# FFl liscense?Gun dealer



## Semi-Pro (Jan 5, 2009)

I was thinking of opening up a shop since my other buisness went under.I have talked to a couple of ditributers about quanities and pricing to do so but they dont want to give me any info till i have a ffl.Does any body wish to release profit margin information?I know its different with each gun and situation but i dont want to buy a ffl if its not going to be worth my time. My last buisness i would get 20,35, 50% off msrp and stuff like that. any help would be appreciated.You can pm me if you like. Thanks.


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## DYI hunting (Jan 5, 2009)

I don't have the info, but from what I hear from buddies in the business, you just about can't afford to get into the business.  Some guns on gunbroker and online sites sell for less that what the local FFL's can get them for.


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## polaris30144 (Jan 5, 2009)

There is a lot more to it than"buying" an FFL. The current regulations all but eliminate anyone that wants to get into it casually, like in years past. Go the the BATF website and look at what is involved in obtaining an FFL. The experience I have had with buddies that have an FFL is, the price you pay is a direct result of your volume of sales and your location of the business(state). The high volume sellers get the best prices from the distributors and the small time guys pay almost retail leaving very little mark up. This is not a business you can run out of your home anymore.


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## Semi-Pro (Jan 5, 2009)

I called glock and they sent me a price list also i can buy no more than 15 guns a year.Start up with as little as 5.I know plenty of people selling more than that in a week.I didn,t want to get to the ffl part until i know if i can make some money. The distributers are being very vague. There's got to be a good amount of profit in some of these manufactures.I bought an AR that lists for 1500 for 750 brand new,this was a few years back but i think it is worth some lookin in to.Plus who wouldn't want a few hundred guns lying around?I also have found that the pawn shops are doing the best,alot because of used guns.


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## nda5150 (Jan 5, 2009)

You'd be better off opening up a pawn shop.


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## Twenty five ought six (Jan 5, 2009)

> The distributers are being very vague. There's got to be a good amount of profit in some of these manufactures.



I've purchased shotguns from two major shotgun manufacturers at distributor prices, and compared to retail there's not a "good amount of profit."  One a high dollar shotgun, that would be one in the $3000 range and up, a dealer hopes to make 10% but will settle for less.  On a lower end gun, they aim for 5%.  Many FFL's will order you a gun for $20-25 above their cost.  They hope to make it up on quantity incentives, just as car dealers do, AFTER they've sold the requisite number of guns.

Many of the manufacturers run specials, where if the dealer buys 5 of a mid-grade or high grade gun the manufacturer will through in a  lower grade gun for free.  This kind of incentives make it hard to determine both cost and profit, and the real "profit" is only in the last gun purchased, which makes the dealer eligible for the incentive.

Again, just as with auto's, MSRP is a joke, and has nothing to do with profitability.

Other than general business conditions, the biggest problem dealers have, especially in long guns, is the tremendous inventory in used guns.  Especially with long  guns, there's not really anything new that makes a gun a "must have".  For ex., regardless of business theory, Marlin for example, is limited to what it can charge for a 336 because there are 2 million or so of them sitting out there in closets that will come out if the price goes up enough.

That's why pawn shops do so well on guns, because they set their own "wholesale cost", mostly from ignorant people in desperate need, and determine their own mark-up.  Although most pawn shops pay less that 50% of FMV, they usually ask FMV.  Retail stores can't begin to touch this.


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## AR-Trvlr (Jan 6, 2009)

IMHO gunshops make money on ammunition, accessories, and services.  The guns are there to get people in the door.

It might be a decent business if you've got a local underserved market, or a specific niche to serve.  If you combine that with a strong internet presence selling some specialty items you might do ok.

Still, it's a tough business to get into, and will likely require some $$$ to get started.


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## Semi-Pro (Jan 6, 2009)

well put, thanks for the help


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## dawg2 (Jan 6, 2009)

DYI hunting said:


> I don't have the info, but from what I hear from buddies in the business, you just about can't afford to get into the business.  Some guns on gunbroker and online sites sell for less that what the local FFL's can get them for.



That is true.  Especially if I add sales tax.  I can beat or meet some, but occasionally they are listed below what I would pay.


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## bearpugh (Jan 6, 2009)

only way for success is full service. no money in guns, it's in everything else. ammo, supplies, gunsmithing and repairs. and the pawn shop idea is good. you make 25% on loans.


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## specialk (Jan 6, 2009)

bearpugh said:


> .... you make 25% on loans.....



only on the first 3 months in pawn, after that state law mandates the pawnbroker to lower the interst to no more than 12.5% per month....which is still profitable...


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