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Dealer cost/markup on new guns

Discussion in 'General Gun Discussions' started by heron, Apr 21, 2010.

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  1. heron

    heron Member

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    Okay, I sent in my entry for the NRA-ILA contest, and the Grand prize is 19 guns, which I selected from a list.

    Now, supposing I won this instant armory, I really have no desire for most of the ones I checked; I just checked off 19 items for the purpose of the contest.

    So, I'm guessing that they would all be shipped to the dealer of my choice (a good local shop). I would then say, "I only want these; would you buy the rest of them?"

    If the dealer wanted them, I'd want to get a price that's fair to both of us. I know that, on a lot of goods, dealer cost is about half of MSRP. I also know that this isn't true of everything, and markup or profit margin may be less than that on guns.

    So, could someone give me an idea of what to ask? Is dealer cost about half of retail, or is it substantially higher?
     
  2. CoRoMo

    CoRoMo Member

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    You're getting the cart before the horse a bit, aren't you. Let's wait to see if you are lucky enough to win the grand prize first. But to answer your question, some dealers price their guns as little as 5% above cost. Some obviously make larger margins, but it's much smaller a percentage than most anything else in retail.
     
  3. Hatterasguy

    Hatterasguy Member

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    I don't know why but 10% is stuck in my mind.

    Unless its something new and hot like the FN Scar or LWRC REPR, than its a BMW 7 series payment.:rolleyes:
     
  4. kostyanj

    kostyanj Member

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    A dealer that I used to get from told me he charges a 12% margin on guns.
     
  5. smince

    smince Member.

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    A dealer-friend who has a good business says he would rather make $25-30 on a gun and sell a lot than try to make his car payment on one gun :D
     
  6. content

    content Member

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    Hello friends and neighbors // This would be close to finding a gun shop to sell my firearms/gear on consignment in the case of my death.

    I checked with several before I got what I considered the best response. Now my family has this as an option for any that might not be passed down(cringe).
     
  7. Bubba613

    Bubba613 member

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    The dealer should offer you 15% over your cost for the guns you've won in the contest.
     
  8. Bubbles

    Bubbles Member

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    Depending on what they are the FFL may or may not be interested, especially if he's already got the same models in stock.

    I'd suggest consigning them with the dealer instead.
     
  9. hso

    hso Moderator Staff Member

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    No, dealer is not half of MSRP on firearms. New firearms are actually the smallest margin for a brick and mortar gun shop and most retailers don't even charge MSRP to get the full margin.
     
  10. heron

    heron Member

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    I just thought I'd get some info about this before I forget about it (which I will). Boy Scout motto, y'know.

    Well, that would certainly be a bargain for him . . . all I've got invested so far is a postage stamp.

    I've noticed that some places sell for less than suggested retail, maybe 5% or more -- my local shop is one of them -- so that tells me that dealer cost has to be somewhat less than that; I'm guessing maybe 15%. I also know that some dealers charge more than MSRP. I just needed a reasonable price range.

    IF I win (big if), and if he doesn't want them, he can put them up on consignment for me.

    Thanks, everyone; that helps.
     
  11. Bubba613

    Bubba613 member

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    If you want to consign them, take a look around the net and see what people are selling the same guns for, e.g. on Gunbroker.
     
  12. Salty1

    Salty1 Member

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    My actual sell margins only average 10% over cost, I put slightly higher margins on the cheaper guns than I would say an STI or Sig. No dealer is going to pay more for them than their cost would be new from the distributor or manufacturer, it makes no business sense at all. I would only consider 10% below my cost for them so I could make some money while my cash was tied up, fast moving high quality guns could be another story though, then maybe 5% below. Dealer cost is no where near half of MSRP, not sure where you heard that but is is totally false. If you were lucky enough to win the auction sites would be the best place to sell them, then again the pricing needs to be right, the old saying that a sucker is born everyday may be true but gun buyers typically know values and what the going price actually is, the smart ones never buy from places like Bass Pro or Cabella's.
     
  13. Sniper X

    Sniper X Member

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    To address a few comments about other "retailers" We only make 10% IF THAT in the (TV Film, video production) broadcast equipment sales world. It is surprising how much people who walk in here THINK we make percentage of markup wise. Shoot, I have people asking me to take off 20% for a sale!
     
  14. JohnBT

    JohnBT Member

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    Don't forget to save enough $$$ to pay the IRS if you win. :(
     
  15. Zack

    Zack member

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    Where do I submit my forum :D ?
     
  16. HGUNHNTR

    HGUNHNTR Member

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    In the gun shop where I worked a few years back, it varied by gun. 870's were pretty much given away at cost so we were not undersold by wally world. Other higher end firearms usually were a 18-24% profit margin. Used guns were another story altogether.
     
  17. CoRoMo

    CoRoMo Member

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    Yeah, used guns are like used cars.
     
  18. chief52

    chief52 Member

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    HGUNHNTR: great response. I was a little surprised no one gave a really specific answer other than what markup ISN't rather than IS until you opined. Funny how vehicles (20-30 grand) have 10-20% profit and furniture about 40-60% and clothing the same, but guns have only 5-10%???? Not even the box stores (Cabella's, Bass Pro, etc) operate at less than 10%.
     
  19. nulfisin

    nulfisin Member

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    What is the margin on ammo and other non-gun sales? Guns shops must make SOME money somewhere. How?
     
  20. Bubba613

    Bubba613 member

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    Ammo runs about the same as guns. It didnt used to be quite like that, but with the run up in prices no one is going to buy a box of .45acp for $39.
    Holsters, mags, cleaning supplies, pepper spray, optics, slings etc etc all have decent margins.
     
  21. ForumSurfer

    ForumSurfer Member

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    Ask yourself this:

    If you won a new car, would you let the holding car lot give you an extremely low ball price for it? Or would you accept it, pay your taxes, research the resale value and auction it off somewhere to make the most profit? Is several hundred more dollars worth your time?

    You'd likely get at least $100 more per gun selling them privately, assuming you didn't keep them. If you ended up selling only half, that's around an extra $1000 for your time at least. Well worth it!
     
  22. wishin

    wishin Member

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    You're right, but do you realize how many new car buyers leave hundreds, and sometimes a thousand $ or more, on the table when trading in their used car? Some folks don't want the bother of selling stuff.
     
  23. jmr40

    jmr40 Member

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    Around 10-15% at most on new guns. It depends on the gun and how hard or easy they are to sell.
     
  24. mgkdrgn

    mgkdrgn Member

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    Don't I wish. If I can get a 10% margin over my cost, I'm having a good day.
     
  25. Phydeaux642

    Phydeaux642 Member

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    Try selling consumer electronics.:banghead: Horrible margins thanks to the interweb. A lot of brick and mortar stores are going by the wayside because too many internet sellers are happy with a couple of percentage points. When/if that happens to my local gun shops, I'll likely not buy any more guns. I support the local economy as much as I can. Sorry for the sidetrack.
     
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