Dealer cost/markup on new guns

[Crawford]

Try selling consumer electronics. 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.

Electronic retailers have "Monster Cable" and other add-ons as their case cows. I'm sure gun shops have some items they can push for profit.

 

[Bubba613]

The "high margin" items are things like Rem oil. Buy it for $1.95, sell it for $3.25, call it a 33% margin.
How many bottles do you need to sell to cover a $4,000/month overhead?

 

[HOWARD J]

How much will the gun shop charge you for receiving the guns????
You know you are going to get a list price 1040 from NRA.----------------
In the long run you may wish you were not the lucky winner.....................:banghead::banghead:

 

[Uncle Alvah]

I also know that some dealers charge more than MSRP.

Instances of that are VERY rare.

On a new, popular gun, say an XD, a dealer might make $50-$60 on average. Google "gun dealer millionaires" , I doubt you'll find much.

On used guns, the money is made on the buy, not on the sell.

 

[lab28143]

I had a local dealer sell to me at cost. plus the s/h charges

 

[natman]

At the shop where I worked we were on the higher end and we only got 20-25% on guns. The money, such as it is, is made on accessories and clothing. Guns are sold just to get people into the store to buy other things.

**IF** you win, I wouldn't expect to get more than half retail from the dealer if he'll agree to take them at all. If he wanted a particular gun, he can order one whenever he wants. He may not be in a position to take on 19 at once, they may not be the guns that sell in his territory, this season, whatever.

Personally I'd make a deal to transfer the guns in bulk, then sell them on Gunbroker.

 

[NMGonzo]

Sell them locally

 

[mgkdrgn]

Now, supposing I won this instant armory,

If you do, you'll owe about 1/2 of their MSRP value (or whatever the IRS decides to value them at) in income/FICA/MEDICARE taxes .... Fed, state, and local if any. Oh, and they want that RIGHT NOW.

THEN you can concern yourself with selling them. In the end, you'll end up with maybe 25% of the MSRP in your bank account.

 

[Mr.Davis]

Guns have exceptionally low profit margins for dealers. I was shocked when I learned that new guns typically only have a 10-15% profit margin for dealers. They could make a little more if they sold at MSRP, but I only see big boxes try that around here.

Keep in mind that once the guns are transferred to you, they'll effectively be used merchandise. I doubt a reputable gun dealer would resell them as "new" merchandise, meaning there's going to be a bit of a hit associated with the "used" or "preowned" stigma.

I bet a lot of dealers would be willing to pay 65-70% of MSRP on the guns, even if they had to sell them as used.

I suggest considering a trade for part of their value in this case (if you win, of course). You could probably get a little more value for your money by trading for inventory he already has than asking him to write you a $7k check.

 

[leadaddict]

I buy from a small dealer that doesn't carry much inventory and he just charges a flat $20 over his cost when he orders me a gun. The same amount as if it were a transfer fee.

 

[Jimineer]

Markup? Might also depend on whether or not your dealer also has a range. My LGS had a big sale recently. I asked one of the employees why, and he said it is so they can keep people on the range - so I took this to mean, range time, gun rentals, buying ammo, accessories etc. So maybe margins on guns arent' all that great and the money to be made is on the other stuff they sell plus range time, ammo, etc.

Just another data point.