Opening a new firearms business need opinions

[tango0202]

I have been thinking of starting a firearms business for a while now. I already have my FFL and LLC associated with my FFL. Cook's firearms and outfitter will be located in southeast Missouri. I have been trying to put together a list of guns, clothing, boots, reloading gear, ammo,...etc. I have a basic idea of what I will be initially stocking the store with but wanted to ask you guys what would you like to see in more places that most people miss and simply don't usually have in stock.

Initially the store will be strictly an outdoor store but I would like to eventually have the equipment to be able to do more intensive gunsmithing.

 

[tacdrver]

Re: Opening a new firearms business need opinions

ithica shotguns... for some reason gunshops seem to forget about them and stock up on remingtons mossbergs and browning
RBCD ammo..

 

[shoepop]

Re: Opening a new firearms business need opinions

I would not get in a great hurry with the smithing end other than offer bore sighting. Build up good client base, ask them what they would like to see.

 

[HOGGHEAD]

Re: Opening a new firearms business need opinions

I was a distributor rep. for many years. Normally what happens with new shops is they buy what they like to look at. So your queston makes good sense. It is best to try and stock what people want, and not what you like.

What I found the best to stock for successful stores are accessories. It takes alot of your budget to stock alot of firearms. But you can stock a ton of accessories for that same amount of money.

Firearms are like candy. They wil get people into your store. But the profit margins on them are low, and the overhead is high.

I would much rather sell a holster, a couple of boxes of ammo, and the cleaning products instead of selling the firearm itself.

You always want to make sure you have the accessories for any firearm you sell. There is no reason to let someone get out of your shop with a new S&W 45 Auto unless you sold them a holster, and an extra mag., and a couple of boxes of ammo, and a cleaning kit. So keep the accessories in mind. Or keep it in mind if you want to be successful.

I can tell you alot of horror stories of new dealers who thought it was smart to fill their shelves with lots of interesting firearms. only to have customers come in and look at the firearms, then go some where else and order the firearm. You do not want to be the place they shop. You want to be the place where they buy.

So you can stock a $500 pistol and make $50. Or you can stock $150 in accessories and make $50. Pretty simple decision as far as I am concerned.

And the funny part is people will shop for weeks for the best price on the firearm. But have no idea what they should pay for a holster, or an extra magazine.

And if you have a local WalMart. Be sure to go there and spend alot of time there. Study their inventory well. Then make sure you stock what they don't have. Also learn who the full time employees are at WalMart. Heck I have seen dealers offer the Walmart full time employees a $10 or even $20 referral fee for a customer they would send in who would order a firearm from you. You might not make alot on that first firearm. But initially it is all about getting people in the door. And what better way than to have a WalMart employee recommending your store?? WalMart really can not compete with you if you take a positive stance and do not try to butt heads with them. But if you try to butt heads with WalMart then you will loose every time.

Heck when they ran blow out sales on some stuff, some of my dealers would go in and buy them out of whatever they advertised for a low price. WalMart is not a nimble company that can restock in a day or two like you can. So take advantage of that. Tom.

 

[45.308]

Re: Opening a new firearms business need opinions

Very good advice from Hogghead. Hand guns out sale long guns by wide margin. Days I may transfer one or no long guns but everyday handguns got transferred. Your money is to be made by add ons to gun sales and walk ins looking at said gun to find out you have mags, holsters, kits, pouches, ammo, etc. The more they buy the faster you margins go up. Nothing like buying a new pop gun to only find out there are no accessories...magazines in particular. Walk local gun shops and see just how many mags, holsters, speed loaders, night sights and such they stock. Very rarely did I have a firearm customer who was not asking for spare mags at time of transfer.

Had a buyer who bought what he thought was cool and what he thought he would buy and his whole inventory lost money...big money.

My advice is terms...not sure just how many new proprietors of a small bizz understand terms and how they can help keep the lights on. Dating is more important than % because it does not matter if you cannot move the product by the date to get the %. I fought long and hard, seem liked everyday for terms. Vendors who gave me the best terms is who I brought in and kept. Make reps work for you, you not for them...I had some odd dealings with reps, they had the idea it was up to me to help them get as much of the 8% as they could to feed their family, product line failed who cares as they got their 8% and some were scratch me I will scratch you fighting for me and terms. I believe inside company reps deal better than independent outside reps. If a rep wants to you to bring in his product, lay out the terms up front, beat what I have or no deal. You will be robbing peter to pay for paul...get your terms!!

Watch you MAPS, Ruger! Can be good and can be bad.

Next was shipping, shipping cost can eat up monies quickly so I also fought hard for shipping terms...the more I bought up front to ship to me once, the better dating I demanded. Once again, when they brought up % on a big order I said no, apply it towards shipping or dating.

Next is warranty..nothing like having to eat money because the vendor does not or will not give credit because of their policy...someone sitting in their glass castle 3 states over who does not deal with customers on a daily basis has no idea about taking care of a customer only quoting their written policy.

Too many issues, bad issues with gunsmithing on premise unless it is you doing the work. Hiring a smith to work for you on premise can lead to heart burn for you!

Work deals with locals...LEs, fireman, gun clubs, hunting clubs...but understand most of them will take advantage of you with discounts and always wanting something free for walk ins. What I did was, they put together a wish list, I would set our terms on both sides, written agreement, PO their list. Supplied the whole department with boots at very little cost to me and they got a smoking deal. I just bought and paid for in less than 30 days a couple hundred pairs of boots, now I have buying power with terms with that boot company. Sold clay targets, lite 8s to local trap shoot range, 20000 rounds of 40SW to security detachment. I now had many lifelong customers and when they needed something else, guess who they came too.

The new word is tactical and sniper in the retail world. Black is out. Browns and camo is what is rocking right now.

Good luck!

 

[PistonPete]

Re: Opening a new firearms business need opinions

<div class="ubbcode-block"><div class="ubbcode-header">Quote:</div><div class="ubbcode-body">Cooks firearms and Outfitter coming soon to southeast Missouri</div></div>

any where near Cape Girardeau ??

 

[springerjb]

Re: Opening a new firearms business need opinions

Well advertised cheap ammo, a good gunsmith, primers and powder. These are things that can't be shipped (gunsmith) or get more expensive when shipped (hazmat, plus I have to track down to sign for the stuff because I'm always at work). These items are more internet proof than other items. Your shop will be successful or not based on service.

What does the market research in your area look like. Mostly hunters? Rifle, shotgun? What do they hunt? Stock what they need and what they have a hard time finding locally.

Best of luck!

 

[former naval person]

Re: Opening a new firearms business need opinions

Remember that soft goods...clothing, etc., are the high profit items. Volume buys get greater profit margins. I.E., a $350 retail jacket that you buy for resale can cost you $125 for two or three, or if you buy 20 or 30 you can get them for $30 to $50 each. But...last year's camo is out of style, and as you know, nothing is worse than a bad/mismatched/leftover camo day! If you are going to remain a local business, look into a Pawn Broker's license and combine that with the gun business. The clientele sucks, mostly, but it is a stable business in good or bad economies. JMHO

 

[Tactical Support]

Re: Opening a new firearms business need opinions

Take a good look at the demographic area you are thinking of setting up shop in. Is there a WalMart Cabela's, or Bass Pro type store close by? You will not be able compete with ammo prices.

Most manufacturers have map pricing however if you think you are going to make a living on selling firearms you need to do some research first. Take a look at Gunbroker the major gun sellers there as the pricing there is less than some firearms distributors are selling to the small gun shops. Now factor in Rent/Lease utilities and Insurance yes you will need Insurance. Also all the tools/tooling you will need for gunsmithing.

You will make a better margin on ammo and accessories than firearms.

How to make a small fortune in the gun business? Start with a large fortune!

BTW I have been in the firearms,ammo,gunsmithing retail business over 30 years. We have two stores and purchase ammo by the Pallet=Truckloads to compete with the big box stores.

 

[tango0202]

Re: Opening a new firearms business need opinions

Thanks guys for the replies. As far as the demographics around here most people hunt and fish. A very large turkey and deer hunting community around this area. Also a large amount of people that are strictly fisherman and of course some people like myself that hunt and fish both. There is also a large community of bow hunters around this area and unlike gun hunting seems to be growing more and more quickly.

There isn't a bass pro, cabelas, or gander mountain around this immediate area. There is a walmart however but they are almost impossible to get away from nowadays. I have been in some of the local outdoor stores in my area and all but a few seem to be either gun oriented or bow oriented but not both. The pawn shops in my home town all just carry used guns mainly and of course a bunch of random stuff for just some of the guns they carry.

I am really inexperienced with terms and dates. I understand the concept of dealing with these distributors and making your rep work for you and not the other way around. Some clarification on that subject matter would be greatly appreciated. And what do you mean when you say "watch your MAPS"?

Yes it will be near Cape Girardeau.

 

[tango0202]

Re: Opening a new firearms business need opinions

One other thing I was curious about, to you guys that have outdoor stores or have experience with dealing with the business side of such a store. Did you obtain your distributorships directly with the manufacture or is there a wholesaler that should be used? To clarify what I'm asking...if I am wanting to sell Lacrosse boots should I call lacrosse directly and obtain a contract with them directly? Would this be the same for redhead, Avery, primos...etc?

 

[HOGGHEAD]

Re: Opening a new firearms business need opinions

Basically you need to get out there and go to some trade shows. You should never miss the SHOT show. There is a large archery show in Louisville every year(or there was). Find these shows.

Buying direct from the mfr. is not normally a good thing for beginners. Normally factiory minimums are too high. However there are loop holes in there. You need to learn to exploit them.

"Terms and dating" is simple. But you have to have good credit. Or a "line of credit" to be able to take advantage of them.

Basically what it means is early in the year distributors or mfrs. will ship you a single large order that you do not have to pay for until sometime into the season.

The company I worked for offered a tackle program in October that did not have to be paid for until June. Then our fall program was offered in February but did not have to be paid for until October. Those are dating programs. They are a double edged sword-so be very careful when using them, and be sure not to spend that money when you sell a product that is on dating.

The better your credit qualtiy, the better the dating program the mfr. or distributor will offer you. So be sure you pay your bills, and not on time-pay them early.

Alot of distributors use D&B. So contact D&B and get yourself registered.

One person mentioned clothing. You may want to go that way. But IMO clothing and boots in a sports shop are a bad idea. Maybe waders. But not clothing. It is just impossibble for you to compete with the big boys on clothing. And clothing is an extremely trendy item. If you do not have your finger on the exact pulse in the clothing market, then you are behind. and will be stuck with junk sitting on the shelf. Tom.

 

[168BTHPM]

Re: Opening a new firearms business need opinions

You won't get rich selling new guns, there is almost no money to be made selling new guns. Anyone that wants a new gun will be price shopping on the internet, WalMart and other local gun shops. They will also probably find an FFL that will do an internet transfer for $20.00 on a new gun that sells on Gun Broker for less than you can order one. Cheap internet transfers are a good thing for you to do, register as an internet transfer dealer on every gun auction and classified website you can find. Get the customer in the door any way you can, they will buy something else while they are there or come back later. Internet customers are also some of the best word of mouth advertising you can get. For new guns Sports South and Davidsons always treated me well.

There is a hell of alot of money in used guns, but a word of advice, don't use the Blue Book of Gun Values for anything but reference material for dates of manufacture, production numbers and possible rare variations of guns. The values in that book are completely worthless, know your market, know your customers and buy accordingly. I used to travel all around the western US to auctions, gun shows, estate sales, and pawn shops looking for used guns to sell. Once you establish yourself and develope a good repuation the business will come to you and there will be a lot less leg work. Once you have been around for a while and establish yourself as a good buyer the auctioneers and pawn shops will call you first when they have something you might be interested in.

Find out where your local Friends of the NRA committee is and volunteer to do the gun transfers for their annual banquet. Do them free or at cost if your locality charges a background check fee. I did that for years and got a lot of repeat customers from the FNRA banquet.

Just my .02, I had an FFL for 17 years and bought and sold a lot of guns.

 

[45.308]

Re: Opening a new firearms business need opinions

You get in a $5000 PO and in 30/45 days you have to pay that $5000. If you do, then you get a 3/5% off. Do not meet that date and your credit may suffer with that vendor. Most times, its very hard to meet that date and get your % but it sounds enticing until you realize you have to move product to pay the bill. Order small to meet that date the shipping will eat into your monies. To me, the longer the vendor gives me to pay the bill the better chance I have of selling the product to have the monies in the bank. I was getting 90 net 91 7% with my best vendor and a discount on shipping. I worked long and hard for those terms. Another was 45 days but I got free shipping. That was huge to Alaska.

Seasonal vendors was 180 days with a huge discount that afforded the opportunity to have the lowest prices in the in the area and country with the highest volume of inventory. No MAP.

You have to sell 2 to pay for 3. That does not include keeping the lights on, remember Uncle Same must be paid every month!!!!!!!!!!!!

Pay attention to shipping, you cut a $1000 PO and it gets shipped over 5 $200 shipments due to back orders and by the time you pay the extra coin in shipping, you made no money. I had one that would put a single shirt in a box that was BO and ship it UPS 2 day costing most than the margin was on the shirt. I would get 3 boxes a day due to their automated shipping, it would kick out when ever it was avail. Went ballistic on them and rep got me a shipping credit on the term date.

MAP is min advertised price so Ruger tells you you can only sell M77 for nothing cheaper than what they tell you, its in their contract that you agree too. You can move the product cheaper than the MAP but you cannot advertise it but if you found out then the Ruger may pull their product. The good thing is, every M77 everywhere is the same advertised price. I know for a fact that certain manufactures are very hard policy on MAP. Another local retailer brought in same product to compete then complained our prices he could not match and the manufacture informed of the MAP and that they would pull product.

I was all manufacture but some small product I ordered from A16. Their terms sucked but it was such a wide category of product, I had to go with A16 because they had it all to cut down on shipping.

Good luck

 

[PistonPete]

Re: Opening a new firearms business need opinions

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: tango0202</div><div class="ubbcode-body">Thanks guys for the replies.

Yes it will be near Cape Girardeau. </div></div>

good ! i have relatives in that area, i'll clue them in when you get the door open.

 

[tango0202]

Re: Opening a new firearms business need opinions

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Piston Pete</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: tango0202</div><div class="ubbcode-body">Thanks guys for the replies.

Yes it will be near Cape Girardeau. </div></div>

good ! i have relatives in that area, i'll clue them in when you get the door open. </div></div>

Thank you!!

 

[fattycakes]

Re: Opening a new firearms business need opinions

My local gunshop has no holsters for my beretta 92. One of the most common guns evar. I always ask, but nope. So please for the love of all that is holy, stock some beretta 92 holsters.

 

[tango0202]

Re: Opening a new firearms business need opinions

Just a heads up for you left handed guys out there...I will be stocking a few left handed bolt guns along with a few left handed AR's. I am left handed myself and know what its like to not be able to hold a gun before having to order it.

I have finally gotten in touch with several vendors and started the contract process with them. I am now narrowing down the options on which store front will be the best choice. From there I simply have to get the contracts finished up and the initial orders in to stock the store and we should be good to go. I hope to have this open in the next 2 months or so. There is alot more work ahead of me at this point but things are going smoothly so far so I just hope they will continue that way from here on out. Hopefully I will soon be successful enough to become a sponsor here on the Hide!! I would like to give back to the site that has given me a alot of knowledge over the relatively short time I have been on here.

 

[Greg Langelius *]

Re: Opening a new firearms business need opinions

The successful G&A businesses I have known have all had a very strong relationships with their distributers.

The distributers see businesses come and go. They structure their inventories and services around the requirements of successful retailers. Simply put, there is no better source of guidance and support than the distributers. It is they, rather than individual retailers or customers, who drive the order and fulfillment process that determines product configuration and availability.

For example, the SHOT show is essentially the industry's get together that gets producers and distributers into sync for the coming year, and that's why individual customers (and perhaps retailers too) are not invited.

In most cases distributers will provide you with a product catalogue that showcases their inventory and available in-stock, on-order items, and customize it with your retail operation's customer information.

It is, IMHO, the mark of an astute retailer, and allows you to maintain an inventory based on staple products and impulse purchase accessories; leaving the big-buy items at most a week away on order, delivered to the retailer for free once weekly on the distributer's truck.

Guns in the rack should be either consignment items, trade-in flip/turnarounds, or generic products that have a high browse-buy appeal. When you handle firearms, do it as a dealer, and not as a trader.

Inventory is a liability. If you indulge your instincts and sentiments, it could consume the bulk of your capital, and is worth precisely nothing until it actually sells.

Remember, the goods in your inventory are <span style="font-style: italic">not</span> your collection, they are the burden you need to unload unless you enjoy running your business at a loss. The very impulses that make one a good consumer are precisely the same ones that will make you a lousy retailer. You're not a hobbyist; you're a retailer.

Your actual sales, from the catalogue, should dictate what you decide to maintain in your own on-site inventory. Hot items may warrant getting one item in stock for the hasty buyer. Otherwise, order for firm customer orders from your distributer. If your distributer is really sharp, they will be making relevent suggestions.

Study up on pricing. Understand the concepts of loss leaders and profit leaders, and employ those concepts strategically. Organize a floorplan according to sound marketing principles.

Greg

 

[maccrazy2]

Re: Opening a new firearms business need opinions

The owner of my local shop sells tons of highpoint guns. I asked why he stocks so many of those and his answer was he makes about $50 on a sale of a pistol and it is easy to sell $200 guns all day long compared to 700 ones.

 

[remiglockoholic]

Re: Opening a new firearms business need opinions

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: tango0202</div><div class="ubbcode-body">I have been thinking of starting a firearms business for a while now. I already have my FFL and LLC associated with my FFL. Cook's firearms and outfitter will be located in southeast Missouri. I have been trying to put together a list of guns, clothing, boots, reloading gear, ammo,...etc. I have a basic idea of what I will be initially stocking the store with but wanted to ask you guys what would you like to see in more places that most people miss and simply don't usually have in stock.

Initially the store will be strictly an outdoor store but I would like to eventually have the equipment to be able to do more intensive gunsmithing. </div></div>

http://www.snipershide.com/forum/ubbthre...461#Post2350461

these are some of the suggestions i got when i posted this question

 

[MidwestPX]

Re: Opening a new firearms business need opinions

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Greg Langelius *</div><div class="ubbcode-body">

Inventory is a liability. If you indulge your instincts and sentiments, it could consume the bulk of your capital, and is worth precisely nothing until it actually sells.

Remember, the goods in your inventory are <span style="font-style: italic">not</span> your collection, they are the burden you need to unload unless you enjoy running your business at a loss. The very impulses that make one a good consumer are precisely the same ones that will make you a lousy retailer. You're not a hobbyist; you're a retailer.

Your actual sales, from the catalogue, should dictate what you decide to maintain in your own on-site inventory. Hot items may warrant getting one item in stock for the hasty buyer. Otherwise, order for firm customer orders from your distributer. If your distributer is really sharp, they will be making relevent suggestions.

Study up on pricing. Understand the concepts of loss leaders and profit leaders, and employ those concepts strategically. Organize a floorplan according to sound marketing principles.

Greg</div></div>

I had to quote this because you nailed it.