Starting a Gun Sales and Supply Business

[TheGoodLife]

I asked a moderator in another section where to post this thread, and he told me General Gun Discussion. So here it is.

I have thought about either starting some kind of gun sales and supply store, or even purchasing an existing business. My personal experience with guns is somewhat limited, mostly with shotguns and hunting. For some of you that might be a problem, but I do believe that one could start small with general items and then expand. I'm a quick learner.

I would like to ask a question of any forum members who might have a gun store, or gun supply store, or hunting supply (anything related).

I was wondering if any current members of thehighroad could share about the good, the bad, and the ugly when it comes to doing business with firearms, ammo, supplies, government regulations, liability, etc. If you can steer me to other threads on this forum, or even other forums, I would appreciate that.

Thanks for your help.

 

[thereisnospoon]

I recently asked a friend of mine who owns a gun store the same question. He has been in business five years and is very good at what he does. He is an Army Reservist and very knowledgable about guns, hunting and all things that go boom.

He suggested the following and it is the path I am following.

Start at local gunshows...if you can make money there then do area gun shows, then do state wide gun shows and get familiar with guns, buying selling and trading. Once you have a few years experience under your belt find a good location and start your gun store (or buy one) if you still have the heart and mind for it.

It cost him over $100,00.00 for inventory and he swore his store was half empty. He suggested that I have at least $250,000.00 for inventory (not just guns by the way, but everything gun related as well, including hunting) plus money to live on during the first five years.

This is good advice as I have started a business before and the most common reason for failure is lack of or not enough start-up capital (money).

Anyway, I liked his advice and I have been following the plan...we'll see how it turns out.

 

[TheGoodLife]

good advice

Thanks thereisnospoon.

It seems like a very reasonable way to get started, slowly at first, learn as you go.

 

[Spreadfire Arms]

i started with one table doing only one local gun show a month and internet sales. i started with a one-gun inventory.

you slowly work your way up. i got into the Class III business as well. then i branched out into AR-15's. i went from a 1 table set-up eventually to a 7 table setup.

i would find a larger guy in the show to talk to who is not threatened by your "small fry" table who can get you into more preferred shows and get your name out there. that bigger dealer can also help you finance bigger deals, give you some pointers, and tell you who in the business to associate yourself with and who to avoid.

the more people buy from you the more sales you get. also make sure your reputation (both locally and on the internet) aren't tarnished with poor customer service.

hope this helps...

 

[Standing Wolf]

It cost him over $100,00.00 for inventory and he swore his store was half empty. He suggested that I have at least $250,000.00 for inventory (not just guns by the way, but everything gun related as well, including hunting) plus money to live on during the first five years.

Sad to say, that's not the least bit unrealistic.

 

[Onmilo]

I agree, 100 will get you running a small shop or specialty gun store,(don't do this, chances are you won't last and this I suggest from my own experience.).
250 G will get you set up as a fairly decent gun store.
This is just your inventory and set-up costs, if you are going to gunsmith and do it right figure another $50-$75,000 in tools, machines, and equiptment.
This doesn't include the gunsmith and his wages.

It takes a chunk to get started. Figure a minimum of two complete turns of inventory at 10-15% and you gross $50-$75 grand a year which is used to cover all expenses.
More you turn, the more you make.

I had my own shop for several years and now work part time for a full time dealer.

 

[redneck2]

As Jack Nicholson says "you want the truth??? You can't handle the truth!!!"

Now, the reason I say that is because I've owned several small businesses and worked in a gun shop. Most owners/employees tend to offer more, WAY more for trade-ins and "stuff" than that they should. They think in terms of buying it for themselves.

You HAVE to think in terms of "OK, I've GOT to make 30% minimum on this.."

Remember, you've got to pay interest, taxes on inventory, taxes on FICA, taxes on property, sales tax, state tax, federal tax, interest on any borrowed money, utilities, heat, rent, and pay yourself and employees a wage.

Many guys think of it as a hobby. Problem is, the people at the grocery store view their daily work as a profession and they want paid. If you like to eat every day you'd better make money.

If you're gonna make a living, you've got to condition yourself to buy stuff cheap...as in WAY cheap...as in "I think I just screwed the guy". Cause if you don't, nobody's gonna pay your bills for you

Oh, and get ready for the idiot that brings the gun in he just bought last week....

<sob...sob...> Man, I've got to sell you this gun back...<sob...sob> Never fired it man. Yeah, my rent's due, the kids need shoes, don't have grocery money. You gotta remember, this gun is now used and it dropped 50% when he took it out of the store (because you can buy a brand new one for 30% off) If you think this is fabrication, wait until you're in business a few weeks.

Also, you'll make the most money off used guns IF, and a big IF, you buy them right. You can be everybody's friend, or you can be in business, but you can't be both

 

[thereisnospoon]

Redneck2 is right on with that post. My friend gave me a formula using the Blue Book which he says has served him well and I realized why he is making money and I was previodly making a collection.

You must make money on every deal or you don't need to be in business.

Anyway, start small and work your way up.

I am currently doing DuraCoat refinishing and adding that to my list of things to "sell".

Good Luck

 

[Monkeyleg]

I've learned a lot about the gun business in the last year, but not enough to give advice.

However, I have a friend who owns a shop who's more than willing to give advice. PM me if you would like me to put the two of you together.

Unlike most gun store owners, he's a businessman first. This is just one of many businesses he owns or has owned. He's 43 and could retire right now. He likes guns, but doesn't love them. He loves success.

There's another gun store owner I know who loves guns, and opened his store six years ago. Late last year, some thieves broke a window and stole a couple of guns. The cost of the guns and the broken window came to $2400. His insurance deductible was $2500. He'd had a bad year, and that was enough to drive him under.

Even in the worst years with my own business, $2500 wouldn't have ruined me.

 

[Sam]

Being a 'gun nut' is a detriment to running a giood gun business. Way to east to get wrapped up in the guns and not in the business.
Constantly have to remind myself that all of those guns are not mine .

Business in and of itself can be fun. Keep your guns and your business seperate and stay focused.

Sam

 

[Andrew Rothman]

From what I've seen, the best way to make a small fortune running a gun shop...























... is to start with a large fortune!

 

[CrisOR]

I've heard it said that a gun shop is a petting zoo for guns - the real money will be made in the gift shop (ammo, accesories, supplies, etc.).

 

[TheGoodLife]

great suggestions

Thanks for those who have posted to my question. I thought when I posted that some folks already in the business might not want to share their 'secrets' so as to keep the competition down, which I understand. I appreciate the advice given.

to Spreadfire Arms

i started with one table doing only one local gun show a month and internet sales. i started with a one-gun inventory.

After seeing your web site, amazing that you started so small. That is fantastic. Glad it has worked so well for you.

To Onmilo

I had my own shop for several years and now work part time for a full time dealer.

If you don't mind, what led you out of your own business to work for someone else?

To redneck2

Remember, you've got to pay interest, taxes on inventory, taxes on FICA, taxes on property, sales tax, state tax, federal tax, interest on any borrowed money, utilities, heat, rent, and pay yourself and employees a wage.

Many guys think of it as a hobby.

All those taxes, which means some serious paperwork and accounting are a reality check, for sure, before getting into business. Also, treating it as a business and not a hobby is a major issue.

to thereisnospoon

How long have you been at it?

And what is the formula and Blue Book you mention?

My friend gave me a formula using the Blue Book which he says has served him well and I realized why he is making money

to Monkeyleg

However, I have a friend who owns a shop who's more than willing to give advice. PM me if you would like me to put the two of you together.

I will PM you about this. Thanks.

to Matt Payne

From what I've seen, the best way to make a small fortune running a gun shop... is to start with a large fortune!

That would certainly help.

I will add a few more questions to this in the next day or so.

 

[thereisnospoon]

Simple Formula:

Grade the gun according to fit finish and function (i.e. 95%)

find that value in the "Blue Book"

Multiply by 65% offer that value to the customer in cash
Multiply by 45% offer that value to the customer in trade for another item on your table.

So if you have a gun that is at 95% finish say glock23 and BB values it at $385.00

$385.00 * .65 = $250.00 Cash Value

You then sell that gun fo $ 385.00 and make $135.00 cash for your trouble.

 

[TheGoodLife]

which blue book?

thereisnospoon

Thanks for that very helpful formula.

You mention,

find that value in the "Blue Book"

I searched on google and found at least two blue books,

Orion Blue Book for Guns and Scopes
http://www.orionbluebook.com/orion/guns.asp

and

Blue Book of Gun Values, 26th Edition (Blue Book of Gun Values)
at Amazon

Is there a preference, or are both necessary?

Thanks.

 

[thereisnospoon]

Blue Book of Gun VAlues by Fjestaid (?sp) is what most folks use to value guns, although you will find a lot of old military rifles, etc. are not in this book (some are), so there are a number of reference books you may want to have including the BB of GVs.

It would probably be helpful for you to make friends with a dealer at your next gun show (or BEFORE THEN IF YOU CAN) and then "volunteer" to help him work the show. You get free admission, he gets help, you get to watch and learn.

 

[Spreadfire Arms]

i think more FFL's start out small and get bigger as time goes by, rather than the guys who start out and fork out $200k and open a storefront. statistically speaking, that is.

what you don't want to do is compete with Wally World, Cabela's, and other big box gun retailers. they will usually undercut you. if you do choose to go head-to-head with them, make sure you offer something different, like offer gunsmithing or something they don't. you can also carry accessories they don't, like Beta Mags, EOTech sights, rail systems, etc.

i don't really carry what you can buy at WalMart, Academy, etc. i sell Class III stuff and evil black rifles, and other things like the FN Five-Seven pistols and things they won't sell because they are politically incorrect. but it allows people who do want those kinds of items to come talk to me.

another thing is customer service, knowledge, and friendliness. i think i spend more time talking to people on a personal level at gun shows than i do actually selling items. i have a salesperson or two to do that, i usually end up talking to people. it creates a bond and people feel like they know the owner of a small business vs. a big box retailer, where if they're lucky, they know the manager of the gun counter.

i also have a different expertise when it comes to firearms that the big box guys don't. Title II questions and concerns about AR-15 functioning (extraction, gas system, etc) are things you can't normally converse with the salesperson at the big box store unless he happens to be an AR-15 junkie himself. i sometimes find myself being more of a knowledge resource for paramiltary rifles and Class III legalities, vs. a guy you'd go to to ask about a hunting rifle or shotgun.

customer service will keep people coming to you vs. the big box retailer down the street. alot of people will pay the little guy a little more knowing that the guy is going to take care of him down the road should something ever arise with the firearm vs. the big box guy who will tell him that he needs to send it back to the factory instead.

i have a lot of people who have bought something from me and came back to give me repeat business. that is what really makes a small business successful.

my two cents.

 

[Gunfyter]

The BEST advice that I can offer is to BE VERY CAREFUL of who minds the store. You will most likely have to be there at all times to make sure that you aren't giving things away. No matter how much you like who is working for you, you probably can't trust them. They will sell stuff to their buddies below cost, etc, etc. I had a liquor store for nine years and it nearly broke me for this very reason.

 

[Monkeyleg]

"The BEST advice that I can offer is to BE VERY CAREFUL of who minds the store. You will most likely have to be there at all times to make sure that you aren't giving things away. No matter how much you like who is working for you, you probably can't trust them. They will sell stuff to their buddies below cost, etc, etc. I had a liquor store for nine years and it nearly broke me for this very reason."

Geez, who did you have working for you? Pauli from "Goodfella's?"

 

[ak47nevada]

As a customer, I can fairly ask that you don't charge $750 for $500 rifle. And please don't charge $13 for steel surplus AK47 30 round mags.

 

[TheGoodLife]

thereisnospoon

That is a great idea on volunteering at a gun show. I would be glad to do that, and I'm sure the education would be fantastic.

Spreadfire Arms

Great thoughts, thanks for sharing that. No doubt, the key is the quality customer service. Problems are inevitable when doing business, but how one responds will make a huge difference in gaining and keeping customers. I'm glad you are doing well with your business.

Gunfyter

Isn't that the truth.

Years ago I had a friend from high school get fired while he was working the checkout in a full service dept store (they had a small hunting and fishing section with some shotguns, rifles, and supplies). I never got involved with him, but he was lowballing guns to friends and family members. His job only lasted about a week or so, but during that time several individuals walked off with some real deals.

ak47nevada

You have nothing to worry about with me!