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December 24, 2017, 10:28 PM | #1 |
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Discussion with FFL family member
Extended family member, see only once or twice per year. He and his son dabble in various items, from flea market stuff, to collectibles, to vehicles, and firearms. They do sale at some local gun shows.
Basically, they want to get rid of all of their handguns, and only deal in collectible long rifles.They can't compete with larger vendors on price for new handguns. Said that the big guys can get a big line of credit on an order of multiple, popular handguns that they can sale at the discounted price that they paid for the item. But because of the large volume orders, they get free ones as well. If they sell all at the wholesale price, they make 100% profit on the one(s) they received free. He said the small guys like him are paying more for the item than the large guys are selling for. He said that most of the small vendors like himself are selling for $20 profit, sometimes as low as $10. It was an interesting discussion. Said the greatest volume of what he does in firearms are $20 transfers. |
December 24, 2017, 10:35 PM | #2 | |
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December 24, 2017, 11:54 PM | #3 |
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I have a friend who owned a gun shop but no longer does...He said he also saw guns advertised for less than he could even buy them for. Just couldn't make it work, so he closed up shop.
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December 25, 2017, 12:03 PM | #4 | |
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December 25, 2017, 12:07 PM | #5 |
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This applies to almost everything, not just guns.
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December 25, 2017, 12:38 PM | #6 |
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"...the big guys can get a big line of credit..." They get better credit terms your uncle/cousin/nephew likely don't get at all.
Suspect the 'dabbling' part is a lot of their issue. There's little to no money at all in being a gun show dealer. "...only deal in collectible long rifles..." There's not much money to be made in collector stuff either. And you really have to know the market and the firearms. As in not all M1 Rifles, for example, are collector pieces. And no rebuilt "correct" Carbine is either.
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December 28, 2017, 06:31 AM | #7 | |
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December 28, 2017, 08:37 AM | #8 |
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Heck, it has been that way since 1990 at least. The FFL I used to work for couldn’t even buy from other distributors at the same price that Fred’s Outdoor America was retailing. That’s how he got started building custom AR15s from Nesard parts kits. I think he eventually ended up just buying from Fred’s who gave him an additional discount as an FFL.
As a small FFL, you really need a niche to service. |
December 28, 2017, 10:38 AM | #9 | |
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The ones who I've seen prosper don't regard selling guns as their core business. They sell range time and training and a bit of fellowship, things people can't get at Walmart or online. They may be happy to sell you a gun, but that isn't what pays their salaries and utilities.
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December 28, 2017, 07:06 PM | #10 |
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I don't know how much the gun sales and transfers compare to the other items they deal in. Several years back, they were the first to get shipments of the Duck Dynasty t-shirts when the show became a hit. And they sold a ton of them at the flea markets.
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December 28, 2017, 10:12 PM | #11 |
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I once tried to get an FFL to buy from a big store and resell to me at slightly above what I would pay with transfer if I ordered it. He was insulted and said he wouldn't support his competitor like that. He is out of business and I am still buying guns.
I know a drive-thru owner who bought a huge covered trailer. So he could buy pop at Wal-Mart because they sell it cheaper than his distributor. |
December 29, 2017, 01:21 AM | #12 |
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And I've got a buddy who is accountant at a local lumberyard. He can get plywood at his employer's cost, but that's more expensive than going to Home Depot.
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December 29, 2017, 01:26 AM | #13 |
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I worked at a gun shop 16 years ago, and what we made on selling new guns wouldn't have kept the lights on. Accessories was where the money was, and the markup on targets, cleaning supplies, etc., was sometimes over 100%. This was without gouging, we remained competitive. Holsters, ammo, other consumables were the ones that paid the bills.
Last edited by armoredman; December 30, 2017 at 04:36 AM. |
December 29, 2017, 09:30 AM | #14 |
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Trouble now is with Amazon all the accessory type stuff is available without ever leaving home. I'll admit I like on line shopping and hate what it does to brick and mortar stores. Was at LGS other day----didn't waste much time on accessories knowing I could shop around at home. Good used gun selection at decent price points ( not like cabelas and others) and knowledge and service is all guns shops have to hang their hat on anymore unfortunately.
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December 29, 2017, 10:07 AM | #15 |
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Things are tough all over
The above thread does not have to be about guns. It's pretty much the same in every aspect of business today. The little guy can survive and actually prosper IF they find the appropriate niche.
Plus it must be the right niche. As the corporate monster feeds it will start devouring niche business's as well. Corporate interests will start to fill the larger niches as shareholders demand more.
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December 29, 2017, 10:26 AM | #16 | |
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December 29, 2017, 10:37 AM | #17 | |
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Another niche that hasn't been brought up is reloading supplies. The effective markup from the hazmat shipping fees is substantial when you're not buying in bulk, which strongly discourages dabblers and other low-volume handloaders from mail-ordering powder and primers.
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December 29, 2017, 12:56 PM | #18 | ||
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Lastly, I suspect this is tough time to be an FFL business with the current gun glut. There have been good years. Everyone remembers evil black rifles flying off the shelves for above MSRP in 2008/2009 and again in 2012. Prices stayed up on ammo and certain accessories for a good while. Many LGS owners made a good bit of money back then, when they could get any inventory in. So... the business may be a bit of feast or famine like so many others. Last edited by 5whiskey; December 29, 2017 at 01:02 PM. |
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December 29, 2017, 04:29 PM | #19 |
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Having a table at a flea market is a lot different than a brick and mortar store. Profit on new guns is known to be little or none since very few folks are willing to pay full MSRP. Without a retail store, I would think that transfers would be about all one could reasonably do outta their home any more. Sounds like your relative is a proverbial "Jack of all Trades and Master of None", and a typical Flea Market vendor that has a little bit of everything and hits or misses on what the current customer base is looking for. Collectable long rifles are probably what folks going to a flea market looking for guns are expecting. Folks looking for a new revolver generally don't even consider that venue.
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