Markup on guns and ammo

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  • Cole46845

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    Hey guys just curious anyone know how much profit is in selling guns say my local gun store has a glock for 550 and box of 45 for 32.99 what is his profit on average stuff like gun and annoying sales?
     

    96ramair

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    Jul 19, 2012
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    Not much dealer cost on a gen 4 is 480-490 and a gen 3 around 450. Then if they pay shipping then their overhead. Not much money to be made..
     

    Leo

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    It is real hard to determine markup due to there being no "set" wholesale price. Every firearm that comes in the door is affected by different prices of not only what distributor they used, but what the price was that day. If I would order 14 firearms and three are really slow movers from the distributor, there may be a lot better price from the distributor for the order. Plus, the shipping is cheaper on a per unit basis as the order gets bigger. (5 pistols in one box is cheaper that 5 pistols in 5 boxes)

    If the LGS wants to order a firearm that is so popular that they are back ordered, the wholesale price starts to get close enough to lick retail price. If the shop marks it up $30 the price gets to where people complain that the are "getting ripped off".

    With the current ammo shortages, the distributors are not making pricing deals, no matter how much you try to order. Simple reality is that if a place has ANY in stock, you pay that mans price, or the next customer will. Don't thing the middleman is not jacking up prices.
     

    Indy_Guy_77

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    Their markup all depends on their cost.

    Their cost depends upon their distributor's costs.

    There isn't a standard answer - other than to say, on new firearms, there isn't much markup at all due to the relatively high initial cost.

    (for instance, a mgr. at an Indy shop said on here the other day that $499 for a brand new M&P, as being offered to another INGO'er direct from S&W, was below wholesale)

    Imagine, then, paying $550 for a brand new M&P may seem like a lot, but the shop itself isn't making a whole lot of dough on the deal.

    -J-
     

    No2rdame

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    I believe Dons is about 300%

    Well, that's a lot better than what Cheaper Than Dirt marks their junk up to.

    But, on a serious note, from what others have said I don't think the LGS makes a huge profit on each gun sold by the time you factor in overhead. I would think a 10% markup is actually reasonable.
     

    aaron580

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    It seems ammo markup is more being determined by the dealer than the distributors, as cabelas, AIM, sportsmans guide, walmart, meijer, etc. are still having ammo at alomst normal to normal prices. I have a hard time believing that they are not marking up the ammo quite a bit since most shops marked up the ammo 100% or more when the panic started.
     

    Cole46845

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    Ok that makes a lot of sense. It seems like it would be expensive to have so much money tied up in inventory to only make 50 or so. Does the distributor make a nice size profit? What does it take to become the distributor?
     

    nra4ever

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    Well I know PSS is 10% on guns and probably 30 to 35% on everything else.

    If you do enough volume then you can make a living at 10% but 10% is generally way below retail mark up needed to make a living and keep your business going.
     

    Leo

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    It seems ammo markup is more being determined by the dealer than the distributors, as cabelas, AIM, sportsmans guide, walmart, meijer, etc. are still having ammo at alomst normal to normal prices. I have a hard time believing that they are not marking up the ammo quite a bit since most shops marked up the ammo 100% or more when the panic started.
    \

    I can see where you would make that assumption, but there is another factor that is not being considered.

    The big chains like Walmart do not buy ANYTHING through open market distributors, like your local gun shop. They have long term, high volume contracts that are signed way in advance, usually direct from the manufacturer, or importer.

    If you are trying to sell something to the big chains, they are right now dictating the terms of the contract for 2014 and 2015. They also stack the cards in their favor. I worked on a contract with Cabelas for well over 6 months and it looked like all go, then they changed their mind right before the first shipment. Supplying a big retail chain can be tough. Study the history of consumer merchandise manufacturers in America. Sears and Roebuck, inc, and Walmart eventually caused the shut down many of the manufacturers that got into exclusive contracts with them.
     
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    RLC

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    Always support your local gun shops before the big chains. If you don't they'll be gone. I've seen it first hand. They deserve our business. Unless you just like to drive hours to buy guns and ammo. Add to that the barrage of State and Federal regulations they have to comply with it's still a bargain. I've found the LGS to be more than fair, selling some guns for a small mark up only to have buyers come in buy 3 or 4 guns and list them on Guns America Or Gun Broker.
     

    CarmelHP

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    In a usual market, MSRP is usually set at about 30% above dealer cost. At the retail level, the dealer, in a usual market, can get away with pricing at about 10-15% above dealer cost, well below the MSRP. This is not a usual market right now so it's difficult to say. If you look at the dealer prices of the big distributors, and add 10-15% you can get a good idea of the counter price at you LGS.
     

    WebSnyper

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    Their markup all depends on their cost.

    Their cost depends upon their distributor's costs.

    There isn't a standard answer - other than to say, on new firearms, there isn't much markup at all due to the relatively high initial cost.

    (for instance, a mgr. at an Indy shop said on here the other day that $499 for a brand new M&P, as being offered to another INGO'er direct from S&W, was below wholesale)

    Imagine, then, paying $550 for a brand new M&P may seem like a lot, but the shop itself isn't making a whole lot of dough on the deal.

    -J-

    I thought the price mentioned in that thread was $419?

    https://www.indianagunowners.com/fo...d_off_the_glock_bandwagon-50.html#post4262959
     
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    Spike_351

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    what I think is funny is my fav lgs will tell me what he gave for it from his supplier, and if I don't like it then buy it somewhere else. He has a $1400 gun on his shelf and is only making $125 off of it. And on new S&W M&P 15 is $669 so I gotta give him credit and I won't ever complain about his mark ups.
     

    PistolBob

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    If 10% was all I could gross on a sale, I wouldn't bother getting out of bed. I would hope they are running at a gross profit of at least 20% to 25%....clothing stores get about 50-60% GP, jewelry can be over 200%...I would hope that a gun, a pure commodity item, would be able to go for at least a 20% gross profit. The real money is in used guns, like anything else...buy it right and sell it right.

    Not sure I could stand being in retail.
     

    CarmelHP

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    If 10% was all I could gross on a sale, I wouldn't bother getting out of bed. I would hope they are running at a gross profit of at least 20% to 25%....clothing stores get about 50-60% GP, jewelry can be over 200%...I would hope that a gun, a pure commodity item, would be able to go for at least a 20% gross profit. The real money is in used guns, like anything else...buy it right and sell it right.

    Not sure I could stand being in retail.

    That's right. New guns are loss leaders. The rule of thumb always was 50-65% gross margins on sales. Gun stores are operating at slim margins. Ammo is usually better but mail order cuts into it. Used guns, gunsmithing, hunting clothing and supplies and range facilities are where most money is made.
     
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