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View Full Version : Would you open a gunshop now?



EDELWEISS
06-09-2013, 02:11 AM
Title pretty much says it all. I was talking to a buddy who owns a shop today. Hes talking about retiring from the business. That got me thinking about the PROs and CONs of owning a shop, perhaps even doing NFA sales. Its something I pondered years ago and never pursued. On one hand it seems like it would be something Id like when I retire from being a Cop; but I hadnít planned on doing that anytime soon. On the other hand having a fall back income would mean I could retire if the department pissed me off over something stupid.

Now the negatives ďTIMĒ (This is Maryland). Thatís probably enough right there. Still when all is said and done in this latest BAN, Im thinking a lot of shops will close, so this may be a void that could be filled.

Thoughts???

Mickey Rourke
06-09-2013, 03:28 AM
Two of our most successful local dealers said they would retire if O got a 2nd term.

They kept their word.

bdcbbq
06-09-2013, 03:44 AM
If you own a gun shop you have to spend a lot of time running it.

Your shooting time goes way down.

Lots of detailed paperwork to track

Slim profit margin

Large cash inventory

Development of many "wanna be friends"

As you said "Maryland" location

CB3
06-09-2013, 03:48 AM
Market research with changing laws may be tricky, but critical. Demand with no supply does not help. Continuing political/legal attacks on the products you sell could require changes in the business. Flexibility will be key. Good industry and general contacts expand flexibility.

Your corporation would have to become a FFL. You need to know the probability, time & cost of this before you close the deal.

You must have 1-2 top tier employees who can understand and follow the ATF and state regs, protecting each other's backs on every transaction. Avoid ATF and state regulator problems. Paperwork must work.

You may need multiple ATF licenses to cover the current inventory or future acquisitions.

Knowing the attitude of local law enforcement toward your store would be helpful.

Finally, do the current owners have good contacts and alliances with wholesalers and any other key industry people or groups, and will these transfer to you.

With a change in ownership is the opportunity to refocus the business to serve customers better with products they want. Shotgun target shooting, bird hunting, big game hunting or even outfitting safaris, personal defense weapons and training, have or get a range, classroom for courses, gunsmith on site, etc., all such opportunities need to be assessed and acquired or dropped for your business model. That may take additional cash.

Don't overlook the liabilities inherent in such a business, such as low sales volume, low customer visits, thin inventory of the right or wrong types, outstanding financial obligations, building structural problems (security), and many more.

Do you know someone who has recently bought a gun shop in MD who could share advice? Have a good attorney and CPA involved in the transaction and first few months of business.

Have an exit strategy. Keep it long term and pass it to a grandson, or improve it and flip to the first buyer with real cash? Hobby with an employee manager, or true primary source of income with personal daily involvement? Open a second store elsewhere in 3 years? Partner with another store? Sell to a chain? Liquidate and retire. Have a plan.

Al Lipscomb
06-09-2013, 05:24 AM
Not in the Northeastern United States. Lots of other places would be fine. Our local gunshops are doing great.

jlwilliams
06-09-2013, 05:24 AM
I wouldn't open a gun store now. The huge cash outlay for inventory (relative to other retail categories) is one thing, but when you add the regulatory burden on top of that you see a really lop-sided picture. From a strictly dollars for doughnuts financial perspective, a gun store doesn't make a lot of sense. It would be one thing if you already own one, have years invested and are just keeping up to date. That could make sense. Starting now, under the current conditions? Not a chance. I'm not saying you should consider a medical marijuana dispensary or a porn shop, but somewhere between the extremes there are many other business options that make more sense than a gun store.

Mike Erwin
06-09-2013, 05:41 AM
I will add what I can to this discussion. My wife and I own a store (Electrical, Lighting, Plumbing and HVAC supplies). Last year, due to my love of shooting and the slow construction economy, we added firearms to the mix. These are the things I have learned. Unless you have seriously deep pockets you will have to build up your inventory slowly. People want to come in and fondle your stock and then go order it online and want you to do the transfer for them. The margin on new firearms is small compare to other items we carry in our store. With the current supply chain problems acquiring stock is very difficult. I have heard from one of my reps that there are some stores they do business with that are struggling to stay open because they can not get enough inventory to sell.

Our sales have done well considering we started last year in a small town. I would do it again because I enjoy it and we don't depend on gun sales to keep our business successful.

Mike

TFA303
06-09-2013, 05:46 AM
Since you have a law enforcement background, and one of the key problems in MD (from what my friends there say) is navigating the MSP regulatory quagmire, you might carve out a market niche by being able to get people guns faster or more reliably than other dealers. Regulations suck, but they can provide a competitive advantage to the crafty.

Personally though, I'd rather try to sell pork BBQ in Pakistan than guns in Maryland.

Gabriel Suarez
06-09-2013, 06:55 AM
A "gun shop", as in the traditional "mom and pop" place where the local cheapskates come in because they are retired with nothing to do (an nothing to spend) and want to drink your coffee and spend the day talking? Nope...no thank you. In this day and age, unless it is a big place like for examples, Scottsdale Gun Club, The Bullethole, or in the low end side, J&G, I think I would rather own a Wine and Spirits Store. That is...if making alot of money is not the goal. On the other side of the coin, the gun business is excellent and quite profitable. But you need to have a good business model.

WadeP
06-09-2013, 07:30 AM
People want to come in and fondle your stock and then go order it online and want you to do the transfer for them. The margin on new firearms is small compare to other items we carry in our store. With the current supply chain problems acquiring stock is very difficult.

Truth right here. With my part-time, on the side business, I do pretty well with gunsmithing and transfers but I don't mess with retail sales for these reasons.

dbaierl
06-09-2013, 09:08 AM
A "gun shop", as in the traditional "mom and pop" place where the local cheapskates come in because they are retired with nothing to do (an nothing to spend) and want to drink your coffee and spend the day talking? Nope...no thank you. In this day and age, unless it is a big place like for examples, Scottsdale Gun Club, The Bullethole, or in the low end side, J&G, I think I would rather own a Wine and Spirits Store. That is...if making alot of money is not the goal. On the other side of the coin, the gun business is excellent and quite profitable. But you need to have a good business model.

Damn... You just described a local store by me.

I stop in a few times a month to look for reload supply's.
the same guys are there every time. BSing and plugging up the one cow path through the mess.
His prices are good when he has it. Nice guy's for sure.
But get out of the damn way would ya. Drink your coffee at home.

barnetmill
06-09-2013, 09:48 AM
Our local sports academy and walmarts must be making a terrible dent in what most gunstores can sell. Walmarts is big enough to deal directly further up the supply chain, if not directly from the manufacterer and easily undercut any dealer. My dealer usually does not stock the gun I want, but can normally get what ever I want at the overall best price. I and I also suspect at least one if not both of the local SI instructors also purchase from this fellow as do most of my friends.
In my area you need to fit into some sort of niche to start a successful gunshop. More than one new gunshop here has gone out of business. Maryland is not a good place for the future. I will make an exception if you just plan to sell duck/goose guns. Those will likely never be outlawed in maryland. But handguns and black type rifles are probably on their way out. Consider nearby Virginia for a shop.
I remember a shop in beltsville maryland that in the 90's was just waiting for someone to come by and buy the realestate acording to what the owner told me. He had an interesting collection of rare commercial firearms like shotguns with fiberglass barresl and such. I am sure that by now they are long gone.
About maryland it is really a shame. But with much of the population being a bedroom community for DC and also a large influx of legal foreign immigrants, what can you expect! Virginia is not so far from Maryland if you want to be near your maryland family.

bae
06-09-2013, 10:26 AM
I'd consider it, and I have been considering it.

I'd not open up a high-volume, low-margin ammo & CCW handgun sorta place.

I'm thinking more for my personal project of setting up a by-appointment-only very high-end establishment, along the lines of the Beretta salons, carrying *very* exclusive goods, aimed entirely at the local and visiting millionaire/billionaire set - double rifles, Sunday-meeting/BBQ guns, superb leather, forged Bowies, restored WWII military arms, that kind of thing. I'd ideally like to set it up next to the tasting room at my vineyard, and have a small range there for customer testing/instruction.

I have a friend here who does a similar thing, with a different class of goods. He told me why: "well, this way all my toys are 'inventory' or 'investments' and not 'my collection', and my dear wife doesn't complain so much :-)"

Destro
06-09-2013, 02:35 PM
Innovation is key. Why not year round layaway? 'Store Club'-a Christmas Club that you can do a general layaway, and then buy anything in stock. Know thy foe: If a business charges 20% for transfers, Charge 15%. Be a U-boat amongst pirate ships.

TrojanSkyCop1
06-09-2013, 03:09 PM
On the other side of the coin, the gun business is excellent and quite profitable. But you need to have a good business model.

I'd be more inclined to open a gun range (with both gun rentals and the option for customers tobring their own gats),with perhaps some gun sales on the side as a secondary priority. Am leaning more toward an indoor over an outdoor range (climate control, less susceptible to inclement weather, etc.). Sensible idea, or am I talking out me derriere? If the latter, please talk some sense into me.

And naturally, if and when I got this biz started, I'd be quite willing and able to host SI instructors and teaching sessions, of course! :cool:

And in response to the OP, thankfully I reside in Texas and not Maryland.

bdcbbq
06-09-2013, 04:09 PM
Am leaning more toward an indoor over an outdoor range (climate control, less susceptible to inclement weather, etc.). Sensible idea, or am I talking out me derriere? If the latter, please talk some sense into me.


Air quality issues for an indoor range can be very expensive building from scratch. I had a conversation with a guy awhile back and he had looked into it for a local gun club. Not cheap at all.

guns68
06-10-2013, 07:23 AM
Here is my take on things. I recently bought an indoor range and gunshop. Thankfully I already had my FFL so that part of the transition was easy. I do have a couple of "vampires" around but I minimize them by not having coffee available, I do have bottled water and soda for sale which paying customers seem to like but it tends to repel the blood suckers. I am certainly learning about business models. When I first opened I thought of my business as a gunshop that has a range attached. Bad move, What is bringing in the money is the range! Also where I live (Mobile AL area) there is a lot of interest in firearms and shooting by adult women. This group is willing to pay both to learn how to handle their firearms and time at the range practicing. They don't like ego's and want to be treated as competent, confident people that want to go someplace they feel comfortable at. I have discovered that cranky old white guys know everything, like to finger !@%$# everything you have, and are cheap! But not to exclude them I hand out copies of my FFL like candy! I charge 15.00 for a transfer that takes me 15 min tops to complete. That works out to 60 dollars an hour.
I'm still learning about dealing with distributors and when to buy and how much of certain items to have on hand so they will be available for customers, but not too many (or the wrong type) tying up my money in inventory. I've been told that business is a lot like sex, until you do it you really don't know what it's about. So far that's turning out to be true.
Destro, I like your comment! I may have to change my handle to U-15 (using my business address)

Silat Student
06-10-2013, 01:28 PM
I can only speak locally, from experience talking with a few different gun shop employees and owners around here.

We've seen a huge uptick in people opening Gun Businesses in my little Tampa Suburb and nearby areas. About 5-6 years ago we had 3-4 local gun shops, with maybe double that number when you add in pawn shops and big box stores with a gun counter. Now we probably have 15-20 local stores who got into the gun business and in normal times, "pre-Sandyhook", that was fine since everyone had product and could pursue their own business model. Now we have every one of those locations chasing diminished supplies from what is often the same vendors. The locals have dealt with that in three ways
a) sold out of all product, no product stocked back, store is basically bereft of most things aside from niche items
b) Doled out product on strict limits, preventing hoarders. This has created mixed feelings, but most of the clientele base I've talked to seems to be okay with it.
c) I suspect, but nobody will admit to it, that some people saw this event or one like it coming down the pike and had a little product stocked by and sold it to the panic buyers at increased rates. I've heard grumbling from clientele base about this, but I can't fault them from making a mint off of one time customers who's only redeeming feature is the overwhelming need to swipe their credit card and buy every black rifle or case of .223 in the store because "the gubmint's commin fer 'em".

I wonder if someone were to open a brick and mortar business for an internet heavy gun store, wait for one of these crisis to pop and then a few weeks later flood the brick and mortar location with hard to find items at a 15-20% markup if they might be able to maintain viability and even profitability. Most of the panic buyers that you'd be "taking advantage of" are people that you're probably unlikely to see again until the next crisis. I know you'd be basing your business model on panic buyers are crisis popping up, but over the last few years those crisis don't seem to be in short supply.

And if all of your stock and inventory was somehow outlawed in the gun grab everyone's always worried about it would seem to me that would skyrocket your profitability if you put on your Pirate Hat. Just a thought.

bc45
06-11-2013, 08:33 AM
just negotiate the lease to include no liability of you lose your ffl or the fedinistas close your door

Mjolnir
06-11-2013, 08:55 AM
I recently listed a Glock 17 Gen. 3 NIB with 6 extra factory hi cap mags and 3 extra glock 33 rd happy sticks, a carry pouch for 6 mags and a book for $700.00

No takers , just lots of offers of trade. Gauging by this............. i'd say this last rush to buy everything at top dollar off the shelves and from online have bled dry many gun buyers.

Wow, that sounds like an awesome deal to me. Maybe Iam crazy.


Boards don't punch back.

Dark One
06-11-2013, 03:18 PM
Local shops in my area are packed. The downer is the "good stuff" is not found. Local web site in my area is better...... Some guns are still at good prices, especially if you know your stuff. If you are an impulse buyer, they are paying $2000 for an Olympic AR.

Mike Erwin
06-11-2013, 03:31 PM
I recently listed a Glock 17 Gen. 3 NIB with 6 extra factory hi cap mags and 3 extra glock 33 rd happy sticks, a carry pouch for 6 mags and a book for $700.00

No takers , just lots of offers of trade. Gauging by this............. i'd say this last rush to buy everything at top dollar off the shelves and from online have bled dry many gun buyers.

I think I know that G17 and those mags. Some one will buy them. I price things in our store as realistically as possible. If I get a good deal I offer a good deal.

Mike

Mike Erwin
06-12-2013, 04:57 AM
Yes Mike, that has been my experience dealing with you and yours. I will probably just keep the G17 anyways. Why give it away. I don't know what i was thinking. All i know is that i went shooting and nothing rocks in my hand like a P-99. ( Range Goon kept eyeballing me. I was recreating my 8 shot string and how fast it was...........

Damn, it was fast if i do say so myself! ;-)

'C',

I prefer my P-99 also. I ordered a compact version in January but have no clue when it might be available. I do have two G-19's NIB if you know somone looking for one.

Mike

AlwaysVigilant
06-12-2013, 05:22 AM
I'm with Gabe on this one. Traditional store front...booze.

barnetmill
06-12-2013, 02:04 PM
In my area most of the smaller gun stores are actually pawnshops. This way you have more than one source of income. Diversifying has always been one strategy of most local shops that sell guns. Many of such places are not worth going into unless you are hunting for something that is not common and maybe the owner will not know what he has. One local very small shop is more of a hobby. It is possible that he got out the pawn business. The owner makes a few bucks. The place is full of friends and they have a christmas party that I never got invited to, most likely because I only stop by about twice a year where I get harangued about my selling him my 30 us carbine. They are into collecting military items. The hangers on often go to lunch with the owner. I think the owner is living off of a pension and this business is really a hobby that yields a few bucks and gives him something fun to do.

OldLawman
06-13-2013, 06:48 AM
Like you, I live in MD, at least for the next couple of years until my wife retires. Then, we are bolting for freer pastures.

I would not open one in MD. After Oct. 1, 2013, I predict fully half of the shops in MD will close. The change in gun laws will just kill them. The combination of the new assault gun ban, and the new licensing requirement for handguns will cause sales to fall off the edge of the planet. The poor sales of hunting rifles and the (lack of) ammunition supply will mean they have nothing left to sell. With the MSP taking over 90 days to approve handgun purchases, and the concern of many shops, even with legal guidance to do otherwise, to release after 8 days no matter what, means their customers will either go elsewhere or just not buy. Too bad.