Opening a Shop

[Newbomb]

Been thinking of opening a gun shop/store in Indiana. The competition isn't very strong. The 2-3 shops in the area have outrageous prices and poor customer service. Plus, Cabela's is....well, Cabelas . Applying for FFL next week, you guys think it would fly just buy stocking it with a few of my own guns until I built up an inventory/customer base? Any advice would be great.

 

[mstuhr]

Howdy

Hi Newbomb,
I did that back in the bad times of Carter/Reagan.
I picked up a liquor license too and that helped some.
I was out of work and ran the shop for about three years. I did not borrow any money to put in the business and that may have been in error. I don't know?
I put most of my profits back into the store and added stock as I could.
The down side is most of the bread and butter hunting guns were being sold at Wal-Mart for less than I could by them wholesale.
It was fun. It made money every month I was there but it just never made enough to call it a living.
I did minor gunsmithing,guns and gear, hunt and fish license, beer and liquor.
Zanders supply was right across the river and Bart (Glen Zander's son in law) worked here in town at the railroad. Anything Zanders had Bart would deliver to me daily with no shipping. That helped.
The place was always full of liars and other good company. We had a liars bench out front and it was somewhat of a social club.
It occupied my time and added to the income some but not much in a time when jobs were as hard to come by as they are now.
I wish it had done better and It may have with more inventory.
I will pass this on. After it was all said and done I am glad I did not borrow any money. When things picked back up I closed and went back to work. It felt good knowing I did not owe anything.
If at all possible, you might try it part time. That might be a way to test the water.
Best of luck to you and be careful.
Mike

 

[bountyhunter]

Been thinking of opening a gun shop/store in Indiana. The competition isn't very strong. The 2-3 shops in the area have outrageous prices and poor customer service. Plus, Cabela's is....well, Cabelas . Applying for FFL next week, you guys think it would fly just buy stocking it with a few of my own guns until I built up an inventory/customer base? Any advice would be great.

You will probably need to move a lot more volume than that to cover the overhead.

 

[BlueMike]

Overhead, taxes, and insurance will be the limiting factors. If you can get a handle on those expenses you may be able to break even or make a little profit. But it will be really hard to make any significant income.

 

[perrazi]

new gun sales will be tough. if you are knowledable in the collector end of things, that is a possibility but takes quite a bit of money. reloading supplies is a way to goif you have the market. you need to be able to offer something that the competition either doesn't offer or at a better price and/or better service. this will be a tough go in this economy. good luck to you.

 

[jimmyj]

Gun Shop:
1. with a firing range.
2. an area for the regulars with time on their hands( chairs/couch/coffee pot/snacks
3. a private area for buying/selling/trading.
4. good lighting/ well lit
5. adequite restrooms
6. clean and orderly
7. regular hours and stay open late one night a week
8. no consignments

 

[oldman45]

A good indoor shooting range with ac/heat will make a great deal of money for the owner. Sadly, independent gun stores are generally not profitable on their own.

I went to school with three guys whose fathers were brothers and owned a chain of five gun stores. This was back in the late 50's. They owned luxury cars, nice homes and had money and name recognition in a city of 100,000.

Then chain stores began to enter the area. They could not compete. Now there is one store and it is being ran by the three cousins. They now sell medical supplies, western clothing, boots and have one counter for guns, ammo and hunting supplies. The few guns they sell can be bought cheaper at any of the chain stores.

OTOH: A sheriffs deputy built a 3,000 ft building in a manufacturing area back in the 80's. It became an indoor gun range and selling shooting supplies. In 2002, he sold it for over 2 million. Now with 14 shooting lanes, the new owners are taking appointments for shooters @ $35 per hr per person, pretty much all of which is profit.

 

[nogoodnamesleft]

A well written business plan is the first thing that needs to be completed.

 

[Big Cholla]

I have been in or around the retail gun business since I was 18. I worked in a custom gun shop while attending college. I had my own gunsmithing shop for 9 years while being employed as a LEO. My observations pretty much have been mentioned, but to give added emphasis; The custom shop I was employed at was put out of business by the local drug store chain selling new rifles at cheaper prices than my owner could buy wholesale. While an enjoyable passtime, my gunsmithing was a very mediocer income producer. Almost every retail-only shop that I have been acquainted with have been in the same category. EXCEPT, for the one shop where the owner travels all over the USA purchasing 'estate' guns for resale in his shop. And the few shops that have indoor shooting ranges. They are making money for the owners. So, my advice is to build a place with a shooting range, hire a good honest manager and hit the road purchasing 'estate' collections. You won't compete with the big box stores in selling new guns. ........ Big Cholla

 

[Andy Griffith]

I suspect there are many different ways that a feller can make it in the gun business, and I suspect there are far more ways that it can fail, but I don't know because I've never been there.

I have heard it said:

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

I wish you good fortune on a tough venture.

 

[mkk41]

Ya gotta do an honest assessment of whether or not a gun shop will make money in your area. How's the local economy? Are there people with the disposable income to spend on recreational shooting or gun collecting?
Internet sales on ammo and accessories and the big box stores are the real killers of your local gun shop. They sell a box of ammo for less than a small shop pays wholesale from a distributor.

Then look at zoning , licenses/permits/fees , insurance , financing.

Powder and ammo make for sky high insurance premiums and fire insurance will be mandatory. Some insurance companies won't even cover gun related businesses. Some financial instutions won't do business with gun shops.

Urban sprawl is sucking up most rural hunting and shooting lands. Nobody buys guns if there's nowhere to shoot them.

 

[H Richard]

A friend that owns a one man used gun store won't carry any reloading supplies as he can't compete with any other stores or on line sellers. Not enough profit to warrant the inventory. He carries ammo, and will order new guns for anyone, usually at less than they can get them at area gun stores. He moves a fair amount if inventory, but has very low overhead. He has a sign out on the main street a half block away, "I buy used guns". That does actually bring a lot of his inventory in. He is knowledgeable to "buy right". He also works off a smaller markup than most retail gun stores, and that's what is buying him a following with us gun nut types. He treat the regulars right. His inventory is normally around 70 to 80 guns, about half handguns and half long guns.

 

[chief38]

I started, and had a very successful retail business for thirty years and I just sold my business and retired two years ago (at age 55). Went I first was thinking of opening up a business, a friend of mine gave me a piece of indispensable advise that I will now pass on to you; ----here it is:

Figure out all your overhead expenses, insurances, accounting expenses, light heat & power, advertising, opening and start up expenses, permits, inventory expenses, displays, carpeting, decorations, etc. etc. and add that figure to what you need to live on a year. Add 10% to it because things always come up unexpectedly, and things you forgot to figure in. NOW TAKE THAT TOTAL FIGURE AND DOUBLE IT! That is the minimum you will need to start up. 90% of start-up businesses fail within the first year because they are under capitalized. Not my opinion, that is a fact.

I am not trying t be a downer or discourage you, I am being honest and blunt! If you don't have enough $$ up front, you will not have the "STAYING POWER" you will need to hang on until your business catches fire. No matter how good a businessman you are, you are not going to have lines out your door the first few months, and you need survival start up money.

Good luck and I hope you do well if you take the plunge!

chief38

 

[mike4sigs]

Jimmyj had a few good reconmindations and one that i didnt understand why but we will ask him that later and i agreed with one very much! (evening hours)
just asking?? Jimmyj why wouldnt you do consignment??

And dont do my pet peeve it will make people look elsewhere!! that is posting hours and not being there ! i have a nice little shop close to me and the guy seems like he is never open. i quit going just to see what he had and really dont even think about stopping in any more.
If shop is close to me i may be become a regular.
Good luck on your endeavors!

 

[Marksman]

I had a gun shop in western New York state several years ago, I was the gunsmith and had two partners. From that experience I can tell you chief38's advice is right on, if you are not sufficiently capitalized from the minute you open the doors you will not succeed. If you have partners make sure they are trustworthy, incorporate and make a buy/sell agreement part of the legal documents.

 

[blujax01]

There is a really small basement shop in Westerville that I frequent even though there are several bigger and less expensive shops not far away. The reason is that (1) they have a ton of used guns and (2) they sell reloads. He has a pneumatic Star machine in the back and a part-time retiree with nothing better to do than feed it.
Buying .38 Special or .45 plinking ammo for $17 keeps me coming back. And as a result, I do make other purchases there even though I could save ~10% elsewhere. And the coffee's tolerable.

Good luck in your venture. Some make it. I do hope you will be one.

 

[HEAD0001]

You need to have enough cash on hand to cover your overhead for at least one year, and preferably two.

But the big question is---what is your overhead?? How much??

There are alot of successful gun shop owners who started in there basement with zero overhead. However the new requirements for an FLL are different than they were 20 years ago. So it really depends on what assets are available to you??

If you have that requirement, then all it takes is good hard work, common sense, treat your customers fairly and honestly, and have a proper attitude that you are the best, and no one out there can do a better job than you.

Alot of gun shop owners went under when the WalMart came to town. But the reason they went under was instead of learning how to compete with WalMart, all they did was complain about WalMart.

WalMart is a big giant that moves slowly. All you need to do is be nimble. Pay attention to what WalMart does, and do the opposite. Heck some of the most successful places I have seen moved as close to WalMart as they could get. Who on earth draws more customers than a WalMart store!! Why do you think WalMart does not go into shopping malls?? They know they are drawing the customers, and they do not want to share!! Price is not the only variable in where a customer buys.

One quick piece of advice that I gave a small local dealer here in WV. He was just starting out. He rented a small little place, and is dependable with his hours. He spent his stocking money wisely in reloading components. Things that are harder andf more expensive to order online. And he stocked them heavy.

I told him to advertise and encourage customers to bring their internet gun deals to him. Charge a fair small fee, and clean up the gravy left over. Now he is very successful, and he attributes his success to handling firearms for customers. It has greatly improved his customer base. And he sells them ammo and reloading supplies for the new rifle that he just made $25 on and never had to put up a dime!!

I agree with the consignments. stay away from them. They are a real headache. And you can loose two customers through no fault of your own.

I worked for the largest distributor of sporting goods there was in the 80's and early 90's. I have seen alot of shops come and go. The biggest problem dealers had was lack of proper attitude. Second was trying to be too big when starting. And third was not having a back up income for a few years before they got the ball really rolling. Do those three and you will be successful. Tom.

 

[jimmyj]

Hi, Mike4Sigs:
Why no consignments?
1. The owner wants and expects "Top Dollar" thus giving the appearences that your shop over prices.
2. The consignment item is in competition with your stock.
3. The consignment owner will be bugging you on a regular basic to check on his merchandise.
4. If anything is not right with the consignment item, the customer is going to blame you and not the consignment owner.
5. You are responsible for the consignment item if it is damaged or stolen.
6. The consignment owner will be dealing outside your shop and if he makes a deal all you will get is the privalege of keeping and showing his item. He will come and pick up his item and receive the cash and it has cost him nothing. Also a would be customer will deal with item owner directly to get a lower price.
8. A consignment item will be taking up space that your stock would be in.

 

[n4zov]

A well written business plan is the first thing that needs to be completed.

Exactly right. Unless you have previous business experience, I would spend a lot of time talking with others who have started businesses successfully. It takes a considerable amount of money to get even a small business off the ground and unless you can finance the operation yourself, you will need financing. Anybody loaning money for a start up is going to require a business plan.

 

[mike4sigs]

Hi, Mike4Sigs:
Why no consignments?
1. The owner wants and expects "Top Dollar" thus giving the appearences that your shop over prices.
2. The consignment item is in competition with your stock.
3. The consignment owner will be bugging you on a regular basic to check on his merchandise.
4. If anything is not right with the consignment item, the customer is going to blame you and not the consignment owner.
5. You are responsible for the consignment item if it is damaged or stolen.
6. The consignment owner will be dealing outside your shop and if he makes a deal all you will get is the privalege of keeping and showing his item. He will come and pick up his item and receive the cash and it has cost him nothing. Also a would be customer will deal with item owner directly to get a lower price.
8. A consignment item will be taking up space that your stock would be in.

All very good points and i see your side of it !! but also why not take them but have very strict rules and stick to them and that being said if the consignee is wanting to much out of his item just a simple explantion on that fact and then move on from there!! just my opinion ? that and $1.07 in indiana will get you a cup of coffee(@ MCDONALDS)