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Retail Gun Markup

Featured Replies

 

 

I find that hard to believe. The average cost of an MP9 FS that I have seen is $539 ($579 at a store that rips u off) online I can order it for $430. Are u telling me the online retailer is loosing money? No way.

I'm in the market for a M&P9....please point me in the direction of the $430 NEW model.

 

http://www.gandrtactical.com/cgi-bin/commerce.cgi?preadd=action&key=209301

 

Dealer won't last selling this for $430? I'm pretty sure Grant has been around for quite a while and will continue to do well in the future.

He's also offering all of the most popular mods, which is a great idea and hard to turn down when buying the gun at that price.

If I sold a full size M&P9 for $430, I'd lose about $35 after free shipping and CC fees. Dealers buying in buying groups might break even and hope to cost average out a free gun or two to make $400 on a 10 gun buy-in. 10%.

 

My favorite saying about the gun industry is, "How do you make a small fortune selling guns? Start with a large one."

They don't get it Ty... :facepalm: like talking to the wall. They sound like our lustrous politicians. ;)

 

 

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He's also offering all of the most popular mods, which is a great idea and hard to turn down when buying the gun at that price.

Grant knows how to do it. Even if u order it the shipping may be $25 so ur at $455. You can get some of the leases expensive guys in Nj transfer the gun for under $40. Ur all in under $500. So on average u save $40 plus tax. That's 200-250 rounds of ammo.

Grant knows how to do it. Even if u order it the shipping may be $25 so ur at $455. You can get some of the leases expensive guys in Nj transfer the gun for under $40. Ur all in under $500. So on average u save $40 plus tax. That's 200-250 rounds of ammo.

Saving $40 is not worth any of that to me though. As a matter of fact, I drive 50 minutes to my gun shop just because I've supported them for a very long time, and they've reciprocated. I can assure you I would leave there with "extras". They're also the first store to stock my inventory, which was likely initiated because of the relationship I built with them. $40 is not worth losing a relationship, certainly not when they make up for it in other areas. In my experience, this is the case with most gun shops (some excluded).

They don't get it Ty... :facepalm: like talking to the wall. They sound like our lustrous politicians. ;)

 

 

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Believe me, I get it. But when the price is what it is online, the reasoning behind it is not a concern to me.

Saving $40 is not worth any of that to me though. As a matter of fact, I drive 50 minutes to my gun shop just because I've supported them for a very long time, and they've reciprocated. I can assure you I would leave there with "extras". They're also the first store to stock my inventory, which was likely initiated because of the relationship I built with them. $40 is not worth losing a relationship, certainly not when they make up for it in other areas. In my experience, this is the case with most gun shops (some excluded).

Totally understand. I, however dont have any such relationship.

Believe me, I get it. But when the price is what it is online, the reasoning behind it is not a concern to me.

Like I said, significant savings is one thing. But the comments about the LGS being rip offs is a pretty blanket statement. It was made with a fook them attitude by the other fellow. Just trying to make a point as to why. If that is the final analogy, then all I can say is stay out of stores and keep those types of comments to yourselves. (I never said some are not ripping people off and usually that is evident especially when prices are set over suggested retail). But in most cases, it's not fair to them that don't.

 

 

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Totally understand. I, however dont have any such relationship.

Then make one. The satisfaction in the long run would be worth it.

 

 

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I've been saying this like forever.... So here is a lesson....

 

Let's start with local gun shops or any small retailer. Most LGS are small retailers in my opinion. You can no longer call most of them your big one stop shops. That is because of mostly the internet and retailers that have large multi-item products like Ganders, Dicks or any of the well known ones. Now back to my analogy. I had 5 online stores years ago. I dealt directly with the manufacturers, (usually the owners of the companies)... That means I left out the middle man, ie;, the distributors.

 

When you deal with the main company, (or that matter even some distributors), you have guidelines which are restricted. They may give you about 3 different scenarios depending on their policies and they will NOT deviate just for you. So choices may be, Tiers, Bulk Buys, -OR- pay full wholesale no matter the cost.

 

- If you are in tiers, they may start you out and the most expensive tier and say to you, "when you show significant sales, we will move your profit margins up to the next tier. That can take time unless you have a product that people will rip your guts out to get to.

- Bulk Buys are just that. You want to sell 'their' products, you must possibly buy thousands of dollars in product. For example: 50 models of 3  of their most popular guns. Most new stores whether online or brick and mortar may not be able to do that unless that's the only product they will sell which is hardly the case.

- Then there is pay their highest wholesale price and like it.

 

On top of all that, you have MAP pricing that they may not let you post. That is even if they let you do MAP pricing. These are the goings behind the scenes. Now referring to big box stores vs. you as a merchant.

- Example: I use to sell online, expensive BBQ grills not normally found in big box stores. Normally small authorized specialty stores.Some of these grills wholesale each, were in the thousands easy. The companies were popular and these stores sold tons of them. So I was able to make a decent profit and still offer good prices even being guided by their wholesale prices. They wanted you to make sales and make money so they catered to you. I did pretty well.

THEN! Big name stores like Sears and Fortunoffs to name a couple started selling them. My profit margin went down, they no longer let me post low prices. When I asked why, they said because we don't want to lose a national account like Sears or otherwise and you are their competition. Gawd forbid little old me with my small business will hurts them, but that's their mentalitiy. Hence, I was no longer special.

 

Now, regarding local gun shops as a merchant. (This applies to any merchant)...

There is overhead. Just to name one overhead item because we all know they pay rent or pay mortgages on their buildings, is MERCHANT FEES.

While Visa and Mastercard are not the worse, you have Amex which will protect the consumer, but they kill the merchant in fees because their is no interest in their regular cards. So they have to make money somewhere.

I've been out of it. But I was paying for Visa and Mastercard, a fee of about 2.2% per charge plus a fixed fee. I never charged credit card fees to the consumers because most products gave me a decent margin. So I ate the fees. IF company wanted me to sell their product, if I couldn't make a decent profit or they forced me to post suggested retail prices while the big guys discounted theirs, I turned them down. And there were quite a few I turned down.

 

So let's wrap this up. Going by what is posted above in what vendors say gun markups are. If they are making only a small margin on new guns and paying fees, then John Q Public cheapskate comes in, presents a credit card and demands a nice discount, forget it. They will tell you that they can discount it IF you pay cash. That may mean they are not making much money on it already. So you see, it's not about just fees, but rent, insurance, you name it, works into every product they sell. Profit may be nil at some points if they give you the deal of the century. Thinking that they are ripping you off is not impossible, but you need to weigh the differences yourself.

How? You ask yourself, is this a new store, are they small, are they older mom/pop, etc... Look at the store itself. Is it big, well stocked. Do they only have a few models compared to others. If so, they may be locked into a wholesale groove they can't move from. OK, and for accessories. Just like the cell phone market, they give away a lot of phones for free with a plan, but they also sell accessories. That's where most of their profit is. Most made outside the US. You might by a cheap bumper for your iphone that costs 10 bux, but costs .25 cents wholesale. The retailer can afford to buy 100's or so if they know they'll move and not worry if they get stuck with them. So yes, they make profit that way.

 

I can go on and I'm already long winded here, but you get the gist of it. Bottom line: The FU attitude about LGS is what kills them. I closed all my stores down because sales plummeted in lieu of the bad economy at the time and competition from the big stores. It can happen to any retail business especially when you have unique items. Yes, guns are unique items. You can't buy them in a lot of places. So you hopefully as with any product, find a location that will buy your products.

 

My take is this. I pay cash when I can. Even if I save up for it. A LGS may even let you make payments on a layaway basis. Especially if you frequent them. But I draw a line too. What hurts sometimes more than anything is the effing Tax. That's on Uncle Sam, not the stores. Don't blame them. But even if I get a discount at a LGS and the savings are no where near what an online sale will get me, then the old rule, money walks, yadda yadda. If I can save hundreds elsewhere and avoid paying shipping and tax, I'm there. But if I only save 25-50 bux, I will give the sale to my LGS. As others have said, I'd rather have the hands on and personal treatment then not. One ast thing, I don't do this and retailers hate it. Go there, drive them nuts with a million questions, then come back a few more times and do the same thing, then go buy online or elsewhere. I'm shouting this: YOU ARE WASTING THEIR FOOKING TIME AND YOU ARE A SCUMBAG! You want cheap prices? Take the chance and buy sight unseen.. You either sacrifice knowledge and hands on for prices, or you support the little guy! Can't make that any clearer. My conscience will not let me do that because I know companies that suffered shit like that as well as myself. I may help you the first time for a few minutes, but if you keep coming back over time, I will tell you, sorry, no time for you today.

 

...:: Hopping off my soap box! ::.... :)

Sorry for the rant, but I'm tired of people's BS when it comes to this type of crap.

the bolded part. i have kicked at LEAST 4 customers out of my shop due to them doing this. 'cept they ask me, then go buy their stuff online, and do it themselves.

So I guess you don't use Amazon.com? ;)

on rare occasion. i mostly spend cash though, so that makes amazon kind of inconvenient. :)

I think the money and margin is in accessories.  It seems the only way to run a profitable, full-time LGS nowadays is to have an attached shooting range.

 

From what I understand, there are only a couple distributors in the business so basically every retailer gets their guns from the same place.  In fact, I think some internet sellers are virtual and just have the gun drop shipped to the customer directly from the distributor.  No inventory and overhead.  Tough to compete against that.

 

Anyway, they say Best Buy is Amazon's showroom.  It seems people use their LGS as Bud's showroom...

I monitored all of Amerada Hess Corp's operations in NJ for a year and most of them for longer. From retail petroleum, to terminals, and Port Reading refinery. I had (and still sometimes have) the guy who put the two GPU units into Port Reading as an employee.

 

Ever wonder why all corporate retail mogas stations (vs. dealer stations) have been turned into C-Stores (Convenience Stores) since 2000? Because they make more on that stuff than on petroleum. Wawa has become notorious for this. An unnamed person from Hess once told me, with respect to the Hess Truck sales, "We are a much better toy company than petroleum company" LOL :)

 

NGS can't match the low overhead and high volume of the online sellers, so you can't expect them to match out-the-door pricing. The best everyone can hope for is that the price gap is small enough that the service and convenience factors make up the difference. Sometimes it does, sometimes it doesn't.

the bolded part. i have kicked at LEAST 4 customers out of my shop due to them doing this. 'cept they ask me, then go buy their stuff online, and do it themselves.

I hear ya....

I hear ya....

Was doing a little research. Can't find the warehouse square footage, but Buds just opened a huge retail outlet in Tennessee complete with range. The store area alone is 20,000 sqft. I think the said the range is 15000 sqft. I know the warehouse is huge, hence mucho stock. That's how they have low prices.

 

 

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that, and no overhead of paying an employee to sell that gun to ya.

 

 i don't think i've bought a gun online. i bought ammo a few years ago for my garand from orion7(was a pain in the ass paying for that one). i think they stopped shipping to nj though, and i've lucked into some here and there rigth here in nj.

 

 overall, as weird as this is gonna sound.....i like the personal service i get from local guys. i've bought from jt on here.....fantastic dude. bought from another local home based ffl....also fantastic dude.......bought from bobs. bunches of fantastic dudes in there.

that, and no overhead of paying an employee to sell that gun to ya.

 

i don't think i've bought a gun online. i bought ammo a few years ago for my garand from orion7(was a pain in the ass paying for that one). i think they stopped shipping to nj though, and i've lucked into some here and there rigth here in nj.

 

overall, as weird as this is gonna sound.....i like the personal service i get from local guys. i've bought from jt on here.....fantastic dude. bought from another local home based ffl....also fantastic dude.......bought from bobs. bunches of fantastic dudes in there.

Same here. All my guns were bought local except for one. Love the personal service and biz relationship.

 

 

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I bought my Beretta at LGS.  Price difference was not that big after factoring in xfer fee.

Other guns I bought online because they were hard to find at LGS.  I did most of my research online and I also rented several at large, well stocked ranges in other states.

 

My next purchase will probably be a Glock, and I will almost certainly buy it locally, as most shops will have it in stock.  Again, the price is not that much different.

I'm not loyal to the local shops or to any online retailer.  I wish everyone the best but I'm not looking for a friend.  I just want to buy a gun.  That doesn't mean that I don't have a couple of local shops I like and will visit first.  It just means that they don't have any right to my business if I can get a better deal somewhere else - even if it's online.

 

That said, I'll pay an extra $20 for a gun if you have it now.  I don't want to spend half a day driving around waiting in line to look at guns.  I want THAT one - wrap it up - let's go.

 

Online Cheaper?   I've bought 2 guns online.  Both were because they were older, unusual guns I wouldn't find otherwise.  I'm not opposed to buying online but I've never found a real deal - at least not on new.  Prices are lower but when you add in the $35 shipping and $35 transfer fee, I might as well buy local.

If you find an LGS that has other business as well (i.e. Jim Flynn's truck repair) they can usually do a bit better on pricing because their livelihood doesn't completely depend on gun sales. Before I left NJ for free America, Jim's standard price was $40 over his cost on firearms...buy a gun that cost him $200-your price $240 (he makes 20%)...you buy one that costs him $800-your price is $840 (he makes 5%). And the more expensive the gun, the less he makes...because his "business" is truck repair, FFL is more of a hobby.

 

For an example, I bought an LC9 from him for $390 out the door...HG wanted $419 before tax, transfer & NICS.

 

 

This signature is AWESOME!!!

This sad conversation comes up quite often.  I could go into a rant same as John did, but I'll save the typing energy.  Business relationships MEAN something!  When it comes time for our local club to host a Kids event, a NRA Women on Target event, etc., we ask for some help (in the form of ammo, supplies, etc.) from our local gun shops, who are always willing to be there for us.  One shop in particular draws a lot of hate "from you fellers" due to some of you being asked to leave after too many "fondling sessions", lol, so I won't divulge who my friends are.  INSTEAD, I'LL JUST KEEP THEM IN BIDNESS!

 

BIG PICTURE TIME:

 

Women and Youth make up a HUGE percentage of new gun owners.  When is the last time you heard of a mail-order company shipping FREE AMMO to a Club Event??  Can any of you Cheapskates answer THAT one?  Do any of you help run these events on a volunteer basis?  Volunteer with the Boy Scouts shooting programs?  We all want new voters to help elect folks that are at least neutral to 2A and shooting instead of at war with it, right?  How is this accomplished you may ask?  Here's the answer:  ONE woman and/or Kid at a time!  Helping a Mom and Pop Shop stay in business is really HELPING YOURSELVES be able to more fully enjoy recreational as well as self defense shooting.  On-line buys don't exist in a VOID.  That extra $30 you spent on that pistol goes into a lot of nooks and crannies of the overall operating budget of Mom and Pop's Gun Shop.  The SAME Gun Shop that gives FREE AMMO to the Scouts, Women on Target, etc.  Life is about choices.  MAKE THE RIGHT ONE!

 

Dave

44 years behind the trigger and too many creds to list

I usually buy from the same LGS here. I do price around, but they are always helpful, I can layaway if I want, etc. I only buy online when it is a gun I can't find locally.

I had a favorite dealer but he went out of business. The guy would not order anything for me he didn't deal. I would say, "You'll get a dealer discount, then mark it up, I don't care. I want to buy it here." He would tell me just to buy it on the internet and ship it to him for a transfer. I ordered a bunch of AR lowers and some parts and had them sent there, he opened them up and assembled one for me before I showed up. $20 transfer for multiple guns and assembling one without me asking (some would say without my permission). He fixed guns I didn't buy from him for free. Nice guy, but really weird business. I think his downfall was trying to run the business off of his friends and people he knew. HE was very gruff to people he didn't know and hated people from Jersey, being located right on the border no less. He had a corner with BB guns from Walmart that he priced around $90 and would tell people from Jersey the BB guns were in the corner.

I always look in the area first before i buy something, but i usually end up having something shipped to Mastodon.  Half my guns were purchased in NJ stores but if i have to order something anyway, i just do it myself. Point is i always look local first and if its in stock i will pay the extra if its reasonable...

I usually buy from the same LGS here. I do price shop first. I will tell you to be honest I shop around at Cheyenne Outfitters (old Harry's Army & Navy), Sportmen's Center, and now Howell Gunworks. I have bought from all three. Whomever has to best selection (that I am looking for) gets my business. I do think service counts for repeat sales. I have been disppointed in Sportsmans Center over the last few years because their inventory is not like it once was. Love the people that work there though. They used to know me by name when I came in. Cheyenne has better inventory, but customer service there is hit or miss. Howell GW is the new place I have gone to. I like their service and selection.  

 

Smokin .50 mentioned business relationship is everything. I agree, but it often times seems like a one-way street. Some businesses rip/rob people off with their prices. I see it often times in the motorcycle business. I sometimes often wonder how my local dealership stays in business with the prices he charges for service and parts. It is like they are still in business despite themselves and their attitudes. Because they are the "only dealer in town" attitude.

 

To me, I will be locally, as often times by the time you factor in shipping and transfer fees it will be equal or a little more than taxes and mark up. To me if it is within $25 the LGS will get the business.

 

I have never purchased a gun online because I will not be something sight unseen. If I fondle it enough times at the LGS, I will buy it from them. I am not one of those douches that goes several times and then buys it online. If I am in your store several times, there is a reason, and I eventually aim to buy something.

 

S.

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