Opening a gun shop -- UPDATE: Two Years In!

[kcshooter]

I do buy about half of the accessories online. The other half is bought in their store.

Almost all my reloading components are bought in person at their store.

I bet I put more profit in their pocket from that stuff than I would if I bought 4 or 5 guns a year from them.


However, if they were condescending jerks about it, I wouldn't spend a dime there. Which is pretty much what larryh1108 said he experienced for himself a few posts ago.

 

[kcshooter]

So now it's a matter of being competitive with what other FFL's charge and not simply $10-20/gun?

Yeah, it has been since I said that in post #115. Sam said the same thing in #116.

 

[Sam1911]

Do you honestly believe that most who go through the trouble of buying arms on-line are not also buying "accessories, ammo, accouterments, services, and so forth" on line? Really?

Not for everything, of course. But some things, sure! Again, though ... if the guy is IN your store he may buy something from you. If he's NOT in your store, he WON'T buy anything from you. You can try to lure him into your store with low prices, free popcorn, dancing girls, ...whatever. But the government says he MUST come to your store (or your competitor's store) to get his gun. You can turn him away, or you can get him in the door. Your call.

 

[Sam1911]

So now it's a matter of being competitive with what other FFL's charge and not simply $10-20/gun?

Of course it is! I said that before. Your local market will dictate all sorts of prices. If the going rate in your area is high -- let's say $50 -- then charge $45 and get those guys in YOUR shop. Or charge $100 just on principle and watch them go into your competitors' shops.

Believe it or don't believe it -- folks who go into stores for ANY reason (well, maybe not serving a warrant or something) buy things. Not everything they ever needed, but some stuff. That's stuff you either just sold, or you just didn't sell. Again, your choice!

I'll second another point that was raised before: If you can get a gun for a customer, let them know, and tell them your price. If you can't get within shouting distance of the price they can get the identical item elsewhere, acknowledge that they'd be a fool to pay so much more, and offer them a price for the service of transferring the gun. You aren't getting their business on the gun at your cost, regardless, period, at all. Treating them like they're unethical or evil because they're making an economical decision is really poor. Give them a price for transfer that is fair in your local market and make your money that way. Maybe the $30, 40, 50 whatever, you made on the transfer isn't quite as much as the profit you'd have made on the same gun marked up from your display case. But that doesn't matter. What matters is money you made vs. money you didn't make.

 

[leadaddict]

I'm curious, maybe a gun-shop owner can help me with the math. Let's say I want a Glock 17. Bud's currently has them for $499.00 (shipping included). With a $20 trasfer fee, it ends up costing me $519 and you make $20. What can you sell a Glock 17 to me for and what would be your profit? Are you making $40 or $80? I'm just trying to understand the number behind the argument. - Thanks!

 

[JustinJ]

And that's something we're all working on changing -- and something that is ALREADY changing. The shops that are catching on that wave are -- and will continue to -- reap great rewards.

Not sure what evidence you have for this but i'd be glad to hear it.

The vast majority of women i see in gun stores are accompanied by men and are going to be far more concerned with his input than the person behind the counter, man or woman.

But it isn't just for the ladies. There is something very wholesome and welcoming about having a diverse staff. The more aware/in-touch guys will notice it, but every customer who comes in that door will benefit from the atmosphere shift that comes from a staff that doesn't all look, talk, and act the same -- and the same as you do.

I can't speak for others but the diversity, or lack of, of the staff, will have far less bearing on me than their abilities to do their job. Maybe i'm just naive but i tend to look past such superficial things.

Hire the best people you can find.

Well...um, yes. Obviously. My point is, look for and pursue for hire any women you can find who are qualified to discuss guns, and have the other qualities needed for salesmanship. It will pay off over hiring just another guy, as good a salesman as he may be.

Well, um, no. You can't do both. You either hire people on entirely on their merits or you don't.

A sales job is all about personality and making relationships, however briefly. If you think that's gender neutral, you're not paying very close attention to the way the world works. Heck, even telephone sales is not gender neutral, by a LONG shot. Shoot, even PRINT ADS that just give you a web address to go to are not gender neutral.

Gender neutral means that any person can successfully do the job. There are plenty of men full of charm who will outsell the vast majority of women and vice versa.

Women feel far more comfortable, quite often, discussing their needs, worries, hangups, interests, and goals with another woman than they would with almost any guy. (There's an angle there, but the forum isn't ready for it.) The double-whammy is, though, that GUYS react almost MORE positively to engaging and knowledgeable female sales staff. And it isn't just "sex sells." The reasons are probably too involved to get into here, but it just IS so.

Strange then that men and women have such equal representation in sales jobs. Women can also be extremely competitive and antagonizing to each other. It all comes down to the skill of the person behind the counter, male or female.

 

[larryh1108]

It's logical to expect that those shoppers who go through the trouble of buying a gun on line also buy most/all of their ammo and supplies on-line (or at Wal*Mart) as well. The receiving guns at $20.00/gun and then making it up on accouterments and supplies is fantasy.

The fantasy is believing your own words. That may be how you are but when you consider shipping costs on accessories it is a lot more in the long run to buy online unless you buy in large quantities. I'd also bet that if you ask for a case price on ammo at your local source that you'd save money there as well. Try buying 2 boxes of ammo online. It cost's as much to ship as the cost of the product. Many of us don't have $275 plus shipping to buy a case of ammo. Cleaning supplies, patches, bore snakes, Hoppes, etc, are all things we use as well as ammo and it may be easier to order online if you don't live close to a source we usually get those things locally. Hey, it's obvious you don't want our money. We'll gladly spend it somewhere where it is appreciated.

 

[mje]

I don't think you have to undercut everyone to be a successful store; instead, market service. There are several stores and ranges around here that sell only popular combat pistols and 5.56 poodle shooters, and I won't patronize any of them. Instead, I happily drive 30 minutes to a little mom and pop store that has a small selection of new guns, and an ever changing selection of used guns. And I often drive an hour to a shop that has excellent service and a huge selection of all sorts of used guns. (Michigan residents: Guns Galore, in Fenton.)

If you open a shop selling only the combat style stuff you'll be constantly dealing with wanna-be gang bangers, camo-clad Tacticool bozos and worse. If you open a store catering to hunters and gun hobbyists, you'll enjoy it a lot more.

I can offer one tip from my days run ing a musical instrument store: If you sell commodity items everyone can get, you'll end up trying to compete on price and you'll never make any money. Try to find your own niche.

 

[Sam1911]

Not sure what evidence you have%

 

[drsfmd]

I'm curious, maybe a gun-shop owner can help me with the math. Let's say I want a Glock 17. Bud's currently has them for $499.00 (shipping included). With a $20 trasfer fee, it ends up costing me $519 and you make $20. What can you sell a Glock 17 to me for and what would be your profit? Are you making $40 or $80? I'm just trying to understand the number behind the argument. - Thanks!

I'm not going to tell you the exact profit, but it's more than $20. Moreover, if the store is already a Glock dealer they have paid for the right to sell them, and get a discount in return. Many shops are just buying from distributors and marking up the price-- most small shops operate that way.

Some manufacturers require that you carry a certain amount of their product at any given time (for one I'm most familiar with, it's $50,000 in merchandise... guns, accessories, etc). You can bet your life that no shop that's made that kind of investment is going to bring in a $20 transfer on a gun from that manufacturer that they already have in stock. Hence my earlier "cutting your own throat" argument.

I find it ironic that most of you complaining about gun shops and prices have never worked on the other side of the counter. You have no idea of the expenses... it only STARTS with the merchandise.

Drop shippers like Buds are a scourge to the industry, and are doing damage to all gun shops, whether they realize it or not.

Do the math for yourself... how many transfers and how much small junk do you need to sell to gross, say, $500,000 in a year in sales? That's a SMALL shop. Now extrapolate that out to a large shop with a full staff, gunsmith, bookkeeper, insurance, a big building that needs to be heated and air conditioned, etc...

 

[Upstater]

The question was how much for the G17. Not the rhetoric of how much it costs to do business in a gunstore. I for one am genuinely interested in this question, here in N.Y. a G17 is $550.00 plus tax, and remember only a 10 rd. capacity.

 

[oneounceload]

$550 is standard list price just about everywhere

 

[Kynoch]

Not for everything, of course. But some things, sure! Again, though ... if the guy is IN your store he may buy something from you. If he's NOT in your store, he WON'T buy anything from you. You can try to lure him into your store with low prices, free popcorn, dancing girls, ...whatever. But the government says he MUST come to your store (or your competitor's store) to get his gun. You can turn him away, or you can get him in the door. Your call.

If I owned a LGS there is just no way I would receive a gun from a place like Bud's unless my fee was pretty close to the profit margin I expected to make on a prepaid special order.

I would hope to build a business where my clients would give me an honest chance at quoting them a price before coming in, waggling a printout from Bud's or Able Ammo. I would want my shop to be known as a fair priced (or even low priced shop) but not merely as a receiver hub for the on-line discounters.

What I wouldn't be is a LGS that refuses to receive guns, has a posted $199 charge/gun and/or illegally refuses to do person-to-person transfers here in CA.

In the case of my FFL, he only sells used guns -- typically very expensive guns. There is absolutely no opportunity cost for him to receive a new gun for me or anyone else.

 

[drsfmd]

The question was how much for the G17. Not the rhetoric of how much it costs to do business in a gunstore. I for one am genuinely interested in this question, here in N.Y. a G17 is $550.00 plus tax, and remember only a 10 rd. capacity.

More than $20. As I said earlier in the thread, the industry standard markup is 8-12% on most new guns.

 

[Kynoch]

There are other variables at work right now. Some models from some manufacturers are really backed up right now. This would be a good opportunity to take care of your "regulars" if you receive some SR1911's or the like...

I was in a gun shop a few weeks ago in a giant market (Culver City, CA -- middle of LA) and I listened to someone answer the phone. They very nicely explained that they do not receive Internet orders but to please come in and ask for "John" to get the best price possible. That was impressive to me. The caller was treated very nicely and was invited to drop in for a quote.

 

[Kynoch]

More than $20. As I said earlier in the thread, the industry standard markup is 8-12% on most new guns.

Indeed. Keep in mind that if the LGS is doing any decent volume at all, they should be able to buy the gun for somewhat less that Bud's is peddling them for on line.

 

[oneounceload]

And MAYBE the shop that drsfmd works in IS one of those, and from previous posts on other threads I suspect that to be true - but MOST small time shops are not doing that volume, not even half.

Most of these folks do not realize, that to become a "Master Dealer" for most brands requires a substantial investment - usually 25-50K and that means you also have to buy the "dogs" that don't sell well besides the real popular ones - and depending on your volume, your ability to get those popular ones can be real dicey. Even Bud's shows most popular guns as "out of stock" because the makers are doing what they can, but they also take care of their main distributors first, as well they should

 

[kcshooter]

I'm confused. You said:

If I owned a LGS there is just no way I would receive a gun from a place like Bud's unless

but then in the same post said:

What I wouldn't be is a LGS that refuses to receive guns

Contradiction?

What you wouldn't be, by refusing to be competitive, is in business very long.

They very nicely explained that they do not receive Internet orders but to please come in and ask for "John" to get the best price possible. That was impressive to me. The caller was treated very nicely and was invited to drop in for a quote.

Now, the customer comes in for the quote, they are $100 more than Bud's. The customer tells them so, and asks if they can't come closer than that, how much would they do the transfer for. They then refuse to do the transfer, losing the customer's business.
The customer goes to the next closest gun shop, gets the transfer done there, then buys 250rds of ammo for their new gun. And a holster. And 4 extra magazines. And has their in-house gunsmith put sights on it.
Customer never returns to the other gun shop, nor recommends them to anyone else.

See what happens here?

 

[drsfmd]

The customer goes to the next closest gun shop, gets the transfer done there, then buys 250rds of ammo for their new gun. And a holster. And 4 extra magazines. And has their in-house gunsmith put sights on it.

That would be a VERY rare sale. Most folks buy a box or two of ammo with their gun and walk out the door. They buy a cheap uncle Mike's holster online, and never buy extra mags or new sights.

 

[Upstater]

All of the above because "20.00" wasn't enough!:banghead::banghead:

 

[drsfmd]

All of the above because "20.00" wasn't enough!:banghead::banghead:

Insurance, heat, lights, mortgage, salaries, merchandise, and pay myself too? Nope, $20 isn't even close to enough.

 

[Upstater]

I know I must be the exception but 1: bought my G19 also bought tritium nights sights, a laser max , & 9 mags. 2: bought my m&p .40 also bought 4 mags, a blackhawk cqc, and 300 rounds of ammo
3: bought my Kimber 1911 also bought 9 mags, 500 rounds of ammo
4: bought my Ruger mk3 also bought 5 mags and 5000 rounds of ammo, red dot sight, and a Ruger mk holster.
Must be the exception.

 

[kcshooter]

That would be a VERY rare sale

I don't think that's true at all. Especially with the large number of CCW permits over the last several years.
How many people who carry do it in a $20 Mike's holster?
And if you try to upsell a little, how hard is it to get the customer interested in a decent holster and a few extra magazines?

Taking 5 minutes to show him a decent leather rig, and show him why the Mike's holsters aren't as good as the leather ones for carry could go a long way.

Sure, if you act like a jerk and treat him like it's a burden to earn the $30 you charged for the transfer he may not listen to you, but if you tell him it was a good deal, sorry you couldn't have beat it, actually put yourself in his shoes and ask if you'd spend $100 more than you had to for the exact same thing, maybe you'd earn his business, repetitively.

You're already losing the business by saying "he's just gonna buy a Mike's holster online" with that attitude. And this isn't even a real encounter!


The naysayers here remind me of the kind of people who are behind the counter at the gunshops I refuse to go to anymore.

 

[Kynoch]

Yes, you certainly are.

There is no contradiction. There is a huge difference between outright refusing to receive mail-order guns (not so uncommon around here) and having a customer choose not to use your services because they disagreed with a shop's fee.

Your 250 round scenario is largely fantasy. Someone insisting to buy from Bud's is likely to get their ammo from Wal*Mart or some other discount source. Their holsters and the rest are likely to come from Internet sources where they don't even have to pay the tax.

Again, if I ran a LGS, I would want it to be a LGS and not a drop-ship point for Bud's.

 

[oneounceload]

Those who have never owned a business with employees see it one way; those who have/had owned a small business with employees know better - there are a LOT more costs involved that these folks who work for someone who pays them do not realize.

It seems here neither side will convince the other - unless someone has something better to add, perhaps it is better closed