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Old February 25, 2006, 10:32 PM   #1
Patriot45
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Owning a Gun Shop

Hey All,

I have a question for you. I have a growing interest in owning a gun shop in the future. However, I have read several items/articles on the internet that suggest it is a very hard business to maintain. This confuses me. The firearm industry is a multi-billion dollar enterprise. There are countless small arm manufacturers. I can understand there being competition with Wally World for long guns, but they don't sell handguns. If the local gunshops are floundering, who the heck is selling all these handguns? Is the local gunshop business viable? Any data/feedback you can provide would be much appreciated.

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Old February 25, 2006, 10:51 PM   #2
rapier144
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From what i understand they don't make much money on the guns as they do on the ammo,holster,sights,slings.scopes,etc.But it all depends on the local competition and who has the best customer service.
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Old February 25, 2006, 11:16 PM   #3
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Gun stores are magnets for criminals. One local store closed down because they got tired of being repeatedly robbed. In the last robbery, the crooks defeated the store's security by ramming a stolen car right through the front of the store about 03:00 one morning. They looted armloads of weapons and disappeared before police could respond. The store/target range I frequent rents guns, and has had rentals stolen - someone gave them a stolen driver's license to secure the rental, then slipped out a side door with the gun.

The gun stores in town are doing good business. Violent crime has increased of late, and more honest citizens are arming themselves and learning to shoot. There's money to be made, but think through what you're getting into, and how you're going to secure yourself against the predators ypu will attract.
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Old February 26, 2006, 12:20 AM   #4
RyanJones
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I would think it would be like a liquor store. Most of your investment is tied up in the actual merchandise in the store. You make most of you money when you sell the biz. Also liability is a big pain plus criminals love both types of stores.
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Old February 26, 2006, 01:13 AM   #5
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Some of this has been said but:
Security is a concern. One place I know has 1" thick security glass, all have bars on the windows. Many have concrete emplacements to keep criminals from crashing a vehicle through & grabbing what they can. Some have film on windows to limit transmissions to the outside.
Insurance cost - if you have a range, this will be very high.
Protests will be inevitable.
Paper work must be kept forever.
Money is in the accessories. Without inventory of guns, people don't come in for that though.

Money can be made, you have to do your homework though.
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Old February 26, 2006, 08:23 AM   #6
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Based upon observation as well as some conversation with local shop owners, here's a few points.

Profit on new guns is minimal (esp. compared to many other types of merchandise).
Profit on used guns is better.
Much of their profit comes from gunsmithing, in some cases the majority of it.
Location matters-ALOT--Get a map and see where the competition is, then look for a location where they AREN'T. A couple of the "best" shops in my area are nearly 1 hour away, so I don't frequent them nearly as much as the closer ones.

And the biggy, for any business, is keep your overhead low. Having owned a couple of small businesses, and been involved with running a couple more, I know that its easy for overhead to get out of control.
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Old February 26, 2006, 10:19 AM   #7
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This is a lot like the car business: If all a dealership did was sell new cars, they'd go under the first month. There's no money to be made there. There's a little more in used cars. However, most of the money is made at the service department, the parts department, and the body shop (if they have one). Selling the cars on the front end is just the necessary evil to getting the cars on the road so you'll need parts, service, and maybe the body shop.
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Old February 26, 2006, 04:03 PM   #8
mack59
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I'm no expert - I do have an FFL and would love to make it a full time business - but there is not a lot of profit in selling new guns. In my area the places that make the most on guns are the pawn shops because they buy used cheap and sell for a good profit at the market rate.

There is a lot more profit to be made in the accesories - knives - reloading - ammo- holsters - ect.... However, if you open a gun shop - as has been said - unless you have a good inventory of new guns at reasonable prices you will not have a lot of foot traffic - people just don't come in the door for accessories.

Also, depending where you live, city officials are often, (in the east, west coast, and parts of mid-west), hostile to gun shops and tend to create barriers to opening a gun shop. If you did get an okay, it is usually in a less than desirable location, which means a lower rent part of town - where there will be less foot traffic and more exposure to criminals likey to rob or burglarize.

If I someday am able to open my own shop, I will have to really learn gunsmithing. That would go a long way to making it more likely that I would make a profit.

From what little I know or have been told.

1. Get a decent location
2. Carry a good selection of firearms
3. Order guns for customers at reasonable prices
4. Sell used guns
5. Gunsmithing
6. Carry lots of accessories and make it known you are happy to quickly locate order hard to find items for a reasonable price
7. Be polite but helpful
8. Don't let friends or gun shop commandos take over your shop, be friendly but firm
9. Advertise
10. Sell other sporting equipment
11. Don't plan on making a profit
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Old February 26, 2006, 05:14 PM   #9
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and to add to the previous post:

12. Plan on having some knucklehead drop the nicest, hand crafted shotgun with the fine stock on the floor, and have nowhere near the $$$ to pay for it.

13. Plan on having unloaded (hopefully) guns pointed at you every day as you hand over guns for people to look at. At one store near me, the clerk commented that during the CA "safe handling" test he has had more guns pointed at him than you can believe.
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Old February 26, 2006, 05:22 PM   #10
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I talk with owners of shops all the time, and from all over the country.

As has been mentioned, location is extremely important.

Inventory is a killer. If you can't turn over your entire inventory at least once a year, you're losing money on the stuff you bought.

People want both great selection and low prices, but they're being unreasonable. You can have one, but not both. If you have hundreds of guns in stock, you either owe the bank a lot of money, or you're using your own capital. Either way, you need to move those guns.

Keeping a smaller inventory and special-ordering guns is another route. However, you'll have to be very competitive on price, or people will go elsewhere.

Shops with a large inventory of guns will get 25% or more above their cost on new guns. Shops that special order go as low as 5% (that's the lowest I've found). Most shops that do a lot in the way of special orders seem to charge around 10%.

The shops that are doing well are concentrating on providing what the big discount chains don't offer. Some won't even sell Remington or Mossberg. Others really push the service aspect.

The owners I've talked to who do really well are businessmen first, gun nuts second.
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Old February 26, 2006, 05:28 PM   #11
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The margins are hard.
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Old February 26, 2006, 10:38 PM   #12
Patriot45
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Yikes...kinda depressing.

Thank you all for your input. It paints sort of a bleak picture. I wonder how all these guys are making any money owning a shop. I now understand that the money is in used guns, ammo, gunsmithing, and accessories; but, when you consider the overhead costs (e.g., security systems/hardware), how is anyone surviving? I guess that's why the number of gun shops has gone down. Am I misunderstanding your input? Is there a glimmer of hope, or should I simply give up the dream and pursue other venues?
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Old February 26, 2006, 11:08 PM   #13
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There are two types of customers you need to beware of:

The people who only want to come in and "talk" guns and never buy anything.

The people who only come in and compare your prices to the Internet prices and whine that your price is fifteen dollars higher.
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Old February 26, 2006, 11:16 PM   #14
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Give up your dream?

Let it never be said I told a man, woman, or child to give up their dreams. I still have mine - gave them up once - but found that life just isn't worth living without them.

Only you can decide - but yes, at least around here making a living from an independent gun shop is very hard - that is why there are so few.

You can add to your business through the internet and you can supplement your income by buying and selling at auctions. Go to non-gun auctions and pick up used guns at good prices and then sell them at your shop or at a gun auctions. Gun auctions also seem like a good way to turn over a lot of the inventory that hasn't been moving. Occassionally you may find a relatively valuable gun for relatively cheap at an estate type sale/auction. Of course all the above takes time and work - and you might make more focusing on selling non-gun items from your shop.

Myself, I figure once I become a world famous novelist with hollywood begging to buy the movie rights or I win the next mega-millions/powerball lottery - then I'll open my gunshop/coffee bar/bookstore. Of course then I won't actually work there, I'll just stop in to play, check the books to see how much I'm losing that month, and annoy my employees and customers.

Seriously, it can be done - people do it - but dreams usually come true - when we work not just hard but also smart. If it really is your dream, you can do it, it is just never is a easy as we first believe or would like.
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Old February 26, 2006, 11:40 PM   #15
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Alternative Method

You no doubt have heard the joke about the perfect woman. One part was owning a liquor store. Well, in your case, make sure she owns a gun store.
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Old February 27, 2006, 09:50 PM   #16
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Consider this

Perhaps you could buy into an existing gun store. That would be a low impact way of getting started. If you can't afford to do that then I doubt you've got the capital to start your own. I'm a survivor of three undercapitalised business ventures so i know where I'm going on this. Partnerships can be tricky but the secret is, keep it on a business footing and be scrupulously honest with eachother.
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Old February 27, 2006, 10:26 PM   #17
Patriot45
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Benonymous,

Were any of those three ventures gun shops?
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Old February 27, 2006, 10:43 PM   #18
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Patriot45, I hope my comments didn't discourage you in any way from pursuing your dream.

I can't tell you how many gun shop owners I've talked to who are extremely successful. If you like, I can try to connect you with one here in MKE who's enormously successful, and he's only in his mid-forties.

In most respects, starting a gun business is like starting any other type of business: have a solid business plan; know your customer base; have experience in the business before you go on your own; make sure that you're adequately capitalized; make sure you have months of cash to fall back upon as a cushion. Any night-course in business should cover this. (Wish I'd taken the time to attend such courses).

If you decide to go ahead with this, PM me, and I'll give you free advertising.
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Old February 27, 2006, 10:51 PM   #19
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No Discouragement Taken

Monkeyleg,

Thanks for your input. You didn't discourage me. These are the types of conversations that need to be had...brutally honest and factual. I am several years from starting my business up. But, I am trying to do my homework ahead of time. I'm workin' on the long-term goals. Again, thanks!!!

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Old February 27, 2006, 11:32 PM   #20
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I've often thought of obtaining a Class II for gunsmithing, suppressors etc. I've been a machinist for 16 years and have some equitpment but not enough. I've heard insurance for this would be very high.
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Old March 3, 2006, 01:47 PM   #21
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Set up a website and advertise online at forums and such. If you can undercut the other guys out there, or if you can just get the word out on forums and people trust you, then you can easily make some more cash from this. See if you can get someone you know to set up the website. Hosting is cheap enough, I know a friend who hosts several sites just for kicks out of his pocket, pretty much, and he's not exactly rich. I think he spends $20 a year hosting and maintaining his sites on his server, which he bought used. Go to local competitions and whatnot and get to know the shooting community around you. Know your market, as was said above.
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Old March 3, 2006, 08:26 PM   #22
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Don't quit you day-job just yet

Your question is all that is needed to conclude you have no future as an owner of a firearms dealership. It is VERY difficult to make money selling guns. Everything is purposely stacked against you. Only those who have excellent BUSINESS intellect and educations can make it.

Stick to whatever you currently do and leave the gun stores to those who have the aptitude to survive. BTW, I have been a FFL dealer for the last 22 years.
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Old March 3, 2006, 08:38 PM   #23
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Quote:
I've heard insurance for this would be very high.
Try almost non obtainable

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Old March 11, 2006, 04:26 PM   #24
Patriot45
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Sorry, I was on a business trip.

Indy Sig,

As noted above, I am looking several years down the road. My question is simply the beginning of my research. Are you suggesting that it is not possible for the rest of us to achieve the superior business intellect of yourself? If that is the case, you are in the wrong business yourself.

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Old March 12, 2006, 03:56 AM   #25
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Patriot45... the nature of your question shows that you possess the capacity to make a good run at a gun business. I am ashamed of Indy_Sig!!! I was born and raised in Indiana (Bloomington) and am pretty sure that Hoosier blood will run through my veins till the day I die. Hoosiers don't treat people like that, unless of course the subject is a basketball rivalry... in which case everyone who cheers for Purdue (:barf can go strait to H... (j/k ) how about we get back to the point.

I having been talking with a buddy of mine who is due to come out of the Marines in a few years. We both would like to own a gun store and have concluded that location isn't your primary concern. The gun shop I currently frequent is about 30 minutes away. It has the largest selection of both guns and accessories around, and that is what brings me back in the door time after time. I can beat thier prices through the internet (barely), BUT... I (and I would assume like many others) would rather chew broken glass than have to wait for a weapon to come in through the mail. I won't buy I weapon that I can't handle right on the spot. Thier inventory is good and most of the staff is friendly, knowledgeable, and helpful... except for one guy who will never be the poster-child for customer service.

I guess I haven't said anything much more insightful than anyone else. But my .02 is to not loose sight of what you are trying to do.
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