New Firearms Retail Markup

Sorry if this is not the right forum - it seemed to be.

Anyone have any idea of how much a "medium" sized gun store, (not big like Cabela's and not a small "mom & pop" shop) marks up their new firearms over cost?

I know that different dealers get different price structures from manufacturers but does anyone have rough order of magnitude? Is it 5-10% 15-20% greater than 20 or 30% over cost?

I know that used guys sell for a very high mark up. I was wondering what it is for new guns.

Thanks
Seabee CO

Way too many variables to answer that. Each shop/dealer has different behaviors and needs. One thing to keep in mind is that stores put dollars in the bank, not percentages. Shops that put the same percentage mark up on every item are foolish (IMO) because they price themselves out of low end sales and don't make enough return on invested capital on their high end sales.

Common guns (Glocks, XDs, etc) tend to be treated as commodities and almost everybody has to compete on price to sell them. As a data point my local (small) shop marks up everything $30. His price for a new Glock 26 is $470. I've seen them around the area from $489 to $535. His flat mark up get's him plenty of business, but he is losing significant margin opportunity on higher priced guns.

on average I make $40-$50 on most new guns. The markup on new firearms is terribly low and it makes me grind my teeth when someone asks me for a better deal on a $600 gun that I am making $40 on.

Quote:

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Originally Posted by Seneca Arms Co. Inc.

on average I make $40-$50 on most new guns. The markup on new firearms is terribly low and it makes me grind my teeth when someone asks me for a better deal on a $600 gun that I am making $40 on.

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+1. I do some light gun repairs in-store for a few local gun shops, and Seneca Arms is spot-on.

Markup on new guns is market-driven, and kept low. The MSRPs for guns are posted all over the internet and in print, as are so-called "wholesale" prices for the same guns. Customers only want to pay "wholesale" prices, and that means the markup on a new gun is around $30-$50. Out of that has to come wages, payroll taxes, rent/lease/morgage, property taxes, inventory taxes, utilities, phone and internet, shipping, and now Obamacare. Gotta sell a LOT of new guns every day to make it happen.

That's why shops and dealers offer 50% to 60% the market value when buying used guns. That's where they they make their gross margin before expenses. Used gun turnover and sales of scopes, bases, gun cases, etc., are what keeps gun shops open.

Noah

Seneca Arms,

Thank you. Myself and two of my friends were in your shop for the first time two months back after coming from a local disappointing auction. I found your shop to be well stocked and you friendly and professional. I hope I can get out that way again.

Seabee CO

Based on getting to know a few of the shop owners in my area over the years,
I'd say Noah Zark's comments echo what they've told me.