Question for Shop Owners...

JackiePapers

Is there any rule of thumb about the markup... or "spred" between wholesale (What a dealer might offer me for a firearm) and what he would eventually want to sell it for over the counter? Or putting it another way how much LESS than book would firearm be worth to the gunshop owner.

Probably put this badly but I'm sure you get my drift...

Thanks...

drobs

Shop I worked at would usually ask people looking to sell or trade guns the standard question...

What are you looking to get for it?


Some will answer this question way under the going rate. We'd bought guns from people for $50 to $100 that way.

Otherwise our standard practice was 15% under blue book or new dealer cost. And that depended if we thought we could resell the gun.

You can get the most money for a gun by selling it on consignment, selling through this website, or in one the many equipment exchanges on the various gun boards.

As far as selling guns the dealer I worked for would try to get at least $100 over whatever he bought a gun for.

41 nut

I will pay 75% of what I can sell a gun for.

duckhunter

20- to 30 % under retail.

gotstolefrom

One shop around here operates with about 100% mark-up.
What he takes as a trade in on a new gun purchase, is then
put on a used rack priced about 30%+ higher than what you can do here on GB.

What you see on the used rack for $ 250 is something he gave $ 125 for. I've witnessed 4 'deals' in the last 2 or 3 years, and then see the guns on the used rack. They all were in this markup range.

I HAVE bought off of his used rack once....something I had been looking for. Yes, I paid a bit high, but I got what I wanted.

nmyers

It can vary widely on current guns.

One of my local dealers was secretly a distributor; he had a separate location for his wholesale business. But, his guns were sold at full list in his store. So, he was able to buy at the absolute lowest price, & sell at the highest price; you can bet he would give you < 50% on a trade-in.

Neal

p3skyking

There are no rules set in stone. Many factors determine mark-up, trade-in, local disposable income, local preference. What works here may not work in your location.
Any new opening business will have to pay to learn.

drsck

I've worked at several shops and large sporting goods retailers over the last 40+ years. Each one arrived at the markup differently. Some of them really seemed to have no clue, keeping their markup formula a secret. Others seemed simply to mark up items randomly or based on whatever whim was moving them at the moment. As you might imagine, these companies and shops are now out of business. One that is still in business simply uses a formula of adding 10% to the cost of firearms and 25% to the cost of other items and then rounding it off upwardly to the nearest $9.99. For example, if a gun cost $200, this shop would simply mark it up to $220 and then add $9.99 for a price of $229.99. The formula for establishing a price for used items was always a little different, but some seemed committed to simply marking things up and them coming down as time passed and they sat on the shelf. A couple of places tried to establish a formula for buying and selling that could be applied by any clerk regardless of whether they new anything about firearms. In these cases, the practice was usually a variation on buying for a percentage of blue book price and then marking up another percentage or selling for a percentage of the blue book price. For example, one shop would do it this way. A customer would come in with a gun to sell and ask for a price. The shop owner would refuse, saying instead "let me know when you know what you want for it." I think he did this in order to avoid offending lots of folks who thought their junk was valuable. Well, the customers would often turn and walk out but other times, they would say "I don't really have an idea of what it's worth." The shop owner would then turn to the blue book, often one that was a little outdated, and look up the item. He would show the customer the price and then explain condition, etc. concluding with the words he really couldn't expect to sell items at full book price. He'd then show the customer a couple of items he already had for sale and that he was asking about 90% of blue book price, but that was only as starting point because it was "easier to come down than to go up." So, he'd then offer the customer about 50% of blue book price. Most of the time they'd pass, but some of the time they'd accept the offer and other times they'd come back in a day or two. Several years ago when Dick's Sporting Goods bought and sold used items they used a variation of this method, buying for 75% and selling for 90%, but then they don't deal in used guns anymore. I am told that Cabela's gun libraries do about the same thing. A couple of words to consider, regardless of what you decide to do. First, working on a 10% margin is not enough to keep the doors open for a storefront operation. If you're operating out of your home, that may work, but it won't pay the bills in a typical storefront operation. Second, above all remember that it is "easier to come down than it is to go up." Third, what ever method you choose, develop a code that you can use to mark the price you paid for an item on the tag so that customers can't determine what you paid, but you'll be able to determine at a glance when it's time to negotiate a price with a potentional buyer. This way you don't have to stop and go to your books to look up the price you paid for an item. Hope this helps. Best of luck -- Steve

JackiePapers

Great info guys... I really have no intention of going into the business... I'm a collector (in my own humble way)... not a seller! Each gun I have is like one of my children...Ha Ha! I was just curious as to how it worked.

Thanks a million [:D]

abcguns2

O.K. , here we go , I know Im going to catch some 'heat' for this one , but here it is , and by the way this is the same basic theory that my Dad used in his shop for years and I know several dealers who do basically the same :
I do have a small shop and we do a lot of 'smithing' as well as sales/trades ect...I also work a full-time (as well as a part-time) LEO job and because of the "LOW" overhead and the Non-Need to make a rediculas? profit I can cut things down a little ...
We 'mark-up' our 'stock' apx.$25-35 and or try to be somewhere between 75% of current dealer costs and dealer costs on the same gun (if ordered new),example : if a XYZ model 234 has a current wholesale (dealer costs) 0f $199.95 , we try and be able to buy it/trade for it and price it on the rack (for sale) A apx. $150-199 depending on several factors ,Condition,assesocries(scopes,mags,ect.),time of year (hunting season ect.)caliber,ect.ect. all with-in current market prices (not depending on the "BOOK") to figure 'what is worth'??? as much as I have tried for the past 26 years plus in this business , I have never been able to get any $$$ (money) out of a dang book ??? Been doing this for a long time , seems to work ???
Good Luck !!!
d.a.stearns
Gunsmith / LEO
Niota , Tn

JK

Look out the window into the parking lot. If the fellow drives up in an old pick me up with a bale of hay and feed in the back, give him the best break you can. If he drives up in a Mercedes add 10%. I just couldn't resist that. When my son was 10 he said exactly the same thing to me.