike

Seattleimport
January 19, 2009, 05:39 PM
+1 on the in-store range, and on the extended hours.

I notice you're in Oregon. Portland, at least, is a wired community. If I were you I'd strongly consider spending just as much time on your website as you do on your physical storefront--if not more. Make it known to your customers that they're able to order off gunbroker and have their purchases shipped to you: FFL transfers are pure profit for you, with the added bonus that you don't bear any inventory risk. After all, your physical store, no matter how big, can never come close to matching the breadth of products available on the Internet. And guns are particularly niche products; even if you sell the particular model of 1911 wanted by Joe Customer, do you offer it in the right caliber, finish, grip, and trigger? Almost certainly not. Consider your physical on-hand gun inventory to be representative display pieces, and make it easy for customers to get what they actually want (via special order through you, or by using you as delivery for Internet purchases).

Lastly, I recommend you put a lot of focus on community and membership (particularly if you have a range). Sell services like cleaning, safety classes, marskmanship leagues, training classes, "rep" days. Again, there's no inventory burden and high margin, and by giving customers a reason to come into the store even when they're not looking to buy, you encourage them to buy ammo, accessories, and maybe even a gun.

In other words: my advice to you is to put the least of your focus on actual guns, and most of your focus on memberships, ammo, accessories, apparel, services, and FFL transfers. Foster a community, publish a professional-quality newsletter (email *and* snail mail), make your store a destination, and sell high margin, high inventory-turnover products.

CoRoMo
January 19, 2009, 05:41 PM
Go for it, for all our sakes.

It should end up a little of both. Heaven to be in and around what you love. Hell to put up with and abide by the ATF hassles.

RPCVYemen
January 19, 2009, 06:00 PM
+1 on the in-store range, and on the extended hours.


Do you think that stores make money on the range, or does the range drive sales?

I've always wondered, because the range seems very costly - increased liability, lots of maintenance, finicky equip - and staff who are competent RSO's.

That seems pretty expensive to me.

Mike

Sam1911
January 19, 2009, 07:05 PM
The range sounds like a good idea, but there are some considerations to weigh:

Around here (central PA) we have a wealth of shooting clubs that cater to all kinds of shooters, but all have basic facilities for the little bit of target shooting most gun owners do. I'm a member of a club located 30 min from my house and I know of three (and maybe a fourth) gun club CLOSER to my house than that! Plus we have numerous state game lands ranges open to the public -- TWO of those are closer to my house than my chosen club. And I can't count the number of informal "backyard" ranges I see when I'm out driving.

You'd have to be REALLY good to make a commercial range profitable around here. No-one's going to see much point in it!

I do know of one commercial shooting range within an hour's drive of here, but it seems to cater mostly to folks coming up the interstate from Baltimore and points south (in MD).

Their facilities are "state of the art." They have a staff and seem to do a good job of running a safe range. They are a little rigid in the types of style and practice you're allowed to do. But the big thing is that THEY ARE BLOODY EXPENSIVE! Just as a comparison, checking their posted rates and fees, my average level of shooting (not counting weekends when I travel for matches) would cost me well in excess of $2,500 per year!

My costs to shoot that much at my club? $55 a year...well I pay $70 for the family membership so I can bring the kids. We don't have A/C, a target return system, or an in house (VERY expensive) gun shop, but I also saved $2,445 last year on the deal, so I'll live with that.

Before you spend ANY time on the commercial range idea, make darned sure that your area could possibly support one. Are you close enough to a big pool of city folks who would be willing to travel out to your location -- and pay hefty cash -- because they don't have a local club and don't choose to find one to join?

The expenses of lead control/filtration/abatement, range safety officers who are professional, alert, and polite at the same time, insurance, climate control (which is difficult in a high-volume ventilation area like a firing range), and a number of other thorny issues, (including the very large cost to construct it to begin with!), are going to mean you have to take in a substantial amount of money every hour -- or your range will suck the cash right out of your business.

You do need a good business model as others have said, but do your homework well so you know your assumptions are accurate. Finding out that you get an average of 1.75 shooters through the range an hour, week after week, when you needed 17.5 per hour to break even, is going to dampen your enthusiasm a bit.

-Sam

redneck2
January 19, 2009, 07:38 PM
You can pretty much rule out the shooting range thing. Liability insurance will eat you up. Also, newer ranges have to comply with a ton of environmental issues. Last I read, 600K (yes 600K) is the going rate.

I worked in a gun shop for two years. If you think there's no such thing as a stupid question, you've never worked in a gun shop. Your customers will spend endless hours there to pass away their time. You have to do parts ordering, inventory, stock shelves, price merchandise, etc., etc. while they are babbling about their 1,000 yard shot on a mouse at midnight.

A cobbler's kid has no shoes.....a gun store owner never gets to hunt or shoot. You have to be at work when everyone else is off.

Since the internet, everyone can get everything somewhere else cheaper, then bitch because you won't do a fifty cent transfer. Guns end up being a commodity rather than a passion.

I have a friend that has owned a shop for three years. It's worth over half a million, but he hasn't gotten a dime out of it yet. Fortunately, he's got a main business that makes good money, and the gun shop is a hobby.

regal
January 20, 2009, 11:30 AM
Owning a gun store is an investment in security.

What will the landscape look like in 30 years?

Youwill be sitting on an inventory of weapons with all the business connections and network that comes with it. I have a feeling you will be in a better position than someone selling insurance or real estate.

trailgator
January 20, 2009, 01:26 PM
Confucious say: Never make your hobby your profession.
Maybe it wasn't confucious, but it will still suck the fun right out of it. I watched it happen first hand to a good friend.

Duke of Doubt
January 20, 2009, 01:36 PM
I got that advice from a stripper once.

glockman19
January 20, 2009, 02:22 PM
I've been thinking of partnering with a FFL hoilder and opening up a pawn shop that specializes only in jewelry and guns.

I've even found a vacant bank with drivethru.

Imagine it has a large safe and bullet proof glass.

In this economy it might be a winning combiation.

Seattleimport
January 20, 2009, 03:03 PM
Good points about knowing your area/customers. If you're out in real rural country, where anyone can just go to a field and bang away, then the range has less appeal.

If you can draw urban dwellers who don't want to drive 1+ hours into the sticks, then consider the range.

Nice thing about range is that you can mandate that all customers buy and use range-sold ammunition. That's high margin, and gets the customer to pull out their wallet, giving you an opportunity to upsell accessories, training, etc.

Also, a range with a rental component (and why wouldn't you have such a component?) gives customers a chance to try before they buy--an attractive part of the buying process that the Internet simply can't offer.

rainbowbob
January 20, 2009, 05:23 PM
Also, a range with a rental component (and why wouldn't you have such a component?) gives customers a chance to try before they buy...

Yes...but the policy of NOT renting to somebody who does not bring a firearm of their own with them may protect you against the use of your firearms as a method of suicide. The theory is that a person already in possession of a fiream will not need to rent one of yours to do the deed.

ACORN
January 20, 2009, 05:33 PM
I'd have to think long and hard if it were me. If you make 20% on a firearm you're doing pretty good. Most gun owners seem to be savvy and research the cost of a weapon before they buy. Factor in the overhead and you'll see you have to do a heck of a lot of volume to cover your expenses.

Sam1911
January 20, 2009, 05:38 PM
Holy duplicate posts, Batman!

-Sam

Sam1911
January 20, 2009, 05:54 PM
Yes...but the policy of NOT renting to somebody who does not bring a firearm of their own with them may protect you against the use of your firearms as a method of suicide. The theory is that a person already in possession of a fiream will not need to rent one of yours to do the deed.

Maybe. But in practice, it just kills of the primary reason to even HAVE a rental facility: curious non-gun-folks or newbies who want to try things out before they buy and don't have a whole lot of gunny friends who's collections they can sample.

I don't believe you can write ANY policy that will prevent the gun rental suicide possibility. Any more than you could write a policy that prevents them from renting a Cadillac for that last ride off a cliff. If you cannot face the possibility (or the threat of liability) -- and I can see why that would be a tough decision -- then don't open a rental range.

Seriously, if a person is going to end it all, what do they care if they have to max out a credit card, sign a form, and wait 10 minutes for a NICS check? Don't rent them a gun? Ok, so they BUY one and go out in the parking lot for the big exit.

Those are the risks of the trade. But I'd say they're pretty unlikely.

-Sam

Sam1911
January 20, 2009, 05:57 PM
Dupe

Sam1911
January 20, 2009, 05:59 PM
Dupe

Bill of Ojai
January 20, 2009, 06:42 PM
My favorite local gun shop transitioned from mostly new gun sales to used gun sales. One of the partners actively sought out collections from estates of the deceased.

As a result, their clientele morphed into the mainly traditional guys like us who appreciated older guns and collectibles.

Of course, the business went down the tubes after a burglary (came through the a/c vents) prompted an ATF visit. Their employee didn't maintain the required firearms logs correctly, which prompted a complete audit of the last 20 years of their business.

You can employ a full time person just to keep up with California paperwork.

All the best to you!

Duke of Doubt
January 20, 2009, 06:45 PM
But she may not pass the NICS check. Prior committal, prior felony, etc.

Come to think of it, I've never rented a gun (I've borrowed them to try before I buy). Is a background check commonly performed for rentals? I'd doubt it.

Sir Aardvark
January 20, 2009, 07:13 PM
You could make more money doing something else than selling guns.

Write up a business plan - if you figure out how much it is going to cost to set up your shop per city/county regulation & code, purchase your inventory, hire staff, pay licensing, fees, and insurance and weigh all of this against your expected profit, you're going to find that opening up a dry-cleaner may be the better route.
Internet sales have pretty much made profits on firearms razor-thin - so if you open up a brick-and-mortar store then make sure you have a website that does Internet sales - you'll need every sale you can get!
Carry stuff like Blackhawk - the profit margin is better on accessories than on ammo and guns.
And, as has been mentioned, think about opening an indoor range to bring in more clientele - doesn't it rain all of the time in Oregon anyways?
Last, don't forget how incredibly regulated this industry is.

You might find it more profitable and enjoyable to open a Dry-cleaning business and then just sell guns on the side as a second business instead of wholeheartedly embracing the Gunshop idea.

I had an FFL-01 in California for 6 years. I was one of those "Kitchen-table" gun dealers. I was able to make a profit, but that was because I had no overhead expenses. I finally gave up my license because California made it so that I had to have 7 separate licenses, permits, and certificates to sell a handgun - too many hoops to jump through!

moooose102
January 20, 2009, 09:11 PM
well, as much as i love guns,i would have to say it is a risky business. you have gotten a lot of things hear to think about. i didn't read all the posts above, but i did read many of them. the first thing i want to mention is the golden rule of every retail business. location, location, location. not what is good for you, but where is good for that type of business. if i were you, i would do some consulting with some members of the business comunity. is there enough buying customer base? or will your place need to depend on an out of the area customer base? how far would you be from that base? right now, it isnt so bad, but if gasoline goes back up to $4.50 a gallon again, it will kill your business. do you have enough start up money, or will you have to solicit it or find a partner? how will you survive the first six or 12 months with limited income (when you are the new guy on the block, it akes a while for the word to get out)? this is going to be a huge investment to put a good stock into a gun store. even if you forget about the guns, all the ammo, scopes, slings, jackets, hats,cases, gloves,etc., etc., etc.,that alone is going to be tens of thousands of dollars. then add say a small amount of guns, say 75 for enough to open the doors. 75 x 400 per = $30,000 on top of the other stuff. so $50k might be enough to stock a store with enough to open the doors. now, you need to buy the property, put a building on it with a huge safe, insure it, hire at the minimum three other people (1 for the books, 1 to stock, and one "boy friday". plus you. then, you have health insurance, state taxes, and almost every drop of profit will need to go back into the store to buy more stock so you can make more money for at least five years..... hmmm, i do not mean to take the wind out of your sails, but there is a lot to this do it yourself business thing. that is why not everybody does it. if you have the will, can come up with the money, and can find a great place for the business, i honestly wish you all the luck in the world. i sincerely hope you make it!

Sam1911
January 20, 2009, 09:29 PM
But she may not pass the NICS check. Prior committal, prior felony, etc.

Right! The Cadillac it is then! :D

Come to think of it, I've never rented a gun (I've borrowed them to try before I buy). Is a background check commonly performed for rentals? I'd doubt it.

I was wondering that myself. Might be an interesting option and I don't think it would really drive many customers away. (Well, it might...but that might be a good thing. If they can't pass the NICS check, you really aren't supposed to hand them a gun.)

-Sam

Mark K. C.
January 21, 2009, 07:11 AM
Go for it. You have the savvy. That would truely be a dream come true. I will be one of your first cash customers.

Grey_Mana
January 21, 2009, 10:24 AM
1) You'll spend more time than you want playing psychiatrist and life coach. A lotta people take their guns more seriously than their religion. God, grace, good deeds is fine for Sunday but they don't much impact personal time. But topics like - how much you paid for that, which gun is best, etc. etc. are serious and personal.

2) A gun store has a unique problem, and that is armed robbery. If some new gang wants illegal guns (or better guns), they'll going to want to rob you. They are going to come with murder premeditated. Jewelry stores and banks face similar problems, but the BGs aren't as afraid for their lives. When the BGs come to your store, they'll going to be expecting you to have ninja moves. Their attack plan will have contingencies for stuff you can't do/couldn't afford.

3) Customers like stores planned by women. Neat, clean, well-lit, spacious, friendly, professional. Gun shops tend to be like auto mechanics, bait shops, and other stores run by men - dirty, dusty, faded crap taped to the walls, overstocked and crowded with inventory. Poorly-built jury-rigged racks and showcases. Wires (for the security system, phone, or whatever) 'temporarily' strung. Eye-sores everywhere.

koginam
January 21, 2009, 10:24 AM
I have found that when the economy starts to go bad gun sales increase in the used gun market, and in bulk ammo sales. From personal experience while a range sounds good it is to expensive to operate for what you get for it, with the exception of large cities where there is no where close to shot they really don't make you any money. The space would be better used as retail space or storage space. Having a good gunsmith on site is well worth the space, but they should have there own entrance, insurance, licenses, and electric meter, in other words they are there own business running out of your location. Renting firearms for any reason is asking for trouble even if you could get insurance it would be very expensive. Selling consignment guns is very profitable. What you carry will dictate who your customers are. no windows lower then 26 inches to the ground and install 8 inch pipe barriers 4 to 6 feet in front of doors and windows. Bars on the inside of windows and on the doors, Lots of lights around outside of building and a very loud alarm.
Don't carry much cop stuff there is always someone in the department that will sell it and they will buy from him before you. footwear is a waist of space even though there is a very big markup.
I think if you have the money to get a good selection of merchandise you will do very well.
I still have just over two years to go on a no competition agreement but if I could I would open a store now.

PX15
January 21, 2009, 10:41 AM
Here's a thought:

Rather than open a dedicated "gun shop" why not consider opening a "pawn shop" w/guns?

I have a casual friend who owns such a place, (he does my ffl transfer dealings for me), and I've never asked him, because it's none of my business, but I'm of the opinion he makes most of his profit on the "pawn" side, not the "gun" side of his shop.

When the economy is in the dumper (as it is now) you will get MORE business in a pawn shop, not less.. If you have an ffl license you can take in firearms on pawn, and have very little invested in them, and if they are not redeemed you can make a reasonable to quite good profit on them.

You can also special order firearms for customers, charging a reasonable profit.. My friend has done that for me several times. In fact when I get interested in a new firearm I always give him first "dibs" on finding me one at a fair price. Sometimes he can, sometimes he can't, but he'll wind up getting paid something either way.

You can become an ffl transfer dealer (as my friend is) and charge a reasonable price for simply handling the paperwork for other folks.

A word of caution however..

Another friend of mine opened a pawn/gun shop in Tampa many years ago, and he had a full time job elsewhere, so hired a fellow to run it for him when he was unable to be there himself.. This fellow became a very good friend to my buddy, and it was a bit of a surprise one morning when Ken went to the shop only to find the buddy had taken the "good stuff" (jewelry & guns mostly) and skipped town. :barf::barf:

But if I were putting my money into a business, and it was a gun shop, or a pawn/gun shop, I'd bet the best return for my money would be the latter..

Just personal opinion, could be wrong.

Best Wishes,

Jesse

Grey_Mana
January 21, 2009, 12:05 PM
Instead of a great location, are there any warehouses for sale cheap?
A large warehouse could be converted to an indoor range, or even a place to offer tacticool classes.

CountGlockula
January 21, 2009, 05:13 PM
If I win the Lottery, I'd open a couple.

But in order for it to be sucessful is location, location, location...particularly next to a Walmart or Target.

Cosmoline
January 21, 2009, 05:22 PM
It's what's known as a highly regulated business. So on top of the ordinary red tape with wage and hour laws, workers comp, insurance, etc. you have a federal agency who's sole job it is to make your life difficult. Plus you have the difficulties of zoning and just find a place to open up shop. That's been a huge headache for local shops here, since the local planning authorities are far from friendly. Landlords can be a problem too. One shop I went to frequently got the boot when Sisters of Providence bought the mall and enforced their no-firearms policy.

MrAcheson
January 21, 2009, 06:07 PM
There is an old joke around here that the best way to get a range is to buy it cheap from the original owner/builder when he loses his shirt in it.Nice thing about range is that you can mandate that all customers buy and use range-sold ammunition. That's high margin, and gets the customer to pull out their wallet, giving you an opportunity to upsell accessories, training, etc.Unless you're the only game in town (or it's a safety issue with lead or your backstop), this is a great way to drive away business. I had no problem with my local range telling me what I could shoot in their guns. But when they started insisting I use their ammo in my guns, I went elsewhere and never came back. I used to shoot there once a week.Make it known to your customers that they're able to order off gunbroker and have their purchases shipped to you: FFL transfers are pure profit for you, with the added bonus that you don't bear any inventory risk. After all, your physical store, no matter how big, can never come close to matching the breadth of products available on the Internet.Completely right. I wish one of my local shops did this, instead they're so focused on selling me what they have on the shelf, that half the time I go elsewhere to get what I want. I buy cowboy guns at the tacticool shop because they don't stock them. I buy stripped lowers and the fudd shop for the same reason.

BigBlock
January 21, 2009, 09:31 PM
Thanks everyone for the replies. Here is a little more detail about my plans. I firmly belive the property is in an IDEAL location, and the property itself is a great investment with over 600 feet of highway frontage on a major highway. The local population from both sides of the highway makes higher than average income. I am still in the initial planning stages, but I'm pretty sure I can have the mortgage on the property paid for by other resources -the lot is about 10 times larger than I'd need for a gun shop.

For the shop itself, I'm thinking possibly log cabin style, since there are a lot of trees on the property. I do not intend on opening a full on range at this time, but I was considering a "test fire only" range. This way a customer could fire 6 rounds before they buy a gun. Security would be a top priority, but I'm kind of a security geek :) so I can lock the place down like a vault at the press of a button. I'm prepared to use tear gas.;) (if that's legal? LOL)

As for employees, I'm basically retired, and I'm not even 30. :) I have time to work there whenever basically. (and I definately agree with staying open late, I'm a nite owl myself) I made some good money with the internet boom, and I'm also considering creating a high end online gun store to compete with the likes of budsgunshop. My dad is also unemployed, he would be perfect for manning the counter and I wouldn't have to pay him in the beginning. ;) Aside from that I'd probably want to hire one good helper, and another cheap laborer to answer phones and do paperwork.


Of course, all of this is just coming right out of my head as I think it, and is very subject to change. :D Here's the way I see it: I have to work somewhere, wouldn't it be more fun to run a gun shop than a any number of other small time shops?

cbrgator
January 21, 2009, 09:44 PM
Well, if you intend to have an online shop like Bud's be sure to build the shop quite large in order to maintain adequate inventory of a million types of guns. Build once and build right.

MartinFA
January 22, 2009, 12:45 AM
Like any business, you will be tied to it. Expect about a 6 month time frame to get all your permits and licenses. Make sure zoning is not a problem. Significant start up costs. Forget about stocking what you like, stock what sells.
Best arguments for - your inventory does not expire rapidly. The gun business is the only business right now showing significant growth. Your customers will be better than the average customer of almost any other business.

Arguments against - You pay for your inventory up front. Right now the wholesalers are out of stock on items like the rugar mini 30 which are in high demand. Wholesale prices on AK types are increasing weekly.

Business will increase across the board when anti-gunners make noise. Clinton did more for gun sales than any other person even on things that were not going to be banned.

The markups posted by another THR member were accurate. Guns get people in the door. Profits are made on the accessories.

Do market research before selecting inventory. Guessing what people will want is a crap shoot.

It is possible to make a lot of money. Remember it will be a business, not a hobby. Price well, give outstanding service, advertise heavily.

logical
January 22, 2009, 08:31 AM
Build a half million dollar building, fill it with an even $million in inventory, price stuff so low that you can't even make the interest payments and maybe, just maybe we'll like your place.

I'd look at buying the current guy out and turning his shop around.

bonedust
January 22, 2009, 09:51 AM
I did the very same thing 3 years ago, and i can tell you 100% from experience, on any given day its 49% one way and 51% the other. Somedays heaven wins, somedays hell.

As with any business, your customers make up your biggest asset and your single biggest pain in the ass. The gun crowd is 25% newbies, 25% self proclaimed experts who are looking for someone to agree with them or someone to argue with, 25% internet educated experts, and 25% easy going good customers.

the guy who mentioned the $600k range vent system must live in Kommiefornia. we built a 6 stall 50' fully EPA compliant range system with 2 large viewing windows for under $100k. as with any high volume system, it is very high maintence and is a huge PITA, but its our single largest profit stream. i couldnt see opening a gun shop without a range...

the easiest money you will ever make in a shop is with a classroom. private groups, ccw classes, womens only classes, boyscout groups, 4h groups, corperate groups, ect. its super easy money. build a state-of-the-art classroom and watch the money roll in.

i could go on and on, but then nobody would buy my book ;)

Atticum
February 4, 2009, 01:16 PM
BigBlock -

I applaud you for your entrepreneurial spirit! Bonedust's advice seems pretty legit.

Business make more sense to me than guns, so I'll stick with that and with what hasn't already been said.

Don't spend your own money. If you fail you have nothing left. It sounds like you are confident in getting financing elsewhere. Getting a decent loan right now is tough, so good luck!

Just an observation from a few weeks of reading this board - the "Obama Scare" has people stockpiling right now, and I see many people talking about how they can't afford this "right now" or having to wait till their next paycheck... I won't name names but there are people discussing buying $1600 scopes because they got a brand new 0% apr credit card.

Maybe the dive-bombing economy hasn't hit the gun-owning population yet, but it will happen eventually. People want to stockpile now for "SHTF" scenarios but realistically they could be wishing they saved that money for the more realistic scenario of monthly mortgage payments and increasing credit card rates. The banks will be the ones crawling at their doors, not zombies, Chinese nationalists, looters, and President Obama.

Of course, people will still be buying guns and you say your area has a higher than average income. The above diatribe is more for gun-owners and not retailers.

What I hope for this to mean for you is that given the current economic conditions, any business should be preparing for the worst right now.

Good luck!

bonedust
February 4, 2009, 09:14 PM
Having done this very thing i can tell you there is ALOT of really bad info and advice in this thread.

-unless someone had a buisness plan, blueprints, and intent to proceed...there is no possible way they could know what liability insurance would be. none. and to be very honest, its not bad at ALL.

-Internet sales have raised local gun purchases. what seems like a good deal online doesnt become such a great deal when all the shipping and transfer fees apply. even then, you are buying sight unseen. alot of 'new' guns sold online show up dirty and smelling like Hoppe's.

-armed robbery in a gun shop? id like to see the stats to back that one up!!! ATF even states differently. bad guys have 0 problems getting dirty guns on the street, so why would they knowingly walk into a firefight to get them?!? all of my 6 employees open carry in the shop, that sends a message. heck, even someone walking into the range area with an unholstered uncased gun is met with quick strict attention.

mcwjr13
February 5, 2009, 12:27 AM
I have often considered the same thing. However, I used to be an avid fly-fisherman until I opened a guide service I have very rarely picked up a rod since I closed the business. Don't screw up what you love by turning it into profit margins etc.

reddawg26
February 6, 2009, 07:30 PM
bonedust has a point, i have never heard of someone going into a gun store where everyone has a gun and start acting stupid. walmart, office supply store , department store, sure but not a gun shop. More importantly, dont worry about the war stories. You are gonna have good days and bad. Have a vision of where you want to be next year, and the year after that and five years from now, then do whatever it takes to acheive your goal. Adapt to everything that comes your way. Every business on every street in America started in the same place... as a dream. Your shop will be whatever you want it to be as long as you make it happen.

Tinker2
February 6, 2009, 09:17 PM
Well you got a lot of free advice. Take it for what it is worth.
Good luck to you.




Been there, done that, still doing that, got the T shirt.
Tinker2

webmogul
June 14, 2009, 04:01 PM
Sorry for revitalizing this thread, but I was curious if you got this off the ground and going?

I know a guy that helped his son-in-law get his FFL and some related stuff going for a storefront. Said it took about 4 months total for all the paperwork and such.

I ask because I've toyed with the idea of opening one in the next year or so after I move this summer. I've been to some good stores/ranges where I live now and the service was ok to good. Where I plan on moving I've heard the service generally sucks at all the ranges. I currently work for an online retailer and one thing they focus heavily on is customer service so I've learned a lot from that aspect of it. Big believer in good service. The company I work for (non-gun related) doesn't even compete on price and are generally the higher side of prices, but their service is impeccable and as a result they have great customer retention (over 75%).

danbrew
June 14, 2009, 06:58 PM
Apparently he's now a millionaire. Of course he started with $10,000,000.

:eek:

41022collector
June 14, 2009, 07:31 PM
Hi BigBlock:

Ok... I have owned two gun shops in the past and now only do gunsmithy work out of my home.

The real key is price margin Vs. overhead. Lets say you want to make a very modest low income of $25,000.00 a year. Most gun shops today run on a 13% sum margin on most goods. Lets round that down to 10%. To make $25,000 on a 10% sum margin, you would have to gross $250,000 in that year, plus pay what ever taxes, licenses, overhead and supplies (utilities, coffee for every arse in the region and toilet paper etc.)

Now a typical shop today is either very large or very small, very few in between shops. large would be close to 1000 new and used firearms in stock. Small would be 50 - 100 firearms, new and used. The accessories to support those firearms such as ammo, cleaning kits, holsters, scopes and such..... would take close to $22,000 in wholesale capital for a small shop and close to $200,000 in wholesale capital for a larger shop. Operating capitol is usually close to 30% of expected gross regardless of size unless you do a Cabelas or Outdoor world.

In short, you are either in both feet with the kids future hocked or in it so small to not even make a dent in the local market because everyone has a few friends with an FFL that will sell $10 over cost.

Unless you find a nitch of a certain firearm like the GSG-5 and be exclusive for a market area, you truly are losing money everytime you sit down with a coffee and read Shotgun News.

Now that was money... lets talk laws... getting a FFL is easy, almost every Joe or Jane with an address can have one. The hard part is stating the hours you are open and sticking with it as this is where BATF suspends most licenses, even for short terms. I have had all at one time, local police, county law, state law, feds and even super feds in my shop at one time for inspections, they coordinate them. Then I have local anti gunners and peace nics..... then I have the thugs, thieves and drug addicts that consider a gun shop a bank in waiting. Also the local news that each time some idiot went ballistic with a piece, they were at my front door at the same exact time I sold cousin Joe an AK47 kit and 3000 rounds of ammo with Gopher bright orange targets.

Then god forbid, someone buys a firearm from you and uses it legally (Illegally, you are toast) to defnd themselves or the fam. Everybody in the chain gets sued.... there in comes the HUGEST cost, Insurance, Liability and Comprehensive coverage. Even when bought from NRA, it is a true real chunk of money, up front, every 6 months. Don't pay it, then that is when they take an arm, leg, eye or left nut if you get sued. If you do get sued, then it goes up 25%.

in the end................ I found my nitch of gunsmithing classic firearms.... charging a lil over cost and do it out of my shop, I still have my FFL to conduct the transfers occasionally. But a real gun shop... unless you honestly have 1.4 million green backs to open and operate a real one, or 50 - 100 guns laying around the house you can put in Browning safes each night that are bolted to the devils arse..... I suggest you find a true nitch, stay happy, drink the coffee, sell the occasional piece to a friend...... and forego the headaches of the real world in the world of Gun Sales on a grand scale shop.

Want to make some real money and be happy in firearms... either invent or find overseas somewhere a Full Auto BB Gun not made of plastic that actually works on compressed air (not Co2 as that will soon be illegal or cost $32.50 a 12 gram tube to shoot)....and shoots standard BB's (not soft pellets)..... advertise it, demo it and sit back and laugh all the way to the bank..... I know damn well I could sell at least 400 M-19 Anilators (mid 1980's, I have three and have been offered up to $700 each for them and they had cost like $30 each) a week and that would be just Gunbroker.com and Auctionarms.com and Soldier of Fortune ads.

I know this was long winded.... but really I just wanted to get across the hassels and concerns of running a REAL gun shop. I love firearms and all that has to do with them, but running those shops almost made me hate the firearms and the people who wanted them..... it takes just one stupid MoFo to ruin your day, week, month or year.....and 30 Nice people to make you forget the idiot. :banghead:

P.S. the best thing I have ever done was geR a FFL C&R license, buy old klunkers and create jewels out of them and sell em for damn near cost, but the friends made along the way has been priceless.

Have a Nice Day
Mike from Cleveland

bayernwolf
July 8, 2010, 11:26 PM
Re-reading this I can't help but wonder Big Block......What DID you decide??? Anybody else know?

Buck Snort
July 9, 2010, 03:09 PM
Don't ruin a good hobby by turning it into a business.

dougw47
July 9, 2010, 04:15 PM
+1 Don't do it!

Tallinar
July 9, 2010, 04:23 PM
Thanks for that write-up, 41022collector. It was a good read.

JoeSlomo
July 9, 2010, 04:37 PM
it takes just one stupid MoFo to ruin your day, week, month or year.....and 30 Nice people to make you forget the idiot.


:)

That's sig worthy, and oh sooo true...

CraigC
July 9, 2010, 06:04 PM
As they say, if you love what you do you'll never work a day in your life.
They also say that the surest way to take the fun out of anything is to try making money at it. ;)

I worked at one for about six months when I was in college. It was an experience, good and bad. Met some interesting characters. Kept a couple good acquaintances but most the guys working there were arrogant and the owner was a full blooded a-hole. Still is. It was enough. I'm sure there are rare circumstances where you could make a living at it and still enjoy it but I gave up that dream a long time ago. I want to make as much money doing as little as I can to pay for what I want to do when I'm not working. Fulfillment is a lot to ask of a job in the 21st century. Best to seek it elsewhere.

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