Gun store startup questions

[junglerogue]

This is directed to all those who have started their own gun stores in the past:
I recently moved to El Paso and have been sorely disappointed with the available inventory of the local stores. On top of that, FFL's want to charge $25 for transfers. My questions are as follow:
- Would you do it again?
- How much startup did you need?
- What are the pros/cons to high inventory?
- How long do you project it will take to break even?
- Do manufacturers cut you significant breaks for carrying complete lines?
- Any manufacturers more willing to work with smaller shops?
- Can you share your business plans without divulging proprietary info?
- Tips, pointers, and misc.
The market seems ripe being right next to a military base, the only real competition would be the PX due to no sales tax (8.25%). However they have no after sales support and carry limited stock/brands (Taurus, Springfield and Glock). Local stores carry maybe two cases worth of weapons. I'm not sure if it's the proximity to Juarez or recent actions against some unsavory dealers.
Thanks in advance,
Junglerogue

 

[Leo]

Have you ever been in business, rasied your own venture capital, done a market study, etc.? No offense, but you seem to not have a lot of information. By the way, It is pretty tough for a new, small business to deal directly with the manufacturers, there is an established system of distributors. Zoning and Insurance are very large hurdles in firearms businesses. I would take some business planning classes and some SBA courses at a local college as a place to learn to develop each part of your business. Also, if you have a brick and mortar store in a business district, between the time and the required FFL licensing costs, $25 for a transfer is really not a high profit charge.

All that said, if a gun store is your dream, keep pushing forward to pursue it. It may take several years to put it all together, but time spent in planning is infinitely wiser that time spent paying off the debt of a failed business. Good Luck!

 

[sepe]

$25 for a transfer is pretty good for what I've seen locally.

I've been talking to a few people about doing this and my thoughts have been to try to start as an internet dealer (with transfers and special order local sales) or to have a fairly small shop with a good deal of used along with fairly typical brands of firearms and long guns that Walmart doesn't carry along with EBRs that I know could be sold at lower prices than many of the local shops (also carry shotguns that many of the locals don't carry/have outrageous prices for special order and Walmart won't carry or special order). Even having been in business (basically a traveling surplus shop) and having 2 semesters left in a business program @ IU, there are many questions I've not been able to answer quite yet.

My plans for a shop would be a few years out and I'd be wanting a location that wasn't within city limits (wanting to get a house with land and work a few years to have some $$$ put back). I'd be looking to start a shop on my property as a way to keep the property costs down (rent or a lease). As far as SBA courses, that is a great option but not something that is "needed". You can contact a local small business group that has mentors (they'll have people that know all aspects of business and can help with marketing, writing a business plan, ideas for staffing (coaching on interviewing skills), and just about anything else you can think of).

I agree that if it is your dream, pursue it but have a backup plan as new small businesses don't have a great success rate. Figure out a way to supplement firearms sales, I was thinking about getting back into the surplus business as a way to maximize profits because I know roughly what I can buy and the prices as well as the prices I can list and have no issues with sales.

Unless you have start up money, you're going to have to come up with a pretty solid business plan.

A really good place to start would be talking to owners of small shops if you can find someone that is willing to talk and actually knows what they're talking about regarding the business (many of the small shops I've been to started because the person was interested in guns but knew nothing of the business side of things so they're struggling and learning as they go...means very little in the way of answers). You could check out El Paso District Office | SBA.gov, go to resources and they have a link for finding a mentor. Attend workshops and meetings they have and try to absorb everything you can. Remember, the mentor doesn't HAVE to know the firearms business to be someone that will help a great deal (in addition to their knowledge, they may have contacts with someone that knows the specifics).

 

[ZombieApocolypse]

Open a gun shop in Washington D.C. .... theres only one shop doing transfers and they charge $150 ... youd make a killing!

 

[sepe]

Even with the ability to charge outrageous prices, living in the DC area would make it not worth it.

 

[junglerogue]

Thanks for the feedback guys! I guess I'm still in the researching phase, and wanting to make an educated decision. I'm just fed up with the lack of choice. Here's another question, what is involved with being an FFL dealer? Is there a profit being such a small middleman? Do I have to sell so much inventory? What is the minimum that I would need to be a licensed FFL?
Sepe, it looks like my plans would resemble yours in a roundabout way. I just got back from San Antonio, where I had to go to find a reliable gunsmith. None here in El Paso. There is a definite "need" here. Any other ideas/suggestions would be greatly appreciated!
Junglerogue

 

[LionWeight]

Even with the ability to charge outrageous prices, living in the DC area would make it not worth it.

Besides, the big crooks in D.C. don't use firearms to rob people. They use pens.

 

[ikky68]

If you start up a gun store, you may want to consider a shooting range as well.

There's money to be made in firearms training too. I know one guy that provides training. He's retired and does it for fun and some (minor) profit.

So if you start up the the shop, the range, and training you can determine what your public wants/needs and adjust into that business. Instead of what you want to do and then hoping you can fill in a niche.

Just my

 

[sepe]

Thanks for the feedback guys! I guess I'm still in the researching phase, and wanting to make an educated decision. I'm just fed up with the lack of choice. Here's another question, what is involved with being an FFL dealer? Is there a profit being such a small middleman? Do I have to sell so much inventory? What is the minimum that I would need to be a licensed FFL?
Sepe, it looks like my plans would resemble yours in a roundabout way. I just got back from San Antonio, where I had to go to find a reliable gunsmith. None here in El Paso. There is a definite "need" here. Any other ideas/suggestions would be greatly appreciated!
Junglerogue

Profits on new guns won't be all that big. You'll do better profit-wise off of used. Services and accessories will be another area to find profit.

There is a phone number in the link that will have any technical questions about requirements as far as licensing.

ATF Online - Firearms - How To - Become An FFL

ATF Online - Firearms - Frequently Asked Questions - Conduct of Business (Licensees)

ATF Online - Firearms - Frequently Asked Questions - Licensing