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Don't forget INSURANCE.
 

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I work in a local shop. It is true that there's not much profit in each new gun sold. Theres not that much profit in the holsters and ammo either. Your not putting your kids thru college selling "Accessories". Used guns is where the monies at in our shop.
Unfortunately I think that's also what encourages some shops to give some old widow $200 for her husband's WW2 M1911A1, after which they list it on Gunbroker for $4,500.
 

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I have a good friend who owned/operated a pawn shop and gun store for over 30 years. He would special order new guns for 10 % over cost plus freight, but his real money was in selling used guns. Between the pawn business and gun sales he did quite well for most of those years. The last 8-10 years got tough. With internet sales of guns competition and the general decline in pawn business, he closed his store and retired. I would be very hesitant to try to do it.
 

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Unfortunately I think that's also what encourages some shops to give some old widow $200 for her husband's WW2 M1911A1, after which they list it on Gunbroker for $4,500.
I hear stories like that. The reality of it, at lest in our store, is that every old widow that comes in seems to have internet and thinks that their old rusty mixmaster, refinished and/or buffing wheel cleaned up 1911 or Luger is worth $4500.00 because they saw one on Gunbroker at that asking price. Once verified and condition is graded, most are worth (at wholesale) closer to $200 than the $4500.
 

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...

Consign is win/win for everyone.

Depends on the store policy. I consigned a 100+ year old fine collectable shotgun once. The store marked it up so high it sat in there for a couple years. Never did sell. I got it back with some light rust in places on a gun that had otherwise been 100%. I ended up selling it myself. Some stores tell you "tell me what you need for the gun, and we'll mark it up XX%". Then you have a realistic idea of what they will market it for and you can adjust "your cut" to assure a marketable price. When the store puts whatever price they want on the gun above "your cut", its a waste of everyone's time.
 

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Well, if you are in this state...you are nuts....

Running a business with employees and all the regulations alone is tough. I know, I had 106 employees in CA...

If it is a gun business in this crap hole...well, may not end up going very smooth...
 

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Understand a few things:
How to write a business plan!

Using other people's money!

Don't think about opening any business expecting to make a profit for 24 months!

Be willing to work 75 hours a week!

Take $200,000 and burn it right now! Get that step out of the way. If you can't stomach that, do not proceed!

Smiles,
 

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This is in very general terms. Firearms are purchased through wholesalers; Buds, Hicks, Sports South not from manufactures. Many gun shops are part of a collective buying group for better pricing and terms. Big box stores always get better terms as they have the cash to pay bills on time and of course move lots of guns.

To open a shop, do I have 50 guns, 100 guns, 500 guns in my book for whatever is the price for each gun. I order 100 guns in my book, I pay $300 for each gun to open my shop, 30k$. You can do the math from here.

Terms or dating are net30 meaning, I order a gun Aug 1, I must pay for it by Aug 29 or late fees. Some shops / wholesalers has special terms, net30 2% meaning if I pay the invoice within 29 days I get a 2% discount. No way to explain all the terms.

Some manufactures had MAP pricing meaning, they set the price and you must sell it at that price or lose selling their firearms. If you think your favorite gun manufacture is nice to you as a customer, go open a shop and find out behind what they are like behind the counter. Some are good and others are a nightmare.

The average mark, what is made from a gun sell is 15%. I sell a gun at $100 I get to put $15 in my pocket. Lowest mark I have is 8% and highest is 26% mark.

The good mark "profit" is in used guns. Depending it can be 50%.

There is little mark in ammo, around 25-40%.

Its good in cleaning supplies, targets, holsters, etc.

Clothing is were the money is, its as high 80%, sell a shirt for $10 I make $8.

Nothing about the business side, just firearms.
 

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I’m just curious. What’s the investment to open a gun store. Forget about getting an FFl. Assume you did. Forget rent. What’s it cost to stock a new store? Is it like my peanut stand. Where I only pay the distributor for the peanuts I actually sold? Is it cash up front for all your stock?

I’m just curious. Not looking to open a store. I sell peanuts. What’s your experience?

Also I’m curious on profit per gun. I bought a gun at $500 below msrp. There’s got to be a big mark up on some guns. I’m sure there’s very little on others. Tell me what you know.
If you want to make $1M in a retail gun shop....

Start with $5M.

Retail mark-ups have a HUGE variance in the US. From 100% on grocery items to 600% on furniture to 8-900% on jewelry. There are two schools of thought in the retail industry: 1. Sell as cheap as you can get away with and count on volume to make a profit but need a huge warehouse. 2. Sell for as much as you can get away with at lower volume and a lot less non-displayed inventory.
 

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Might be cheaper to buy an established shop. They seem to be closing up fairly frequently so ya might get a good deal.
 

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I had thought about "sliding' into retail sales. The capitalization required isn't stupid expensive like say, medical equipment manufacturing. But still, to be successful, the old Paradigm of "beat the Big Boys" still holds true. We wanted to keep our amortized OH low. That meant owning the building/property outright as well as all the fixtures. This was 2018 and our initial capitalization was going to be ~$3.6mil for a 2500 sq/ft shop and a fair inventory. This included a 10 bay 25yd range. The OA mark-up in firearms can range from 21% to 33%. The MAP is usually 23-25%. The REAL mark-up is in ammo, cleaning supplies, cases, holsters, targets, etc. Those items can exceed 80%. Think about what we buy most Guns or "Gun stuff". It's hard to be competitive with a brick and mortar store.You have to bring "value" like free range time for guns purchased at your store. Shooting Leagues, training, etc. There is nothing as depressing as walking into any store that is not properly capitalized that has 20 el cheapo guns on the shelf and the owner and owner's wife have to "live" there because they failed to secure capital to support start-up. We opted to continue DoD contracting. OBTW, if you look around in this current time of want and woe, you'll notice the "Big Boys" still have inventory..why? Capital.
 

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In this political climate you may not have the patience for the delays and possible hike in fees. Then there's the area where you want to open. If word gets out then you're likely to have opposition from the community.

Buying an existing business might be better. When you hire people the really need to have reading comprehension, critical thinking skills and the strong ability to distinguish right from wrong. Why?

You'll be dealing with the Feds. If too many 4473 forms have errors your store can be shut down. You'll be dealing with customers that can barely read or write which means you CANNOT help them complete the form. An independent 3rd party can help. If they do they have to sign the form too to verify the person fully understood the questions and truthfully answered them. If you just want to make a sale you're putting your business or someone else's business at great risk of a federal crime.

Its bad enough to have an illiterate English speaker try to fill out the form but for a non-English speaker its nearly impossible. The form has to be competed without error. One little mistake and they might have to start over on a new form.

I've seen old dudes with hands so shaky they couldn't fill out the form and would get angry because he couldn't get help. My concern goes beyond filling out a form. When their hands are that shaky they shouldn't be around guns in the first place.

If you knowingly sell a gun to a person who hands shake uncontrollably you could be on the bad side of a lawsuit if he uses that gun to defend himself and shoots someone across the street by accident. You could also set yourself up when the local police and feds investigate where he bought the gun and who sold it to him.

Then there's the robberies and burglaries. You'd better have a primo alarm system with 4k HD video cameras, steal bars on the windows and doors.

https://www.youtube.com/watch?v=Jp46DR9zrzs

Some stores actually lock all their display guns in a safe each night. As you can see by t his video this store has so many guns on display take a guess on how long it would take to lock the guns up in a safe or use a thick cable to lock through the trigger guard. Then to replace the glass with shatter proof glass.

Burglars will totally trash a place if they can't run out the door with arms full of loot. One of the burglars was caught after posting photos of cash and a few of the stolen guns on FB with the price tag still on them with the store name clearly marked.

If you buy a gun store you will likely spend all your waking time working there. Most gun store owners are so up to their eyeballs in their business they have little to no time for sport shooting or hunting.

When I worked for a gun store before we were not permitted to take time off for hunting season because that IS the busiest time of the year.

They eventually caught three of the thugs.
https://abc13.com/southwest-houston-gun-store-weapons-door/1228041/#:~:text=The ATF says three suspects,store burglary in southwest Houston.&text=HOUSTON (KTRK) -- A smash,Tuesday morning at Carter's Country.&text=The store, located on South,was burglarized around 4:30am.
 

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Here you go

I’m just curious. What’s the investment to open a gun store. Forget about getting an FFl. Assume you did. Forget rent. What’s it cost to stock a new store? Is it like my peanut stand. Where I only pay the distributor for the peanuts I actually sold? Is it cash up front for all your stock?

I’m just curious. Not looking to open a store. I sell peanuts. What’s your experience?

Also I’m curious on profit per gun. I bought a gun at $500 below msrp. There’s got to be a big mark up on some guns. I’m sure there’s very little on others. Tell me what you know.
This is in very general terms. Firearms are purchased through wholesalers; Buds, Hicks, Sports South not from manufactures. Many gun shops are part of a collective buying group for better pricing and terms. Big box stores always get better terms as they have the cash to pay bills on time and of course move lots of guns.

To open a shop, do I have 50 guns, 100 guns, 500 guns in my book for whatever is the price for each gun. I order 100 guns in my book, I pay $300 for each gun to open my shop, 30k$. You can do the math from here.

Terms or dating are net30 meaning, I order a gun Aug 1, I must pay for it by Aug 29 or late fees. Some shops / wholesalers has special terms, net30 2% meaning if I pay the invoice within 29 days I get a 2% discount. No way to explain all the terms.

Some manufactures had MAP pricing meaning, they set the price and you must sell it at that price or lose selling their firearms. If you think your favorite gun manufacture is nice to you as a customer, go open a shop and find out behind what they are like behind the counter. Some are good and others are a nightmare.

The average mark, what is made from a gun sell is 15%. I sell a gun at $100 I get to put $15 in my pocket. Lowest mark I have is 8% and highest is 26% mark.

The good mark "profit" is in used guns. Depending it can be 50%.

There is little mark in ammo, around 25-40%.

Its good in cleaning supplies, targets, holsters, etc.

Clothing is were the money is, its as high 80%, sell a shirt for $10 I make $8.

Nothing about the business side, just firearms.
 

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How to make a small fortune, start with a large one, old joke. Probably applies to a lot of business. There are ins and outs in any business and if you are going to be successful you need to learn them as quickly as possible. The old saying we've all heard a thousand times, [find a business you love and you'll never work a day in your life] is total B.S., sounds good but it's total B.S. As a matter of fact, the best way to really screw up a hobby is to try to make a living at it !
 

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Cost is something I can't speak too as I spent 11 years at a big box store. But there's so much more involved. I can speak to the frustrating stupidity of some customers, especially concerning the law & 4473 completion. And you BETTER have it right. We had annual ATF audits, 2 agents for a solid week. As mentioned, the shakey hands, lack of comprehension, and my pet pieve...."no habla". No habla no sale was my motto. And then there's the gang bangers. I had one guy stick my display G17 down his pants, wiggle his hips around and say "yeah, that feel good". I refused the sale for "moral" reasons.
But as an owner of a small buisness, you can't afford to refuse sales for moral reasons.
Bottom line, I'm so happy to be out of that buisness.
 

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you don't see many gun shop owners towing boats on trailers.

Y-U-G-E local construction magnate is a firearms aficionado, and started the gun shop as a way to make HIS hobby cheaper. He's also into car dealerships and owns a truck driving (18 wheeler) school, and a couple of corporate jets.

And I know when he's in the shop, because the BIGGEST, most-blinged out pickup or Hummer in the parking lot, is his. Pretty nice guy, actually. It's also the only indoor-range in the South Hills, and the shop is full of stuffed animals and mounts he's shot on multiple safaris in Africa. His corporate jet flies him there directly, from the county airport across the street from the gun shop!

Gunshops are like owning a NASCAR team. You know how to become a millionaire at it?















START out, as a MULTI-millionaire. :eek:
 
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