where do small dealers buy their new guns?


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machinecraig
February 9, 2012, 10:19 AM
How do small FFL dealers purchase their new guns, and what sorts of costs are they getting them at?

By small dealers I mean, the dealers who maintain an inventory of new guns and that are regulars at local gun shows - but who do not maintain a store front. Where do they purchase their new guns from, and how much of the MSRP are they paying on average?

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drsfmd
February 9, 2012, 10:33 AM
They buy from wholesalers like Bill Hicks and Accusport.

I won't tell you about pricing, as that's closely guarded in the business. I'll just say that it's a lot less profit than you think it is...

gym
February 9, 2012, 12:06 PM
Distributers

drsfmd
February 9, 2012, 12:13 PM
Actually in re-reading, my initial post may not be accurate... those types of "dealers" may not make purchase minimums to stock items from the larger (and thus better priced) wholesalers and distributors.

rule303
February 9, 2012, 12:15 PM
They are buying from the same distributors as the big shops, but they aren't getting the same quantity discounts. Firearms are a pretty low margin item, 10-15% usually.

russ69
February 9, 2012, 12:29 PM
Where I live the difference between a small shop and a major city discounter, is about 50 bucks on a 500 dollar gun.

The Lone Haranguer
February 9, 2012, 12:50 PM
They buy from pretty much the same wholesalers/distributors that big shops do. Gun makers don't sell their products directly to dealers.

drsfmd
February 9, 2012, 01:04 PM
Gun makers don't sell their products directly to dealers.

Nonsense.

There's a lot of direct-to-dealer sales from manufacturer, but it's not on a one or two piece at a time basis.

A dealer buys a dealership-- the right to stock that brand, and in turn receives a higher percentage off the item at wholesale than the shop buying through a distributor. They are also required to stock minimum amounts of product from that manufacturer (I know personally of some as low as $5000, others as high as $100,000... but I'm sure there's even greater variation out there).

machinecraig
February 9, 2012, 02:47 PM
Thanks for the insights, guys - seems like a tough business for a smaller shop.

Isaac-1
February 9, 2012, 04:51 PM
The successful smaller shops that I have seen over the years tend to specialize in some way they either offer better variety, better support of find some niche market which could be anything from gold plated AK's to obscure european shotguns.

Ike

MtnSpur
February 9, 2012, 05:05 PM
I'm friends with my FFL who does not have a storefront and he orders from distributors or wholesalers just like any storefront operation would. What he marks them up to I have no idea as it's none of my business and I'd never presume to ask him. I do know he sells for less than a LGS in the next town and I can pretty much bet his markup is minimal. His business is built on solid, reliable customer service and a reputation as an honest guy who will bend over backwards to find what one wants.

gym
February 11, 2012, 11:10 AM
Kimber was asking for a 10,000 dollar minimum order, So considering you have a lot more brands to sell, it's a lot of money to lay out for 10 or 15 guns.That's why distrubtors or big guys like shoot straight, come in,they have the cash.

mgkdrgn
February 12, 2012, 11:01 AM
They get them the same places the "big dealers" do ... they just don't get the "big dealers" prices.

Brett Parks, Columbia Arms (small dealer)

writerinmo
February 12, 2012, 08:01 PM
I've spent the last few days contacting all the smaller local gun shops around my area within a 50 mile radius trying to locate a Ruger P95. I get the same response (from those who take the time to respond, I guess the other's have a different type of "customer service") all of them saying that their distributor doesn't have any. Since I can find them on various online seller's website as in stock, I would have to assume that either somebody bought a whole lot of them and it wasn't their distributor or there exists and actual shortage of them as new. The same with a couple of other handguns that I contacted them about

jmstevens2
February 12, 2012, 08:19 PM
Or they hoped to sell you something sitting on the shelf that is 'just as good as'

mgkdrgn
February 12, 2012, 09:41 PM
I've spent the last few days contacting all the smaller local gun shops around my area within a 50 mile radius trying to locate a Ruger P95. I get the same response (from those who take the time to respond, I guess the other's have a different type of "customer service") all of them saying that their distributor doesn't have any. Since I can find them on various online seller's website as in stock, I would have to assume that either somebody bought a whole lot of them and it wasn't their distributor or there exists and actual shortage of them as new. The same with a couple of other handguns that I contacted them about
Yep, none of my distributors have any either.

And remember, just because the on-line guys -say- they have them, doesn't mean they really do... or they could have ONE. Opera ain't over till the fat lady sings.

orionengnr
February 12, 2012, 10:22 PM
If you purchase a firearm, hold onto it and shoot it for a few months, and then try to sell it off, don't be surprised that you only pull even or barely get away with a +10% profit.
What are you smoking?
Really..inquiring minds want to know. :rolleyes:

Onmilo
February 12, 2012, 11:07 PM
Buy new, keep for 3 months and sell for 10% profit?!?
Not even in a pipe dream and maybe once in a lifetime.

20 years ago I could realize 25% profit on used guns and 15%-18% on new.

With the current value of the dollar at a standing low a dealer is lucky to get 15% across the board.
Dealers buy from distributers and import houses & when it comes to the import houses he will mainly do transfers & keep very little C&R on hand anymore as so many people have received C&R licenses now.

Ole Coot
February 13, 2012, 10:11 AM
Years ago I ordered few new guns and made a larger profit on used firearms. I couldn't stock lots of new ones so I only ordered one of what I thought would sell and discovered I could pick up used firearms and resale much faster. This was at a time when you could sell out of your basement with minimum hassle from the BATF. I quit when the regs started to cost more.

oneounceload
February 13, 2012, 10:53 AM
I've spent the last few days contacting all the smaller local gun shops around my area within a 50 mile radius trying to locate a Ruger P95. I get the same response (from those who take the time to respond, I guess the other's have a different type of "customer service") all of them saying that their distributor doesn't have any. Since I can find them on various online seller's website as in stock, I would have to assume that either somebody bought a whole lot of them and it wasn't their distributor or there exists and actual shortage of them as new. The same with a couple of other handguns that I contacted them about

Or, since those stores are all in the same area, they may all be using the same distributor -and if he doesn't have any, then they won't either. There aren't that many big distributors but some seem to have a lock on certain regions for certain brands - and that might be a deal they have with the maker

dogtown tom
February 13, 2012, 10:55 AM
mortablunt ... If you purchase a firearm, hold onto it and shoot it for a few months, and then try to sell it off, don't be surprised that you only pull even or barely get away with a +10% profit. Guns also tend to depreciate in value rather poorly. If you want to make some extra spending money by selling guns, just get rid of some you already have.

So..........if i take my new guns out of the box, shoot them for a few months....they increase in value?:scrutiny:

This has to be the most bass akwards advice I've ever read on a gun forum.

mgkdrgn
February 13, 2012, 12:38 PM
What are you smoking?
Really..inquiring minds want to know. :rolleyes:
And I hope he brought enough for everybody!

mgkdrgn
February 13, 2012, 12:40 PM
Or, since those stores are all in the same area, they may all be using the same distributor -and if he doesn't have any, then they won't either. There aren't that many big distributors but some seem to have a lock on certain regions for certain brands - and that might be a deal they have with the maker
mmmmm not so much. Such shortages START at the manufacturer. They generally don't continuously produce ALL guns in the their catalog ALL the time. When the distributors run out, which they have in this case, there is a "shortage" untill next time there is a production run. Any dealer can order from any distributor they please (well, at least the brick and mortar ones can ... not quite the same for us small fry).

Miata Mike
February 13, 2012, 12:54 PM
Maybe Ruger is focusing on getting SR-1911's out the door and put P95's on the back burner for a bit. Not sure if they are made in the same place. When you didn't want a P95 I bet they were all over the place. ;)

Last year I fell into a deal on a new one that I couldn't refuse while out on my snowmobile ($295 stainless). Ever try to fill out the paperwork without your glasses? :cuss:

oneounceload
February 13, 2012, 09:22 PM
They generally don't continuously produce ALL guns in the their catalog ALL the time

Of course they don't - HOWEVER, if I am in the SE US, and Sports South or Ellett Brothers has a lock on the area, and they have sent out their allotment until the next production run then there will be a shortage in that area. The internet has greatly reduced that issue, but it can still be a factor if the retailer has a good discount deal with one of them, allowing them to buy at good discounts but in smaller quantities - not every mom and pop can afford to be a master dealer at $25,000 initial inventory buy in

jay21
February 13, 2012, 09:48 PM
Others are maybe not "out of stock" but "allocated". This is basically the salespersons (at the distributor) call who they will hand it out too (dealer). Easier to tell a customer out of stock most of the time. Small dealers can order form most of the distributors larger shops do.

newfalguy101
February 13, 2012, 10:02 PM
They get them the same places the "big dealers" do ... they just don't get the "big dealers" prices.

Brett Parks, Columbia Arms (small dealer)
Actually, many "big dealers" buy factory direct in large quantities ( think case lots )to get the price break and sometimes even free shipping.

I buy from distributors, and pretty quickly realized as a onsie twosie, I simply canNOT make any money on new guns.

C2C Guns, in business since May 2004 :D

Davek1977
February 14, 2012, 01:23 AM
I'll agree with what rule303 said. If you purchase a firearm, hold onto it and shoot it for a few months, and then try to sell it off, don't be surprised that you only pull even or barely get away with a +10% profit.

In what world do items get more valuable with use than they are right out of the box new? Why would one EXPECT to make 10% profit over the price of a new firearm?

Panzercat
February 14, 2012, 02:25 AM
An FFL I recently frequented has been trying to float his own business. When I asked him how it was going, he mentioned not very well. Profit margins are narrow and it probably doesn't help he lives in a state where you trip over firearms like dirt.

jmr40
February 14, 2012, 10:03 AM
It just depends. Many buy from distributors. Often they get a discount for large orders. I know that at times the distributors will sometimes offer a deal where if you buy a dozen Rugers, they will throw in a free Taurus. I've known of that to happen.

Some companies do require a mimimum order. Benelli and Kimber come to mind. Some smaller stores simply don't carry them because they have to agree to a huge order or they can't get even 1 gun.

The guy who owns the LGS where I hang out told me that a year or so that S&W changed their policies and will no longer give multi gun discounts and simply lowered the prices on all their guns for everyone. He said it made it a lot easier for him to compete with the bigger stores.

That can cause problems though. Seveal years ago Ruger really ticked off a lot of dealers when they drastically lowered their prices suddenly. Dealers who already had a large inventory of Rugers were stuck with guns that they had already paid for. Other dealers were selling new guns for less than other dealers had paid for the same guns. After lots of complaints and stores refusing to carry Rugers for a while they changed to a policy of offering rebates, instead of cutting prices. This was fair to all dealers.

mgkdrgn
February 14, 2012, 11:00 AM
Actually, many "big dealers" buy factory direct in large quantities ( think case lots )to get the price break and sometimes even free shipping.

I buy from distributors, and pretty quickly realized as a onsie twosie, I simply canNOT make any money on new guns.

C2C Guns, in business since May 2004 :D
Oh you betcha ... that is why I don't stock any. I'll order anything you want at 10% over my cost if you are willing to wait a day or two. My two big sales items are Mosin Nagant rifles and consignment sales.

Onward Allusion
February 14, 2012, 09:45 PM
Like most everyone already said, little money to be made if you are a small dealer. Margins are slim on new guns. If I were to go into the business, I'd focus on used guns and police trade-ins. Much more room to work.

Just as an example, I think most of us here know where to get the S&W 5906 police trades. I still see 'em in stores for over $500. Nice mark-up and a lot of room to work with the buyer.

But then again, it wouldn't be a business to be in for the money.

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