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ugimports
03-14-2010, 1:48 PM
I was inspired to start this thread based on what I read a lot in these forums. Some feel that Gun Stores gouge and while I agree store's have higher prices, I do not believe it is to gouge. As others say time and time again you have the option of shopping where you wish. In light of all that I'd like to offer some visibility in to what some costs are involved in running a shop. These costs are not all inclusive and the number in fact is probably higher, but I made some assumptions and ran with that.

Let's assume an retail store of 1200 sq ft that is open 7 days a week for 10 hours per day, 365 days a year with 2 full time min wage employees + 1 owner.

Rent: $2400 / mo (@ $2/sqft)
Insurance: $300 / mo
2 minimum wage ($8 / hr) employees: $4800 / mo
Alarm System / Misc Office Expense: $500 / mo
Website, Internet, Telecom (ph/fax): $200 / mo

Total Monthly Expenses: $8200 / mo

Let's say the Gun Shop marks up items with a 10% markup. This means they need to do $80,000 / mo in sales JUST to pay expenses keeping 0 inventory. Keep this in mind when you harass gun store about their prices. My numbers here are conservative and based on some experience running my own small shop, part time. Realize my assumptions don't account for taxes that the company has to pay just to be in business and assumes the owner is making 0.

Also, shops don't always get stuffed shipped free if they are not doing high enough volume so keep that in mind too as those costs need to be passed on.

pontiacpratt
03-14-2010, 1:58 PM
I'm unclear on the question... A business is to make a profit. Are you asking if they should be a non-profit organization? Or you asking should they be regulated to an "acceptable" profit margin? I vote they should make a profit and if they are asking to much then they will not get business.

PolishMike
03-14-2010, 2:01 PM
Why would a business not be allowed to make a profit? Anyone who answers no is a communist ;)

dominic
03-14-2010, 2:07 PM
Of course they should be able to make a profit. The customer can always go somewhere else if they don't like the price, thats the incentive for the business to be competitive in the marketplace.

CSACANNONEER
03-14-2010, 2:10 PM
Apparently some people here don't think so.

See here:

http://www.calguns.net/calgunforum/showthread.php?t=278487

It seems to me that certain people feel that they should personally be able to dictate just how much profit, if any, a store can make.

ugimports
03-14-2010, 2:19 PM
Apparently some people here don't think so.

See here:

http://www.calguns.net/calgunforum/showthread.php?t=278487

It seems to me that certain people feel that they should personally be able to dictate just how much profit, if any, a store can make.

It was mainly a rhetorical question, but I wanted to give some perspective to those that think gun stores in Cali should be dirt cheap or should be able to easily be competitive to internet based pricing.

To one of the other posters, no this didn't have to do with gun stores being NPOs.

I've read numerous threads where folks complain and complain about pricing and why isn't it like factory direct, etc...

Cokebottle
03-14-2010, 2:23 PM
I'm willing to pay for anything.
I'm willing to pay for availability and customer service.

If I walk into your shop, it's empty (or the employees outnumber the customers 3:2), but your staff won't give me the time of day because they're busy chit-chatting with other employees, screw them... your prices had better be good.

If I walk into your shop and ask for some ammo and I'm told that it's on order and to check back in a week.... screw that, I can order it online, cheaper, and I won't have to worry that the 2 cases you get "in a week" will sell before I can get there.

But I'm Mr. Instant Gratification. If I walk into your store with a hair up my butt to buy ammo, you have 4 cases available, and it's 10% or even 20% more than it's available online, you've got a sale.

If I walk in to do a PPT and I'm greeted without attitude, and with an employee eager to complete the transfer, when I'm looking to buy a new gun, even if you are 10% more than Turner's, you can bet that I'll be checking out your shop first.


Customer service and spare parts availability has a value, and that's a value that I'm willing to pay for.
But on parts availability, if I'm going to have to come back to pick it up, I may as well order it online and save a trip.
I do the same thing with motorcycle parts.

chickenfried
03-14-2010, 2:26 PM
thread title
Should Gun Stores Be Allowed To Make A Profie? yes

poll title
Should Gun Stores make a Profit? That's up to the people that run it. If they're doing things right customers couldn't resist the store anymore than a deer could resist a salt lick.

XYZ
03-14-2010, 2:29 PM
Since the 2nd amendment is the need for a well regulated militia for the security of a free state I think the government should provide rebate checks or offer tax credits to arm every American :)

50BMGBOB
03-14-2010, 2:32 PM
I try to always get from a local shop as opposed to the internet/mail order. It is not just the guns that keep a local gun shop in bussiness. There are some things that I do get online, when the local price is way higher, but if it is close, I will pay more at the local shop instead. Will you can get some things through the mail, you can't get your guns that way.

hollowpoint67
03-14-2010, 3:24 PM
its a business, if you arent in it to make a profit then what are u doing?

theres a difference between profit and ripping people off.

SO:

Yes they should be allowed to make a profit, but they should be aware of the market they are in and be available to match competitors and the internet.

ChrisTKHarris
03-14-2010, 3:25 PM
As long as Obama stays out of it gun shops will try to make a PROFIT.

CSACANNONEER
03-14-2010, 3:40 PM
As long as Obama stays out of it gun shops will try to make a PROFIT.

Too late! Many gun stores, across the country, have declared Obama to be their number one sales person of last year!

ChrisTKHarris
03-14-2010, 3:42 PM
Too late! Many gun stores, across the country, have declared Obama to be their number one sales person of last year!

LOL yeah that's true I guess, he's using reverse psychology to get us to BUY guns out of fear.

chrisw
03-14-2010, 3:50 PM
Yes gun stores should make a profit and yes, I want to keep as much of my hard earned $$$ as I can, so of course I'm going to try to find a good price. Sure, support your local business etc... but when I can buy a gun somewhere, have it shipped, pay a local FFL's fees AND it's still cheaper than the local store, why shouldn't I?

Sorry, that's business.

pontiacpratt
03-14-2010, 4:05 PM
I gave my local shop several opportunity to get my business:
attempt #1: Wanted a certain gun... couldn't get it for me.
attempt #2: Wanted .22lr she told me to call every day and if I asked real nice she'd save it for me
Attempt #3: Wanted them FFL a CA legal Beretta Cougar 8045. Told me no.
Attempt #4: Wanted them to FFL a stripped lower. They said no and they would sell me a CMMG for $250 or a complete Stag rifle for $1900
Attempt #5: Wanted a couple of boxes of .40 (wal-mart was out) they wanted $24 a box of Wal-mart brand... I wonder why Wal-Mart was out
Haven't been back since.

Peter W Bush
03-14-2010, 4:43 PM
$4800/month for 2 full time $8/hr employees? How did you come up with that?

Cokebottle
03-14-2010, 4:46 PM
$4800/month for 2 full time $8/hr employees? How did you come up with that?
Their salaries total about $2700, but he has to pay social security, workers comp, and few other fees.

I don't know about now, but when I was making $5/hr, it cost my employer a total of about $8.50/hr to employ me.

Rob454
03-14-2010, 6:31 PM
its a business, if you arent in it to make a profit then what are u doing?
theres a difference between profit and ripping people off.
SO:
Yes they should be allowed to make a profit, but they should be aware of the market they are in and be available to match competitors and the internet.

Yes gun stores should make a profit and yes, I want to keep as much of my hard earned $$$ as I can, so of course I'm going to try to find a good price. Sure, support your local business etc... but when I can buy a gun somewhere, have it shipped, pay a local FFL's fees AND it's still cheaper than the local store, why shouldn't I?

Sorry, that's business.


The ONLY people that are getting ripped off as you guys put it are the ones who do absolutely no research on guns and values. Those are the same people with no financial sense. its up to YOU to do reaseach and see where the best price for a item is. If a shop is priced through the stratosphere with the price on a gun then the gun wont sell. if it does its gonna sell to someone who either doesnt care about the cost or has done no research.
if someone wanted to buy my truck for 20K ( its worth about 12K) do you really think Im gonna say no? LOL its his problem if he did no research not mine. Call it whatever you wish Im not here to make buddies with him or cuddle at night wispering soft nothings in his ear. He made a choice to buy something. Wether its overpriced or not is not my concern. if it was overpriced then I woudl get no calls and woudl need to adjust my price accordingly.

den888
03-14-2010, 6:45 PM
A business has to profit to survive, no other option.

Rob454
03-14-2010, 6:57 PM
A business has to profit to survive, no other option.
Exactly. I mean do you guys who think that a shop is overpriced I ask you DO you go to work for minimum wage? Walk in to your bosses office on monday and tell him that you think he is getting screwed over by paying you what he is paying you and you want to work for minimum wage because its only fair. yeah i see that happening.

Saigon1965
03-14-2010, 7:18 PM
Make your profits and deliver the service -

Joe
03-14-2010, 7:21 PM
They should be able to make a profit, just not off me :)

The Blind Gunman
03-14-2010, 7:25 PM
Apparently some people here don't think so.

See here:

http://www.calguns.net/calgunforum/showthread.php?t=278487

It seems to me that certain people feel that they should personally be able to dictate just how much profit, if any, a store can make.

Seems you took it out of context. It was about the fact the chain store bought a used gun and sold it for a ridiculous amount. Keep in mind that chain stores arn't necessarily always going to be cheaper and that local stores (atleast in the bayarea) usually sell their guns around the MSRP.

ugimports
03-14-2010, 8:35 PM
$4800/month for 2 full time $8/hr employees? How did you come up with that?

$8/hr is CA minimum wage as of 2008. Assume they work 7 days a week 10 hours per day as per store hours:

$8 * 10hours * 30 days per /mo = $2400 for 1 employee -- let's assume this is a 1099 so we don't have to worry about the employer paying taxes on the employee.

ugimports
03-14-2010, 8:38 PM
I gave my local shop several opportunity to get my business:
attempt #1: Wanted a certain gun... couldn't get it for me.
attempt #2: Wanted .22lr she told me to call every day and if I asked real nice she'd save it for me
Attempt #3: Wanted them FFL a CA legal Beretta Cougar 8045. Told me no.
Attempt #4: Wanted them to FFL a stripped lower. They said no and they would sell me a CMMG for $250 or a complete Stag rifle for $1900
Attempt #5: Wanted a couple of boxes of .40 (wal-mart was out) they wanted $24 a box of Wal-mart brand... I wonder why Wal-Mart was out
Haven't been back since.

I don't fault you at all for your experience nor anyone who's had an experience like you. You tried and instead of coming here to complain about said store not doing what you want, you did what most people would and brought your business elsewhere and that is perfectly cool. My OP was more towards those that don't go to another store, but complain that the store they went to SHOULD play by the rules they want. As another poster said, which I disagree, is not all stores need to attempt to price match. Does that mean they'll stay in business in the long run? That's not up to me, nor do I care. That's up to the owner to decide how to run their business. The consumer has some choices on where to go.

On the flip side, I know an electronic chain store such as Good Guys that is no longer around did do a TON of price matching at least whenever I went there. Now they are gone.. I can't say that the price matching / beating is what killed them, but I'm sure it didn't help the bottom line.

ugimports
03-14-2010, 8:42 PM
The ONLY people that are getting ripped off as you guys put it are the ones who do absolutely no research on guns and values. Those are the same people with no financial sense. its up to YOU to do reaseach and see where the best price for a item is. If a shop is priced through the stratosphere with the price on a gun then the gun wont sell. if it does its gonna sell to someone who either doesnt care about the cost or has done no research.
if someone wanted to buy my truck for 20K ( its worth about 12K) do you really think Im gonna say no? LOL its his problem if he did no research not mine. Call it whatever you wish Im not here to make buddies with him or cuddle at night wispering soft nothings in his ear. He made a choice to buy something. Wether its overpriced or not is not my concern. if it was overpriced then I woudl get no calls and woudl need to adjust my price accordingly.

Along these lines you have to realize price is in the eye of the beholder. I've long wondered why people on eBay would pay top $ for some electronic components that I can buy online or at Frys for 20% less. Then it hit me... maybe they don't know about Frys (or want to go there)... Maybe they don't know about where to shop on the internet, but recognize the eBay brand and feel safe there. Whatever the reason, the value for the object to them makes sense.

Along the lines of what Rob is saying...some of the people that go into any particular gun store and "overpay" for an item, may find the value just fine. Maybe they've heard things about Sigs and think the pistol is valued about $1k.. Maybe that's MSRP for the particular model they're looking for.. Maybe the gun store is selling at MSRP and they're ok with that.. I for one am a bargain hunter like the best of them. I'll do my research when I want something, understand the value and shop accordingly. I don't fault others that don't have the inclination or time and are willing to pay $10, $50, $500 more then what I would.. It's not my money they are spending.

ugimports
03-14-2010, 8:45 PM
Seems you took it out of context. It was about the fact the chain store bought a used gun and sold it for a ridiculous amount. Keep in mind that chain stores arn't necessarily always going to be cheaper and that local stores (atleast in the bayarea) usually sell their guns around the MSRP.

The thread that inspired me to start this one is actually:
http://www.calguns.net/calgunforum/showthread.php?t=279761

Partially because I was at the Gun Show doing transfers and I see the types of customers coming through there. I would say 99% are not Calgunners that were purchasing firearms and I don't think that's good or bad. It is what it is and there happens to be a market for those buyers to do their buying in.

The Blind Gunman
03-14-2010, 9:10 PM
The thread that inspired me to start this one is actually:
http://www.calguns.net/calgunforum/showthread.php?t=279761

Partially because I was at the Gun Show doing transfers and I see the types of customers coming through there. I would say 99% are not Calgunners that were purchasing firearms and I don't think that's good or bad. It is what it is and there happens to be a market for those buyers to do their buying in.

Right. I've been following that thread as well. There was a guy who said I agree with you that most of the prices are high. If you factor in the price of gas, bridge toll, parking, and admission to me it's just not worth it. Keeping in mind that I'm going off topic on this thread I am only responding to you. This guy DOES make a good point as I always take in consideration when diving to a gun store before I buy ammo VS just ordering it online. I do this for other things as well.

Unfortunately I came down with a bad cold and was not able to make my first gun show but he did make a good point and I was only going to go for ammo since I just bought a new handgun.

I figured I would save if I just ordered ammo online because I would have to pay for parking and admission.

Plisk
03-14-2010, 9:35 PM
So the OP is saying that Gunstores should sell at rock bottom prices because he's a penny pincher for the best possible price? That's just greedy.

If I'm wrong on that please correct me, but that's what I read from this.

Another thing to consider is that most online retailers that sell merchandise at such a great price is pretty much solely concentration on such a product. They buy that item is massive bulk and sell it for good prices. Most local FFLs don't have the ability to order in such bulk.

IrishPirate
03-14-2010, 9:40 PM
They should be able to make a profit......why else would they even be in the business, or any business for that matter?

Gouging (to me) is when they are the only ones in town and they know it so they raise the prices of the guns to just under what it would cost you to buy online while their actual costs remain the same. Sure, prices fluctuate, but if they are charging $230 for a stripped OLL because it would cost you $250 with shipping, gas and dealer fees to buy from the next closest place but they are buying the OLL at the same price as everyone else (say, $75), that's price gouging and it's unethical.

You're right, people can always shop elsewhere, but everyone has a right to know that there is a crappy businessman running a crooked store out there.

ugimports
03-14-2010, 9:41 PM
So the OP is saying that Gunstores should sell at rock bottom prices because he's a penny pincher for the best possible price? That's just greedy.

If I'm wrong on that please correct me, but that's what I read from this.

Another thing to consider is that most online retailers that sell merchandise at such a great price is pretty much solely concentration on such a product. They buy that item is massive bulk and sell it for good prices. Most local FFLs don't have the ability to order in such bulk.

My OP was more informational to those that feel what you stated above (emphasis added by me). I was trying to associate the costs that it takes to run a store and why they shouldn't just expect rock bottom prices and in fact can do all their shopping online if they preferred rather then come and whine about why stores aren't all like Frys Electronics (cheap and deep).

ugimports
03-14-2010, 9:49 PM
They should be able to make a profit......why else would they even be in the business, or any business for that matter?

Gouging (to me) is when they are the only ones in town and they know it so they raise the prices of the guns to just under what it would cost you to buy online while their actual costs remain the same. Sure, prices fluctuate, but if they are charging $230 for a stripped OLL because it would cost you $250 with shipping, gas and dealer fees to buy from the next closest place but they are buying the OLL at the same price as everyone else (say, $75), that's price gouging and it's unethical.

You're right, people can always shop elsewhere, but everyone has a right to know that there is a crappy businessman running a crooked store out there.

I agree a little bit on this. However, say he is the only guy in town. It's more then likely because there isn't enough traffic to support 2 shops in town. That being the case, they may have to charge higher prices to make up for the fact that they have a smaller customer base. I still don't consider that gouging (in my opinion as well).

Now, an enterprising business person in the SAME or close town can say... "Hey, gunstore A is gouging...I KNOW that I can do the exact same business, charge 5% less then him and take away ALL his business..." -- and boom capitalism at work. Now there are some weird laws of economics that I can't explain, but can give a few example that I've seen:

Example 1)
2 gas stations across the street from each other, both big name brands (we'll say Shell/Union 76 for this example). 1 charges 10c cheaper / gallon then the other, but both stay in business. Why? Some people don't like to make left turns to get gas and it's worth 10c more to them. I'm a cheap SOB, but if it's an unprotected left turn (which I hate from past xp) I'll pay 10c more to turn right.

Example 2)
In San Diego (for those that are local), off Garnet street in Pacific Beach. There are 2 VONS Supermarkets, literally across the street from each other on the same side of the street (so no left/right turn issues here). BOTH stay in business (well I don't know if they are still there, but it intrigued my in 98 when I was down there for school). An econ major told me that it had something to do with "what the market could bare/bear(sp?)" and people in general go to what's closer.


SOOooo.. my 2 examples are intended to illustrate that the reason people may go to Gunshop A with high prices, despite maybe an FFL who's a little farther away sometimes is the simple fact that Gunshop A is closer.

For those math/economics majors I'm sure they could quote some theories or principles on how that stuff works.

I'm merely an observer.

Honestly, I'm sure the result of my becoming an FFL and 'stealing' business from whomever I stole it from has probably gone unnoticed. I know that some of the people that come visit me also say the only reason they do is because I'm closer EVEN though I cost a little more then, say Roger's Relics. For them the extra few bucks is worth it for the convenience. For others that limit may be higher.

CSACANNONEER
03-14-2010, 9:51 PM
They should be able to make a profit......why else would they even be in the business, or any business for that matter?

Gouging (to me) is when they are the only ones in town and they know it so they raise the prices of the guns to just under what it would cost you to buy online while their actual costs remain the same. Sure, prices fluctuate, but if they are charging $230 for a stripped OLL because it would cost you $250 with shipping, gas and dealer fees to buy from the next closest place but they are buying the OLL at the same price as everyone else (say, $75), that's price gouging and it's unethical.

You're right, people can always shop elsewhere, but everyone has a right to know that there is a crappy businessman running a crooked store out there.

That sounds more like supply and demand to me. It also sound like $230 for a stripped lower is a great price if the next cheapest one is $250. I bet that you could open a shop half way in between and make a killing selling tem at $215. Just think, everyone would thank you for giving them such a great deal.

The Blind Gunman
03-14-2010, 9:53 PM
So the OP is saying that Gunstores should sell at rock bottom prices because he's a penny pincher for the best possible price? That's just greedy.

If I'm wrong on that please correct me, but that's what I read from this.

Another thing to consider is that most online retailers that sell merchandise at such a great price is pretty much solely concentration on such a product. They buy that item is massive bulk and sell it for good prices. Most local FFLs don't have the ability to order in such bulk.

May the best deal win.

Vinz
03-14-2010, 10:01 PM
If service is good and they are stand up, they get my business regardless of price.


Like it was said earlier, if you don't like the price move on and do your research.
Vinz

NSR500
03-15-2010, 6:47 AM
Gun stores should turn a profit.

Having said that... I think Gun stores need to evolve with the customers of today. Some just have business models or practices that just don't fit with customers of today.

RedFord150
03-15-2010, 8:47 AM
This is a simple example of a gun store buying a gun for $50 and selling it for $150. He makes $100 to buy the gun, clean and inspect it, put it up for sale, store it while trying to sell it, processing DROS upon the sale, possibly paying credit card fees after the sale, paying a commission to a salesguy, etc. If the OP thinks the store actually made $100 profit, he is sadly mistaken.
Yes, stores need to make a profit. The real question is how much?
Margins on guns are very low due to internet sellers. The real profit should be in ammo, accessories, cases, safes, etc.
I think the answer is too buy your ammo and supplies from your local dealer, not just worry about the margin on the guns.
BTW, approaching a customer to buy something from him or sell him something on store property is very bad 'etiquette'. You should be asked to leave for this. The store owner pays for the location and marketing and advertising to get that customer in his shop. Attracting customers costs money. If you than 'steal' that customer, you are also stealing the stores' investment in their premises and their marketing.

Bruce
03-15-2010, 10:58 AM
$8/hr is CA minimum wage as of 2008. Assume they work 7 days a week 10 hours per day as per store hours:

$8 * 10hours * 30 days per /mo = $2400 for 1 employee -- let's assume this is a 1099 so we don't have to worry about the employer paying taxes on the employee.

I'm glad I don't work for you! Seven days a week @ $8/hr? Whatever happened to the 40hr work week? IIRC FLSA would require you to pay those 70hr a week employees about 30 hours of overtime.

macadamizer
03-15-2010, 12:55 PM
They should be able to make a profit......why else would they even be in the business, or any business for that matter?

Gouging (to me) is when they are the only ones in town and they know it so they raise the prices of the guns to just under what it would cost you to buy online while their actual costs remain the same. Sure, prices fluctuate, but if they are charging $230 for a stripped OLL because it would cost you $250 with shipping, gas and dealer fees to buy from the next closest place but they are buying the OLL at the same price as everyone else (say, $75), that's price gouging and it's unethical.

You're right, people can always shop elsewhere, but everyone has a right to know that there is a crappy businessman running a crooked store out there.

This isn't gouging, nor is it crooked -- the store is just charging the highest price that their particular market will bear -- and that's the smart thing to do, anything else is leaving money on the table for no good reason. And that's not a crappy businessman, that's a smart businessman.

audihenry
03-15-2010, 1:07 PM
I was inspired to start this thread based on what I read a lot in these forums. Some feel that Gun Stores gouge and while I agree store's have higher prices, I do not believe it is to gouge. As others say time and time again you have the option of shopping where you wish. In light of all that I'd like to offer some visibility in to what some costs are involved in running a shop. These costs are not all inclusive and the number in fact is probably higher, but I made some assumptions and ran with that.

Let's assume an retail store of 1200 sq ft that is open 7 days a week for 10 hours per day, 365 days a year with 2 full time min wage employees + 1 owner.

Rent: $2400 / mo (@ $2/sqft)
Insurance: $300 / mo
2 minimum wage ($8 / hr) employees: $4800 / mo
Alarm System / Misc Office Expense: $500 / mo
Website, Internet, Telecom (ph/fax): $200 / mo

Total Monthly Expenses: $8200 / mo

Let's say the Gun Shop marks up items with a 10% markup. This means they need to do $80,000 / mo in sales JUST to pay expenses keeping 0 inventory. Keep this in mind when you harass gun store about their prices. My numbers here are conservative and based on some experience running my own small shop, part time. Realize my assumptions don't account for taxes that the company has to pay just to be in business and assumes the owner is making 0.

Also, shops don't always get stuffed shipped free if they are not doing high enough volume so keep that in mind too as those costs need to be passed on.

This is a half baked post on so many levels. The most obvious, however, is that the "gun store" in your title can be changed to ANY OTHER kind of store. What exactly is your point? If you can't run a business, get out and let someone else who can do the job. No need to be a gun shop apologist.

a1c
03-15-2010, 1:13 PM
Stupid poll.

oddjob
03-15-2010, 1:15 PM
Many years ago a FFL dealer (and cool guy) told me he would give a customer 60% of the value of what he thinks he could sell it for and not the value of the gun. This was due to his customer base and the surrounding area. He went on to explain about his lease, insurance, utiltity bills & etc. Made sense. He had it with Calif & moved out of state and is doing very well. He told me what his profit margin was with new guns, but I can't remember. I once spoke to a former S&W rep about profit margins years ago. His stated to me that if a handgun's MSRP was $500.00 it ROUGHLY costs S&W $250.00 when it leaves the factory. The rest is in wholesalers, distributors, dealers & etc. I don't know if its true, but this is what was told to me.

A friend of mine who owns a bar. A customer pays $3.00 for a beer and some people wonder why so much? Overhead such as insurance, salaries, utilities, workers comp, taxes (a local downtown sidewalk tax as well!!) eat up his profits. Gotta buy the beer (and all booze) from the local distributor and not COSTCO/BevMo. Beer (no tap, just bottles) is his lowest profit maker. Well drinks are his bread & butter. Call drinks are the 2nd worse profit maker (at least for him).

I really don't care what profit margin a dealer makes on guns. Gouging to me is a term like "rich." I'm not sure what it is, but I'll know it when I see it. If I don't like it I move on. And I don't come back to buy. Not even for accessories. I will freely admit I'm lucky in that I have a friend with a FFL and he charges me a $10.00 profit on top of DROS.

Just my opinion, but the internet has made most of us smarter buyers in all fields. We are more aware of costs, profit margins & etc. I think overall in the long run it makes us wiser with our money (including us gun buyers). And it keeps most retailers on their toes. It also helps us understand what FFL dealers have to go through to stay in business. My vote is "Yep."

lawaia
03-15-2010, 3:16 PM
I voted "no" on profitable businesses. I think Barry is onto something with this whole Socialist agenda. None of us should make money. We should all give our money to support the poor. Down with capitalism!!!!:rolleyes::)

Cokebottle
03-15-2010, 6:43 PM
Having said that... I think Gun stores need to evolve with the customers of today. Some just have business models or practices that just don't fit with customers of today.
It's not unique to gun shops.
I've heard the same song and dance from sole proprietorships for the last 30 years in every activity that I've been involved in... RC models, model railroads, scuba, motorcycling, etc...
20-30 years it was mail order houses that they complained about, but mail order was so inconvenient that it was a small threat. MOST of your stuff came from the local shops and you paid what they wanted. The mail order houses like JC Whitney were known for selling cheap imported crap.

Today, there are still independent hobby shops, dive shops, and motorsports dealers... but they are few. The successful shops moved forward and bought into a larger corporate entity, whether by franchise or by outright sale, that could take advantage of volume pricing on the wholesale level.
I fully believe the guy around the corner that claims that Tower Hobbies is selling for less than his cost... he doesn't have the volume to get that pricing. But I can go across town to Hobby People and get the same price as Tower. I'll have to deal with employees that aren't qualified to work at 7-11... but at least I don't have to listen to whining about how the internet is destroying the business the whole time I'm in the store (unsolicited or elicited I might add).
I'm glad I don't work for you! Seven days a week @ $8/hr? Whatever happened to the 40hr work week? IIRC FLSA would require you to pay those 70hr a week employees about 30 hours of overtime.
He mentioned 1099 employees... he can do pretty much anything he wants with them, as they are not "employees", but rather "contractors" and work on negotiated terms.
But that may not last. My daughter worked for a house cleaning service that paid her on 1099, and it took me 10 minutes to get through the questions and confirmations that Turbotax presented. I got the distinct impression that the IRS looks closely at businesses who have only 1099 employees that should be classified as regular employees.

five.five-six
03-15-2010, 6:47 PM
what??? if a gunstore wants me to grace them with my presence, they should be selling me stuf at under cost, or buying stuff from me for more than they could ever sell it for... I am special

Cokebottle
03-15-2010, 6:48 PM
He told me what his profit margin was with new guns, but I can't remember. I once spoke to a former S&W rep about profit margins years ago. His stated to me that if a handgun's MSRP was $500.00 it ROUGHLY costs S&W $250.00 when it leaves the factory. The rest is in wholesalers, distributors, dealers & etc. I don't know if its true, but this is what was told to me.
MSRP on a Yamaha powersports product allows for a 17% margin over invoice.
The dealers make their money in the service department, charging $60-$90/hour and full list for parts (many high volume dealers will sell parts at 15% off), and only paying their techs minimum wage (and "book rate" at that... if a job books at three hours and it takes the tech four, tough... the customer pays $180-$270 and the tech gets $24).

G17GUY
03-15-2010, 7:06 PM
MSRP on a Yamaha powersports product allows for a 17% margin over invoice.
The dealers make their money in the service department, charging $60-$90/hour and full list for parts (many high volume dealers will sell parts at 15% off), and only paying their techs minimum wage (and "book rate" at that... if a job books at three hours and it takes the tech four, tough... the customer pays $180-$270 and the tech gets $24).

How can a tech work 4 hours and get paid for 3? Anyone who works for minimum wage is selling them self short anyway.

Cokebottle
03-15-2010, 7:19 PM
How can a tech work 4 hours and get paid for 3? Anyone who works for minimum wage is selling them self short anyway.
They often get paid "piecework".
If they complete the job in 2 hours, they still get paid for 3.




And they need it to pay their $25k debt to MMI.

G17GUY
03-15-2010, 7:28 PM
And they need it to pay their $25k debt to MMI.

This MMI?
http://www.uti.edu/Home/Motorcycle

So they get minimum wage while they are paying off the debt?

for2nato
03-15-2010, 7:47 PM
of course they should be able to make profit. the real question should be. "should the people of california stand up and show resistance against the high priced dealers in their area?" i can speak from experience. every gun you buy in california is over priced. even when i thought i was getting a good deal on my pt-111 i bought half a year ago. i got robbed. $120 more than i can get it for at the current location i live. and thats not california. and after a long bit of research on most of the current firearms offered for sale today. every gun i looked at while i still lived in california was $100 more than i can get it for in the state i live in now. and i have to add that the pt-111 i purchased was $80 less than all other dealers in the area. i am not against a business making money. but the amount of money they are making off of the residents of california is rediculous.

Cokebottle
03-15-2010, 7:58 PM
This MMI?
http://www.uti.edu/Home/Motorcycle

So they get minimum wage while they are paying off the debt?
They're actually lucky to get a job with only MMI and no "real world" experience, despite MMI's claims.
Experienced techs tend to look at MMI graduates as "90 day wonders".
Hang around on some MC forums and it's amazing the motorsports version of "FUD" that you'll hear from new grads who have yet to replace their first screwdriver. The mere suggestion of using synthetic oil in an engine with less than 15k on it is like throwing raw meat in a shark tank.

I've known some MMI grads that really knew their schnitz... but they had a few years wrenching before going. MMI helped them by tying their experience in with new concepts and it made them better mechanics.
I've known some MMI grads that couldn't tell you the first thing about a V-Twin. The standard course covers sportbikes/standards. The "cruiser" models are covered in a $eparate $e$$ion. I believe they do offer an exception to that for the Harley-sponsored training.

Regarding their wages... they get minimum or only a little above (best I've heard of is $12-$15/hr) whether they're paying off that debt or not. They get MMI on their own, the employer has nothing to do with it. It's a personal debt, that I understand, it treated like a student loan where payments are suspended while you are not working (and that may not be 100% true).

But this is getting way OT.....
Suffice it to say, the only way to really make real money is to stop working for someone else... but at that point, you have to have a solid business plan. Winging it will guarantee failure. Having a solid business plan provides a chance, but no guarantee, of success.

ugimports
03-15-2010, 8:14 PM
I'm glad I don't work for you! Seven days a week @ $8/hr? Whatever happened to the 40hr work week? IIRC FLSA would require you to pay those 70hr a week employees about 30 hours of overtime.

I was using simple numbers to illustrate an example. I don't have employees. If it makes you feel any better we can say we have 4 employees each working 35 hours a week and all the math stays the same.

ugimports
03-15-2010, 8:23 PM
... i am not against a business making money. but the amount of money they are making off of the residents of california is rediculous.

Again the cost of living and the costs in other states to operate a business (any business) is lower then CA. Hence they can afford lower markups on firearms and still make reasonable money. This is the core of my original post. It isn't cheap in CA to run a business. Again, I'm not in this position as I run a tiny operation. I'm more defending gun stores and their "gouging" prices because when I ran the calculations on how much it would cost for me to open a retail store front and make the SAME amount of money I make right now during my day job I realized the numbers didn't make sense to me unless I was doing tremendous volume which I wasn't prepared to do.

Ding126
03-15-2010, 8:25 PM
I try to support my local shops because sometimes I don't mind paying extra 1) because they have it & 2) I want to support them.

But when they sell a MOE hand guard for 40.00 and I can buy it online for 25.00 shipped..then I have to ask if I really want it now Becaue I believe shops get items at better prices than we can buy.

another example of a magpul rear BUIS for 70.00 whenI can get it for 43.00 + shipping.

I often wonder why the don't make things cheaper and increase sales based on volume rather than a high profit per item?

But then I realize its difficult to operate any store front..you can't just pull people off the street and make them buy things.

A great example is Guns & Fishing in Vacavile.35-40.00 per box of wolf 45acp or 12.99 for 20 rnds AE .223 WTF?? I stop in once in a while for laughs

bsg
03-15-2010, 8:41 PM
i don't think the government is going to begin handing out guns to our people, so i would guess it's an incentive to a dealer to make a few bucks on a sale....



-Brady-

Rob454
03-15-2010, 9:25 PM
of course they should be able to make profit. the real question should be. "should the people of california stand up and show resistance against the high priced dealers in their area?" i can speak from experience. every gun you buy in california is over priced. even when i thought i was getting a good deal on my pt-111 i bought half a year ago. i got robbed. $120 more than i can get it for at the current location i live. and thats not california. and after a long bit of research on most of the current firearms offered for sale today. every gun i looked at while i still lived in california was $100 more than i can get it for in the state i live in now. and i have to add that the pt-111 i purchased was $80 less than all other dealers in the area. i am not against a business making money. but the amount of money they are making off of the residents of california is rediculous.

One thing you are forgetting it costs MORE to do business in california. From overhead to taxes. its a FACT that it costs more. Our cost of living is higher than most states. We ( usually and its been proven) we have a more robust economy than the other states. With that in mind yes a shop in middle of Texas USA may be able to sell for less because they have lower overhead and less taxes. if you can get it cheaper some where else get it there. Any smart shopper will tell you that. I look for the best deals and when I find them I get them. I dont have a problem paying a fair price. if I FEEL the price is too high I simply dont buy. I dont get mad or upset I simply wait till it goes on sale or go to the next store down the line. but shops here They have to pass that cost on to the consumer. its unfortunate. Yes some shops have outrageous prices but you yourself did your own research to see who was the lowest priced. its no different than buying a car or shopping for food. I dont see a problem here. A Smart shopper either finds or waits for the deal to come to him.

IMO UNLESS you had to personally finance or take a loan ( quit your safe job and go in the great unknown sink or swim kind of thing AND the stress that comes along with being a small business owner hiring and firing dealing with screwball employees etc) to start your OWN business in california and know what it takes to run a business then complaining about the gouging is pointless cause you really have no idea what you are talking about. Not trying to be rude about it but unless youve been in that position you really are clueless.
Running your own business is basically feast or famine no steady paycheck or anything. Youre on your own. The profit you make at the end of the month after paying everyone and everything is what feeds your family. Put yourself in that position then come talk to me. Once you do that now let me come and tell you that you need to drop your profit by 1/2 cause I feel you are gouging. Now let me know how you feel.

A lot of these online "shops" as you guys call them are either a home based business or simply a guy with a computer who is a middle man. You buy through him and he drop ships straight from the factory to you. A brick and mortar business that has employees taxes lights overhead simply cannot compete with that.
I helped my Brother start a small online sales thing where he basically sold 4x4 parts for 15% over cost. All he did was take the orders and then order from his supplier. and he made 15% profit. granted he did it part time but anyone can do that. All you need is a few cheap or free licenses from the state you live in.

Swatguy10_15
03-15-2010, 10:03 PM
IM presuming the OP needs to re-phrase his question..As theres no question as to whether or not gun stores should make a profit. Why else would you open a business? Whats the whole point??? PROFIT. But the amount of profit is the real matter. You also cant compare local business to online. Online vendors out of state have merely a percentage of what we do here tax and fee wise.. why do you think californias working so hard to make us unable to buy things off the net??
There are variables.From one county to the next, fees,permits, more fees, taxes, more fee's etc.. The cost of doing business in this state just doesnt seem worth it. But people do and its a good thing as if they werent where would we obtain our weapons? The back of a van is great but......
However I do understand why some would be upset. I live in the valley. Most of the dealers I work with are a) not on calguns and b) not on the internet at all thus are still reasonably priced. The thing i wonder is when I go over and see them same hardware in the bay areas for anywhere between 4-500 dollars more. Does it cost that much more to do business in the bay area? And then there are these "transfer and recieveing fee's" some places want almost 100 bucks to just recieve youre weapon and do the dros stuff for you//what the? 50-60$ to do a private party and half the time theres attitude about it? But like anything else supply and demand rules. and theres always some guy who runs into the shop who barely speaks english and gladly pays whatever the tag says for that weapon he has no idea how to use.. The thing I dont like is the gun shop owners openly hoping for another "rush" so they can jack the prices back up to astronomical chevron oil status profit margins and screw us out of every last dollar they can..remember when an upper was listed for 8-900 dollars during the obama rush?? Ofcourse gun dealers should make profit. Thats what pays theyre bills and feeds the family. But running the gun business emulating corporate americas greeedy ways does no good either.

Vinz
03-15-2010, 11:13 PM
I'm glad I don't work for you! Seven days a week @ $8/hr? Whatever happened to the 40hr work week? IIRC FLSA would require you to pay those 70hr a week employees about 30 hours of overtime.

welcome to the small business owners life. LOL

Its tough around here and 7 12 hour days and no stranger for me lately.


vinz

aplinker
03-16-2010, 12:04 AM
Yes - but only on the other customers.

I'm entitled to special treatment.

If you don't want to give it to me I'll flame you on the message boards and run you out of business.

CalNRA
03-16-2010, 12:16 AM
A great example is Guns & Fishing in Vacavile.35-40.00 per box of wolf 45acp or 12.99 for 20 rnds AE .223 WTF?? I stop in once in a while for laughs

you should have charged me at least 25 a box for those Federal 9mm. :rofl:

bohoki
03-16-2010, 12:19 AM
i dont mind supporting a local shop as long as i am not their sole support

oddjob
03-16-2010, 10:19 AM
I know of a gunsmith/dealer that had a decent "formula" that worked for him. He told me his profit margin on guns was minimal. Accessories profit was better then guns. His money maker was wrenching on guns. He used gun/accessory sales as a draw to his shop. He's been in the business for 35+ years now. The downside is insurance costs go up if your a gunsmith as opposed to a plain dealer.