Sam1911
Moderator Emeritus
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Opening a gun shop: Heaven or Hell?
- Thread starter BigBlock
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Bill of Ojai
Member
My favorite local gun shop transitioned from mostly new gun sales to used gun sales. One of the partners actively sought out collections from estates of the deceased.
As a result, their clientele morphed into the mainly traditional guys like us who appreciated older guns and collectibles.
Of course, the business went down the tubes after a burglary (came through the a/c vents) prompted an ATF visit. Their employee didn't maintain the required firearms logs correctly, which prompted a complete audit of the last 20 years of their business.
You can employ a full time person just to keep up with California paperwork.
All the best to you!
As a result, their clientele morphed into the mainly traditional guys like us who appreciated older guns and collectibles.
Of course, the business went down the tubes after a burglary (came through the a/c vents) prompted an ATF visit. Their employee didn't maintain the required firearms logs correctly, which prompted a complete audit of the last 20 years of their business.
You can employ a full time person just to keep up with California paperwork.
All the best to you!
Duke of Doubt
member
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- Dec 29, 2008
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- 2,863
But she may not pass the NICS check. Prior committal, prior felony, etc.
Come to think of it, I've never rented a gun (I've borrowed them to try before I buy). Is a background check commonly performed for rentals? I'd doubt it.
Come to think of it, I've never rented a gun (I've borrowed them to try before I buy). Is a background check commonly performed for rentals? I'd doubt it.
Sir Aardvark
Member
You could make more money doing something else than selling guns.
Write up a business plan - if you figure out how much it is going to cost to set up your shop per city/county regulation & code, purchase your inventory, hire staff, pay licensing, fees, and insurance and weigh all of this against your expected profit, you're going to find that opening up a dry-cleaner may be the better route.
Internet sales have pretty much made profits on firearms razor-thin - so if you open up a brick-and-mortar store then make sure you have a website that does Internet sales - you'll need every sale you can get!
Carry stuff like Blackhawk - the profit margin is better on accessories than on ammo and guns.
And, as has been mentioned, think about opening an indoor range to bring in more clientele - doesn't it rain all of the time in Oregon anyways?
Last, don't forget how incredibly regulated this industry is.
You might find it more profitable and enjoyable to open a Dry-cleaning business and then just sell guns on the side as a second business instead of wholeheartedly embracing the Gunshop idea.
I had an FFL-01 in California for 6 years. I was one of those "Kitchen-table" gun dealers. I was able to make a profit, but that was because I had no overhead expenses. I finally gave up my license because California made it so that I had to have 7 separate licenses, permits, and certificates to sell a handgun - too many hoops to jump through!
Write up a business plan - if you figure out how much it is going to cost to set up your shop per city/county regulation & code, purchase your inventory, hire staff, pay licensing, fees, and insurance and weigh all of this against your expected profit, you're going to find that opening up a dry-cleaner may be the better route.
Internet sales have pretty much made profits on firearms razor-thin - so if you open up a brick-and-mortar store then make sure you have a website that does Internet sales - you'll need every sale you can get!
Carry stuff like Blackhawk - the profit margin is better on accessories than on ammo and guns.
And, as has been mentioned, think about opening an indoor range to bring in more clientele - doesn't it rain all of the time in Oregon anyways?
Last, don't forget how incredibly regulated this industry is.
You might find it more profitable and enjoyable to open a Dry-cleaning business and then just sell guns on the side as a second business instead of wholeheartedly embracing the Gunshop idea.
I had an FFL-01 in California for 6 years. I was one of those "Kitchen-table" gun dealers. I was able to make a profit, but that was because I had no overhead expenses. I finally gave up my license because California made it so that I had to have 7 separate licenses, permits, and certificates to sell a handgun - too many hoops to jump through!
moooose102
Member
well, as much as i love guns,i would have to say it is a risky business. you have gotten a lot of things hear to think about. i didn't read all the posts above, but i did read many of them. the first thing i want to mention is the golden rule of every retail business. location, location, location. not what is good for you, but where is good for that type of business. if i were you, i would do some consulting with some members of the business comunity. is there enough buying customer base? or will your place need to depend on an out of the area customer base? how far would you be from that base? right now, it isnt so bad, but if gasoline goes back up to $4.50 a gallon again, it will kill your business. do you have enough start up money, or will you have to solicit it or find a partner? how will you survive the first six or 12 months with limited income (when you are the new guy on the block, it akes a while for the word to get out)? this is going to be a huge investment to put a good stock into a gun store. even if you forget about the guns, all the ammo, scopes, slings, jackets, hats,cases, gloves,etc., etc., etc.,that alone is going to be tens of thousands of dollars. then add say a small amount of guns, say 75 for enough to open the doors. 75 x 400 per = $30,000 on top of the other stuff. so $50k might be enough to stock a store with enough to open the doors. now, you need to buy the property, put a building on it with a huge safe, insure it, hire at the minimum three other people (1 for the books, 1 to stock, and one "boy friday". plus you. then, you have health insurance, state taxes, and almost every drop of profit will need to go back into the store to buy more stock so you can make more money for at least five years..... hmmm, i do not mean to take the wind out of your sails, but there is a lot to this do it yourself business thing. that is why not everybody does it. if you have the will, can come up with the money, and can find a great place for the business, i honestly wish you all the luck in the world. i sincerely hope you make it!
Sam1911
Moderator Emeritus
Right! The Cadillac it is then!
I was wondering that myself. Might be an interesting option and I don't think it would really drive many customers away. (Well, it might...but that might be a good thing. If they can't pass the NICS check, you really aren't supposed to hand them a gun.)
-Sam
Mark K. C.
Member
Go for it. You have the savvy. That would truely be a dream come true. I will be one of your first cash customers.
1) You'll spend more time than you want playing psychiatrist and life coach. A lotta people take their guns more seriously than their religion. God, grace, good deeds is fine for Sunday but they don't much impact personal time. But topics like - how much you paid for that, which gun is best, etc. etc. are serious and personal.
2) A gun store has a unique problem, and that is armed robbery. If some new gang wants illegal guns (or better guns), they'll going to want to rob you. They are going to come with murder premeditated. Jewelry stores and banks face similar problems, but the BGs aren't as afraid for their lives. When the BGs come to your store, they'll going to be expecting you to have ninja moves. Their attack plan will have contingencies for stuff you can't do/couldn't afford.
3) Customers like stores planned by women. Neat, clean, well-lit, spacious, friendly, professional. Gun shops tend to be like auto mechanics, bait shops, and other stores run by men - dirty, dusty, faded crap taped to the walls, overstocked and crowded with inventory. Poorly-built jury-rigged racks and showcases. Wires (for the security system, phone, or whatever) 'temporarily' strung. Eye-sores everywhere.
2) A gun store has a unique problem, and that is armed robbery. If some new gang wants illegal guns (or better guns), they'll going to want to rob you. They are going to come with murder premeditated. Jewelry stores and banks face similar problems, but the BGs aren't as afraid for their lives. When the BGs come to your store, they'll going to be expecting you to have ninja moves. Their attack plan will have contingencies for stuff you can't do/couldn't afford.
3) Customers like stores planned by women. Neat, clean, well-lit, spacious, friendly, professional. Gun shops tend to be like auto mechanics, bait shops, and other stores run by men - dirty, dusty, faded crap taped to the walls, overstocked and crowded with inventory. Poorly-built jury-rigged racks and showcases. Wires (for the security system, phone, or whatever) 'temporarily' strung. Eye-sores everywhere.
I have found that when the economy starts to go bad gun sales increase in the used gun market, and in bulk ammo sales. From personal experience while a range sounds good it is to expensive to operate for what you get for it, with the exception of large cities where there is no where close to shot they really don't make you any money. The space would be better used as retail space or storage space. Having a good gunsmith on site is well worth the space, but they should have there own entrance, insurance, licenses, and electric meter, in other words they are there own business running out of your location. Renting firearms for any reason is asking for trouble even if you could get insurance it would be very expensive. Selling consignment guns is very profitable. What you carry will dictate who your customers are. no windows lower then 26 inches to the ground and install 8 inch pipe barriers 4 to 6 feet in front of doors and windows. Bars on the inside of windows and on the doors, Lots of lights around outside of building and a very loud alarm.
Don't carry much cop stuff there is always someone in the department that will sell it and they will buy from him before you. footwear is a waist of space even though there is a very big markup.
I think if you have the money to get a good selection of merchandise you will do very well.
I still have just over two years to go on a no competition agreement but if I could I would open a store now.
Don't carry much cop stuff there is always someone in the department that will sell it and they will buy from him before you. footwear is a waist of space even though there is a very big markup.
I think if you have the money to get a good selection of merchandise you will do very well.
I still have just over two years to go on a no competition agreement but if I could I would open a store now.
PX15
Member
Think about it.....
Here's a thought:
Rather than open a dedicated "gun shop" why not consider opening a "pawn shop" w/guns?
I have a casual friend who owns such a place, (he does my ffl transfer dealings for me), and I've never asked him, because it's none of my business, but I'm of the opinion he makes most of his profit on the "pawn" side, not the "gun" side of his shop.
When the economy is in the dumper (as it is now) you will get MORE business in a pawn shop, not less.. If you have an ffl license you can take in firearms on pawn, and have very little invested in them, and if they are not redeemed you can make a reasonable to quite good profit on them.
You can also special order firearms for customers, charging a reasonable profit.. My friend has done that for me several times. In fact when I get interested in a new firearm I always give him first "dibs" on finding me one at a fair price. Sometimes he can, sometimes he can't, but he'll wind up getting paid something either way.
You can become an ffl transfer dealer (as my friend is) and charge a reasonable price for simply handling the paperwork for other folks.
A word of caution however..
Another friend of mine opened a pawn/gun shop in Tampa many years ago, and he had a full time job elsewhere, so hired a fellow to run it for him when he was unable to be there himself.. This fellow became a very good friend to my buddy, and it was a bit of a surprise one morning when Ken went to the shop only to find the buddy had taken the "good stuff" (jewelry & guns mostly) and skipped town.
But if I were putting my money into a business, and it was a gun shop, or a pawn/gun shop, I'd bet the best return for my money would be the latter..
Just personal opinion, could be wrong.
Best Wishes,
Jesse
Here's a thought:
Rather than open a dedicated "gun shop" why not consider opening a "pawn shop" w/guns?
I have a casual friend who owns such a place, (he does my ffl transfer dealings for me), and I've never asked him, because it's none of my business, but I'm of the opinion he makes most of his profit on the "pawn" side, not the "gun" side of his shop.
When the economy is in the dumper (as it is now) you will get MORE business in a pawn shop, not less.. If you have an ffl license you can take in firearms on pawn, and have very little invested in them, and if they are not redeemed you can make a reasonable to quite good profit on them.
You can also special order firearms for customers, charging a reasonable profit.. My friend has done that for me several times. In fact when I get interested in a new firearm I always give him first "dibs" on finding me one at a fair price. Sometimes he can, sometimes he can't, but he'll wind up getting paid something either way.
You can become an ffl transfer dealer (as my friend is) and charge a reasonable price for simply handling the paperwork for other folks.
A word of caution however..
Another friend of mine opened a pawn/gun shop in Tampa many years ago, and he had a full time job elsewhere, so hired a fellow to run it for him when he was unable to be there himself.. This fellow became a very good friend to my buddy, and it was a bit of a surprise one morning when Ken went to the shop only to find the buddy had taken the "good stuff" (jewelry & guns mostly) and skipped town.
But if I were putting my money into a business, and it was a gun shop, or a pawn/gun shop, I'd bet the best return for my money would be the latter..
Just personal opinion, could be wrong.
Best Wishes,
Jesse
CountGlockula
Member
If I win the Lottery, I'd open a couple.
But in order for it to be sucessful is location, location, location...particularly next to a Walmart or Target.
But in order for it to be sucessful is location, location, location...particularly next to a Walmart or Target.
Cosmoline
Member
It's what's known as a highly regulated business. So on top of the ordinary red tape with wage and hour laws, workers comp, insurance, etc. you have a federal agency who's sole job it is to make your life difficult. Plus you have the difficulties of zoning and just find a place to open up shop. That's been a huge headache for local shops here, since the local planning authorities are far from friendly. Landlords can be a problem too. One shop I went to frequently got the boot when Sisters of Providence bought the mall and enforced their no-firearms policy.
MrAcheson
Member
There is an old joke around here that the best way to get a range is to buy it cheap from the original owner/builder when he loses his shirt in it.
Unless you're the only game in town (or it's a safety issue with lead or your backstop), this is a great way to drive away business. I had no problem with my local range telling me what I could shoot in their guns. But when they started insisting I use their ammo in my guns, I went elsewhere and never came back. I used to shoot there once a week.
Completely right. I wish one of my local shops did this, instead they're so focused on selling me what they have on the shelf, that half the time I go elsewhere to get what I want. I buy cowboy guns at the tacticool shop because they don't stock them. I buy stripped lowers and the fudd shop for the same reason.
Thanks everyone for the replies. Here is a little more detail about my plans. I firmly belive the property is in an IDEAL location, and the property itself is a great investment with over 600 feet of highway frontage on a major highway. The local population from both sides of the highway makes higher than average income. I am still in the initial planning stages, but I'm pretty sure I can have the mortgage on the property paid for by other resources -the lot is about 10 times larger than I'd need for a gun shop.
For the shop itself, I'm thinking possibly log cabin style, since there are a lot of trees on the property. I do not intend on opening a full on range at this time, but I was considering a "test fire only" range. This way a customer could fire 6 rounds before they buy a gun. Security would be a top priority, but I'm kind of a security geek so I can lock the place down like a vault at the press of a button. I'm prepared to use tear gas. (if that's legal? LOL)
As for employees, I'm basically retired, and I'm not even 30. I have time to work there whenever basically. (and I definately agree with staying open late, I'm a nite owl myself) I made some good money with the internet boom, and I'm also considering creating a high end online gun store to compete with the likes of budsgunshop. My dad is also unemployed, he would be perfect for manning the counter and I wouldn't have to pay him in the beginning. Aside from that I'd probably want to hire one good helper, and another cheap laborer to answer phones and do paperwork.
Of course, all of this is just coming right out of my head as I think it, and is very subject to change. Here's the way I see it: I have to work somewhere, wouldn't it be more fun to run a gun shop than a any number of other small time shops?
For the shop itself, I'm thinking possibly log cabin style, since there are a lot of trees on the property. I do not intend on opening a full on range at this time, but I was considering a "test fire only" range. This way a customer could fire 6 rounds before they buy a gun. Security would be a top priority, but I'm kind of a security geek
so I can lock the place down like a vault at the press of a button. I'm prepared to use tear gas. (if that's legal? LOL)As for employees, I'm basically retired, and I'm not even 30.
I have time to work there whenever basically. (and I definately agree with staying open late, I'm a nite owl myself) I made some good money with the internet boom, and I'm also considering creating a high end online gun store to compete with the likes of budsgunshop. My dad is also unemployed, he would be perfect for manning the counter and I wouldn't have to pay him in the beginning. Aside from that I'd probably want to hire one good helper, and another cheap laborer to answer phones and do paperwork.Of course, all of this is just coming right out of my head as I think it, and is very subject to change.
Here's the way I see it: I have to work somewhere, wouldn't it be more fun to run a gun shop than a any number of other small time shops?MartinFA
Member
Like any business, you will be tied to it. Expect about a 6 month time frame to get all your permits and licenses. Make sure zoning is not a problem. Significant start up costs. Forget about stocking what you like, stock what sells.
Best arguments for - your inventory does not expire rapidly. The gun business is the only business right now showing significant growth. Your customers will be better than the average customer of almost any other business.
Arguments against - You pay for your inventory up front. Right now the wholesalers are out of stock on items like the rugar mini 30 which are in high demand. Wholesale prices on AK types are increasing weekly.
Business will increase across the board when anti-gunners make noise. Clinton did more for gun sales than any other person even on things that were not going to be banned.
The markups posted by another THR member were accurate. Guns get people in the door. Profits are made on the accessories.
Do market research before selecting inventory. Guessing what people will want is a crap shoot.
It is possible to make a lot of money. Remember it will be a business, not a hobby. Price well, give outstanding service, advertise heavily.
Best arguments for - your inventory does not expire rapidly. The gun business is the only business right now showing significant growth. Your customers will be better than the average customer of almost any other business.
Arguments against - You pay for your inventory up front. Right now the wholesalers are out of stock on items like the rugar mini 30 which are in high demand. Wholesale prices on AK types are increasing weekly.
Business will increase across the board when anti-gunners make noise. Clinton did more for gun sales than any other person even on things that were not going to be banned.
The markups posted by another THR member were accurate. Guns get people in the door. Profits are made on the accessories.
Do market research before selecting inventory. Guessing what people will want is a crap shoot.
It is possible to make a lot of money. Remember it will be a business, not a hobby. Price well, give outstanding service, advertise heavily.
Build a half million dollar building, fill it with an even $million in inventory, price stuff so low that you can't even make the interest payments and maybe, just maybe we'll like your place.
I'd look at buying the current guy out and turning his shop around.
I'd look at buying the current guy out and turning his shop around.
I did the very same thing 3 years ago, and i can tell you 100% from experience, on any given day its 49% one way and 51% the other. Somedays heaven wins, somedays hell.
As with any business, your customers make up your biggest asset and your single biggest pain in the ass. The gun crowd is 25% newbies, 25% self proclaimed experts who are looking for someone to agree with them or someone to argue with, 25% internet educated experts, and 25% easy going good customers.
the guy who mentioned the $600k range vent system must live in California. we built a 6 stall 50' fully EPA compliant range system with 2 large viewing windows for under $100k. as with any high volume system, it is very high maintence and is a huge PITA, but its our single largest profit stream. i couldnt see opening a gun shop without a range...
the easiest money you will ever make in a shop is with a classroom. private groups, ccw classes, womens only classes, boyscout groups, 4h groups, corperate groups, ect. its super easy money. build a state-of-the-art classroom and watch the money roll in.
i could go on and on, but then nobody would buy my book
As with any business, your customers make up your biggest asset and your single biggest pain in the ass. The gun crowd is 25% newbies, 25% self proclaimed experts who are looking for someone to agree with them or someone to argue with, 25% internet educated experts, and 25% easy going good customers.
the guy who mentioned the $600k range vent system must live in California. we built a 6 stall 50' fully EPA compliant range system with 2 large viewing windows for under $100k. as with any high volume system, it is very high maintence and is a huge PITA, but its our single largest profit stream. i couldnt see opening a gun shop without a range...
the easiest money you will ever make in a shop is with a classroom. private groups, ccw classes, womens only classes, boyscout groups, 4h groups, corperate groups, ect. its super easy money. build a state-of-the-art classroom and watch the money roll in.
i could go on and on, but then nobody would buy my book
BigBlock -
I applaud you for your entrepreneurial spirit! Bonedust's advice seems pretty legit.
Business make more sense to me than guns, so I'll stick with that and with what hasn't already been said.
Don't spend your own money. If you fail you have nothing left. It sounds like you are confident in getting financing elsewhere. Getting a decent loan right now is tough, so good luck!
Just an observation from a few weeks of reading this board - the "Obama Scare" has people stockpiling right now, and I see many people talking about how they can't afford this "right now" or having to wait till their next paycheck... I won't name names but there are people discussing buying $1600 scopes because they got a brand new 0% apr credit card.
Maybe the dive-bombing economy hasn't hit the gun-owning population yet, but it will happen eventually. People want to stockpile now for "SHTF" scenarios but realistically they could be wishing they saved that money for the more realistic scenario of monthly mortgage payments and increasing credit card rates. The banks will be the ones crawling at their doors, not zombies, Chinese nationalists, looters, and President Obama.
Of course, people will still be buying guns and you say your area has a higher than average income. The above diatribe is more for gun-owners and not retailers.
What I hope for this to mean for you is that given the current economic conditions, any business should be preparing for the worst right now.
Good luck!
I applaud you for your entrepreneurial spirit! Bonedust's advice seems pretty legit.
Business make more sense to me than guns, so I'll stick with that and with what hasn't already been said.
Don't spend your own money. If you fail you have nothing left. It sounds like you are confident in getting financing elsewhere. Getting a decent loan right now is tough, so good luck!
Just an observation from a few weeks of reading this board - the "Obama Scare" has people stockpiling right now, and I see many people talking about how they can't afford this "right now" or having to wait till their next paycheck... I won't name names but there are people discussing buying $1600 scopes because they got a brand new 0% apr credit card.
Maybe the dive-bombing economy hasn't hit the gun-owning population yet, but it will happen eventually. People want to stockpile now for "SHTF" scenarios but realistically they could be wishing they saved that money for the more realistic scenario of monthly mortgage payments and increasing credit card rates. The banks will be the ones crawling at their doors, not zombies, Chinese nationalists, looters, and President Obama.
Of course, people will still be buying guns and you say your area has a higher than average income. The above diatribe is more for gun-owners and not retailers.
What I hope for this to mean for you is that given the current economic conditions, any business should be preparing for the worst right now.
Good luck!
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Having done this very thing i can tell you there is ALOT of really bad info and advice in this thread.
-unless someone had a buisness plan, blueprints, and intent to proceed...there is no possible way they could know what liability insurance would be. none. and to be very honest, its not bad at ALL.
-Internet sales have raised local gun purchases. what seems like a good deal online doesnt become such a great deal when all the shipping and transfer fees apply. even then, you are buying sight unseen. alot of 'new' guns sold online show up dirty and smelling like Hoppe's.
-armed robbery in a gun shop? id like to see the stats to back that one up!!! ATF even states differently. bad guys have 0 problems getting dirty guns on the street, so why would they knowingly walk into a firefight to get them?!? all of my 6 employees open carry in the shop, that sends a message. heck, even someone walking into the range area with an unholstered uncased gun is met with quick strict attention.
-unless someone had a buisness plan, blueprints, and intent to proceed...there is no possible way they could know what liability insurance would be. none. and to be very honest, its not bad at ALL.
-Internet sales have raised local gun purchases. what seems like a good deal online doesnt become such a great deal when all the shipping and transfer fees apply. even then, you are buying sight unseen. alot of 'new' guns sold online show up dirty and smelling like Hoppe's.
-armed robbery in a gun shop? id like to see the stats to back that one up!!! ATF even states differently. bad guys have 0 problems getting dirty guns on the street, so why would they knowingly walk into a firefight to get them?!? all of my 6 employees open carry in the shop, that sends a message. heck, even someone walking into the range area with an unholstered uncased gun is met with quick strict attention.
I have often considered the same thing. However, I used to be an avid fly-fisherman until I opened a guide service I have very rarely picked up a rod since I closed the business. Don't screw up what you love by turning it into profit margins etc.
go for it
bonedust has a point, i have never heard of someone going into a gun store where everyone has a gun and start acting stupid. walmart, office supply store , department store, sure but not a gun shop. More importantly, dont worry about the war stories. You are gonna have good days and bad. Have a vision of where you want to be next year, and the year after that and five years from now, then do whatever it takes to acheive your goal. Adapt to everything that comes your way. Every business on every street in America started in the same place... as a dream. Your shop will be whatever you want it to be as long as you make it happen.
bonedust has a point, i have never heard of someone going into a gun store where everyone has a gun and start acting stupid. walmart, office supply store , department store, sure but not a gun shop. More importantly, dont worry about the war stories. You are gonna have good days and bad. Have a vision of where you want to be next year, and the year after that and five years from now, then do whatever it takes to acheive your goal. Adapt to everything that comes your way. Every business on every street in America started in the same place... as a dream. Your shop will be whatever you want it to be as long as you make it happen.
Sorry for revitalizing this thread, but I was curious if you got this off the ground and going?
I know a guy that helped his son-in-law get his FFL and some related stuff going for a storefront. Said it took about 4 months total for all the paperwork and such.
I ask because I've toyed with the idea of opening one in the next year or so after I move this summer. I've been to some good stores/ranges where I live now and the service was ok to good. Where I plan on moving I've heard the service generally sucks at all the ranges. I currently work for an online retailer and one thing they focus heavily on is customer service so I've learned a lot from that aspect of it. Big believer in good service. The company I work for (non-gun related) doesn't even compete on price and are generally the higher side of prices, but their service is impeccable and as a result they have great customer retention (over 75%).
I know a guy that helped his son-in-law get his FFL and some related stuff going for a storefront. Said it took about 4 months total for all the paperwork and such.
I ask because I've toyed with the idea of opening one in the next year or so after I move this summer. I've been to some good stores/ranges where I live now and the service was ok to good. Where I plan on moving I've heard the service generally sucks at all the ranges. I currently work for an online retailer and one thing they focus heavily on is customer service so I've learned a lot from that aspect of it. Big believer in good service. The company I work for (non-gun related) doesn't even compete on price and are generally the higher side of prices, but their service is impeccable and as a result they have great customer retention (over 75%).
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