Margins on firearms

[ngum Rights]

Obviously there are many factors but does anyone know what the average margin is on firearms?

For example, for a $500 gun how much did the dealer actually pay wholesale?

Or is the the profit on other items such as amo or accessories?

[knight0334]

The markup on guns by dealers typically range between 5% and 25% depending on the dealer. Places like Gander Mountain has a really high markup - they will list things at MSRP when other shops have a price over $100 less for the same thing.

Dealers don't make much money on guns. The money is in the accessories and other sporting goods.

[millsan1]

Obviously there are many factors but does anyone know what the average margin is on firearms?

For example, for a $500 gun how much did the dealer actually pay wholesale?

Or is the the profit on other items such as amo or accessories?

Very small margins on firearms. On less expensive items, like a $500 pistol, the margins are even lower.

I would be surprised if there was $50 in a $500 pistol.

One thing to remember when dealing with a small shop, when they give you a discount, that discount is coming out of their profit. So in the above example, lets say there is $50 profit in the gun. If they give you $25 discount, it feels like a 5% discount, but in reality, they are taking a 50% hit on their profits.

I try to be fair with any small business, since I owned one and know the struggles. Unless the prices are way out of whack, I pay. If they are ay out of whack, I try to negotiate. If they won't negotiate to a reasonable price (not internet price), I will pass.

[Orlov556]

To be competitive with other dealer and the internet, i think anymore than 15% and people would start to accuse dealers of "gouging."

Based on a few guns i know the wholesale prices of, compared to what i have seen in stores, i have never seen a gun marked up more than that, save gander mountain and some gun shows.

[wanneroo]

There is not a lot of profit in new guns and sometimes old ones too. A dealer might make $50 gross profit on a new Glock or similar pistol.

People mention Gander Mtn and higher prices, true, but they have a much larger overhead to maintain.

If someone owns an average sized gun store, to make a $50K salary a year, they've got to move a lot of stock.

[Hawk]

Shops can easily make 50% or more return on used firearms.

When I was young and stupid, I traded in, or sold, my firearms to the shop and typically received half the current market value or less in cash or towards the purchase of another gun. Many years ago I bought a used AMT Backup from a local shop for $275. A year later I traded it in on a used Glock G26. They gave me $125 for the AMT. I visited the shop 2 month's later and the AMT was back on display for $275. I learned my lesson.

I was in another local gun shop several years ago to buy a let handed holster they had in stock. A old black lady came in wanting to sell her Walther PPK (LNIB). The guy at the counter said it was only worth $75 dollars to him, and her not knowing any better took the offer.

Last time I went into that shop.

[VooDoo1VooDoo1]

Lest we get buried in anecdotal replies, your assumptions are accurate from the first post. Margins on new guns have some variability but keep in mind that most small shops buy from a distributor and not the manufacturer. There are several percentage points of potential profit that end up as the distributor's profit theoretically in exchange for the activity of warehousing, providing credit and distribution. On occasion the distributor will have a large quantity of a certain style or style(s) of firearm that they may discount to the LGS. So the same firearm that was $275 wholesale this past year might be sold in quantity of 6 or more for @$200. Dealer is happy and he can either sell at the same price or run a sale, sell for less than regular price and still make more money.

But just speaking in generic terms, yes, margins on new guns are tight, selling accessories and soft goods have higher margins but usually can't carry a shop by itself. Used guns are a strong source of increasing margins because only the actual LGS knows what his cost basis is on that particular item.

[jerkin]

The margins are not always that low, it depends on the particular firearm. The Ruger SR1911 is a perfect example. When they had just came out some people were reporting getting them for under $600. A member here that works in a shop told me what the dealer cost was and I don't remember exactly but it was under $550, I'm thinking $525-530.

All of the sudden everyone wanted one and the price went through the roof, shops were selling them on gunbroker and getting close to $900 for them. For the first year or so if you could find one for $700 you were lucky. The demand has been satisfied and you can pick them up for $650 pretty easily today.

The Keltec Sub2K is another one, they were in the shops for $300 2 years ago. Look in the classifieds, guys want $500 for their used ones now and I still haven't seen one in a shop in over a year so I have no idea what the "real" price is.

[Hokkmike]

Places like Gander Mountain has a really high markup - they will list things at MSRP when other shops have a price over $100 less for the same thing.

True, but Gander DOES price match.

[Maropowered383]

My LGS adds $50 to whatever he pays for it, which always comes out as the best price from the other 2 gun shops around me.