Fair retail markup?

[gunprofit]

I pose a question. If you were to open up a brick and mortar retail gunshop, what would your markup be? Keep in mind your goal is to make money and stay in business. Before you say you are going for volume sales and plan to keep your markup super low, your rent, utilities, insurances, and other operating expenses usually account for 15 to 20 percent of sales. This is pretty normal. Knowing all this, what is your markup going to be?

[gunprofit]

Assuming you locate in a city of 150,000 what do you think your sales will be?

[gunprofit]

How much will you pay yourself?

[ClarenceBoddicker]

Buy low, sell high. Most businesses charge at least twice as much as what they paid for something, if the market will bear it. Pretty much you charge about the same as your competitors do.

[zfields]

Buy low, sell high. Most businesses charge at least twice as much as what they paid for something, if the market will bear it. Pretty much you charge about the same as your competitors do.

100% markup? I wish.

Electronics get between 10%-40%
Most grocery stores around 40%
Restaurants around 30-40%.

Very rarely will you see an average markup past 50%.

I've recently been looking at accessories to start carrying, holsters/mounts etc. Most of them run about 40% for MSRP, but to be competitive you need to price them around 25% to keep up with Amazon prices and other online dealers.

Sent from my Incredible 2 using Tapatalk 2

[Icypu]

The average most retail businesses need to make is 23.6% If you make less you will be out of business in a year or so. Firearms are a special case because they can't be bought completely over the Internet.

Now everything else that can be bought from the Internet is on Amazon. This means people get more choice. It also is bad for the retailer because theri customers are asking a good question: "Why do I have to pay for your higher cost structure compared to robots in a fulfillment warehouse?"

Retail brick and mortar businesses need to innovate, find new ways of serving customers and retaining customers. They have to charge for what they know, and not what they sell.

[postal]

^^^^ good points.

Also need to consider, you dont need to -beat- online prices, but need to be ballpark.

I pay more for the getting locally, not waiting for shipping, and not *paying* for shipping convenience.

When you order a $2.00 part, and pay $8 shipping..... believe me, I want to find that part local and will pay more than $2.00 for it.

The main thing though, is checking around with other businesses in your area and be competitive with them.

[mexicancolt1]

You will go broke if you only offer weapons. If live in Los Angeles and the leases on most building kill most of your profit. Need to focus on other services such as Gunsmithing, Customizing and Refinishing. That were the profit can be made. If your are only selling new DOJ approved weapons you will need to compete with the larger retailers such as Big 5 and Turners. Try your luck at a local gun show before you open a shop

[freonr22]

100% markup? I wish.

Electronics get between 10%-40%
Most grocery stores around 40%
Restaurants around 30-40%.

Very rarely will you see an average markup past 50%.

I've recently been looking at accessories to start carrying, holsters/mounts etc. Most of them run about 40% for MSRP, but to be competitive you need to price them around 25% to keep up with Amazon prices and other online dealers.

Sent from my Incredible 2 using Tapatalk 2

thats a 50% markup..

[JeremyKX]

thats a 50% markup..

[zfields]

thats a 50% markup..

Double of cost is 100% markup.

Sent from my Incredible 2 using Tapatalk 2

[freonr22]

Oops my bad, I meant margin. margin is on the sell. In my poor language I would "markup" something 50% by dividing by .50 so doubling it. If i wanted a 30% margin, I would divide cost by .7 I really should use.the proper terms I guess. Sorry.

[mjsweims]

For you to have a brick and mortar store you need to have something other than firearms to attract customers as another poster has said. You need to figure your direct costs for all your inventory - insurance on inventory, interest on loans to purchase inventory (5-10%), credit card charges (2.5-3%), shipping costs, etc. You will probably end up at about 15% margin just to cover direct costs. Then you have all your indirects - wages, general liability insurance, workmans comp, unemployment insurance, health insurance, payroll taxes, utilities, advertising, rent, local permits and taxes, etc. - you have to decide how much of this to apply to each purchase and this will depend on volume of sales. Most of these you can just estimate, and I'm sure you'll find that unless you can do a very high volume you will either decide on a very low inventory level, or be marking items up to MSRP, or be taking in other related work (eg gunsmithing) to make a profit. You may likely find that if you can breakeven without firearm sales you will be ahead of the game, then any firearm sale is gravy. Concentrate on service and you will develop a good customer base. The internet makes it very difficult to compete.