Perhaps, the LGS is different in MI where we have several large independent stores that have large 500-1000 gun inventories. I know of a couple of shops that a one location stores with quarter of a million dollar credit lines from Browning. And in those stores cases (maintaining that large of an overhead) the 40-50% ratio is a recipe for failure.
As far as 30-40% gross margin, their are very few retail operations in any segment that survive on less. The only exception to my knowledge is Wal Mart who come in at about 27%, but they do it with absurd volumes and sacrifice service to do it. I'm not suggesting you have to gross 30-40% on a gun to make it. Only that by the end of the day the total receipts verses the inventory turned you need that amount when you look at the real overhead of a retail business.
It can be range fees, gunsmithing work, hunting clothing, tactical gear, gun cleaning, ammo, even transfers, whatever. And remember what I said about making money on money. Many of these stores will sell a product 2-3 times before they pay for it once. That is extra money interest free in the till too. But after you take out inventory cost, taxes, payroll including HC , utilities, Legal costs, and rent 30-40% doesn't sound like a whole lot.
Back in the days when retail was exploding and high end malls were the rage, a location in a high rent mall needed to clear closer to 50% to break even.
