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Perspective on gun dealers and FFL transfer fees

Discussion in 'General Gun Discussions' started by leadcounsel, Sep 20, 2010.

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  1. leadcounsel

    leadcounsel member

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    Okay - so I need the insight of others on this topic.

    Background: I use an FFL who charges about $20 for a transfer on the first weapon, and $5 on each additional one per order. From my foxhole, that seems like a decent profit for, what amounts to, receiving a shipment and then processing the form/making the call to the local ATF (state bureau), and filing the form. A monkey can do it and it takes minutes worth of work. In fact, if that was your entire business and you did 20 per day, at $20 a piece, I think it would be easy money for little work.

    He runs a relatively robust business, but not a big box store. Probably carries 100-200 various long guns and handguns, and 5 isles of overpriced accessories.

    I've been shopping there for a couple years. I have purchased guns directly from him (displays and special orders) and I have had things shipped there and paid the transfer. I even buy SOMETHING nearly everytime I'm there to keep the cash register ringing (ammo, mags, sling, tools, etc.). And I recently sent my girlfriend there for her first handgun purchase! :)

    Finally, it turns out we were in the same UNIT in the Army together (he was 2 decades before me)...

    I recon he's made at least a few hundred off me, and he frankly charged my girlfriend more than I was comfortable with for her handgun. (I was not there and she wasn't upset about it so I didn't act on it). He charged her $650 out the door for a CZ P01. :fire: But not my battle to fight.

    So I found a good deal on a pistol on the internet from a big box store. I called my FFL and he tells me that they've changed their policy and will no longer be taking any FFL transfers!!! :what::banghead::fire:

    He goes on to explain that he's getting undercut by big box stores, whine whine whine.... I didn't argue with him, I just let him whine about it. I told him thanks for letting me know, and hung up.

    Now, I'm pretty T'd off. I also think he's making a mistake by driving customers away. It's a small piece of the FFL transfer $ better than no piece of the pie at all? He doesn't carry CZs at all, so if I want one from him he special orders it and his COST is more than the big box store is offering to sell it for. And then, there's his markup! All said and done the pistol would be a good 10-20% more if I buy from him.

    Driving away any business just seems like a bad business model. I mean, let's face it, it's the savy customers that are ordering guns, right? They aren't likely to pay over inflated prices anyway, they'll just order it delivered to a different FFL.

    So I'm just going to go with the FFL down the street that charges the same and I'll likely never be back to the first FFL.

    I guess I'll tell him why at some point.
     
    Last edited: Sep 20, 2010
  2. Freedom_fighter_in_IL

    Freedom_fighter_in_IL Member

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    Be glad you can find an FFL that only charges 20 dollars. The lowest one within 30 miles of me charges $50 and the lady on the phone had the audacity to tell me that was a fair and reasonable price as everyone else was even higher. The online and big box stores are running the mom and pop stores out of business so this is the only way they can see making up for the losses. Welcome to free market structure and gun control through our wallets instead of the legal system!
     
  3. WillDe83

    WillDe83 Member

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    the cheapest one around me is 40 (use to be 20) for transfers.

    Shipping is 50 (use to be 25) for a handguns and thats over half as much as other places charge for shipping, one place quoted me 135 to ship a handgun and another place told me they would do a transfer for 90.
     
  4. PT1911

    PT1911 Member

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    A friend of mine owns a shop an charges a flat 25 dollars per gun... Why? because he has spent the necessary money to have an FFL. Furthermore, he will only transfer guns (excluding used guns) that he himself cannot get in new for one reason or another. It is his business and how he makes a living. By your logic, he should also sell guns at wholesale because the accessories are making profit. I think you overestimate how much a single shop owner makes. I certainly did before I began spending a lot of time in a relatively small shop.

    There is nothing stopping you from getting an FFL except several hundred dollars and a storefront (separate area from your home to conduct business.)

    As said previously, you are lucky to get someone who charges that small amount and discounts for multiple guns. It comes down to what the shop owner's time is worth. That being, receiving your gun, logging it into his books, calling in the Yellow sheet, and logging the gun out of his books. Sounds like 20 bucks worth of work to me. There is no hourly amount of money he makes. He makes what he makes and must make what he can when he can.

    Dont like it, get an FFL, but I think you will find it to be cheaper to pay the 20 bucks.

    As to him not receiving transfers anymore, I cannot say I blame him..especially as he constantly hears people (such as yourself) whine and complain about having to pay a transfer fee. He weighed out the pros and cons and chose his path. That is why it is always best to shop around and know what you can do where.

    What is the difference in someone whining about not making money (him, as stated by you) and someone whining about spending money (you, as stated by me?)
     
    Last edited: Sep 20, 2010
  5. Guns and more

    Guns and more member

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    I love the free market.
    I had a dealer tell me transfers were $100 if I didn't buy from him.
    I haven't set foot in his store since.
     
  6. oneounceload

    oneounceload member

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    If it such an easy deal and so profitable, perhaps YOU should open up a store and make all that money..................r...i.......g............h..............t.............. uh huh
     
  7. marktx

    marktx Member

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    The best gun shop in my area was doing transfers for $30 which I thought was a bit on the high side but was worth it as they were fairly easy to deal with most of the time. A few of the clerks are obnoxious dorks but for the most part they were alright. Last week they decided to up the transfer to $40 each which was enough to motivate me to find a new place. It's not quite as nice as I would like but it's closer and $25 which is much more reasonable in my opinion.

    I used to stop in at the gun shop a few times a month for transfers and every other month or so they would have something I would buy on top of my usual transfers. They could hardly complain that they were being undercut by online dealers since all of the guns I purchased were hard to find/collectible pieces that the never would have in stock. Oh well, they probably know more about business than I do.
     
  8. oneounceload

    oneounceload member

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    Yep, 'cause if they did 100 transfers a month, they might be paying the light bill; if they do 500 transfers a month, they might be paying the light bill, some of the taxes and fees, and the owner might be able to but a beer once a week./

    But wait - those damn pesky employees expect to be paid, as does the payroll tax man, insurance man, the rest of the utilities, the bank for the inventory carrying costs, and on and on..................

    Never ceases to amaze me how little folks here know about running a business and how they think transfers should be basically free because they buy a box of ammo once in a while................

    I have said it before and I'll say it again:

    IF IT IS SO DAMN EASY TO MAKE MONEY, WHY AREN'T YOU DOING IT?

    SO many wannabees with ZERO business knowledge - same folks with ZERO gun knowledge......get real
     
  9. dogtown tom

    dogtown tom Member

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    Decent profit?:scrutiny: Where did you go to high school? Retake 8th grade math or 9th grade economics. That $20 transfer fee isn't profit, that's sales income. He has to pay for rent, utilities, insurance, taxes before he even begins to see a $ of profit.

    BTW: "A monkey can do it and it takes minutes worth of work" is as silly as those who think a church pastor only works on Sunday mornings or that firefighters really only work when they are actually fighting a fire.

    No such requirement under Federal law or ATF regulation. Home based FFL's outnumber storefront FFL's by a wide margin.
     
  10. PT1911

    PT1911 Member

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    Home base, yes, but not in the living quarters... must be in a separate area from the living area... (per recent ATF inspection of a friend starting a smithing shop behind his home...)


    An office, basement, or back building is required will suffice.
     
  11. UpTheIrons

    UpTheIrons Member

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    I don't know where y'all are finding these snotty FFLs. I looked and looked for a Savage Cub Pink for my daughter for her birthday. The only place I found (an affordable) one was in Florida. Sent my FFL the link and asked if he could get it for a comparable price, since I said I buy my next gun from him directly.

    He couldn't come close to the price, but he was plenty happy to do the $25 transfer. So I told him to find me a Single Six convertible, and I'd buy it from him. It's worth the few extra bucks to keep that good business relationship/friendship going.
     
  12. dogtown tom

    dogtown tom Member

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    Again, NO SUCH REQUIREMENT in Federal law or ATF regulations. I use my dining room, den and one bedroom. While I was between houses I ran my FFL from a one BR apartment. Now, it is possible that your city or county has additional requirements for businesses, but there is no ATF requirement to be separate.
     
  13. marktx

    marktx Member

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    It's really not that much different than mowing the lawn or whatever else. For $125 a month I will gladly pay the guy to roll up the truck a couple times a month and mow the lawn for me. If the guy raises it to $300 I would just go ahead and do it myself. It's not that I want to do it myself or would want to figure out how to make a living at it but I'm willing to pay a certain amount for the convenience.

    Seems to vary by area.... Some parts of Texas are great and some are just awful.
     
  14. PT1911

    PT1911 Member

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    Fair enough, but someone should tell the ATF that as I know of at least 2 separate individuals who were attempting to get their FFLs and when it came down to it, the ATF inspectors denied their application because they did not have an area outside of their normal living area.

    My other friend, a gunsmith and custom rifle builder, was told the same thing. Fortunately, he has a building behind his home to use as a shop...

    The requirement may not exist, but in the last 18 months this has been conveyed by ATF agents 3 out of 3 times.
    This was VIA the ATF, not the state or county.
     
  15. WardenWolf

    WardenWolf member

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    An FFL transfer fee is basically free money for the FFL. He doesn't have to buy it, he doesn't have to pay to ship it, he doesn't have to display it. All he has to do is hand you the paperwork and call in a quick background check, which he would have to do anyway if you bought it from him. And guess what? If his prices are that high, you probably wouldn't buy from him anyway. He hasn't "lost a sale" simply because he doesn't have what you want or he wants more than it's worth. Nobody is going to pay that. Maybe he should recognize that it's free money, charge a reasonable amount, and make his prices competitive enough that, after shipping, it would cost MORE to buy it from another retailer, have it shipped there, and pay the transfer fees. If he's marking up a gun so much that, after $25+ shipping and a $20 transfer fee you can't get it for the same price there, then he's price gouging. FFL's can view transfers either as a hindrance or an opportunity. If they view it as an opportunity, they can make money at no hassle to them. If they view it as a hindrance, they're going to be seeing people take their business elsewhere and NEVER buy something in their shop.
     
  16. orionengnr

    orionengnr Member

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    Wow.
    And in the same breath:
    So in your post you are saying that a $20 transfer is a miserable, unsustainable business model, yet in your sig line you offer $20 transfers...that you will cut in half for CHL, military/ police/schoolteachers :rolleyes:

    Cry your pardon, but you have stimulated my skepticism...

    And yes, my local table-top FFL does $20 transfers all day long. Literally. Every time I stop by there is someone just leaving and someone just arriving. Nearly all of them are transferring in or out (most, in).

    It appears to be the majority of their business, although they also offer reasonable prices on new firearms and accessories. In the last three years, they have added a new in-ground pool, a new wrought-iron fence, and a newly sodded lawn. If I were a betting man, I would bet that the proceeds for those projects came from the table-top FFL, $20 at a time.
     
    Last edited: Sep 20, 2010
  17. PT1911

    PT1911 Member

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    Try reading that again orion, he was saying that the $20 transfer fee is more than justified by the costs of operating an business. Nothing is profit until the costs are covered. He was saying this in response the the OP's assertion that ANY transfer fee at all is too much.
     
  18. dogtown tom

    dogtown tom Member

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    Uhhhh.......reread the thread. My post was in reply to the OP who thinks the $20 is all profit. Nowhere did I say that "a $20 transfer is a miserable, unsustainable business model".....you dreamed that up all on your own:rolleyes:.

    I'm a home based dealer who does transfers only. While I do have utilities, insurance and other business expenses, I don't have to pay rent on a retail storefront, invest my own $$$ in inventory or pay employees. I don't have nearly the expenses to deal with that the OP's dealer has and I think that dealers transfer fee is reasonable.
     
  19. Shadow 7D

    Shadow 7D Member

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    I know one close to me. $10 a page for veterans (and he cards, so just saying it gets you nothing) Sometimes he'll ask for more if it was something harder/difficult (like him having to bring a trailer to the post office to pick up your stuff) but all in all, not bad.
     
  20. leadcounsel

    leadcounsel member

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    THANK YOU! That's my point exactly!!! On a $500 gun, he's making 5% for doing almost nothing. In fact, he has 2 employees that stand around when they could be doing that instead. He doesn't have to carry the inventory, order it, price it, or pay for shipping. All he does is receive it from UPS, and handle some admin stuff that he would do anyway.

    Eh - "High School" Please... I graduated with honors from college, a couple credits shy of having a minors in Economics and Management. And then I went on to law school. Spare me the "high school econ" lecture.

    Yes, that $20 is nearly pure profit. All the overhead is there whether the transfer occurs or not. Storefront is open anyway. Employees are paid hourly. Light bill doesn't change, nor does the phone bill, ink pens, etc. Any additional 'costs' are negligible.

    The MORE important point is that he's driving away folks that, in addition to the transfer, might also need to pick up supplies like $100 night sights, targets, ammo, a holster, etc. That $20 transfer that his $10 an hour employee just rang up can easily turn into a few hundred dollar sale when the customer buys a $50 holster, several boxes of ammo, a pack of targets, and 4 extra magazines...

    If he's not doing transfers, why do I need to step foot in his door?

    Econ 101 - Don't turn away paying customers!
     
  21. JohnBT

    JohnBT Member

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    "receiving a shipment and then processing the form/making the call to the local ATF (state bureau), and filing the form."

    What really happens...

    Tuesday: Is my gun there yet? I ordered it on line Saturday.
    Wednesday: Is my gun there yet?
    Thursday: Is my gun there yet?

    Three weeks later: Is my gun there yet? The tracking number said it's there, is it there yet? Will you call me when it does get there?

    An hour later: I was out, did you call me? No? Dang.

    Three hours later: Is it there yet? I'm coming down there and wait on it.

    "IT'S HERE, look, is that a 2mm scratch? Will you take it to the Post Office for me and send it back?"

    Two days later: Did the factory call to say they got it?

    Four days later: Is it back yet?

    Seriously, the really busy shops, some of the ones I know of anyway, would rather have the hired help trying to sell guns and overpriced accessories and ammo.
     
  22. leadcounsel

    leadcounsel member

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    Yeah, and those darn pesky customers want to spend money... why not match them up? Seems like a good business model, huh?
     
  23. 9teenEleven

    9teenEleven Member

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    The FFL nearest to me charges $35 and they bitch about how much work it is! So, I stopped going there all together.

    I found a new gunshop in town that does transfers for $15. I did a couple of smooth easy transfers and the owner seemed really happy for the business. You know what, when I was looking for a new gun last month and he had it in stock, I bought it there for a fair price instead of going the internet/transfer route. His price wasn't the cheapest it was just about $20 more. The goodwill he built on the transfers made me want to give him more business, and the non-gouging prices made it possible.

    Also, I now recommend that store to all my shooting friends.

    That's something that these stores that charge huge transfer fees or that have overpriced product should remember. When you are losing business to competition, you need to give your customers a reason to shop there, not a reason not to.
     
  24. CTPhil

    CTPhil Member

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    Seems to me $20. is an entirely reasonable, if not cheap fee for a transfer. I'd pay it and be grateful.
     
  25. leadcounsel

    leadcounsel member

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    The POINT is that the FFL IS NO LONGER DOING TRANSFERS -

    Now I suppose he would if I offered him a lot more, but he was just griping that it was just too much of a hassle...
     
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