Opening a gun shop: Heaven or Hell?
- Thread starter BigBlock
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41022collector
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Hi BigBlock:
Ok... I have owned two gun shops in the past and now only do gunsmithy work out of my home.
The real key is price margin Vs. overhead. Lets say you want to make a very modest low income of $25,000.00 a year. Most gun shops today run on a 13% sum margin on most goods. Lets round that down to 10%. To make $25,000 on a 10% sum margin, you would have to gross $250,000 in that year, plus pay what ever taxes, licenses, overhead and supplies (utilities, coffee for every arse in the region and toilet paper etc.)
Now a typical shop today is either very large or very small, very few in between shops. large would be close to 1000 new and used firearms in stock. Small would be 50 - 100 firearms, new and used. The accessories to support those firearms such as ammo, cleaning kits, holsters, scopes and such..... would take close to $22,000 in wholesale capital for a small shop and close to $200,000 in wholesale capital for a larger shop. Operating capitol is usually close to 30% of expected gross regardless of size unless you do a Cabelas or Outdoor world.
In short, you are either in both feet with the kids future hocked or in it so small to not even make a dent in the local market because everyone has a few friends with an FFL that will sell $10 over cost.
Unless you find a nitch of a certain firearm like the GSG-5 and be exclusive for a market area, you truly are losing money everytime you sit down with a coffee and read Shotgun News.
Now that was money... lets talk laws... getting a FFL is easy, almost every Joe or Jane with an address can have one. The hard part is stating the hours you are open and sticking with it as this is where BATF suspends most licenses, even for short terms. I have had all at one time, local police, county law, state law, feds and even super feds in my shop at one time for inspections, they coordinate them. Then I have local anti gunners and peace nics..... then I have the thugs, thieves and drug addicts that consider a gun shop a bank in waiting. Also the local news that each time some idiot went ballistic with a piece, they were at my front door at the same exact time I sold cousin Joe an AK47 kit and 3000 rounds of ammo with Gopher bright orange targets.
Then god forbid, someone buys a firearm from you and uses it legally (Illegally, you are toast) to defnd themselves or the fam. Everybody in the chain gets sued.... there in comes the HUGEST cost, Insurance, Liability and Comprehensive coverage. Even when bought from NRA, it is a true real chunk of money, up front, every 6 months. Don't pay it, then that is when they take an arm, leg, eye or left nut if you get sued. If you do get sued, then it goes up 25%.
in the end................ I found my nitch of gunsmithing classic firearms.... charging a lil over cost and do it out of my shop, I still have my FFL to conduct the transfers occasionally. But a real gun shop... unless you honestly have 1.4 million green backs to open and operate a real one, or 50 - 100 guns laying around the house you can put in Browning safes each night that are bolted to the devils arse..... I suggest you find a true nitch, stay happy, drink the coffee, sell the occasional piece to a friend...... and forego the headaches of the real world in the world of Gun Sales on a grand scale shop.
Want to make some real money and be happy in firearms... either invent or find overseas somewhere a Full Auto BB Gun not made of plastic that actually works on compressed air (not Co2 as that will soon be illegal or cost $32.50 a 12 gram tube to shoot)....and shoots standard BB's (not soft pellets)..... advertise it, demo it and sit back and laugh all the way to the bank..... I know damn well I could sell at least 400 M-19 Anilators (mid 1980's, I have three and have been offered up to $700 each for them and they had cost like $30 each) a week and that would be just Gunbroker.com and Auctionarms.com and Soldier of Fortune ads.
I know this was long winded.... but really I just wanted to get across the hassels and concerns of running a REAL gun shop. I love firearms and all that has to do with them, but running those shops almost made me hate the firearms and the people who wanted them..... it takes just one stupid MoFo to ruin your day, week, month or year.....and 30 Nice people to make you forget the idiot. :banghead:
P.S. the best thing I have ever done was geR a FFL C&R license, buy old klunkers and create jewels out of them and sell em for damn near cost, but the friends made along the way has been priceless.
Have a Nice Day
Mike from Cleveland
Ok... I have owned two gun shops in the past and now only do gunsmithy work out of my home.
The real key is price margin Vs. overhead. Lets say you want to make a very modest low income of $25,000.00 a year. Most gun shops today run on a 13% sum margin on most goods. Lets round that down to 10%. To make $25,000 on a 10% sum margin, you would have to gross $250,000 in that year, plus pay what ever taxes, licenses, overhead and supplies (utilities, coffee for every arse in the region and toilet paper etc.)
Now a typical shop today is either very large or very small, very few in between shops. large would be close to 1000 new and used firearms in stock. Small would be 50 - 100 firearms, new and used. The accessories to support those firearms such as ammo, cleaning kits, holsters, scopes and such..... would take close to $22,000 in wholesale capital for a small shop and close to $200,000 in wholesale capital for a larger shop. Operating capitol is usually close to 30% of expected gross regardless of size unless you do a Cabelas or Outdoor world.
In short, you are either in both feet with the kids future hocked or in it so small to not even make a dent in the local market because everyone has a few friends with an FFL that will sell $10 over cost.
Unless you find a nitch of a certain firearm like the GSG-5 and be exclusive for a market area, you truly are losing money everytime you sit down with a coffee and read Shotgun News.
Now that was money... lets talk laws... getting a FFL is easy, almost every Joe or Jane with an address can have one. The hard part is stating the hours you are open and sticking with it as this is where BATF suspends most licenses, even for short terms. I have had all at one time, local police, county law, state law, feds and even super feds in my shop at one time for inspections, they coordinate them. Then I have local anti gunners and peace nics..... then I have the thugs, thieves and drug addicts that consider a gun shop a bank in waiting. Also the local news that each time some idiot went ballistic with a piece, they were at my front door at the same exact time I sold cousin Joe an AK47 kit and 3000 rounds of ammo with Gopher bright orange targets.
Then god forbid, someone buys a firearm from you and uses it legally (Illegally, you are toast) to defnd themselves or the fam. Everybody in the chain gets sued.... there in comes the HUGEST cost, Insurance, Liability and Comprehensive coverage. Even when bought from NRA, it is a true real chunk of money, up front, every 6 months. Don't pay it, then that is when they take an arm, leg, eye or left nut if you get sued. If you do get sued, then it goes up 25%.
in the end................ I found my nitch of gunsmithing classic firearms.... charging a lil over cost and do it out of my shop, I still have my FFL to conduct the transfers occasionally. But a real gun shop... unless you honestly have 1.4 million green backs to open and operate a real one, or 50 - 100 guns laying around the house you can put in Browning safes each night that are bolted to the devils arse..... I suggest you find a true nitch, stay happy, drink the coffee, sell the occasional piece to a friend...... and forego the headaches of the real world in the world of Gun Sales on a grand scale shop.
Want to make some real money and be happy in firearms... either invent or find overseas somewhere a Full Auto BB Gun not made of plastic that actually works on compressed air (not Co2 as that will soon be illegal or cost $32.50 a 12 gram tube to shoot)....and shoots standard BB's (not soft pellets)..... advertise it, demo it and sit back and laugh all the way to the bank..... I know damn well I could sell at least 400 M-19 Anilators (mid 1980's, I have three and have been offered up to $700 each for them and they had cost like $30 each) a week and that would be just Gunbroker.com and Auctionarms.com and Soldier of Fortune ads.
I know this was long winded.... but really I just wanted to get across the hassels and concerns of running a REAL gun shop. I love firearms and all that has to do with them, but running those shops almost made me hate the firearms and the people who wanted them..... it takes just one stupid MoFo to ruin your day, week, month or year.....and 30 Nice people to make you forget the idiot. :banghead:
P.S. the best thing I have ever done was geR a FFL C&R license, buy old klunkers and create jewels out of them and sell em for damn near cost, but the friends made along the way has been priceless.
Have a Nice Day
Mike from Cleveland
bayernwolf
Member
- Joined
- Jun 12, 2008
- Messages
- 3
Re-reading this I can't help but wonder Big Block......What DID you decide??? Anybody else know?
Buck Snort
Member
Don't ruin a good hobby by turning it into a business.
dougw47
Member
+1 Don't do it!
Tallinar
Member
Thanks for that write-up, 41022collector. It was a good read.
CraigC
Sixgun Nut
They also say that the surest way to take the fun out of anything is to try making money at it.
I worked at one for about six months when I was in college. It was an experience, good and bad. Met some interesting characters. Kept a couple good acquaintances but most the guys working there were arrogant and the owner was a full blooded a-hole. Still is. It was enough. I'm sure there are rare circumstances where you could make a living at it and still enjoy it but I gave up that dream a long time ago. I want to make as much money doing as little as I can to pay for what I want to do when I'm not working. Fulfillment is a lot to ask of a job in the 21st century. Best to seek it elsewhere.
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