Gun store markup and pricing

[Underdog 1,593]

Obviously it depends on the deal the store gets from a distributor, and the more purchased the better the individual prices and/or shipping, etc., but is there any hard and fast rule as to the kind of markup a Mom and Pop gun store uses in selling guns?

 

Is it customary to for a store to have a "for sale" price on a gun and then charge an additional "shipping fee" when selling the gun (along with NICS and tax)?

[mcbethr 42]

I considered opening up a gun store and range about two years ago and did a lot of due diligence.

 

I did the math and it's almost impossible to make money on selling guns, especially in NJ with our permitting process. Profit on a new gun is about 10%. Profit on a used gun is 100%. In free states, you have a certain churn in used guns. People buy a handgun, decide they don't like it, and trade it in for a new one. This basically never happens in New Jersey because the permitting process practically guarantees that you do lots or research on what you want to buy, because once you make that decision, you are stuck with that gun whether you like it or not. Used guns are what keeps the Mom and Pop stores alive.

 

There is a rule in retail: you always double. If you see a shirt for $10, odds are it cost the store $5. When I contacted ammo distributors for my range, I was looking at $7.45 for a 50 round box of 9mm if I bought it in lots of 10,000. I could turn around and sell that for $20 at the range, offer my members a 20% discount and still make money.

 

Gun ranges are like printing money, especially when it comes to rentals. Renting guns is pure profit. I calculated that I needed exactly 85 member visits and 30 non-member visits every week just to break even. I still have all of the spreadsheets and the math is still good.

 

The only problem was that building the range was going to cost about $250,000. I couldn't build the range until the state police signed of on the site. I couldn't buy the site unless I had a loan from the bank... but I couldn't get a loan from the bank until they knew that Cherry Hill was going to approve my location... and on and on and on.

 

I was looking at $18,848.09 per month in costs including everything from labor to uniform replacement. I wasn't going to break even for three years so I decided to walk.

[Howard 538]

Don't forget the risk of owning that range today. What happens when the anti-gun idiots decide to hold an anti-gun rally in-front of your range, it makes the news and the sheep-a-tions in the town decide to not renew your permits or pass laws basically making your business illegal.

[Smokin .50 1,907]

$250,000 for building a range seems awful small to me. The land required for a "buffer zone" would be tremendous, unless you went the Shore Shot route, and built it in an industrial area. Even so, those building costs have since gone up since you "walked away" from the idea.

 

This brings me to an issue that often comes up on the board with our Keyboard Commandos that don't know Jack Sh!t about how to run a business or what the true costs of operation are. They always whine about prices like little babies and would knife their "friendly" FFL in the back for a lousy $10! IMHO the main reason that more ranges aren't operating in this state is that folks buy too much mail-order. With only a 10% profit, who here has several million to invest in stocking the shelves only to receive a meager return? A $2M investment would yield only $200K from which all of the bills have to be paid:

 

Payroll

Taxes

Maint.

Cleaning

Stock

Permit Fees

Phone

Advertising

Web Site

Security-Alarm System

Groundskeeping

Accounting

Lawyer

Bank Fees

CC Fees

Office Supplies, Furniture

Fixtures

Display Cases

Carpet Cleaning & Janitorial

Insurance $$$

License Fees

CC TV System

ETC., ETC.

 

So relying on the sale of new stock is only a fraction of the business. Used arms, as well as the "expendables" (bullets, oils, cleaners, targets, cases, and every acc's you can think of are required to make a shop stay open. So they next time you save a buck buying something mail order, don't look around and cry that there's NO PLACE TO SHOOT.........

 

O-K, rant off!

[Shawnmoore81 623]

Margins on new guns are razor thin.....

 

Your lucky if you see ten percent or so....

 

Very true. FFL I go to only gets higher end guns because the cheaper ones aren't worth getting

[bry@n 195]

$250,000 for a range is no where near what it will cost. That is a very small number. I have been looking into it and just the target system and backstop is more than 250,000. Of course, this is based on my idea of what I would want the range to be.

[HODGIE 3]

The only problem was that building the range was going to cost about $250,000. I couldn't build the range until the state police signed of on the site. I couldn't buy the site unless I had a loan from the bank... but I couldn't get a loan from the bank until they knew that Cherry Hill was going to approve my location... and on and on and on.

 

If this were true I would own 3 of them right now. I went to SanFran to attend the NRA range owner seminars and have spoken with several range ownes through one of their support programs. To build a indoor or outdoor range in any state you need to add at least a 1 or a 2 in front of your 250,000 the ventilation itself can upwards near 200,000 and that would be for a middle grade system. back stops, heating/cooling and just about everything else adds up to a huge number.

 

I had a partner and this range was going up in a different state more friendly to our business envirement at the time.

Then there is just about everything else that was mentioned in Smokin.50's post. It's easily a $1-2 million dollar venture

for a range and full service shop.

[bry@n 195]

If this were true I would own 3 of them right now. I went to SanFran to attend the NRA range owner seminars and have spoken with several range ownes through one of their support programs. To build a indoor or outdoor range in any state you need to add at least a 1 or a 2 in front of your 250,000 the ventilation itself can upwards near 200,000 and that would be for a middle grade system. back stops, heating/cooling and just about everything else adds up to a huge number.

 

I had a partner and this range was going up in a different state more friendly to our business envirement at the time.

Then there is just about everything else that was mentioned in Smokin.50's post. It's easily a $1-2 million dollar venture

for a range and full service shop.

 

I agree. I met with AIS, Action Target and a few other companies at SS and your figures are in line with what I was seeing. Also had the NSSF do demographic studies to see possible locations. In NJ, it's a little tough to say the least.

[mcbethr 42]

I agree. I met with AIS, Action Target and a few other companies at SS and your figures are in line with what I was seeing. Also had the NSSF do demographic studies to see possible locations. In NJ, it's a little tough to say the least.

 

I got a few quotes for 13 backstops - 12 4" and 1 Handy capped 5'. Heating system, but no air conditioning and electric target returns. I was not figuring in the cost of the building, which I already owned. Just the shooting stalls, backstop, target return system and roof armor.

 

AIS$229,000.00

TargetWorx $605,085.00

Action Target $480,000.00

 

Action Target was the best package, but I had to go with the cheaper range. I was going to go with AIS and just install the system myself over the weekend with day labor.

[compujas 21]

The rule of thumb that I've been told before, and tend to go by, is about 15% off MSRP as a gauge. I will also usually check Galleryofguns.com to get an idea of the going rate if possible. YMMV of course. And given the current situation, all bets are usually off for getting good deals when nothing is on the shelf.

[mcbethr 42]

This image will give you some idea of the costs involved. Keep in mind this is in 2010 dollars. Basically under some scenarios you don't start making money until 5 years out. The AIS system was the cheapest, but like I said , you had to install it yourself. This model also factored in fixtures and initial building costs like refurbishing the bathrooms.

 

Note, I always made it a point when planning to make sure that the women's bathrooms would be perfect. No wife will ever come back to a range if she is afraid to pee in the toilet.

 

[67gtonut 847]

Rough rule of thumb....... $100,000/per lane....

[HODGIE 3]

I think the best way to start off in this business and not loose your shirt is to do it from home, with online ordering

and maybe some local pick up by appoitment if you have the correct set up for it. We are buying a new home

in PA, one of my searching points it a seperate standing structure I can conduct business from and stock some ammo, surplus firearms and set up a machine shop for smithing. Hopefully I will be up and running within a year at very low cost. I just hope there is an industry left by that time.

[kahout 0]

Problem is some of the higher end stuff just sits....

 

As an example...we have a rare HK SL8-1 sitting on the shelf for only 2k...it is getting a name soon.... LOL

I thought the SL8-2 was the rare one. I am going to mention it to a friend either case.

[halbautomatisch 60]

I got a few quotes for 13 backstops - 12 4" and 1 Handy capped 5'. Heating system, but no air conditioning and electric target returns. I was not figuring in the cost of the building, which I already owned. Just the shooting stalls, backstop, target return system and roof armor.

 

AIS$229,000.00

TargetWorx $605,085.00

Action Target $480,000.00

 

Action Target was the best package, but I had to go with the cheaper range. I was going to go with AIS and just install the system myself over the weekend with day labor.

My understanding was that RTSP's range cost about $1.2 million (without the building, they're renting), and the air system was $200k alone. What others are saying is consistent with the information I've heard, not sure how you'd be able to get away with $250k total range cost.

[Barms 98]

I know i'm new to this hobby.. but just seeing the explosion (sorry for the pun) of the popularity of shooting sports in the just the last year.. And again, unscientific i'm just basing this on how long i used to wait at the Bullet Hole and RTSP a year ago.. verus now.. i'd say its a 3X increase..

 

so figure that into your 2010 projected revenues.. and on top of that figure my bet that Woodland Park Range fills all its $600+ platinum memberships (alleged).

[jonfoxx 4]

Wow. Mind Blown. This is like a complete repost from the mid-late-90's in regards to CIGARS! C'Mon cigar guys! Remember the days when the cigar BOOM hit? No inventory, huge mark ups, government smoking bans popping up in restaurants and everywhere else.... its all the same, believe it or not! Freedom being crushed because of the majority mainstream acceptance and open CELEBRATION of such freedoms!

 

I need a Montecristo #2 right about now....

[halbautomatisch 60]

There is a rule in retail: you always double. If you see a shirt for $10, odds are it cost the store $5. When I contacted ammo distributors for my range, I was looking at $7.45 for a 50 round box of 9mm if I bought it in lots of 10,000. I could turn around and sell that for $20 at the range, offer my members a 20% discount and still make money.

 

The only rule in retail is, that there really is no set markup percentage. I have items in my store that I make 10-15% on and other items that I make 600% on. Every product is different, and your local market as well as local competition will also influence prices (and therefore markup).

 

I don't sell clothes, but I would be willing to bet that the markup is far greater than 100%, how else would they be able to sell them at 75% off a price that was already marked down 50% at the end of the season. My guess is that clothes sellers buy a shirt for $5 and sell it $40 or even as high as $60 when they first put it out for sale. As time goes by they continually mark it down until everything is gone as the season changes.

 

I can walk though a Home Depot and point out many items I know they they are making a terrific margin on, and what they are using as a loss leader because I am buying many of the same items wholesale. Large retailers have pricing down to a science, they will draw you in with loss leaders, knowing that you will need to buy accessories for that item that they make killer profit on.

[9X19 125]

Rough rule of thumb....... $100,000/per lane....

agreed

[Onthejob13 0]

If this were true I would own 3 of them right now. I went to SanFran to attend the NRA range owner seminars and have spoken with several range ownes through one of their support programs. To build a indoor or outdoor range in any state you need to add at least a 1 or a 2 in front of your 250,000 the ventilation itself can upwards near 200,000 and that would be for a middle grade system. back stops, heating/cooling and just about everything else adds up to a huge number.

 

I had a partner and this range was going up in a different state more friendly to our business envirement at the time.

Then there is just about everything else that was mentioned in Smokin.50's post. It's easily a $1-2 million dollar venture

for a range and full service shop.

 

True... very small number... $250,000 is nothing to start a range... good educated guess, but once you start thinking about whats needed to get the ball rolling... you can almost double that number in my opinion