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Posted: 3/14/2016 12:31:55 PM EDT
[#1]
In for curitosities sake, but it doesnt take a genius to see that the gun business is extremely competitive, with very low margins, and requires a huge upfront investment as well as a great deal of overhead.
The shops that have been very successful in my area used their store front to drive their manufacturing and service business. Just selling Glawks and Sigs at low volume? Seems like it would be very tough to compete |
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Posted: 3/14/2016 12:32:15 PM EDT
[#2]
87000 dollars Minimum.
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Posted: 3/14/2016 12:32:37 PM EDT
[#3]
judging by these responses I should have this moved to team.
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Posted: 3/14/2016 12:34:30 PM EDT
[#4]
I'd put gun shops in with restaurants as far as how difficult it likely is to make money and survive.
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Posted: 3/14/2016 12:34:59 PM EDT
[#5]
Quote HistoryQuoted:
judging by these responses I should have this moved to team. Yes, this is GD. |
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Posted: 3/14/2016 12:35:06 PM EDT
[#6]
Serious response.
I have been told here and by others. You want o make a million selling guns...you better start with two. |
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Posted: 3/14/2016 12:35:32 PM EDT
[#7]
Quoted:
Rent, utilities, etc aside, how much capitol does it take? Im thinking the major costs are for inventory. Assuming its a one man operation, what do the costs associated with it look like? That is too broad of a question. These numbers will vary across the country. Kind of like asking, how much does a house cost? |
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Posted: 3/14/2016 12:37:58 PM EDT
[#8]
Their was a local fellow I knew who already had a store front, he sold motorcycle/off road parts. He opened a small gunshop off of the same store.
He said the biggest thing that shut him down was the insurance. If I recall correctly he was open approximately from 2008-2013. He said the only reason he didn't close sooner was because of Sandy Hook. Judging by that, I would guess that it is very hard to keep a shop up and running, unless you have a LOT of upfront money to put into it. |
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Posted: 3/14/2016 12:38:29 PM EDT
[#9]
I REALLY wanted to do this several years ago and did the due diligence into coming up with a realistic business plan. Honestly, I could not make the numbers work. At least not with a return that justified the risk and exposure. YMMV.
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Posted: 3/14/2016 12:38:30 PM EDT
[#10]
Quote HistoryQuoted: That is too broad of a question. These numbers will vary across the country. Kind of like asking, how much does a house cost? Quote HistoryQuoted: Quoted: Rent, utilities, etc aside, how much capitol does it take? Im thinking the major costs are for inventory. Assuming its a one man operation, what do the costs associated with it look like? That is too broad of a question. These numbers will vary across the country. Kind of like asking, how much does a house cost? ETA: insurance coverage, how much and what kind? Any REAL FFL's on the site that can chime in? |
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Posted: 3/14/2016 12:39:36 PM EDT
[#11]
$25 FFL and $50 NFa transfers
No inventory. |
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Posted: 3/14/2016 12:40:26 PM EDT
[#12]
Quote HistoryQuoted: $25 FFL and $50 NFa transfers No inventory. |
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Posted: 3/14/2016 12:41:57 PM EDT
[#13]
In.
I'm interested in doing the same. My dad is retired and has been toying with gunsmithing, and my parents have the funds to start one. I'm a programmer but would enjoy the shit out of running a gun shop. If we did open one it would likely be in west Tennessee or north Mississippi. |
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Posted: 3/14/2016 12:42:22 PM EDT
[#14]
Market analysis is your 1st step.
What did you get from that? |
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Posted: 3/14/2016 12:43:03 PM EDT
[#15]
Quote HistoryQuoted:
Their was a local fellow I knew who already had a store front, he sold motorcycle/off road parts. He opened a small gunshop off of the same store. He said the biggest thing that shut him down was the insurance. If I recall correctly he was open approximately from 2008-2013. He said the only reason he didn't close sooner was because of Sandy Hook. Judging by that, I would guess that it is very hard to keep a shop up and running, unless you have a LOT of upfront money to put into it. How much do you consider a "LOT"? $20k? $50k? $150k? $1m? |
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Posted: 3/14/2016 12:43:18 PM EDT
[#16]
1. Profit margins on new guns are low. The money is made in selling accessories or used guns
2. From April to September the gun market is flat. Unless their is panic buying. 3. We opened as a strictly gun shop in 2008. The only reason we are still open is because we went to being a pawn shop in 2011. 4. The internet makes price shopping easy, so you have to compete against online retailers like Bud's. 5. NEVER make your hobby into a business. I failed to listen to my own advice. |
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Posted: 3/14/2016 12:44:26 PM EDT
[#17]
Quoted:
Rent, utilities, etc aside, how much capitol does it take? Im thinking the major costs are for inventory. Assuming its a one man operation, what do the costs associated with it look like? Doing a brick and mortar store with only you is going to wear thin, fast. You will also have hours dependent on you, you get sick, have to go to the dr., go to lunch, etc. Probably a better suggestion is to do gunshows only. But again, one man alone will get tiresome. Years ago I had a so called kitchen table FFL. Even though I had no overhead, it was still a PITA. I did not have an inventory, I would order for people I knew and do transfers. Frankly, there wasn't any money in it not that I really cared, but it got old quick. And this was in the day of the 3 year FFL for $30. By the time you get all the necessary permits, licenses (business tax, etc.), sales tax number and do all the forms you are probably money ahead doing something else. |
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Posted: 3/14/2016 12:44:52 PM EDT
[#18]
Quote HistoryQuoted:I should've asked "How much does it cost to get an FFL, buy a moderate amount of inventory, connect with distributors, cover my ass as necessary with authorities, install some security measures, and anything else specific to the industry?"
ETA: insurance coverage, how much and what kind? Any REAL FFL's on the site that can chime in? My cocktail-napkin estimates thus far have put it around $20k to shoestring it, or $50k or so to make a decent go at it. Inventory is probably the biggest expense if you're running the place yourself, but it's honestly not as much as you'd think. 100 guns in inventory at an average cost of $300 would be $30k. |
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Posted: 3/14/2016 12:45:47 PM EDT
[#19]
Quoted: Rent, utilities, etc aside, how much capitol does it take? Im thinking the major costs are for inventory. Assuming its a one man operation, what do the costs associated with it look like? It doesn't take any capitol. It may however require capital. |
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Posted: 3/14/2016 12:45:53 PM EDT
[#20]
Quote HistoryQuoted:
I'd put gun shops in with restaurants as far as how difficult it likely is to make money and survive. Step 1: Open a restaurant Step 2: Get liquor license Step 3: Open gun shop in same building Step 4: ???????????? Step 5: Profit!!!1!!1!1!!!!1!1!!1!1!1 
ETA: on a serious note you don't make much of a profit at all. Like $50 a gun if you're lucky |
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Posted: 3/14/2016 12:46:21 PM EDT
[#21]
Quote HistoryQuoted: It doesn't take any capitol. It may however require capital. Quote HistoryQuoted: Quoted: Rent, utilities, etc aside, how much capitol does it take? Im thinking the major costs are for inventory. Assuming its a one man operation, what do the costs associated with it look like? It doesn't take any capitol. It may however require capital. |
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Posted: 3/14/2016 12:47:28 PM EDT
[#22]
All I know about the topic is that during the largest firearms demands in history I've seen three fail locally.
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Posted: 3/14/2016 12:49:36 PM EDT
[#23]
id imagine the internet has put a large dent in brick and mortar gun shops
i know it has here. |
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Posted: 3/14/2016 12:51:07 PM EDT
[#24]
If there is no academy, gander, cabelas, or wal mart nearby and not much other competition you may be ok.
Having a mil surplus/gear section would be good too. |
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Posted: 3/14/2016 12:53:29 PM EDT
[#25]
For what it's worth, I think the trick will be to market yourself to women and young professionals. Be approachable by those groups and offer training. Do market outreach on social media. There are plenty of shops out there marketing to us, but the fastest growing demographic is largely ignored and doesn't feel comfortable in them.
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Posted: 3/14/2016 12:54:31 PM EDT
[#26]
Way to broad of a question. Need to determine local market, what niche in the market you want to occupy, local restrictions (this is mostly for home based operations), marketing strategy (hint: if you build they will come is complete and utter bullshit), pricing strategy (ten percent markup in specialty brick and mortar retail is suicide), hours (hint: nights and weekends is when your customers will want you open), what is your financial goal, what are your financial resources, how long can you stay open before you turn a profit (you won't make money the first year, maybe the second), is your significant other buying into your plan, cost of rent, insurance, utilities, security, how well do you deal with customers (hint: gun buyers are the biggest bunch of asshole customers you will find), how will you compete with the internet (hint; you probably can't).
There is a lot of turnover in the industry. Most of the survivors have something more to offer than just guns. It's a brutal business. When you say one man operation are you seriously thinking about working seven days a week for the first year? By yourself? I've done a lot of commercial lending/economic development work in the last forty years. About one person in ten has any business setting up shop for themselves. It takes a certain type. |
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Posted: 3/14/2016 12:55:11 PM EDT
[#27]
Quote HistoryQuoted: Most people need something to finger fuck. I dont need an entire case of glocks 1-infinity, but I need some shit for fondling sake. Quote HistoryQuoted: Quoted: $25 FFL and $50 NFa transfers No inventory. |
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Posted: 3/14/2016 12:55:53 PM EDT
[#28]
Quote HistoryQuoted:
How much do you consider a "LOT"? $20k? $50k? $150k? $1m? Quote HistoryQuoted:
Quoted:
Their was a local fellow I knew who already had a store front, he sold motorcycle/off road parts. He opened a small gunshop off of the same store. He said the biggest thing that shut him down was the insurance. If I recall correctly he was open approximately from 2008-2013. He said the only reason he didn't close sooner was because of Sandy Hook. Judging by that, I would guess that it is very hard to keep a shop up and running, unless you have a LOT of upfront money to put into it. How much do you consider a "LOT"? $20k? $50k? $150k? $1m? I would say his shop consisted of maybe 5k new guns, and I am being very liberal with that estimate. His meat and bones were transfers and some used guns. If he had a larger assortment, say 25-30k worth of guns, and primarily, accessories, I would guess he would still be in business. I can't remember what he said his insurance premium was, but I know it was eye-popping. |
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Posted: 3/14/2016 12:56:16 PM EDT
[#29]
Step 1: Open gun store.
Step 2: Lobby to close the "gun show loophole" Step 3: ???? Step 4: Profit. Or... Step 1: Become CA Senator Step 2: Build up a customer base of criminals Step 3: ???? Step 4: Profit. You'd probably do better with the second option. Not a lot of (legal) competition in CA. Plus you can get a drug cartel to fund your operational costs. |
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Posted: 3/14/2016 1:04:01 PM EDT
[#30]
The best bet for the average person is to just be a kitchen table operation focused mainly on transfers and special orders, with maybe just a small inventory of stuff that is easy to move (Glocks, M&Ps, AR lowers, etc.). Startup costs probably only a couple thousand in that scenario for everything. Going full out with a retail store is probably a losing proposition.
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Posted: 3/14/2016 1:04:37 PM EDT
[#31]
You'll bleed money for the first 2-3 years. As you'll only have the inventory turn over rate to buy through other dealers and distributors.
Once you get the turn over to buy direct from manufacturers, you're going to need a lot of cash to get into stocking dealer programs. You make not much on new guns. You'll make more money on suppressors and rarer items. Accessories, magazines, specialty ammo, etc. You will need to stock hunting guns just as much as tactical stuff. You're going to need a case of glocks, springfields and M&P's because they're what sells. If I were to do it, I'd plan on 500k to 750k minimum. |
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Posted: 3/14/2016 1:05:46 PM EDT
[#32]
A brick and mortar operation starting now with all the cost for start up, building, insurance, inventory etc......probably has a 50% chance of failure in the first 2 years. In a brick and mortar store it's not the guns you make money on anyway, it's ammo, accessories, gunsmithing services and repeat business.
My FFL had a store for years and barely made any money. He gave it up about 10 years ago and now runs his business from home doing transfers, special orders and gunshows. He makes more money than he ever did before and his blood pressure is a lot lower. |
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Posted: 3/14/2016 1:07:18 PM EDT
[#33]
If I remember correctly you are in CT. No way I would consider it in that climate.
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Posted: 3/14/2016 1:10:35 PM EDT
[#34]
Quoted: Rent, utilities, etc aside, how much capitol does it take? Im thinking the major costs are for inventory. Assuming its a one man operation, what do the costs associated with it look like? The rent and utilities are not an aside, they are a large consideration. You need enough to lease a building for whatever period you are obligated on the initial lease. Then, if you're successful, the property owner may not renew your lease and start his own gunshop. You'll need to pay for leasehold improvements - what it takes to turn an empty shell into a gunshop, like display cases, an alarm and a safe. You're going to have to pay utilities and advertising. You will need a lawyer, accountant, and insurance. You'll need whatever permits and inspections the municipality may require. You'll need to pay employees and find people you can trust for when you're not there. You'll need operating expenses for the first year until you establish a cash flow. This one is essential. You're going to have to learn to tailor your inventory to your market (H&K for the carriage trade, Lorcin for the hoodrats). You need to know your competition and your place in the market. Getting this wrong will be expensive. I seriously looked into buying an existing gunshop. I figured I could make as much or more working for someone else without taking the liability and risk of running a business. 25 years later, it looks like I made the right call. Having the capital to purchase sufficient inventory seems like a relatively small consideration. |
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Posted: 3/14/2016 1:11:30 PM EDT
[#35]
Quote HistoryQuoted:
Serious response. I have been told here and by others. You want o make a million selling guns...you better start with two. Two guns ? That's not too bad. OP, you can do this, no problem. |
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Posted: 3/14/2016 1:11:32 PM EDT
[#36]
Quote HistoryQuoted: The best bet for the average person is to just be a kitchen table operation focused mainly on transfers and special orders, with maybe just a small inventory of stuff that is easy to move (Glocks, M&Ps, AR lowers, etc.). Startup costs probably only a couple thousand in that scenario for everything. Going full out with a retail store is probably a losing proposition. I was surprised as I had not seen many around here but he said young single guys were his main customers |
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Posted: 3/14/2016 1:15:47 PM EDT
[#37]
Don't confuse a business and a hobby.
Anyone who would open a gun shop under today's conditions has no business sense. I can think of any number of things that would be more profitable. |
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Posted: 3/14/2016 1:18:18 PM EDT
[#38]
A friend of mine has been trying to do it for over 3 years.
He is trying to do in Chicago, so there is that hurdle. |
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Posted: 3/14/2016 1:19:02 PM EDT
[#39]
Quote HistoryQuoted: All I know about the topic is that during the largest firearms demands in history I've seen three fail locally. A lot of smaller shops failed because they couldn't get inventory to put on the shelves and in the cabinets. Having a run on anything firearms related seems like it'd be a gold rush for gunshops. It's only good if you actually have things to sell, though. |
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Posted: 3/14/2016 1:21:46 PM EDT
[#40]
It's easy, provided you have some other source of income....
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Posted: 3/14/2016 1:22:22 PM EDT
[#41]
The first question to answer is "Can you get an FFL where you are located?"
You have to find a place, get zoned to operate a gun shop there, meeting any licensing requirements, then develop the business plan. Some places (e.g., Chicago, DC, San Francisco) make it almost,but not quite, impossible to open a gun shop. Then you have to get past BATFE's requirements (e.g., environmental plans, understanding of the FFL regulations). Then develop the business plan. Start with gaining an understanding of your competition, locally, regionally, and nationwide (even though they are over a 1,000 miles away, many internet sellers are my primary competition). Make sure that your plan includes all of the difficult issues of insurance,operating hours, inventory, staffing, management, etc. Do you just sell guns? How about ammunition? Reloading supplies? Accessories? Instruction? Your plan also needs to address what happens when we have another mass shooting, and a 2013ish panic. shops weren't charging 10X the pre-Newtown murders for guns just to fuck people over, they understood there was going to be months with no new inventory, therefore, no cash flow. 2013 killed a bunch of small shops because they sold every gun they had, most of their ammunition, and were five months before they got any new inventory. For those five months, they had fixed expenses of rent and utilities but no cash flow. Many exhausted their cash-on-hand, were unable to pay the rent, got evicted, and lost their FFL as a result. As for inventory, big gun shops can carry several hundred guns in inventory at one time. At $400 per gun, on average, 250 guns equates to $100,000, just in guns. Once you done your due diligence, divide the expected ROI in half for the first three years, and add two years to when you think you'll become profitable. Then, after all that, apply for the FFL is you think its worthwhile. |
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Posted: 3/14/2016 1:25:40 PM EDT
[#42]
I'd say have a range, and be open to doing transfers. Don't have didpshits working the counter and keep any opinionated dipshit pseudo customers broomed out of the place and you might have a shot at it.
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Posted: 3/14/2016 1:30:36 PM EDT
[#43]
Quote HistoryQuoted:
I'd say have a range, and be open to doing transfers. Don't have didpshits working the counter and keep any opinionated dipshit pseudo customers broomed out of the place and you might have a shot at it. There's definitely more money to be made in a range vs strictly a gun shop, but the startup costs for a range are astronomical. |
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Posted: 3/14/2016 1:32:02 PM EDT
[#44]
I think a transfer only shop with an intuitive website keeping conversation to a minimum would be pretty dope.
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Posted: 3/14/2016 1:32:30 PM EDT
[#45]
Quoted:
Rent, utilities, etc aside, how much capitol does it take? Im thinking the major costs are for inventory. Assuming its a one man operation, what do the costs associated with it look like? my only advice is that your brand and location is everything. Around here, people will travel stupid amounts of time to get to one LGS that is well known for it's fair prices and fantastic customer service. It's also pretty much built up that brand over the past 10 years. I think it's one of those businesses where you have to make it personal with your surrounding community. Just my advice from shopping at them in my AO |
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Posted: 3/14/2016 1:33:40 PM EDT
[#46]
Quote HistoryQuoted:
There's definitely more money to be made in a range vs strictly a gun shop, but the startup costs for a range are astronomical. Quote HistoryQuoted:
Quoted:
I'd say have a range, and be open to doing transfers. Don't have didpshits working the counter and keep any opinionated dipshit pseudo customers broomed out of the place and you might have a shot at it. There's definitely more money to be made in a range vs strictly a gun shop, but the startup costs for a range are astronomical. Big time. If you don't have a location that can generate huge customer numbers, an indoor range is nowhere near feasible. |
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Posted: 3/14/2016 1:37:40 PM EDT
[#47]
" I can get that $10 cheaper in Timbuktu"
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Posted: 3/14/2016 1:40:14 PM EDT
[#48]
Quote HistoryQuoted:
" I can get that $10 cheaper in Timbuktu" I drew a customer a map to some big-box store once after he said that. 
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Posted: 3/14/2016 1:41:59 PM EDT
[#49]
http://www.thefirearmblog.com/blog/2015/05/18/rockwell-arms-filing-for-chapter-7/
http://www.spokesman.com/stories/2015/jun/02/gun-store-filing-for-bankruptcy/ Local place that also did internet sales. Started out in Sandpoint, moved to Coeur d'Alene, then closed up. I've seen a lot of shops come and go but I've also seen shops that I wouldn't have given 6 months last for years. |
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Posted: 3/14/2016 1:44:50 PM EDT
[#50]
Something I've wondered.
When you get an FFL, how long can you have it before using it for commercial purposes? |
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