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Discussion Starter #1
I've been toying with the idea of going into business for myself. I love firearms, and am constantly buying/selling/trading them. I almost always make money, but I have always just done it for fun and to get new guns. But I'm tired of working for other people and have been thinking that opening a shop and dealing both locally and online would be both fun and lucrative. There are a few good shops in this area, but only one has a website and it isn't very good. I really want to do this, and think I can make it work, but I have a lot of questions that I would need answered first. I'm hoping some of you guys can help me.

1) How much does an FFL cost, and how long does it last?

2) I will also need a business license. How much does that cost and how long does it last?

3) What other licenses will I need to obtain?

4) How much should I expect to pay in insurance?

5) How much money will I need to start a gunshop? $100,000? $150,000? More? Less?

6) What sort of alarm system will I need, and how much will all of the security stuff cost?

7) I know that used guns allow a much higher profit margin than new guns, and I know that some guns sell for more in some areas than others. I know about atmosphere and attitude. But I know that there is a lot that I don't know. What suggestions, ideas, and comments do you guys have?

Thank you all for any help you can give me.
 

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Discussion Starter #2
Come on guy, please. I could really use your help. I'm very serious about this, and my wife has given me the "okay".
 

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Fun

is what it will have to be. Making money is something else. Unless you are dealing with 19th century high ticket items or desirable specialty items such as 1911's you would have to sell a high volume of modern guns to make money. Gun shops are dropping like flies in this country. And if you want to be able to purchase estate collections you must have a major cash flow available. In my opinion it's the wrong time and place for a one man operation.
 

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I can't give you technical information about getting the FFL, but I can confidently give you gun related business advice.

The odds are against you making a great living at it if you only sell guns from the shop.

Here are two solid suggestions I can give you for success:

1. You have to sell masive quanities of firearms online (@ below retail prices). Or have some gun related field you specialize in (that means you are one of very few) that you can sell online.
It'll take an initial investment of ~$2000 to have a stellar e-commerce website.

2. Three words: Indoor Firing Range. Selling shooters range time is far more lucrative than selling guns. Sure, sell guns to get people in the door, add enticements that give disounts for range members who buy guns / gun buyers who also want a membership. 10 lanes and 25 yards in a metal building with a storefront on it. Host IPSC shooting matches etc. Sell all the accessories (holsters, parts, mags, etc.).

There is only one guy I know who makes a VERY GOOD living selling firearms, and he implements strategy 2. He runs a very clean shop, and his employees treat you damn good every time you come in the door.

- J

Oh yeah, business licenses are usually cheap, fast, and easy to get (depends on your county).

Check out the BATF's completely BS and useless website for "SOME" of the info you want about FFL's.
 

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I know from experience (not my own, fortunate or unfortunate is a call that I can't make) that it is a mighty BIGAMEOTCH to make any money selling new firearms, and not much better selling them used. You can do well online, through the auction sites, if you have a good source of good deals on desirable oddities. That I do have limited experience with myself.
Range time is the better money, and a stock of rentals can inspire fence-sitting buyers.
The real money, I've been told, is in ammo, accessories, leather, and magazines after the sale.
I too, would like to start my own shop, but am unwilling to take the risk. FFLs, if I remember correctly, last 5 years.
I can't give any hard figures on the insurance, but shop around and try to find a pro-gun agent with an agency that doesn't have any shady policies surrounding firearms, and you shouldn't have to cut off but one arm and one leg, about mid-shin.
There's good money in reloading equipment if you can build a customer base.
$100,000 is usually adequate start-up capital for a business, most of which will go into setting up the shop, its lease, insurance, and security. However, gun shops, with their rather expensive stock, high security and insurance costs, and etc, I'd go with the $150K number.
 

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Remember, many manufacturers are going dealer direct. These companies require a four to five digit qualifying order just to be an authorized dealer, get terms, and a decent price. And whether you decide to specialize in LEO oriented products, defense, competition, hunting, or any combination, you better have your bases covered. high quality 1911s between $1000 and $3000? ARs accessorized to four times their initial worth? Good Leather? A variety for your customers to choose from? Ammo? Reloading equipment? Inventory based software?

If you are going to jump in, jump with both feet! Be in for the long haul. It takes a lot of time and money to survive for even a short period of time.

Keep going...

Be well!
 

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Discussion Starter #7
Thank you guys. You've all confirmed most of my suspicians and hunches, and brought up some things that I hadn't even considered. Please keep the ideas flowing.

I just got a pretty solid "yes" on the $100,000-$150,000 of funding, but I still need a really solid plan. At this point I am thinking of going with the small shop, nice (but small) range, and a lot of used guns sold online. But that is all subject to change as I keep plugging numbers into my cost spreadsheet.
 

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Wait till you start to see bids/quotes on the ventilation system!
i read an article on a local gun shop/range(4 lanes). it stated that it costed the owner $250k to start up(to build the range and everything). i think that was 15-20 years ago...but now he's been winning big local contracts to the military/le and subsidizes the range with policy of not allowing outside ammo, ie, all ammo must be bought at the store.

the ammo prices are more expensive than say at sport authority, but i'm more than willing to spend a buck or two premium on ammo to support the only remaining indoor range locally.

looks like a tough road for you, but good luck. another reason for all of us to support your local gunshop/range and not always find the cheapest price on the internet....

-kotonk
 

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I have no clue about the firearm business, however I know a fwe things about other business'. Like everyone has said, there is usually no money in the main product itself, the money is in the accessories and service. Car dealerships dont make a lot of money off of the cars compared to what they make from their parts departments, Best Buy is aboe to offer many sales on large items because their gross profit for the accessories is so high (for example, you know that car audio monster cable that costs the consumer $20? It costs Besy Buy $0.52 for a package of that stuff), Home Depot is able to offer fairly low prices and many sales on its tools because they make up all their profit from the accessories like drill bits etc. If I were to go into the firear, business I would really go into the accessory business and sell a few guns here and there. And I would definately build an indorr range.
 

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I wonder what the cost of liability insurance for an indoor range would be. One of our local dealers has an indoor range and he's always b*****n' about his insurance costs going up.
 

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While I am by far no authority on the gun business, I did run a small operation here in WA State, a long time ago. So, here's what I learned:

1. First things first. You need a business address. You can either buy existing space, or build it to suit. Why? ATF only grants FFL's nowadays to those who have an actual store address.

2. Be advised, that to get an FFL, you must jump through the following hoops:

a. Provide all your personal information. This is to be expected.
b. Provide the same information on everyone and anyone who will be doing business under your FFL. That means all salespersons. If your wife will help with the business, you must provide her information. Not too bad yet.
c. Provide fingerprint cards for yourself and all employees. OK, so far.
d. Provide ATF with a DETAILED DRAWING of your business, INCLUDING DETAILED SPECS AND DIRECTIONS TO WHERE YOUR FIREARMS ARE KEPT.
e. After you submit all of this information, you WILL get a visit from ATF Compliance. Expect it.

Next, you must request a UBI (Universal Business Identifier) from the IRS. Not hard to get.

Then, the business license from the State of Washington, and a license to deal with handguns within the State. Again, fairly easy to get.

Word of advice: As soon as you get paper work moving, get copies of Shotgun News, Gun List, and other magazines or pubs that list wholesalers. Once you get your license, make about 3-400 copies of the FFL BEFORE YOU SIGN IT!!!

Now, select at least 10-15 wholesalers. Send each one a copy of your FFL, signed in ink, and a copy of your business license from the State. Request their current catalogs. This way, you can special order any and everything your customers desire.

I made good money because I was willing to special order at the drop of a hat--and I delivered!!

As far as the indoor range is concerned, it is a good idea. Check into the current EPA regulations concerning ventilation and safety around lead before you take the plunge.

Hope this helps, and good luck with your venture.
 

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Discussion Starter #13
Thanks again, all of you. I've already learned a lot.

I know that the cost of opening up an indoor range will dramatically increase costs for me. Given the fact that my budget is limited, would moving outside of town and setting up a covered outdoor range be a better idea? I know that a location inside town will attract more business from the casual gun buyer, but the people around here aren't as resistent to driving a bit out of their way as people in many other areas are. Also, if I can offer some things that no one else does (the only other range in town charges $12 for a single days use of their range), and do a lot of business online, it might work. I would still want to keep it on or near a main road, but... What do you think?
 

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I watched one indoor range go out of business due to poor location. Keep it on a major thoroughfare. The most successful indoor range I've seen was in a town population of 70,000, located on the towns 8th most trafficed road.

Remember this about a clean, friendly indoor range: you will do more than service current gun owners, you will be introducing curious people to the sport. So keep it accessible to everybody.

I recently recieved my license for property and liability insurance. While I certainly haven't had a long career in the insurance industry yet I can tell you this, your insurance premiums will always grow no matter what. And, as with all insurance, I'm sure you'll be able to find some affordable form of coverage. Do you know a lawyer? You will need a very good disclaimer of liability that all range users have to sign. Your insurance company may even provide this.

Somewhere buried within the NRA's website is information on the establishment of indoor and outdoor firing ranges. I think they have gigantic manuals for sale that lay out all the "right" things to do when setting up a range.
 

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Indoor Range For Sale

Check the link above for a bargain on an indoor range advertised in GunsAmerica.com. 10 cents on the dollar???

I am not affiliated with this, just noticed it while cruising the web. From the area code it looks to be in Southeast Texas.
 
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