Should I Open A Gun Store?

[fadetoblack73]

It IS very possible

The first key is that you have to realize that that you will NOT make any money for the first 3 to 5 years. So... your initial capital investment has to include enough money for you and everyone you support to live on for at least 5 years.

The second key you have to realize is that the firearms are the "draw"... NOT what you make your money on. You will be lucky to break even on JUST a firearm sale. You make your money on what is called the "add-on" sale. When someone buys a firearm a good salesperson will include a nicer case than what is included from the factory, a cleaning kit, ammunition, snap caps, frog-lube starter kit, range bag, ammo box to store their ammo, desiccant for their ammo box, a training course to use their firearm, multi-tool for range maintenance, zombie targets, a cwp course (where applicable), hearing protection, eye protection, IWB holster for concealed carry, quick access bedside child-proof safe, lifetime 'professional' in-store cleaning program enrollment, etc. REMEMBER... a salesperson SELLS.

The final, and most important key to be successful over the internet, is CUSTOMER SERVICE. I have yet to find a website that allowed you to experience what that new Sig actually felt like before you dished out a $grand$. Or a website that would have a conversation with you about the whitetail it took last Saturday with the Remington .270 that the store happens to be overstocked on. Or a website that can give you basic instruction on field stripping your new S&W Shield while standing at the counter AND offer you 10% off your in-house pistol training course or CWP course.

I have been in retail management since 1992. I saw the rise of the internet and learned how to combat it. TRUST ME... the internet is awesome but will never replace a live salesperson on high-ticket items.

 

[hso]

In general, the shooting community is currently over-served with retailers so unless your specific community has an open niche that needs to be filled and you won't face competition from WalMart or Academy in the next decade you should find some other investment. OTOH, if you have a ton of money sitting around and you just want to do it, go ahead.

 

[pharmer]

Here in Strange Cloud, 20 years ago there was no decent gun shop around. Today there are 7 or 8 in a town of maybe 8,000 and that ain't counting the WalMart, which has the best price and selection of AR's around. I guess if you could make 20-50 transfers a week at $40 each it'd work out. Joe

 

[Bello]

Carry reloading materials also

 

[Zach S]

Uh, dont, for many of the reasons listed...

If you want to make money off of guns, go into business doing something else, get your FFL, and do transfers. That's what I would do anyway.

One FFL here years ago said he could make more money transferring two glocks than selling one of his, but the transfers didn't have an upfront cost.

 

[chicharrones]

There's no over charging in 2014. That stopped 10 years ago when online shopping became the norm.

Because of internet selling and buying, it is real tough for the traditional business owners to make more than 10% profit on many things. Not just firearms related items, either. Too bad that making the more traditional 25% to 30% profit margin is considered overcharging, but that is the world we live in these days.

Speaking of the profit margin that dealers make, from what I've seen outside the firearms world is that the manufacturers still make near traditional profit margins on selling their equipment to those dealers. It's the small business's profit margins that are squeezed and squeezed hard.

I work for a small business and we haven't made a sustainable profit margin from equipment sales since internet shopping took hold. We have survived by the service and parts we offer. We have always offered service and parts, but it was a much, much smaller piece of our income stream before internet shopping came around.

I forgot about profit margins on used equipment. Yep, when we have used equipment on hand, we do make a healthy profit margin on those items most of the time.

 

[HoosierQ]

I should think you could make a great deal of money with a proper gunsmithing shop. Not an armorer. Not a guy who can swap out a gas block on an AR or even convert a Saiga. I am talking the real deal. I real gunsmith. Of course you'd have to find one (if you are not).

I have two or three projects that I would pay good money to a gunsmith to do but I don't have the confidence to bother with who I seem to have found so far. I may end up just selling the guns in question to fund (partially) the things I want.

Stock a few guns, as was said above, maybe focused on a niche, like used wood and metal guns, and do the gunsmith thing.

As also noted, you MUST put together a business plan and all that. Get a lawyer, a consultant. Margins are too low for guesswork.

 

[AlexanderA]

Here's the acid test: Would you, after doing "due diligence," invest in somebody else's gun shop in the same area? If the answer is no, you shouldn't open your own shop.

As has already been pointed out, it's tough to make a profit from a gun shop these days. Do not confuse a hobby with a viable business.

If you want to try the waters, run the business out of your house (if local zoning allows) to get a feel for the profit potential. Having to pay monthly rent for a storefront will kill a business that is not making a healthy profit otherwise.

 

[mgmorden]

From what I am reading so far, maybe it would be better to just open a range, get your FFL and mainly do transfers.
.

Yep. Its almost impossible to compete with online pricing these days.

Plus you have to understand that for much of the younger population even up into people in their 30's people prefer the online shopping experience more. Not having to drive from place to place looking for something, being able to read reviews and other opinions about what you're looking at etc. Generally I'd buy online even if it was up to 5% cheaper to shop locally - buying online is just more convenient.

And for used guns the pawn brokers are going to be beating you there. Its a lot easier to stay in business when you're selling a big variety of things that happens to include guns than when you are selling only guns.

What local places do come in handy for though is naturally transfers (which is simply a result of laws, but if the government mandates paperwork you might as well profit from it), as well as things that you can't do online. A range is a very big primary thing there. And if you have a range - offer CWP classes - or any other training. I know one local range here seems to do very well with a "ladies night" thing where they have female instructors show girls how to shoot. They end up shooting like 100 rounds of .22LR for around $40 and it seems like it's always booked up.

Also - things that are expensive to ship. Powder and primers with their associated hazmat fees are annoying to buy online except in larger quantities.

If you can, offering gunsmithing services at your location is another big thing. Truthfully though I thin the small "gun shop" where you go to browse items on a shelf and buy is a slowly (or maybe not so slowly) dying industry.

 

[stonecutter2]

Offer a cleaning service at a very affordable price, with reward cards that offer free cleanings.

I like cleaning my guns, but sometimes it would be nice to just drop 'em off and pick 'em up well cleaned and oiled...for a fair price.

 

[Jason_W]

I've always wondered if a gun business models could be just running transfers for online purchases and selling used guns on consignment only. In theory, you wouldn't have to tie up a ton of money by purchasing an inventory.

If it's a popular pass time in your area, the reloading supply game could be decent. If I need one can of powder or one box of primers, I certainly don't want to pay a $30+ Hazmat fee to order from an online retailer.

 

[Mainsail]

If you want to piss me off: stock a huge selection of holsters, nylon and leather, in fact have an entire wall devoted to holsters, but only for four gun models.

That's what everyone does it seems. Awesome if you have a Glock 17, or a 1911, or an XD - not so awesome if you want a holster for a Bersa Thunder 9 UCPro, or a Smith & Wesson 5906, or a P220 Compact...or pretty much anything else.

 

[Welding Rod]

I don't know. The service at the closest Cabellas sucks and much of the staff doesn't seem very knowledgeable. They charge MSRP or close to it. They are packed at the gun counter. Take a number to see a gun and wait, a long time. Pick a gun. Wait, quite a while, for a chance to be able to pay and leave. I don't know how many guns they sell in a good hour, but much of the time it is as many as their staff can write up.

The only thing they seem to have going for them is a healthy inventory. Even at that their inventory isn't that impressive and lacks many desirable guns.... Colt 1911s, Scars, bull pups, M14 clones, and so on. Seems to me they eat up a lot of inventory with hunting guns when it appears to me most customers are buying defensive guns.

Oh and the other thing they have going for them, they are open until 9 PM, and on Sundays. I think that is very important for a gun shop. Working people aren't normally able to go to a gun shop during normal business hours, and don't want to go on Saturday when the place is packed by every one else who couldn't shop during the week.

 

[george burns]

The time for this has past. Many looked into this on a serious level. I am guilty of that also, but it's like the Stock market, or the housing market, we are at the top of everything right now, with so many bad things going on around us, "I won't bother listing them".
It's really not a good time to invest money in anything, "if you want an honest opinion". I have taken some huge risks in my life, with large amounts of money, some good some not so good, but right now in my opinion, we are likely to go down rather than up, in the near time frame, economic forecast.
Although people panic and buy guns when in fear, they may not be financially able to do so should something really go down, getting your supply will be extremely hard, as the large stores will get everything that is available first.
Perhaps ammo would be where you should look instead, as we all know, most people don't stock enough ammo should any kind of socioeconomic issue break out. What good is a gun without ammo?
And people always think they will be able to buy more, when we know it will be gone the first day of any impending or occurring crisis. It's funny that a week ago, while watching a popular TV show, they said that the probability of a major quake hitting CA, in the next 10 years of over 7.5, was 60%.
That's a fact, from the people who track this stuff. Now they didn't get a 7.5, but it is getting tricky, and that is just one of many things that could cause a rush on supplies.
As a normal business, I don't know what your finances are, but this is either go big or go real small, type of business ,as anything in between is going to be difficult to get the guns you need to have in order to thrive, and becoming a distributer for some of them can run into the 6 figure range, for each, and it's built on relationships molded over years. They all need ammo to be of any use.
I would still have an interest in something ammo based with a majority internet presence, if one had the connections to get ammo on a steady basis.
It's not like you are going to get stuck with ammo, IE:, my LGS, I overheard people paying $30.00 a box for 380, last week. If you had just in Pistol calibers, 9mm, 380, and 40, 45, plus 12 gauge and 223, you would not need much more than 7-10 calibers to make it simple and make money. But you would still need a lot of cash to buy in quantity large enough to compete with the big guys.
The ammo problem has always been , shipping. So you would either have to open one brick and mortar location in a very gun heavy area, and see what the best rate you could get on shipping was.
Now this is not going to be the fun type business you originally started thinking about, but it could conceivably make money if you put all of the pieces together. You are still going to need a lot of money to buy truck loads of ammo with, "if you can even get it".
You can always add guns later if you really hit big, and still feel a need for that.

 

[razorback2003]

Have you thought about using the FFL just to do transfers from Bud's at first to see if you like the business? You can do that out of your house without going into a lot of debt and buying a bunch of products to sell. Charge whatever dealers in your area charge to transfer guns from out of state.

You can transfer guns while you work another job to keep your cash coming in.

If the transferring guns deal doesn't work out, then you haven't lost a lot.

 

[Mainsail]

A good friend of mine got into guns late in life. He wasn't unfamiliar with the internet whatsoever, in fact he did most of his shopping online. But he went into Mary's Pistols in Tacoma and bought over the counter when he bought his guns. He loved my FNH SLP shotgun and ordered one from Mary's. He loved my AR and bought one right off the rack the next weekend. He bought a half dozen handguns the same way.

There are still a lot of people out there that want to hold a gun before they decided to buy it. There are a lot of people out there that don't stress over a couple hundred bucks either. There are a lot of people who want to walk in the gun store and walk out a half hour later with a gun too.

Just because ~we~ don't shop that way anymore doesn't mean it's the norm.

 

[Jim K]

The worst reason to start a business is because it is your hobby. Hobbyists, no matter what business, go broke fast. They may know the product, but they don't know how to run a business.

And the idea of a retailer buying retail and trying to make a profit would be sad if it were not funny. Any retailer who doesn't hook up with a distributor is not very good at business.

Jim

 

[Anmut]

Don't open a gun store to get rich. Do open a gun store if you want to never work for someone else again.

 

[Blondie]

What about buying an interest in an existing LGS or pawnshop? Assuming the current owner(s) is interested or is getting to retire, that might be an effective way of getting into and learning about the business without starting from scratch, and you could work on improving things you thought mattered.

 

[taliv]

i think most of the advice in this thread is probably ill considered. it is the equivalent of "follow the herd, buy high, sell low"

don't follow buds model or the internet retailer model. like mike said, there is no shortage of places to buy cheap guns.

the way to make money is to do something no one else is doing. offhand, i would take one of two paths:
1. serious niche... specialize in rare revolvers, or a particular type of competition, or something like that and become THE name and place to go for expert advice and products related to the niche.
2. be a local relationship business. build relationships with your customers and provide knowledgeable service. you will get repeat business e.g. i regularly pay an extra $100 or so for a rifle or pistol at a LGS and buy a couple big things per year that help him out. in exchange, he's never charged me a transfer fee in the past 10 years, even on machine guns and suppressors.

of course that means you either need
1. expert knowledge in some niche
2. a personality and fantastic customer service skills
or 3. tens of millions to compete with buds.

if you have none of those three things, i'd recommend a different business

 

[Teachu2]

of course that means you either need
1. expert knowledge in some niche
2. a personality and fantastic customer service skills
or 3. tens of millions to compete with buds.

if you have none of those three things, i'd recommend a different business

So very, very close to correct. You need TWO of the three!