Ammo warehouse model

[Califpatriot]

Most gun stores in California have traditionally had large markups on ammo and it seems to have gotten worse now that they don't have to compete with online retailers. There are some that keep their prices reasonable, but it's pretty rare. It's understandable because there's a ton of costs involved with being a gun store in California, but not being able to order ammo online and having to pay these prices helps making the shooting sports unaffordable for a lot of Californians. If you have a FFL03/COE, it doesn't matter, but most people aren't going to be bothered with it. A few dealers accept shipments, either for free or for a fee, but they're relatively few and far between and they generally don't advertise it because it's essentially a favor they are doing for their customers, rather than a way to make money.

My thought is whether a warehouse-style model could work in California. Strategically placed stores across the state where the consumer orders online, pays online, and then comes in with his order number and ID, signs off on receipt, and picks it up. The margins would obviously be thinner than gun stores, with the idea that the business makes it up with volume. The warehouses would not need to be staffed with people with any particular gun knowledge--basically, anybody who is trustworthy not to steal could do the job of bringing the box from out back. No cash or payment would be transacted in person. Probably a lot easier to get the necessary business permits for an ammo vendor than a gun store.

The problem that immediately comes to mind is that there probably is not enough volume to justify rent, overhead, even a limited payroll. People who buy a lot of ammo are likelier to have a FFL03/COE, and casual shooters will buy at the range or at the gun store when they buy their ammo. Or am I underestimating the amount of ammo that is purchased in California?

[tziggs]

I'll buy from you when you open...just make it close to me

[M1NM]

Don't know if it would work. How many stores? 5-10? What population/shooting centers will you be close to? You're thin margin on ammo will need to be made up someplace else. Brick & Morter has too many built in expenses you can't avoid. Lights, water, rent, employees, taxes, insurance, city permits and licenses etc. It would be hard not to have expenses of 3-5,000 per month per store. You would have to target volume shooters. The one or two boxes per month shooter won't see or need the savings in buying in 5,000 up lots. I think where this new ammo BS will lead people is to handloading their own.

[Yodaman]

[200Apples]

My thought is whether a warehouse-style model could work in California. Strategically placed stores across the state where the consumer orders online, pays online, and then comes in with his order number and ID, signs off on receipt, and picks it up.

You may be overlooking the new ammunition background check procedure, whatever that winds up being.

As for a business model, you might look at what LAX Ammo has achieved in recent years. Four stores in southern California, including their first, largest and where they manufacture both their reloads and their Factory New (using plated bullets and new brass; in some calibers Starline brass, in others, brass with their own headstamp) and where they sell major name brand commercially-loaded small arms ammunition.

What LAX Ammo doesn't do for whatever reason is allow in-store pickup of ammunition purchased from their virtual store online.