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  #1  
Old 12-18-2007, 6:34 AM
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Default How much do gun shops make?

Does anyone know how much markup a private gun shop makes on the sale of new guns, both pistols and revolvers, and rifles/shotguns? I'm not talking about the bigger stores like Turner's and Bass Pro, but rather the independent gun shops that I would like to buy from, but they are usually much more expensive. Also, is it likely they will negotiate their prices? I've never tried, just paid what they wanted...thanks in advance for any info you may have.
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  #2  
Old 12-18-2007, 6:45 AM
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From my experience, on new guns, the most on mark up is about 10%... and that is for large and small, gun store makes there money on the accessories..mark up is in the 100s of percentile. Used and consignment guns are also very good money makers (ever notice the price of a used gun is less than a new gun by about $50-$100?, well they buy guns at anywhere from 10% of the guns MSRP to at most 60%,,,this is all based on demand, rarity, and popularity of that gun...

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Old 12-18-2007, 6:58 AM
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Originally Posted by Bongos View Post
Used and consignment guns are also very good money makers (ever notice the price of a used gun is less than a new gun by about $50-$100?, well they buy guns at anywhere from 10% of the guns MSRP to at most 60%,,,this is all based on demand, rarity, and popularity of that gun...
I have heard that repeatedly over the years from dealers on both coasts; the "big" money is in used guns. I think that's even more true today since for new guns now everybody runs to gunbroker to see if cost OTD =/< cost+shipping+dros+xferfee from an out of state dealer.
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Old 12-18-2007, 7:35 AM
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Does anyone know how much markup a private gun shop makes on the sale of new guns?
Glocks cost around $75 to manufacture. Add a 250% markup to retailers & LEO and the price comes to about $190. Add the Retailer markup of 250% and you get somewhere around $465.
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Old 12-18-2007, 7:39 AM
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I also believe they make more on used guns. For consignment sales the going rate is 20% and used guns move at maybe 3-5 times the rate of new guns. A desireable S&W, COLT or Winchester will normally be gone within hours of coming in. New guns from the same manufacturers may take weeks to sell and I don't know that they make 20% on those. In addition to all that, when you have a full shelf of guns on consignment, its not your money tied up there in inventory, its other peoples money which makes it even more profitable cause you can invest your cash in other areas.
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Old 12-18-2007, 9:27 AM
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Speaking as a retailer, the mark-up on new firearms is slim. Especially for those of us in small stores. Why? Because I can't afford to buy 100 of something to get the "good" deal from any of the distributors like Wal-Mart does or Turners or Bass Pro. I look for good deals on used guns because as someone said, that's where the $$ are in this business.

Auction houses are another source of great deals for the dealer....at least this dealer. And I don't mean Auction Arms or GunBroker. I mean actual auction houses like Rock Island. There are a few local auctions I go to as well looking for deals that I can turn a profit on. And as prices go, I am a firm believer that if I get a smoking hot deal on a gun, I want to pass that smoking hot deal on to my customer. Not to the point of losing money though.

As for using the Internet to buy guns to the exclusion of the local guy, remember that if you keep doing that, eventually you will drive the local guy out of business. Then who will do your transfer for you?
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Old 12-18-2007, 9:40 AM
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Originally Posted by FortCourageArmory View Post

As for using the Internet to buy guns to the exclusion of the local guy, remember that if you keep doing that, eventually you will drive the local guy out of business. Then who will do your transfer for you?
+ 1,000,000

I refuse to buy from the internet. I would much rather spend a few extra dollars and support my local store. Then again, my local gun shop has excellent staff and service, so I enjoy going there for whatever reason as I usually end up spending an hour or two.
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Old 12-18-2007, 9:55 AM
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Buying local is nice but if you collect C&R pistols the local shops do not have what you want. May be once a year a gun comes in and you are able to get to it before some one else does, especially the workers. So I do not like the high price for a internet transfer on something they would not carry. I am the one taking the risk if the gun or seller is good or not. I have to pay the shipping and up front money, they just have to file paper work. If I bought and brought the gun into CA it would cost $19. That is why I think anything over $40 is gross.

Jerry
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  #9  
Old 12-18-2007, 10:01 AM
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Originally Posted by glockman19 View Post
Glocks cost around $75 to manufacture. Add a 250% markup to retailers & LEO and the price comes to about $190. Add the Retailer markup of 250% and you get somewhere around $465.
what the hell are you talking about,

When we sold here we were getting about 60 bucks on a Glock. I sure as hell never saw a Glock come in for less than $420 from the distributors. Maybe they make a big markup but we sure as hell weren't. I don't know what deals turners runs, but thats the way it worked here.

As to the original poster, it depends on the individual business. We worked on a fixed markup from wholesale, on everything. Guns around 15% and accessories is more. If you were to walk into a store that stocks a few and they're trying to get rid of em you might get lucky. Best advise I can give you is; DO NOT mention the internet and start slow. Try to talk them down $20 this and start increasing from there, if you insult them you'll never get a deal on it.
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  #10  
Old 12-18-2007, 10:21 AM
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Originally Posted by glockman19 View Post
Glocks cost around $75 to manufacture. Add a 250% markup to retailers & LEO and the price comes to about $190. Add the Retailer markup of 250% and you get somewhere around $465.
Um, yeah, I am sure it takes more than an hour of maching time to mill the slide on a glock and maybe another half hour for the barrel. Thats an hour and half. Last time I was in the machining business we were getting $75-$110 per hour per machine so we can assume $112-$165 just to machine those two parts. All the other crap doesn't cost much but I would be willing to bet it costs $150-$200 to build a Glock.
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  #11  
Old 12-18-2007, 10:21 AM
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Originally Posted by glockman19 View Post
Glocks cost around $75 to manufacture. Add a 250% markup to retailers & LEO and the price comes to about $190. Add the Retailer markup of 250% and you get somewhere around $465.
You're nuts.

Glocks may indeed have a *raw* cost of materials of $75 to mfgr. What about direct-to-item labor? That's probably $10/gun alone for mfgr, testing, boxing, putting on the shelf, shipping out...

But if they sold at that $85 price they'd not only not break even, they'd go broke in a screamingly dramatic fashion.

That $75 you quote, if even remotely correct, certainly does not include corporate overhead, sales overhead, etc.

And it most certainly does not include insurance/legal overhead which alone will run $70-$100 or so per gun *alone*.

It also would not include compliance testing for states that require it, and would not include any allocations for R&D development of new guns, advertising/marketing efforts, or reserves for warranty replacements, etc.

I suspect the corporate break-even cost - given all the above costs - is gonna run at least somewhere around $240ish for a Glock.

You also have to figure there's a 10% Fed excise tax for handguns, and that the distributor is gonna clear a fair amount per handgun for tying up a big chunk of cash in inventory -- the distributor can often make a bit more than the dealer on a gun sale.
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  #12  
Old 12-18-2007, 10:34 AM
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Originally Posted by zinfull View Post
Buying local is nice but if you collect C&R pistols the local shops do not have what you want. May be once a year a gun comes in and you are able to get to it before some one else does, especially the workers. So I do not like the high price for a internet transfer on something they would not carry. I am the one taking the risk if the gun or seller is good or not. I have to pay the shipping and up front money, they just have to file paper work. If I bought and brought the gun into CA it would cost $19. That is why I think anything over $40 is gross.

Jerry
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  #13  
Old 12-18-2007, 10:37 AM
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When I was in the biz, the basic mark was either 15% or $50 bucks, whichever was higher. Accessories and ammo is where you make your real money to pay the bills, plus we had the indoor range which is pretty low overhead (reloads from Bulls-X, targets in bulk from Alco or Plumfire and lights.) We didn't usually haggle or match prices, we usually didn't have to, having the lowest in the area. Though LC Action could beat us on Glocks as they were the local distributor. Don't know if that's still true or not.

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Old 12-18-2007, 11:03 AM
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Maybe someone can clue me in as well on this. I have seen pistols out of CA go for a very reduced price compared to my local shops. High demand pistols like Glock, HK, and so forth usually there is not much give. however I have seen Sig's and Springfield's going for a hundred or more less online....that seems kinda strange to me.
I agree, buy from the local guys and keep it honest. However if I go into a shop and some ***** who works there gives me the "well guess you should have bought if from that shop if they have it at that price" when the guy around the corner has the same thing for 40-50 less.... I will !!!
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Old 12-18-2007, 11:15 AM
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Cali prices are usually higher than the national average for pretty much everything, that's part of it. Also I think a lot of the online prices are from smaller shops with in less expensive parts of the country - less overhead so they don't need to make as much on each sale to keep the lights on.
Or maybe it's the opposite for some online sellers; they're big enough that they get a break from the distributors (or maybe they ARE the distributors - we were for H&K for a long time and used to sell out of state all the time) and get a lower price 'cause they buy larger amounts.
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Old 12-18-2007, 5:00 PM
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Well I'm gonna poo where I eat I cant comment on the rest of the makers but those comments on the Glocks might not be that far off...I dont think they're spec on but they might be a tally for the assembly line cost; but not including everything Bill had mentioned.

After years of buying from one mom&pop shop at some pretty good/ok deals I finnally hit them up when I was in the market for a Glock 26. I did some homework and asked <nicely> if they'd ship one in for me; Guy pretty much says he could still beat the prices I found. So ALL done and said-- Gun, Dros, tax AND shipping I paid a smidge under $400. I was shocked and litterally asked if he was still making any money. He said yeah- $65's worth... I dont think it takes a rocket scientist to figure the gun went through a distributor that also made some money....but that FFL clearly stated to me he was paying less than $300 on them while they lasted (Circa 2001-2002)............. but then again- them deals are HARD to find; these days I pay a different kitchen counter guy $15 above his cost and he's happy.............and he's flat out told me too the distributors are still making money..
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Old 12-18-2007, 5:13 PM
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Dealer on GLOCKS is 450-500 which doesn't include overnight shipping....they might run a big special but not usually.....

Only way that you might get'em cheaper is from a big buy that went bad from some LE/DEPT that balked....

If you can get a used GLOCK for 200 and sell it for 400....that's good....prolly not going to happen...

Buy one a new one for 460 and sell it for 500.....not so good....

the distros are making some bucs but they have $$$$ inventory.....the big manufactures are the guys making the $$$$
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Old 12-18-2007, 5:39 PM
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Originally Posted by bwiese View Post

I suspect the corporate break-even cost - given all the above costs - is gonna run at least somewhere around $240ish for a Glock.
I agree, 250+ is probably more reasonable. During WWII (depending on the year), a 1911 cost any where from $15-$50 to make. That is 60 years ago, on a simpler gun, manufactured by multiple companies, on tooling that had been perfected for that model over 30 years prior, and cranking out at a very high volume.
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Old 12-18-2007, 6:47 PM
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Originally Posted by glockman19 View Post
Glocks cost around $75 to manufacture. Add a 250% markup to retailers & LEO and the price comes to about $190. Add the Retailer markup of 250% and you get somewhere around $465.
lol what? Smoking crack is bad for your health...

Dealer cost on a Glock starts at about $430 and goes up depending on the model.

A dealer will pay $200-$300 for a used glock which can sell for $300-$400 depending on model, condition and accessories.
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Old 12-18-2007, 6:50 PM
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Originally Posted by carl8808 View Post
Maybe someone can clue me in as well on this. I have seen pistols out of CA go for a very reduced price compared to my local shops. High demand pistols like Glock, HK, and so forth usually there is not much give. however I have seen Sig's and Springfield's going for a hundred or more less online....that seems kinda strange to me.
A lot of online dealers sell out of their houses. That reduces overhead immensely.

Some gunbroker and auctionarms dealers sell for $20-$30 over cost... they don't mind being bottomfeeders and since they're not doing any transfers, they don't have rent, mortgage, bills, etc to pay.
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Old 12-18-2007, 7:03 PM
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I work for a company that has manufacturing overhead. The cost of this overhead is roughly 7.5% the cost of product, I've been told.

Turby
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Old 12-18-2007, 7:08 PM
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Um, yeah, I am sure it takes more than an hour of maching time to mill the slide on a glock and maybe another half hour for the barrel. Thats an hour and half. Last time I was in the machining business we were getting $75-$110 per hour per machine so we can assume $112-$165 just to machine those two parts. All the other crap doesn't cost much but I would be willing to bet it
Yup! A machinist is about $30 - 40 an hour plus the cost of bits and machine time. If a company can get the slides, barrel and misc part machined in China that'll be a money maker.

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Old 12-18-2007, 7:42 PM
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Retting has a 25-30% markup on new guns and 40-60% on accessories. Turners has a 15% markup on new guns and 30-40% on accessories. These two are the high and low.

Used gun markup is a minimum of 100%. (no one passes on a "smoking deal" to the customer)

Only wholesalers buy 100 guns at a time, and are able to take advantage of the discount hat gets you. Wholesalers have a maximum 10% markup on guns.
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Old 12-18-2007, 8:06 PM
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He said yeah- $65's worth... I dont think it takes a rocket scientist to figure the gun went through a distributor that also made some money....
Any one familiar with blue label Glocks?
On the old tupperware Glock box a blue label on the end meant it was an LEO Glock. Same thing as a regular Glock but sold with the LE only magazines.
Weeeell, back in the day, uhm, unscrupulous dealers would get LEO blue label Glocks (which are sold at a fantastic discount, around $325.00 for all 9mm and .40s and $355 for 10mm and .45s) and then sell them to the general public at less than retail for the area. If Glock caught a dealer doing it, they'd cut them off.
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Old 12-18-2007, 8:08 PM
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I was working for a security company a few years ago, and they decided to upgrade their firearms inventory from S&W Sigma series to Glock 17's. I contacted Glock directly and dealt with them. We had a regional distributor that was going to handle the transfer. Our cost, with total inventory trade-in, was going to be $328.00 per gun, for 200 pistols. That was from Glock. Im sure someone here can do the math, as Sigmas werent worth much on trade-in. As for the poster saying that Glock makes them for $75.00 each, I would have to say you are pretty much off base here. With all the overhead, labor costs, insurance, packaging, Im sure that it costs more than a mere $75.00. I for one would be interested in where you came up with that number.
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Old 12-18-2007, 8:53 PM
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Manufacturing cost on a gun really isn't all the much. The only two people who make the real $$ are the manufacturer and the wholesaler!! Back in the day, I had my FFL and I owned a Machine Shop, trust me when I say, manufacturing costs for that product isn't that much. Especially today's Polymer Receivers, which are manufactured 99.99% Off Shore for next to absolutely nothing. Other parts are stamped, cast, with minimal one and two step machine procedures. Then you have these parts in vast quantities that don't cost that much. Example, Springer XD's, Receivers are made in Croatia.
The manufacturer mark up is between 3-500%!!!

Anyway, shops around here are from 22% and up!
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Old 12-18-2007, 10:55 PM
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what the hell are you talking about,

When we sold here we were getting about 60 bucks on a Glock. I sure as hell never saw a Glock come in for less than $420 from the distributors. Maybe they make a big markup but we sure as hell weren't. I don't know what deals turners runs, but thats the way it worked here.

As to the original poster, it depends on the individual business.
Let's face it your prices just suck on your guns and ammo too. I've bought and seen Glocks for $430 in group buys. Try reading.

Quote:
Um, yeah, I am sure it takes more than an hour of maching time to mill the slide on a glock and maybe another half hour for the barrel. Thats an hour and half. Last time I was in the machining business we were getting $75-$110 per hour per machine so we can assume $112-$165 just to machine those two parts. All the other crap doesn't cost much but I would be willing to bet it costs $150-$200 to build a Glock.
I'm simply quoting from an article where Gaston Glock was quoted as saying his cost to produce one gun was $75. The article was from Forbes Magazine.
http://www.forbes.com/forbes/2003/0331/064.html

Quote:
You're nuts.

Glocks may indeed have a *raw* cost of materials of $75 to mfgr. What about direct-to-item labor? That's probably $10/gun alone for mfgr, testing, boxing, putting on the shelf, shipping out...

But if they sold at that $85 price they'd not only not break even, they'd go broke in a screamingly dramatic fashion.

That $75 you quote, if even remotely correct, certainly does not include corporate overhead, sales overhead, etc.
Quote:
lol what? Smoking crack is bad for your health...

Dealer cost on a Glock starts at about $430 and goes up depending on the model.
Yes $430. and the most I've paid is $550 for a Glock 19 with night sights NIB 2 mags, case.

Sorry disappoint you guys:
"These days Glock GmbH has an estimated $100 million in sales, two-thirds of it from the trigger-happy United States. A gun that retails for $500 can be manufactured for $75, and the company has a pretax margin nearing 60%, estimates John Farnam of Defense Training International, a LaPorte, Colo. small arms instructor."

Last edited by glockman19; 12-19-2007 at 7:35 AM..
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Old 12-18-2007, 11:09 PM
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I make what I can, where I can, when I can. That is what I mark items up. I try to make at least 15% but will make up to 150% if I can get away with it. I definitely spend too much time in that shop not to be making as much as possible.
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  #29  
Old 12-18-2007, 11:51 PM
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Keep in mind that for every hour someone is milling away on the factory floor there is typically another two hours of office work being done by someone else, especially on newer products. The office workers also get paid 2-3 times more than the factory workers.
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  #30  
Old 12-19-2007, 5:28 AM
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Originally Posted by kimbercarry View Post
i think wes said along time ago they start at 440. the guy that got a glock for alittle over 400 including dros and tax got a used gun most likely

nope- NIB. From the sounds of it- I think my FFL mighta stumbled onto one of those balked contracts...... or maybe one of the blue label specials; but nope no leo mags.........
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Last edited by metalhead357; 12-19-2007 at 5:40 AM..
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  #31  
Old 12-19-2007, 1:49 PM
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Yeah, would have been a blue label box... but a FFL selling one of those to non-LE or non-FET exempt firearms could get in trouble if the ATF were to find out.
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  #32  
Old 12-19-2007, 2:13 PM
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Quote:
Yeah, would have been a blue label box... but a FFL selling one of those to non-LE or non-FET exempt firearms could get in trouble if the ATF were to find out.
You'd be surprised at how often it happened back in the 90's. I'd be RO the range and notice a shooter with a blue label Glock box in one of the lanes. An innocent question would confirm that the owner wasn't LEO, but had just picked up their new, bargain priced Glock from a local dealer (now thankfully, out o' the gun biz).
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  #33  
Old 12-19-2007, 2:32 PM
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Originally Posted by xenophobe View Post
Yeah, would have been a blue label box... but a FFL selling one of those to non-LE or non-FET exempt firearms could get in trouble if the ATF were to find out.

so back to the balked contract idea...that or he found himself a distributor to the distributors; this shop was not "it" for the LEO so I dont think that was the route they woulda taken.....
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  #34  
Old 12-19-2007, 7:22 PM
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Dealers usually get glock in for 440, but on the other hand, glocks do offer discount to LEOs. The LEO packages come with three mags instead of two
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  #35  
Old 12-19-2007, 9:22 PM
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Quote:
Originally Posted by glockman19 View Post
Glocks cost around $75 to manufacture. Add a 250% markup to retailers & LEO and the price comes to about $190. Add the Retailer markup of 250% and you get somewhere around $465.
Dude... try and speak with some experience or fact- that way ya won't sound redikerus.
Glocks cost retailers about $440. Period.

250% retail markup? Check your math. We are lucky to clear 25% on a sale.
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  #36  
Old 12-19-2007, 11:42 PM
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Usually tiers are 20-30% in all industries.

So, if something costs $300, the dealer makes 30% off that. So we'll say $100 for simplicity. Then, the distributor also marked it up 30% on $200, so it made roughly 70ish bucks. The manufacturer sold it for $130, and also made 30%. Which would be like $75 or something.

So, a glock at $525...
Dealer: 407
Distributor: 320
Manufacturer: 240

Something like that. This model does not apply to everything though obviously, and may not apply directly to the firearm market either, just some theoretical figures.
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  #37  
Old 12-20-2007, 12:32 AM
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Things vary depending on the item and the industry. Grocery stores for the most part are suppose to have thin profit margins, they make it in volume. I've heard of 50%-100% margins in other industries.

I read once it cost about $13 to make a Raven .25acp which I believe as I remember dealers selling them sometimes for $50 NIB.

Why does Glock offer such a deep discount to LE? I assume they want John Q. Public to see the local cop carrying one and think he has to have one also. Doesn't Glock have 65% of LE market? If Glock was smarter, they would the extent the LE discount or even free Glocks to rappers!
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  #38  
Old 12-20-2007, 2:47 AM
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Quote:
Originally Posted by glockman19 View Post
Let's face it your prices just suck on your guns and ammo too. I've bought and seen Glocks for $430 in group buys. Try reading.

I'm simply quoting from an article where Gaston Glock was quoted as saying his cost to produce one gun was $75. The article was from Forbes Magazine.
http://www.forbes.com/forbes/2003/0331/064.html

Yes $430. and the most I've paid is $550 for a Glock 19 with night sights NIB 2 mags, case.

Sorry disappoint you guys:
"These days Glock GmbH has an estimated $100 million in sales, two-thirds of it from the trigger-happy United States. A gun that retails for $500 can be manufactured for $75, and the company has a pretax margin nearing 60%, estimates John Farnam of Defense Training International, a LaPorte, Colo. small arms instructor."


Im waiting to read Gaston Glock saying that he can make the gun for $75.00. . . havent found it yet, can you help me find it? Sorry to disaapoint you there kid, but Gaston Glock didnt day that. Re-read the article then check your facts. Or, just follow your own advice. Try Reading. . .
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Last edited by Stormfeather; 12-20-2007 at 2:50 AM..
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  #39  
Old 12-20-2007, 7:55 AM
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Stormfeather,

I tend to believe the Forbes article. So you overpay for guns.

YES Glocks cost less than $100 to manufacture, I believe the $75 figure, to produce.

Don't like it. Don't believe it? Call them up and ask them. Tel.: +1 770-432-1202. Also, LEO cost $398. I spoke with Craig in Customer Service.

I believe it.
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  #40  
Old 12-20-2007, 10:59 AM
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Quote:
Originally Posted by FortCourageArmory View Post
As for using the Internet to buy guns to the exclusion of the local guy, remember that if you keep doing that, eventually you will drive the local guy out of business. Then who will do your transfer for you?
In my area, there's one guy who primarily does online transfers(Rob Blank). I don't think he's going anywhere.

I'm not rich enough to "support" the local guy. I gotta squeeze every dollar to buy more guns.
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