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The problem with small dealers whether home based or not. Is that unless you establish a business credit account with 10 or 30 day charge cycles and can pay with a check whether e-check or snail mail you have going to be adding 3% CC fees to you costs. At a min a person should get set up to use E-Check.
The margin is thin as it is. And, ammo is heavy and can only be shipped UPS, Fedex, come on company truck, or local common carrier.
Many OEM's three levels of pricing. Which may or may not allow for the best pricing?
So many wanna dealers fail miserably at thinking they can keep up with big box stores and such. The money is in used guns...... not new.
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Nailed it. I make a majority of my money on estate and inherited collections.
I didn't have any issues getting terms with any of the distributors I use. And I usually pay it off ASAP. With Lipsey's I use E-check but they offered me terms and I didn't need it. I won't use the credit card because of the extra % they charge and it kills my profit. I have a personal line of credit I can use if I need a temporary influx of cash, but I reserve it for purchasing a large collection if I have allot of money out or it's tied up somewhere else. Then I move the best guns of that group as fast as I can to zero out the credit line.
You have to have something that makes you more desirable than the big guys. Your knowledge, convenience, ability to save them time, ect. I can get a guy in/out in 30 min, and with all the CA paperwork/hoops thats not bad. I do appointment only and I have everything set up when they show up. Most guys biggest complaints about the big dealers comes down to a few things I hear all the time. The counter guys are rubes, the amount of time it takes to get in/out, the sales pitch and that it takes the same amount of time when they pick up after the waiting period. I have the pick up down to less then 10 min.
I can afford to sell the guns and ammo at a competitive price because I have very little overhead and don't require a sale to live. Dealing is a side job and anything I make goes right back into it for right now. As said above it's all about used guns. New gun sales cover operating costs like licensing.
You can't beat the big dealers, they will crush you on margins. I am competitive with ammo but thats because I order enough to get free shipping($500-700). Also the New California Law's regarding ammo have made it somewhat better for dealers, in that folks have to have the ammo shipped to a dealer and the dealer can charge to receive it. We are also required to collect sales tax for it
, thats right I have to charge sales tax for something I didn't sell. Same for guns.(try figuring out how to that in quickbooks
). It's a shit show. So, it's either the same price or cheaper to order from me. The calibers you're going to have a hard time matching/beating are going to be the popular calibers(9mm,.223/5.56).