Curious about mark-up prices

[gbclarkson]

The back story:

I purchased a Bersa BP9cc for $400 ~2 years ago. That LGS price was comparable to Buds and CTD prices at that time. Now, after it returns from its 3rd voyage to a warranty center, I want it gone. They are listed for $250ish now.

What are typical gun mark-up prices? Was the Bersa drastically over-priced 2 years ago or are they being dumped at get-rid-of prices in the present day? What other guns have nearly halved in price after two years?

My questions are a curiosity to mask my frustration.

I look forward to others' insights and stories.

[rickyrick]

I’ve never sold guns but some places I’ve worked have 100%-150% markup.

In the days before scanners, the price sticker had a cryptic number above the price... that was the price the retailer paid for it. That way the manager knew how far to discount if there was a problem.

I was a mechanic, and parts have a considerable markup over what the shop paid for them.

Lots of guns are selling for cheaper than just a few years ag. The market is flooded with guns.

[KyJim]

I purchased a Bersa BP9cc for $400 ~2 years ago.

That would have put your purchase sometime around the 2016 presidential election. Many thought Hillary Clinton would win and this would adversely affect gun rights. This, in turn, led to increased demand and higher prices for firearms. Prices then went down after Trump won. The price of AR-style rifles seems to have risen and fallen even more than handguns.

[TJB101]

Buyers market right now. I just purchased a new to me Sig227 on Tuesday. Great price but I was contemplating trading in my relatively new CZ75 Omega. Dealer offered me 225 in trade in ... 225 ... are you kidding me.

Kept the CZ and will wait till next year when Nancy and Chuck do their thing that may drive the market again.

[FITASC]

Dealer mark-ups are typically about 20%, maybe more for folks like BASS who over price everything above MSRP.
Doesn't matter what any book says, pricing is set by the consumer in the long run.
On trade ins, most dealers have a bigger markup as they now have inventory in they really may not have wanted and have to calculate how long it will sit (time value of money) plus their OH and profit.

[lamarw]

Reads like someone else had the same experience with the Bersa as I. A few years back it was the cats meow on this and several other forums. Then you find out Bersa does not have a factory repair in the USA but contract agents for repair.

An expensive but well learned lesson.

[Aguila Blanca]

Originally Posted by gbclarkson

Curious about mark-up prices

You may not be asking about mark-ups. "Mark-up" generally refers to a change in price as an item goes through different stages in the retail change. If a manufacturer sells through distributors, for example, the distributor adds a mark-up over the manufacturer's raw price. Then the gun shop buys from the distributor, and the gun shop adds another mark-up. These are usually based on percentage rather than a set price.

In the case of the precipitous price drop of the Bersa, I doubt that the distributors and vendors suddenly slashed their profit margins. More likely, Bersa lowered their raw prices and the mark-ups remained at the same percentage they always were.

[Oliver Sudden]

I worked in a gun shop for a couple of years, their mark up on guns was 20% and clothing was 100% which I under stood to be typical for the products.

[jmr40]

If you're considering selling it figure out what a comparable NEW gun is actually selling for right now. Your used gun is worth 50-75% of that. How close to 50% or 75% depends on a lot of factors, and in this case I'd say 50% is going to be closer to accurate.


Depending on the gun, and how long you've owned it that 50-75% could mean you taking a big loss, or making a big profit. I have guns that I paid $150 for new years ago that bring $1000 today. Even if I only got 50% I'd have a nice profit.

I have others that I paid $400 for years ago that still sell for $400 new.











5

[R.A.N.G.E.R]

Other pistols that have lost a lot of value in a couple of years?

We bought a new Walther PK380. I have not been able to hit the target most of the time (@10yds.) My wife is scary accurate with my P07 and better than decent with our old warhorse 96FS.

*sigh* I called a LEO over from the next lane at the range. I’d seen this fellow taking out the red dot at 25yds. He had the same problems we both faced. He asked for another mag - 7 shots. He sighted in so carefully. And handed it back saying he was sure he could get used to it in time. He was a bit redfaced.

I tried to trade it in partial payment for a different gun at a pretty big LGS. He saidhe could offer $50...we had 6x that or more in it. It was an impulse buy for her.... The counter guy said some other recent small 9mm pistols had killed its value. Are all Walthers branded with this same brush — I guess I mean not the historically good ones, PPK?

[Nathan]

Products are sold for the highest price the customer will pay and the lowest price the seller will accept.

This is a dynamic relationship. I remember that gun coming out....it was an effort the take Bersa’s good reputation from their lower end 380’s and compete with Glock, XD, M&P.....that retail price point was $400.

Glock held on at $550, XD & M&P dropped to $375. Bersa dropped to $250 like Shield to hit a certain volume.

Problem is they undercut their people willing to buy Bersa as a higher end gun.
If in great condition, I don’t see $230 as too high....$150-$200 is more likely.

[Mike38]

I worked in a gun shop for a couple of years, their mark up on guns was 20%...

The average smuck, such as myself, will find that hard to believe. A "Mom & Pop" gun shop, 3-5 employees counting Mom and Pop, would have to sell 10 guns a day just to keep the doors open. Never mind they have another building called a home, and a whole 'nuther set of utility bills.

[Armed_Chicagoan]

They don't just sell guns. They sell ammo, cleaning products, tactical gear, targets, etc. etc. Guns are probably not where they make most of their profit, much like the mini-mart on the corner doesn't make their money selling gasoline.

[Oliver Sudden]

Smucks don’t always have facts to base their opinions on.

[P-990]

Originally Posted by Mike38

The average smuck, such as myself, will find that hard to believe. A "Mom & Pop" gun shop, 3-5 employees counting Mom and Pop, would have to sell 10 guns a day just to keep the doors open. Never mind they have another building called a home, and a whole 'nuther set of utility bills.

And you'd be wrong not to believe the 20% markup margin for the gunshop. Especially the average small mom and pop shop.

Note: I worked at a small LGS for a few months in between other jobs. (Or what I call "taking a break from being a professional.") Some brands can have even less than a 20% markup, depending on distributor pricing versus MSRP.

I also worked in a local chain retail store in college. Markup on soft goods (clothing) is about 100%, and this is commonly known accepted and practiced.

Shops make money on used guns and accessories. And I don't begrudge them any of this at all, as they're a for-profit business. If they don't keep the doors open, where will we have access to firearms and ammo? Sure, you can "buy online", but that still takes a local FFL to handle the transfer.

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[USNRet93]

'Markup' isn't the same as 'margin'..retail deals with 'margin. a $300 cost gun marked up 20% is $360..a $300 cost gun sold at 20% 'margin' is $375..(divide the cost by .8)..I know, small point. My buddy who owns a gun store sells Glock 17 at 30% margin..($550), cost he says is $385..

[Tom Servo]

When I was in the business, we were lucky to get 10-12% on a new gun to even be close to internet pricing. We usually tried for 30% on used guns.

The margins on guns are pretty much brutal. You have to make the money back on services and accessories.

[FITASC]

They don't just sell guns. They sell ammo, cleaning products, tactical gear, targets, etc. etc. Guns are probably not where they make most of their profit, much like the mini-mart on the corner doesn't make their money selling gasoline.

^^^^^ This right here.

[Nathan]

Honestly, I’m not sure how most shops make an money...

20-30% margins on guns, better on accessories, tight on ammo too. I really feel for them. Markup on reloading supplies, but not sure what it costs them to get them shipped in.

The range is the real money maker, but still many are down there sorting recycling cases to make ends meet.

Around here, 3-4 manpower can keep a range running all day long at an average income of $50 per lane per hour. This probably also spurs gun sales at high prices and training and more range visits. That is the money.

[USNRet93]

Originally Posted by Nathan

Honestly, I’m not sure how most shops make an money...

20-30% margins on guns, better on accessories, tight on ammo too. I really feel for them. Markup on reloading supplies, but not sure what it costs them to get them shipped in.

The range is the real money maker, but still many are down there sorting recycling cases to make ends meet.

Around here, 3-4 manpower can keep a range running all day long at an average income of $50 per lane per hour. This probably also spurs gun sales at high prices and training and more range visits. That is the money.

I go to 2 ranges..one is a stand alone and the other part of a big gun store. The stand alone is always busy..The one as part of a gun store, not really. I wonder if the one as part of a store is 'supported' by the store. Lots shoot then go next door to look around.
Both $20 per lane..only 'per hour' if people are waiting. Prices at the gun store high average. G43-$499, Ruger LC9S-$340, as examples..

[natman]

Originally Posted by Mike38

The average smuck, such as myself, will find that hard to believe. A "Mom & Pop" gun shop, 3-5 employees counting Mom and Pop, would have to sell 10 guns a day just to keep the doors open. Never mind they have another building called a home, and a whole 'nuther set of utility bills.

Believe it. When I worked in a shop 20% on new guns was normal. Gun shops don't make money selling guns. They sell guns to get people in the store to buy things with higher profit margins, like clothing and accessories.

[Aguila Blanca]

And if the markup is 20 percent, that doesn't come close to explaining the price drop in the original post. If a Bersa was selling for $400 a few years ago, at a 20 percent markup that means the gun store was paying $333. If they were selling guns that cost them $333 for $250 ... they wouldn't be in business for long.

So the crux of the question isn't the markup. Bersa has apparently achieved sufficient sales volume that the economies of scale allow them to sell the guns for less than they used to.

[Ricklin]

I am a wholesale guy by trade. Dealers buy product from me to resell.

First off we need to consider the GPM, that's the gross profit. The dealer discount varies by manufacturer. Some manufacturer's publish retail pricing, some others do not.
I don't "do" consumer goods. In the case of consumer goods invariably the manufacturer does publish a retail price.
In many cases that published retail price may be a fantasy. It is typically what the dealer discount is based upon.

The consumer sets what I and many others refer to as the "street price" IE: what the product actually sells for at "retail"

The dealer discount might be 40-50 percent off the list price. That does not mean much when the street price is far lower than the list or retail price.

Can't make a level playing field, like many small dealers "wish for" since the golden rule always applies.
He who has the gold, makes the rules.

Bud's or CTD will get a better price wholesale, their wholesale representative will discount further based on volume. Perhaps an extra 5 or 10 percent. They have the "gold" to buy 100 of that model. and price it to the consumer based on that Addl. discount. Thus the street price that the mom and pop can't match.

Mom and pop will focus on all the things the above retailers can't or won't. Service and accessories of course.

Computer hardware is similar, no margin in the hardware, the sellers make their money setting them up and maintaining them. Most don't really care where you buy the hardware as long as it's good quality.

[Mike38]

At 20% per gun, and even 100% per accessories and clothing, I can not grasp how a Mom & Pop shop can stay open.

[osbornk]

When I picked up my Purchase from Buds from my FFL a couple of weeks ago, he said Buds sells a some guns for less than his wholesale cost.