Any money in the gun business

[Kanewpadle]

Having two friends that own gun shops and one that owns a pawn shop, I would open a pawn shop that ALSO sold guns.

My buddies pawn shop does not rely on gun sales to stay afloat. The fees and interest he makes on loans does that quite nicely.

A great majority of loans are written on guns. And most of those people come back to either pay the interest and pay off the loan completely. If they don't come back then he gets the gun after 90 days. But that's a long time to sit on money so you can't loan a heck of a lot on guns unless the gun is worth it.

But you can't just loan on guns. You would have to learn the value of items that you would consider making a loan on. And you have to narrow your focus on items that you know will get you your money back. You can't be afraid to tell someone that your not interested.

It's a great cash business that requires a lot of cash to run.

These days I would NOT open a gun shop unless I had extremely deep pockets, a local market that could support it and I had no other competition, and someone I could trust completely to help me run it. And he WILL need help eventually.

 

[Gunslinger808]

But you can't just loan on guns.

Sure you can, I'm an 02 FFL that has never taken in anything but guns.
There is no rule that states you MUST take in other items, all it means is that with an 02 FFL you can take in firearms as well.
Without the 02 FFL you can be a pawn that deals in everything except firearms.

 

[Kanewpadle]

Sure you can, I'm an 02 FFL that has never taken in anything but guns.
There is no rule that states you MUST take in other items, all it means is that with an 02 FFL you can take in firearms as well.
Without the 02 FFL you can be a pawn that deals in everything except firearms.

I understand. But if you want to put all your eggs in one basket, then loan on guns only. If you really want to make some money then you must loan on other items as well. A pawn shop after all, is a pawn shop.

 

[Gunslinger808]

I did for the reason you stated, there was no way I was going to get into how much a TV was worth vs what I could sell it for.
Much less trying to figure out the Gold market (that'll drive ya crazy).
Funny thing is, firearms are one of the few constants in the market, regardless of all other comodities they are one of the best investments out there.
Blued Steel always seems to have a better return than anything bling.

 

[Kanewpadle]

I did for the reason you stated, there was no way I was going to get into how much a TV was worth vs what I could sell it for.
Much less trying to figure out the Gold market (that'll drive ya crazy).
Funny thing is, firearms are one of the few constants in the market, regardless of all other comodities they are one of the best investments out there.
Blued Steel always seems to have a better return than anything bling.

True. He does make a lot reselling the guns. But he also does very well with musical instruments, coins, jewelry, high end tools, and high end fishing gear. He also does well with electronics but is careful not to take in anything over a year old.

 

[S&WIowegan]

I would think it is a very tough business to break into if you have to make a living from it, especially if you have or want to have a family. If the person starting the business has to borrow start up capital, it becomes almost impossible to make a go of it. I would think it could take years to get to the point such a business was actually showing much of a steady profit. Now a well established business, that is well run and managed by a knowledgeable person can probably generate a living.

I am not saying it cannot be done, but the odds are very much against such an operation succeeding. A better solution would be for the person to get their FFL and begin a small home based business handling transfers at a low fee, locating guns for friends and others, providing outstanding customer service until they build up some clients. They could also spend time buying and selling from gun shows, local stuff, and the national gun auction houses. This type of business could be run for years while working a regular job and it would be a good way to ease into the business and get some first hand knowledge of what will be involved and to get some real information if a profit can ever be made by them.

Remember no matter how much someone knows about guns if they don't have a good head for business and for customer relations, they will fail commercially in any type of gun business.

I would certainly not finance someone else trying to start up such a business, even if he were my brother, at least not if I ever expected to get that money back. Bankruptcy is most often the result of such businesses and that means most if not all investment capital is lost.

For someone retired with a fixed income already and plenty of start up money it could be a lucrative and fun hobby.

Also if you have to ask such a question in this forum you don't know enough to be financing such a business.

This is the hard, cold unvarnished truth....believe it. If you can't afford to lose your money, don't put it in your brother's or anyone else's startup gunshop. Your brother should work full-time at a successful shop for several years before he tries this.

 

[Andy Griffith]

To make a small fortune in the gun business, start with a large one!

 

[pace40]

Sure is...I've been puttin money into mine since I opened it.

 

[ozo]

I've been doing it about 10 years now, a few lessons learned:

The money is in accessories, for every Dollar you make off a firearm, you'll make Ten off of ammo/holsters/cleaning kits ect...

Know your product, NOTHING will turn me away from a gun shop like lack of knowledge about what they're selling.

Know your clientel, are you catering to hunters? LEOs? Tactical types?
Case in point, I deal with a lot of LEOs, but need a good selection for hunters too.
Stock accordingly.
And along with that, LOCATION!
A shop in a small town will have different requirements than one in a big city (and location in a big city will also matter).

Keep focused, stick with the basics, I've seen more than one shop fail because they tried to be too cutting edge.

Develope a client base, make them want to come to you.
One time sales are fine, but regulars will pay the bills.

KEEP YOUR WORD!
This is a big one, a bad review will run around the town before a good review even gets it's boots on.

Lower prices, I'd rather sell 10 for a 2 Dollar profit each, than 1 for a 10 Dollar profit.

Live in the now, I've seen shops fail because they were too busy trying to be the next Midway while not even being able to pay their current bills.

It's hard, frustrating, with long hours and lots of pit falls, but it can be done.

Five generations....and my daughter is closing the doors at the end of the month.
Things have changed with big box store competition pricing.
That being said, there is truth in the pudding, and much has been learned over time.
Her doors aren't closing because every bit of knowledge was used......and failed. There are many factors involved. [And I can not speak for her and the reason she chooses to close shop]
The above quote [gunslinger] is full of experienced wit and anyone thinking of this sojourn should heed to the words.
BUT.....I don't see all bases covered in the above posts on the pros and cons.Maybe they can't be, realistically, in this day and time, but gunslinger hit on most.
The foremost criteria I see missed is an in-house gunsmith. If you hire one you must pay one very well to have and keep a GOOD one. The shop won't make much money from him, most of the money will go to KEEP him, so YOU must be one. IF you are one, then you will need to hire help, knowledgeable help, to run the counter, and most likely more than one person, because to make a decent living from the gunsmithing you will need to be un-interrupted....and also be able to depend on your counter help. That in itself isn't easy to achieve, even if it is family. This is solely one aspect. I believe, these days, you must have an indoor range also, whether for your customers alone to bring traffic thru your doors, or to make a deal with local LEO agencies to use at discount rates for regular qualifications, or better, both. Now, you need stock....guns, ammo, accessories, etc and a decent 'waiting area' with a couch and TV for the spouse to wait while you BS.....because the average one will be bored and want to go before you get finished. Minor you may think, but proven.
Holsters.....for every ten holsters you purchased that is hanging in display, on a daily basis you only have one. That goes for most of the rest of your stock. Ammo....you ain't got no !!! Only us that don't need any is going to be a regular range rat and pay $15 great big dollars to shoot. At this time and day, you need ALL of these things to attract business, and your prices have to be a bargain....on top of this investment. In this era of shortage, you will lose sleep worrying where you will get the stock alone. Even if you own the property outright, you will still have the salaries, electric bills, alarm services, insurance, etc that will be a wolf at your door. On the average you profit $25 on a new gun sale, a $15 fee to go back to shoot, $2/box on ammo, $5 on a t-shirt, $22 on a holster, 10% on a consignment gun, $4 on a range bag, $1 on an affordable chinese flashlight, etc.......
HOW MUCH traffic do you need DAILY to just CYA ?
I am not negative. I am realistic. I have been there. I do hope, for selfish reasons alone, that someone, maybe even you, will always be there with a gun store so that I will have one to go to !!!!!!!!!!!! Kudos to anyone that even thinks about it.....much less actually does it. God bless you.

Also, to some, maybe many people, reloading supplies......AND the knowledge that goes with it.

 

[TheHobbyist]

The owner of this forum has a site to purchase guns from. I've looked a few times, but cash flow seemed to not quite coincide with the looking. Maybe I should look more!

Anyways, Lee has a statement on his website that is simple but important: My policy is simple, satisfaction guaranteed. Or, something to the effect.

I don't care what business it is, you'd be surprised what genuinely good customer service can do.

Lots of competition in the area? Differentiate yourself AND provide exceptional service that people remember.

 

[doublesharp]

partnership = one foot in the grave and the other on a banana peel.

Good Luck!

 

[rwsmith]

My FFL did just that

A better solution would be for the person to get their FFL and begin a small home based business handling transfers at a low fee, locating guns for friends and others, providing outstanding customer service until they build up some clients. They could also spend time buying and selling from gun shows, local stuff, and the national gun auction houses. This type of business could be run for years while working a regular job and it would be a good way to ease into the business and get some first hand knowledge of what will be involved and to get some real information if a profit can ever be made by them.

My FFL worked out of his pool house! He fixed it up more as time went by. I thought it was funny to go to guy's back fence, get him on the intercom, go through the wooden gate, and walk by the pool to his 'gun shop'. Just a few weeks ago he moved into his new store in Summerville.

Lowcountry Firearms Dealer

 

[radar1972]

If you and your brother decide to pursue that dream, then I wish you good luck.... 'cause you're gonna need it!!