First things first, please take note this is under FFL Discussions, as humorous and entertaining GD is I'm looking for business opinions and thoughts.

Preface-
I'm a new home based FFL and I know and did know when I got into this I wasn't going to be raking it in with new gun sales. I have a Full time profession that make a good living doing but I like guns and the gun business even more. My entire intent is to make some extra cash and gain experience and knowledge in the business, so that when I retire I can do this part time and possibly with a store front when I move out of state. I am mainly interested in resale of used firearms from estate, estate sales, divorces, and inherited firearms folks don't want. I've done fairly well in a short period of time and my goal is to build my capital to be able to purchase larger and larger "collections" without needing a loan either from my personal finances or a business loan.

Situation-
I've been working on establishing and building my connections with estate sale companies and divorce Lawyers. I made a phone call today and spoke with a lady who runs a Estate sale company. I gave her my intro, what I do and what i was look for. I asked her how frequently she came across firearms and would she be willing to set something up for referring folks to me. She said she does come by allot, 800+ a year on average and 250 on a low year. I offered to kick back a % of what I paid for the guns to her. I have previously done this with other estate companies and they were open to the idea and said they would call me.

She asked what kind of Kickback she would get. Here's where I'm a rookie, but according to my math and what I can resell the guns for I figure somewhere around 5% of what I pay to the seller.(ie; $10,000 to the seller, I kick back $500). She said she has a licensed dealer who pays the customer 95% of blue book and she's been working with him for 14 years. This was my first WTF. I have been told and have figured that it should be around 60% of BB value. She then said that he kicks back 20% of what he paid the seller to her.

Now this makes no sense to me, $1000 gun, he pays the seller $950 then he gives her $190, then he sells it. So, he's essentially making $10 on that gun, and thats assuming he gets full price.

I asked if she knew whether or not he was just a collector with a 03 or a Dealer. She didn't seem too sure. I laid out why it didn't make sense to me for a 01 or 07 to deal like this. Obviously I can't compete with a FUD looking to pay essentially full price. She was unsure of what type of license he has, but she has a copy. I asked her to take a look and if he had anything other then a 03 it's not making sense. Even if he has a 03 here in CA(yeah I know) there are allot of restrictions for him. She did say that when she has come across what she described as "street sweepers" he wouldn't deal in them.

She made mention of him buying about 150 SKS's in one bunch. Yes Most SKS's are legal in CA. That doesn't sound like a collector and I can't imagine paying 95% of BB for SKS to resell.

So help me out here, is she full of shit?

What do you guys pay for used guns?

What do you think I should be kicking back by percentage?

She is full of shit, drop her an go on to the next one, the most I ever pay for a gun is 60% and that sucker better be in top notch shape, my average is 40% and maybe 50% on something I know I can turn quick and make a few bucks on.  95% is pure BS.  I have done a few auction lots and I pay back between 5-7% kickbacks.  Rarely will you run into a gold medal gun, it just don't happen that often anymore.

One other thing, I stay away from AR's and AK for resale, I don't want them, can't make enough money on them and for the most part they are a dime a dozen right now.

I love it when I get a call and it involves old English shotguns, if you know what you are looking at and you have built the contact list, you can make damn good money on those, but they are becoming more difficult to find.

Good luck and I would throw what that lady told you, out the window and go on, she must have brown eyes, cause she is full of it up to her eyeballs!