Calculating Profit Margins On Firearms

[eletrickill]

Hello,

I do not have an FFL, but am very motivated to open my own store front as i love firearms and believe it would be a great business for myself.

My question is - How does one calculate profit margin's on firearms and accessories IF you need to be an FFL to see pricing on dealer websites?

Ive been searching on calguns and anywhere else i can think of, but am coming up empty.

For example, If a specific gun store sells a Glock for $550.00 and moves them as soon as they get in, how do I know the spread they are making so i can calculate for my business? This goes for accessories and ammo as well.

Any and all help would be greatly appreciated..

Thankyou.

[DarkSoul]

Most suppliers/manufacturers will give you their dealer price list even with a c&r FFL, these are much easier to get than say a class 7, so if you are serious, take the time to get your FFL, then a business license, usually pretty cheap, specially in smaller counties, and start requesting dealer catalogs.

If you at serious about opening a gun shop however, I would go get a job at one for a while, I am sure there is a lot of behind the scenes stuff, as well as expenses that are not apparent to the casual consumer.

You will need to see if you town/city will even allow them, and if they are allowed, you will need to harden the building to some extent, bars on the windows, a secure safe room or cage for firearm storage and so on.

Gunshops are one of those businesses that are extremely detail oriented, and although I do not know what the margins are on firearms, I am willing to bet its pretty decent, but there is a ton of things that should be on your "to do" list before worrying about margins on the actual guns.

[efillc]

Retail markup on a NIB Title I firearm is typically 10-15% unless it's a very hot seller like the Kel-Tec KSG.

Distributors also sell at different prices based on how much you order. A small shop will often be quoted a distributor price that is more than what a high-volume retailer like Bud's will sell the gun for online.

I've seen markup from 25-100% for accessories and optics.

[eletrickill]

Thankyou for the info so far guys!

I do have my 03 C&R, but the catalogs I have are for 03 eligable firearms - nothing modern.

There is a gun store in my city, but i do not know if i necessarily want to open the store in this town. There are gun stores all over the counties around here.

What are some popular distributers aside from davidsons? Any recommendations?

Thankyou again.

[freonr22]

You need to make rent and overhead /profit. 25%profit is 15% for bys lic tax/rent/ins. And 10% profit...

[QuarterBoreGunner]

We relied on volume in the late 90's, so our rule was $50 or 15% on firearms.
But you don't make your nut on forearms sales; ammo, cleaning supplies accessories are where you make your profit.

And you should hook up with AcuSport. They used to be pretty darn good.

[eletrickill]

Thankyou for the additional tips.

freonr, in additiopn to taxes, license and overhead I have payrole, utilities and product to incorperate into the equation.

Does anyone know what the 'going rate' is for hourly employees?
What about a 'gun store manager' hourly rate?.....im sure it will fluxuate with experience, but a generalization would be good to run some basic numbers.

Also, any idea on the licencing and permit fees are per year?

any savvy owners out there buy the building thier store front is in rather than leasing?


Thankyou for the tip on acusport quarterbore.. I like the idea of them essentially being a business partner helping you grow your business rather than just taking your order and shipping it to you.

Any other helpful hints that have worked for all of you successful firearm retailers would be greatly appreciated!

Thankyou.

[CSACANNONEER]

The money isn't in retailing new firearms. The real profit is in accesories, transfers (no out of pocket investment for the FFL), consignment and buying used guns to resell.

[tonyxcom]

I think that is the first time I've seen an FFL say there is profit in transfers.

[The War Wagon]

Watch a few episodes of Pawn Stars, and you'll learn QUICKLY how to buy USED guns/gear.

Offer 1/4th to 1/3rd what it's actually WORTH, and never actually GIVE more than half the value. That way, you actually MAKE money.

It's ruthless for SELLERS, but you gotta eat & pay bills, too!

[rbetts]

Profit? Who makes a profit on guns? We practically give them away our prices are so low!!

[PWPSK1]

Profit? Who makes a profit on guns? We practically give them away our prices are so low!!

Agreed!

[efillc]

Offer 1/4th to 1/3rd what it's actually WORTH, and never actually GIVE more than half the value. That way, you actually MAKE money.

The seller is always free to turn down the offer. It's not personal, it's just business.

[rbetts]

Profit Margins are trade secrets for the dealer. They each have to price according to their overhead and then to their market. It's trial and error.

Heres a Tip: Price to your desire. . . .Return Customers or money in your pocket.

[AAShooter]

-just don't like a business opportunity (good or bad) ruin a good hobby.