Online "discount" gun dealers

[Seattleimport]

My transfer fees are super low, $25. First, I hate gouging customers and I like helping people out. But when things get busier, like they have been recently, I'll be raising it; it's just not work my time. That's really what it boils down to, time.

I encourage you to revisit this time/value calculation.

How much time does it really take to manage a transfer? 2 minutes? 5 minutes? 10 minutes? Even if it's a half hour, that's a pretty decent rate.

Then consider the cost of goods sold for that transfer: the price of the form. In other words, effectively zero. Consider the physical space required for that form. The amount of lighting and display required. There's no inventory cost; it's pure margin.

Now consider that by definition, a person is required to visit your physical store in order to complete the transfer. Do you know how many hundreds of dollars in advertising is typically required in order to achieve 1 store visit? Instead of having to pay for that advertising, the transfer customer pays YOU.

So: don't give up on transfers. In fact, do everything you can to encourage people to do transfers at your store. Make it easy, make it quick, make it hassle-free. Make it your primary business! You'll never have to worry about being "out of stock" (a common complaint in this thread) because the *customer* provides the exact stock he's looking for, and bears the entire cost in locating, sourcing, and delivering that stock directly to your door. And then he gives you significant $ for doing all that hard work for you.

Now that he's paid you for patronizing your establishment, sell him your wares. He's got a brand new gun; offer to fill it up! Sell him ammo, a case, cleaning supplies, accessories. All high-margin, broad-appeal inventory that's difficult or unsatisfying to purchase online.

It amazes me that a store would be hostile to transfers. Heck, if I had a store, I'd set up a desk and computer so customers could shop online and ship to my store. Make it as easy for them as possible. Customer gets what he wants (low price, infinite selection) and I don't have to deal with bulky and expensive firearm inventory, or bear the risk of having that inventory sit (and depreciate in value) for months before it sells.

 

[FourTeeFive]

I still don't get what he's complaining about when his website indicates he has no storefront and it isn't a full-time business for him. So his fixed costs are extremely minimal compared to a brick and mortar location.

 

[TITAN308]

And thus the mystery begins... (well at least until a Mod comes around. Clicky Clicky)

Don't lock me bro!

 

[JohnBT]

"How much time does it really take to manage a transfer? 2 minutes? 5 minutes? 10 minutes? Even if it's a half hour, that's a pretty decent rate."

How much time? That's entirely dependent on how many times the buyer has to call or stop by to get it arranged. And then how many times the buyer calls or stops by to ask, "Is it here yet? Is it here yet?" And so forth through the pick up and paperwork. Suppose it's damaged in transit. Lost? Oh dear.

Sure, some deals are smooth as silk. The rest of them would drive me nuts. No wonder some places charge $50 or $100 for a transfer. It's the aggravation tax.

 

[TenRingGuns.com]

Alright, here's the skinny. I made my earlier post from my phone after I had just gotten off the phone with my suppliers and learned the news which I believe is significant.

People have been buying guns online for a while now but what I learned several months ago being a new dealer irritated me. A customer did a transfer from Cheaper Than Dirt but the receipt and packing was from one of the suppliers that I use; there wasn't even a receipt from CTD in the box!

Cheaper Than Dirt, Buds, and all the other dealers that prostitute guns for dollars over cost have been drop shipping their guns directly from the wholesalers. That's how they can sell for so low, they do volume sales.

When you place an order on CTD, an electronic order is automatically sent to a wholesaler and the gun is shipped from that wholesaler to the FFL you provided. The "warehouse" you see on CTD's website is the location of the wholesaler, it isn't CTD which is why shipping and time varies due to the various wholesalers that CTD and other use.

The problem is this: any normal FFL who has a shop or who hopes to open one soon (me) can't compete, it's impossible. Analogy: In the same way US businesses who want to stay in the US can't compete with their competitors who send jobs overseas to avoid taxes and to hire cheap labor. Those business are either forced to join the crowd or close their doors (generally speaking).

This was why so many FFL shops in my area are refusing to accept transfers from these online discount dealers, an act of protest if you will.

Anyhow, I find it ironic given this thread which began from my frustration at this issue, that today I learned that SSI and RSR will no longer allow firearms to be drop shipped. As Will and Wes told me today, this drop shipping ended because of the backlash the manufacturers were getting as well as the complaints from FFL dealers trying to stay in business; I'll post the email Will will be sending out to all the dealer as soon as I receive.

There you go. That's the big news. It'll be interesting to see what happens to those dealers because their costs are going to increase dramatically. I'm still figuring out my business strategy but I'll be keeping it as I originally intended: offering the best service around while also giving my customers good prices.

As for the comments posted thus far, I love em'!

 

[mgmorden]

This guy has come in several times to give the thread just enough push to keep it going and stoke the flames.


My guess is that if TenRingGuns actually exists, this guy isn't actually the owner, and just co-opted it as part of a clever trolling identity.

 

[Scimmia]

When you place an order on CTD, an electronic order is automatically sent to a wholesaler and the gun is shipped from that wholesaler to the FFL you provided. The "warehouse" you see on CTD's website is the location of the wholesaler, it isn't CTD which is why shipping and time varies due to the various wholesalers that CTD and other use.

And this is different than what you're currently doing how? You're taking orders then having the distributer ship to the FFL (you) to go to the end customer. I don't see anything different here.

Sorry, I'm not going to pay an extra 30%-40% just to deal with a local guy. That's what the difference is around here, and they do the same thing for most guns, order from the distributer when you order the gun. I have a local FFL dealer that does transfers for $10. I'm not sure why you keep pointing to your $25 transfer fee as being so great, that's pretty average.

You know, there are a lot of distributers out there, if some won't drop ship, others will. It's called free market.

 

[Tim37]

ok shops around here dont have a problem competing. they may not be able to beat them but they get close enough that i dont have a problem paying 10 or 20 bucks more. if they can do it why cant you?

 

[Teachu2]

Alright, here's the skinny. I made my earlier post from my phone after I had just gotten off the phone with my suppliers and learned the news which I believe is significant.

People have been buying guns online for a while now but what I learned several months ago being a new dealer irritated me. A customer did a transfer from Cheaper Than Dirt but the receipt and packing was from one of the suppliers that I use; there wasn't even a receipt from CTD in the box!

Cheaper Than Dirt, Buds, and all the other dealers that prostitute guns for dollars over cost have been drop shipping their guns directly from the wholesalers. That's how they can sell for so low, they do volume sales.

When you place an order on CTD, an electronic order is automatically sent to a wholesaler and the gun is shipped from that wholesaler to the FFL you provided. The "warehouse" you see on CTD's website is the location of the wholesaler, it isn't CTD which is why shipping and time varies due to the various wholesalers that CTD and other use.

The problem is this: any normal FFL who has a shop or who hopes to open one soon (me) can't compete, it's impossible. Analogy: In the same way US businesses who want to stay in the US can't compete with their competitors who send jobs overseas to avoid taxes and to hire cheap labor. Those business are either forced to join the crowd or close their doors (generally speaking).

This was why so many FFL shops in my area are refusing to accept transfers from these online discount dealers, an act of protest if you will.

Anyhow, I find it ironic given this thread which began from my frustration at this issue, that today I learned that SSI and RSR will no longer allow firearms to be drop shipped. As Will and Wes told me today, this drop shipping ended because of the backlash the manufacturers were getting as well as the complaints from FFL dealers trying to stay in business; I'll post the email Will will be sending out to all the dealer as soon as I receive.

There you go. That's the big news. It'll be interesting to see what happens to those dealers because their costs are going to increase dramatically.

So because YOU have decided to sell guns, the folks who have worked long and hard to build profitable businesses JUST LIKE YOU HOPE TO DO should have the rules changed to accommodate YOU - and at the customer's expense!

So if a 5'2", 220 lb 18 year old wants to play in the NBA, should they set a player height limit of 5'3? AND raise ticket prices?

Well, good luck selling that!

 

[TITAN308]

As for the comments posted thus far, I love em'!

Fantastic marketing strategy.

 

[JohnBT]

"have been drop shipping their guns directly from the wholesalers"

This is not news. Even I know it and the only guns I've mail ordered in 50+ years have been a new Cooper Custom Classic .22 and very nice Remington Model 76 lever. The first I gave to my father and the second to my uncle.

John

 

[Teachu2]

And the guns I've purchased from Bud's, shipped from Bud's warehouse - you know, WAREHOUSE...that other building you don't have, where you do shipping, receiving, and backstock for the storefront you don't have...

Bud's should be complaining about YOU.

 

[wojownik]

Wow, so disappointing that a generally well-thought out thread gets rerouted into near trolldom.

I would love to see a copy of that e-mail. Though many brick and mortar businesses may not like the new dynamic of the e-commerce world, there is nothing new here (it has been going on in many retail sectors for over a decade).

And there is nothing improper or illegal about what Buds or the Internet retailers or wholesalers are engaged in. On the other hand, I have a serious concern about - if true - what is being alleged here as a potential attempt to restrain the trade of the e-retailers, by potentially affecting supply, affecting prices, or otherwise attempting to control the market to the detriment of purchasers or consumers of firearms. If this verbiage sounds a little familiar, I'm pretty much typing in the definition of restraint of trade from the Sherman Anti Trust act from memory.

Any action that would be an attempt to limit trade, sales and transportation in interstate commerce could potential be dealt with rather harshly under a range of existing anti trust regulation. I'm not trying to flame this. Rather, I have a very real interest in seeing the text of the purported e-mail, as I extremely curious how the authors would frame this without running afoul of a range of business regulations.

 

[TITAN308]

In a nutshell I am suppose to just believe that every manufacturer of firearms has adopted these supposed new rules.

No one can force this decision, it has to be made willingly.

Or are you saying the government gets to tell them how they make their sales to dealers? Not that I don't think our government won't do anything - but even that is hard to swallow.

The obvious reason the BS flag goes up because at the end of the day one method generates faster revenue than the other. I'm so sure these manufacturers "care" about FFL complaints.

Businesses exist to make money. Not be your friend. And if you not being their friend does not harm their ability to make money you will be told to pound sand if you cannot adapt.

 

[TenRingGuns.com]

The government has nothing to do with it.

Gun manufacturers and FFL dealers complained to the wholesalers about getting screwed over e.g. conflict of interest for starters. The wholesalers, not wanting to lose their customers (FFL dealers like me), then scrapped their drop ship program.

That's it.

 

[TITAN308]

Why am I to believe that FFL dealers account for more dollars than the single user with cash in his pocket and an internet connection.

There will always be someone in town to do the transfer.

 

[TenRingGuns.com]

When was the last time you walked into Smith & Wesson and bought a gun?

 

[TITAN308]

I get the idea. You propose if there is no one to accept and transfer the gun (FFL) then online sales cannot be sustained.

That is not how it works. If all the FFL dealers in one town stopped accepting online orders in protest, some other average Joe is going to drop $700 on a FFL and capitalize on your loss.

Being a bully in the market does not work anymore.

Not to mention widdle away what customer base you have.

Enjoy the double edged sword. Not my idea of an enjoyable business model.

 

[Tim37]

When was the last time you walked into Smith & Wesson and bought a gun?

October 27 2011

http://www.budsgunshop.com/catalog/product_info.php/cPath/21_39_71/products_id/62623

i paid 398+tax at my local. if i would have purchased it from buds it would have been a dollar more. but i would have skipped out on the tax. so i would have saved my self 15 or so bucks.

 

[TenRingGuns.com]

No, not proposing anything Titan.

It is what it is, that's how a person buys a gun in this country. You have to go through an FFL.

In the end, it's all back to service. Read the comments on any one of those guys' Facebook pages, there are more negative comments than you would think.

Anyone can sell a gun for cheap, very few offer quality service.

 

[Zombiphobia]

I prefer to buy my guns from the local stores unless:

- They don't have it
- Won't/cant get it
- want to over-charge
- are rude, insult my intelligence or taste in firearms
- I walk up to the counter and am ignored while the staff chat with people who aren't even doing business

 

[Byrd666]

TenRing - That post # 104 was very interesting for and to me as I'm in the process of putting together a business plan for my future shop and getting my stuff ready for my FFL app.
But what I really find funny, if you will, is that some shops don't want to do the transfer. I mean, 20-25-30 bucks for a small amount of work, seems like easy cash for the shop owner to me.
You learn anything more, please pass it on as this is very interesting stuff to know.

 

[Robert]

I am going to have to order the next rifle I buy no matter where it comes from. There are at least two guys in town that make their walking around money doing transfers, at your amazing price of $25, so I have no need to go to the LGS. I am going to order it from whoever can get it for me the cheapest. If it is the LGS fine, but I really doubt it.

very few offer quality service.

What service? I know what I want and I know what I am willing to pay for it. If you can do that great. If not I will find someone that can. I am not really sure what other service I need. There are a few good smiths in town and the internet is chocked full of every doo dad possible. The fact that I don't have to waste gas and deal with the people at the LGS is good enough "service" for me.

Life, and business, is not fair.

 

[jef2015]

I am absolutely sure distributors are looking out for tenringguns.com best interest. I mean, they have only had the best month in the history of gun sales. They should definitely restrict the most high volume gun sellers on the internet. How do they say it on ESPN? "C'mon man!!!"

 

[TenRingGuns.com]

Hi Byrd
Hopefully this will give you some things to think about. $25 transfer is cheap, super cheap. I do it partly because I like helping my customers out and but also because I want people to experience the service they'll get from me over the other guys.

Gus, believe me, your the exception not the rule. I've spent time on the phone and emailing back and forth answering questions and giving advice to most of my customers so that we can find the right product for them. They want advice, they want knowledge, they want someone watching out for them. That's what I give them.

Guess what? It works, my customers love me. I take my time with each of them and give them a one-to-one experience.

Best month ever Jef? No, not yet anyway. We'll see what my new site does; my current site was built by me and isn't cutting it.