Retail Margins On New Guns and Used Guns.

[arakboss]

What do you guys think the average retail margins are, on new and used guns?

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[TTSX]

10% new, used could be 10x or even a loss

 

[Catfishmoon]

I think the markup is probably higher on used firearms.
There are forum members who work at gun stores who should be able to pretty accurately estimate.

 

[Knobgoblin]

Lgs doesn't make much on guns, the big money is in private transfers.
Hahaha

 

[Xmark1]

I recently bought a new Shadow Systems for $500.
Some retailers charge over $900 for the same piece.
Do the math.

 

[arakboss]

I think the markup is probably higher on used firearms.
There are forum members who work at gun stores who should be able to pretty accurately estestimate

My experience has been 30% on new and several hundred to thousands of percent on used.

 

[dinky450]

NO small business will go into business selling something at no profit or very little profit. You still have over head to cover and selling accessories and doing transfers is not enough. Having a wall full of guns and you are fronting the inventory you have to make profit or your not in business.

I have a friend that is a very small FFL, he finds me the gun i want normally $200 below msrp or market price. He does not get the best price on them either, he does not do enough volume to get the good discount from whole sellers. There are times the big retailers will have guns on sale lower than what he can get from his distributor.

 

[Aero Denezol]

The markup on new firearms is less than people think. And then there is all the paperwork and insurance. You will not get rich selling guns. It is a terrible business. People do it out of love or for service, because they believe in furthering the 2A.

Maybe there was a time when experts could pick and choose from used firearms at a good price, but the auction sites ended all of that.

Just my .02

 

[ilikegunspdx]

OP's thread #150 (or whatever) about "what about this for ffls?", "can ffls do this?", "what FFLs owners should do", "here is my proposed buy back policy for things I sell" etc, etc, etc.

Weird obsession with FFLs continues. Get help or start a ffl business, one of the two.

 

[Longwalkhome]

Years ago I talked to one of the managers of a LGS and his boss set 40% on new gun sales as a profit margin they had to hit. Store went out of business.

 

[Member 34319]

When I worked behind the counter, margins on most were less than 10%. Some as low as 3-5%. At the time the discount at Sportsmans was cost +10%. That was great for things like clothing where the mark ups were 2x the cost or more. At times a certain gun wasn't even worth using the discount as the markup was under 10%.

 

[Kruel J]

I would imagine it varies wildly depending on the business and their wholesale buying power.

 

[Longwalkhome]

No doubt the gunstores business practice sets the amount they will charge.

Bimart became the middleman so they can sell guns at lower cost while still getting their profit.

LGS has to buy from a middle man and it takes real quantity to get good deals.

Some stores buy so much inventory of guns they get not only good deals but 90 days to pay for the guns. Those stores sell for less because it cost them less.

 

[Alexx1401]

I would imagine it varies wildly depending on the business and their wholesale buying power.

This! A LOT of shooters still really do not understand how this works. Most manufacturers make up a run of guns and send them to distributors. The distributor then decides the price to their customers based on how much the customer buys. A LOT has to do with how "hot" the particular item is that week too. Look at what happens when any new gun hits the market. Often takes a good while before the little shops can even lay hands on one. Larger places will get several at a time and you will see them selling them on line. Price can vary WIDELY with what the market will accept.

 

[OldBroad44]

My understanding is that the markup for guns is so low that gun stores would not be able to make a profit selling just guns. This was true even back before the internet.They make the profit on ammo and accessories, which have unusually high markups. And maybe they also sell you other hunting and outdoor gear such as shirts, jeans, boots, camo gear, camping and hiking stuff when you come in regularly to check out any new guns.

It is not true that stores carry only items they sell at a profit. Often there are certain items that are "loss leaders." The markup for groceries is normally about 50% average. But milk is commonly a loss leader. That is, it is sold at margins so low that carrying it doesn't make a profit by the time you consider the cost of running the stores, paying employees, maintaining equipment such as refrigerators, etc. However, milk prices are widely advertised, and many parents with kids choose a store to visit based upon the advertised price of milk. Those people with kids usually buy lots of other food at much higher margins when they come to the store for milk. Guns have a powerful attracting affect and are also usually loss leaders.

Grocery stores usually have a difference between wholesale and retail of about 50%. That us, you pay about twice as much for the can of beans as the store did. The markup for sporting goods is higher. Wholesale is about 60% retail I read.

The 30% markup on new guns that @arakboss mentions sounds about right to me. This would be way less than the markup on most items in a sporting goods store, and too little to be profitable after considering the cost of running the store. However, it can work if the guns draw in people who also buy ammo, gun accessories, and hunting/outdoor clothes and gear, and other stuff with higher markups.

I doubt that the ffl-required paperwork is profitable for an actual physical gun store that charges about $35 or less for a transfer. Even before the transfers became so problematic . Not everybody fills those forms out right or without help. And the calling it in a waiting for a response and having someone hang around waiting is a distraction. And now many guns will need to be held and picked up days or weeks later, which requires storage space. I think a store that does transfers at such prices is doing it largely for good will. I'm guessing when the transfers cost $50 they are actually profitable for the store. But still not very. Not enough for a gun store to survive without selling lots of ammo, gun accessories, and outdoor clothes/gear.

Interesting implication: If you want to support your favorite local gun store, buying guns from them actually doesn't help them much. What helps is when you buy your ammo, accessories, and outdoor gear from them. So drop by your local gun store and buy everything else from them and mention to the owner that you are buying all this other stuff because you appreciate the guns.

 

[Member 53328]

OP's thread #150 (or whatever) about "what about this for ffls?", "can ffls do this?", "what FFLs owners should do", "here is my proposed buy back policy for things I sell" etc, etc, etc.

Weird obsession with FFLs continues. Get help or start a ffl business, one of the two.

He works at location that has FFL I'm pretty sure……You would think he would just ask them.

 

[TTSX]

Some FFLs I've talked to have said that their main profit driver is accessories and ammo. The guns bring the customers in. Much like how gas stations really make their money in the convenience store selling chips and rockstars.

 

[arakboss]

Some FFLs I've talked to have said that their main profit driver is accessories and ammo. The guns bring the customers in. Much like how gas stations really make their money in the convenience store selling chips and rockstars.

I sold a used handgun at a 3500% markup this past weekend. Transfers are money makers if you get good at it. I wish the boss would bring in more ammo but for some reason he doesn't want to deal with much ammo or accessories.

 

[RVTECH]

I sold a used handgun at a 3500% markup

Make/model?

 

[Nosferatu]

When I had an FFL, typical discount purchasing from a distributor was roughly 10% off MSRP.

Typical accessories have a 30-40% margin. A shop will make almost as much off that $75 holster they sell you as the $500 gun.