Cost of opening a gun store?

Discussion in 'XDTalk Chatter Box' started by Thefatgunner, Aug 11, 2010.

  1. Thefatgunner

    Thefatgunner XDTalk 1K Member

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    So my brother and I where talking today about the lack of a gun store in the Laveen, Az area. (except walmart if you want to count them)

    There is plenty of commecial property in the area, and the community has grown a lot. Generally I believe there is a market to be tapped into out here.

    With that said I am a poor college student, and wouldn't have the Monitary resources to pull off opening a store.

    But I have to ask how much does everyone think it would cost to open a small size shop?
    we're talking having maybe 40-60 new semi auto pistols, 20 wheel guns, 10 Ar-15's, 10 shot guns, 10 bolt action or semi auto rifles (10/22's, remington 700's ect) assorted ammo, some shirts, hats, gun cleaning stuff, holsters, magazines and a few other small things.

    I was thinking $250k, remember that they buy guns at a cheaper price than they sell for. anyway just wondered what everyone here thought it would cost.
     
  2. leverb66

    leverb66 XDTalk 100 Member

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    Having started a business myself (and needing to close it within 2 years). I can tell you that once you have figured out what you THINK it'll cost to open the store, mulitply that number by 4. There are always things that change, and having more money to start allows you the time to become established without making rushed/rash decisions. I'm sure others have been successfull on less, but I wouldn't start a business without a sizable cushion again.
     
  3. hayes01

    hayes01 XDTalk 1K Member

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    Depends...

    What does a FFL cost in your area (or in general)?

    What can you find for rent in a building?

    I actually think 250 sounds a little steep, but I have no real basis for this.
     
  4. Tyoung

    Tyoung XDTalk 100 Member Founding Member

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    I would make sure to have a years salary in the bank. That's a hard market to get into and make a profit. There isn't much money in guns sales.
     
  5. jaredshs

    jaredshs XDTalk 100 Member

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    I would also want to know how much fire-theft-liability insurance would cost on such
    a venture.
     
  6. Thefatgunner

    Thefatgunner XDTalk 1K Member

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    FFL is $200 + $90 for a renewal for a dealer.

    the great thing about the area is that commercial property is open, heck within a 2 mile area there are 5 properties that have ample area available to rent, for a small gun store. So if i went to guy #1 and he wanted $1000 a month, i'd go to guy #2 and say #1 wants $1000 what can you do? and I keep doing that till i get the lowest cost, in a place that I think will be good for business.

    250 doesn't sound steep to me, think about it i have to order 60 guns at an average of $400 (semi autos) 20 wheel guns @ $400, 10 Ar's at $1000, 10 shotguns @ $300, add in carrying mags for different guns, and holsters. not to mention the amount of ammo i'd have to order.

    add in the cost of advertising, maybe run a radio add, place a add in the paper, sponsor some IDPA/USPSA, maybe a free BBQ, it adds up.
     
  7. obieone

    obieone XDTalk 2K Member

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    Disclaimer: I am NOT, repeat NOT trying to pee in your cornflakes, but...

    There are a lot of other factors involved, so make sure you do a LOT of research.
    For exmple, just because there aren't any gun stores, does NOT mean there aren't a butt-load of FFL's in that area. You would possibly be competing against sites like Buds, Gunbroker, Auction Arms, etc.
    It IS the age of the internet, so, just something to think about.

    There are other things to think about as well, but I DO wish you the best of luck.
     
  8. df34adfe34

    df34adfe34 Guest

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    It's said that most small businesses fail because they're under capitalized. Supposedly you should have a plan to be able to pay all the expenses and your employees for three years (!) without making any profit, since it often takes that long to start turning a real profit.

    Also, the BATFE can be ruthless. They love shutting down gun stores for no reason over the smallest of so called infractions. You have to be careful.
     
  9. Thefatgunner

    Thefatgunner XDTalk 1K Member

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    Not sure. I know a small gun store has been open for years and hasn't been broken into since 1983.

    I'm sure it would be more than if you where to open a nail salon.


    NOTE: I am not opening a gun store, just wondered on how much people thought it would cost to open.
     
  10. Breadman03

    Breadman03 XDTalk 500 Member

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    120 guns * 400 per gun=48,000
    Figure on at least two glass display cases for the pistols, good lighting, flooring, safes, cash register, credit card processing, basic tools for mounting scopes and other accessories.
    I would think that 250k might open the doors, but I think you would need quite a bit more to operate it. Don't forget that people can dispute credit card charges or bounce checks, so you will have to be prepared for that.

    I would also find a respected local gunsmith and establish a relationship with him or her so that you have a reliable source of gun repairs that may not go to a factory.

    I would plan on having at least one year of living expenses set aside to allow time for the store to become profitable.

    My LGS is about 45 minutes away, so I have also considered the possibility of opening my own shop, and I wish you luck in your potential endeavor.

    P.S.-my opinion and a dollar would almost score coffee at McDonalds, to take it for what it's worth.
     
  11. hayes01

    hayes01 XDTalk 1K Member

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    Do you know this for sure or are you guessing? Is this local or federal?
     
  12. Thefatgunner

    Thefatgunner XDTalk 1K Member

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    I just called the ATF the guy told me $200 to apply, and that covers 3 years and then its $90 for every 3 years after that, subject to change though.
     
  13. rayikeo2

    rayikeo2 XDTalk 4K Member

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    Don't forget to consider the hidden costs: Security system, liability insurance, bars for the windows, display fixtures, gun locks, inventory, theft, wages for help plus all the taxes, social security and benefits involved in keeping employees. bookkeeping exp, rent, utilities, and the list goes on and on. If you know a store doing well as you said, ask them what it would take. Get it straight from the horses mouth. On the other hand you could start small, get your FFL and work out of your house on a pre-sold order basis. Sell customer orders and then get the gun and deliver it with no on hand inventory involved.
     
  14. Cannibul

    Cannibul XDTalk 5K Member Founding Member

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    One of the best ways to make a small fortune is to start with a large fortune and open a small business.

    I'm guessing you will need north of 500K just to open the doors.
     
  15. Rusty Shackelford

    Rusty Shackelford XDTalk 500 Member

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    Don't forget about things like build out - make sure it's meets ATF requirements before you do it.

    Also, think about your mark up. When I had my FFL, I could only mark up firearms about 5-10 percent because of competition. You'll think wholesale prices are great, until you see what they are. To get good price breaks, you'll need to buy volume.

    You'll make most of your money selling gun related items, so you might want to study up on what people buy - do they want reloading equipment? Hunting? What's missing from your area? Used guns? Holsters? Ammo? Guys will come in and argue over a nickel on a gun, then they'll pay you double for magazines without batting an eye - just because it's convenient.

    Visit the Shot Show and talk to some vendors before you jump in. Find out what the minimum orders are for things. The number one problem that new businesses have is that they are undercapitalized.

    Spend some $$$ and sit down with a lawyer to talk about things. The best money I ever spent was $2000 to have an attorney evaluate a restaurant franchise. I took his list of questions when I met the CEO, and lets just say he didn't like them. I found out later that the company was underestimating costs, bringing franchisees in and then taking over when the franchisee went belly up.
     

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