Another thread got me thinking about this. So I know a guy who has an FFL and sells at local gunshows. He sells all his guns at $20 above cost. He will sell between 2-300 guns per show. He sells so much that certain shows have gotten complaints from the other vendors because he gets all the business. He has actually been asked not to return to that specific show because he sells too much. In many cases he undercuts other dealers by $100 or more. This guy moves a ton of volume.

I also know a store in Jamison PA, Tanner’s Sport Center, that has a similar model. They sell guns by the truckload. Counter is often 2-3 people deep. He buys so much distributors seek him out to unload product cheap which he then sells at below dealer cost. He buys guns in the 100’s per model at times. Tanners as a store and the owners are doing very well. Why don’t more dealers do this? I mean it is more work because you have to sell a lot but contrast that with store that charge at or just below MSRP who only sell 5-10 guns a day. Even if they are making $100-200 a gun these high volume dealers are still eating your lunch.

I walked into a store recently that was selling M&P Shield 2.0’s for $500. My buddy sells them for $310-319 depending on caliber. My range which is an nice range is bat shit crazy with their prices. They had one P210A they were selling for $1799. They currently have an HK P30L that’s used for $1300. It has an aftermarket threaded barrel which makes it “custom.” I just bought one for $569 new. Anyone who buys locally at these prices is either completely ignorant of the market or incredibly wealthy.

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Originally posted by Dusty78:
either completely ignorant of the market or incredibly wealthy.

The former.

And they all compete with the internet. Price in King!

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Anyone who buys locally at these prices is either completely ignorant of the market or incredibly wealthy.

I don't disagree but ain't Capitalism grand?
I don't have a problem with what the dealer is doing albeit I wouldn't be buying there.

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Originally posted by Bigboreshooter:
And they all compete with the internet. Price in King!

The two dealers in mentioned who sell volume often undercut the internet prices too.

lots of smaller dealers, esp the ones owned by some older folks, have not adopted modern business practices,

with the internet, esp folks like buds that sell cheap (they do not stock a lot of what they sell, they let the distributor stock it for them) it is hard for a brick and mortar store to start up,
and just as difficult if not harder for the established shops to stay open

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Originally posted by smschulz:

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Anyone who buys locally at these prices is either completely ignorant of the market or incredibly wealthy.

I don't disagree but ain't Capitalism grand?
I don't have a problem with what the dealer is doing albeit I wouldn't be buying there.

Sure but the only time I have taken exception to this is when I have witnessed dealers try and fleece old people for money. An elderly gentlemen was trying to trade in a like new unfired Sig Nickel 226 for something with a rail so he could mount a laser because he vision was getting worse. They offered him $300. I stepped in and offered him 3 times that. In the end he sold it to me for exactly what he paid for it when he bought new which was $700 or so. I offered him more but he declined it. This guy was on a fixed income and was in his 80’s. I’m sorry that just not right.

People like you've described, and the advent of the internet have completely ruined the profitability model of this industry. Making less than 10% on a complicated, high quality, manufactured item is asinine; but that is the world we live in.

More manufacturers are getting aggressive with their MTP and MAP policies, which is a welcome change. Retirees with a pension, one-lungers looking for beer money, and nerds with a laptop tied into a distributor feed need to all go away. Permanently.

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I also know a store in Jamison PA, Tanner’s Sport Center, that has a similar model. They sell guns by the truckload. Counter is often 2-3 people deep. He buys so much distributors seek him out to unload product cheap which he then sells at below dealer cost. He buys guns in the 100’s per model at times. Tanners as a store and the owners are doing very well.

Tanner's is freaking amazing with their use of social media as well. They constantly update their Facebook page with their insane sales. Their sales volume has to be astronomical.

If you guys out of the area have facebook, I seriously suggest following their page. They ship anywhere too. Super friendly service and always a great all around experience. Tanner's leaves any other gun shop experience in the dust.

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Originally posted by RAMIUS:

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I also know a store in Jamison PA, Tanner’s Sport Center, that has a similar model. They sell guns by the truckload. Counter is often 2-3 people deep. He buys so much distributors seek him out to unload product cheap which he then sells at below dealer cost. He buys guns in the 100’s per model at times. Tanners as a store and the owners are doing very well.

Tanner's is freaking amazing with their use of social media as well. They constantly update their Facebook page with their insane sales. Their sales volume has to be astronomical.

If you guys out of the area have facebook, I seriously suggest following their page. They ship anywhere too. Super friendly service and always a great all around experience. Tanner's leaves any other gun shop experience in the dust.

They also treat their employees incredibly well. They have a lot of the same guys working there now then they did when I first set foot in that store in 2007.

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Originally posted by Rev. A. J. Forsyth:
People like you've described, and the advent of the internet have completely ruined the profitability model of this industry. Making less than 10% on a complicated, high quality, manufactured item is asinine; but that is the world we live in.

More manufacturers are getting aggressive with their MTP and MAP policies, which is a welcome change. Retirees with a pension, one-lungers looking for beer money, and nerds with a laptop tied into a distributor feed need to all go away. Permanently.

So do greedy dealers trying to rape every new gun owner that walks through the door. Luckily the marketplace is already doing that. Most of the dealers that charge an arm and a dick don’t know shit about the guns they are selling. It would be a different story if you were getting some sort of actual insight and knowledge from the sales staff...but no not so much.

Not only are Tanners prices great but so is their customer service. Even though I live 1.5 hours away, I've bought many guns from them.

One time I was in picking up 2 pistols and was talking with the sales rep about how often they get in Gen2 Glock 19's. He said they just took one in trade and it would probably hit the floor tomorrow. He went back and grabbed it, a VG condition pistol with austrian proofs and brand new meprolight night sights. Price $275 if I recall correctly. I said something like "that sucks, I can't make it in tomorrow as its a 3 hour round trip for me". The sales rep knew I had purchased several other guns from them and was picking up 2 today so he went over to the owner Ray and told him I wanted the gun and that I was a good customer, Ray smiled and said "well sell him that one too then".

I currently have a deposit with them for the new P365.

Having helped a friend set-up and see shut-down of the lone gun store in San Francisco, there's a lot the gun industry does that tilts the tables. THere's two ways you can run a brick n'mortar store: High volume/low margin (walmart model) or, select product, great service, modest margins; is it better to buy the lowest price from a jerk or, be a repeat customer and pay $100 more but, get great customer service?

Most small independent stores are short on capitol and unable to carry a couple million dollars in firearms alone, thus they rely on distributors who eat up the margin from manufacturers. Stores that are able to carry a high volume of firearms are able to survive while the smaller shops either find alternative ways to make up margin (classes, service, peripheral sale merchandise, etc...) or, they plod-along not realizing they really shouldn't be in business.

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So do greedy dealers trying to rape every new gun owner that walks through the door.

I hear this a lot from people who have never run their own business. I suppose "rape" is subjective, but here's the best way to explain it.

If your overhead is $1,000 a month then you must make a $1,000 profit each month simply to break even. You can sell one item at $1,000 profit, or five items at a $200 profit.

If your overhead is $10,000 a month then you must make a $10,000 profit each month simply to break even. If you can only sell five of whatever it is you're selling, you have to sell them at a $2,000 profit vs the other guy's $200. In both cases neither is making any money, or raping anybody. They're both breaking even.

Want to know how much it cost me to run the internet side of my business? About $50 a month. Want to wager a guess at what it cost me to operate the "brick and mortar" side? I'll give you a clue: Significant difference.

So let's go back to your example. Your buddy who's a high volume, low margin dealer. He's selling a ton of guns and making all of this money. Assume another guy sets up next to him at the gun show and does the exact same thing. Wouldn't it be safe to assume that each would now be selling half as much? Is half as much worth it?

What if everybody did it? Now you have 50 dealers at the gun show selling at $20 over cost. Would the demand divided by 50 be enough for them all to remain in business?

In my industry, and I'm sure others, it's bad for business. It cheapens the perceived value of your product. As an example one of my suppliers sold product to a local clothing store that happens to also sell safes. One of my customers was up there buying some clothes for a hunting trip and saw these safes sitting there.

This customer owns several banks in the area. He was shopping some new equipment, and when that company's name came up he wouldn't even look at them. He said if they sell their stuff out of clothing stores it's not suitable for his banks.

I think the disconnect happens when you charge the high margins and don’t have good customer service. As mentioned above Tanners has both the lowest prices around and the best customer service. It can be done

a1abdj I see what you are saying and I did used to own 2 cellphone stores in NJ. I know all about overhead but I still never sold things above MSRP and I was an expert on every phone I sold. We cut into our commissions to discount phones and did very well. We built up a strong loyal base. I cashed out years ago but the business is still going strong even now in an age of internet sales where independent cellphone stores are generally a thing of the past. I do see your point on multiple dealers selling at low costs it would complicate things. I guess my point is that I’m this day inage where internet prices set the standard dealers who are willing to do what my buddy does are still few and far between. The market could bare a few more. Especially now where market is soft and gun stores are in jeopardy of going the way of the dodo. Innovate or die and lots of places are choosing death.

I've been in gun stores where heavily used Glocks were priced $100 over what you could get brand new ones for. That's ridiculous.

There's a third way. Sell at near minimum prices to get people in the door, then sell them services, particularly those that are hard to set up and inconvenient to transact over the internet. How would this translate to the gun business? Have an on-site range. Have rentals, have training classes. Have an armorer/gunsmith on staff who can do minor work while the customer waits (Ie, sell a gun and ugrade sights, and install them right away.) Keep prices close enough to internet minimums that customers will still buy (if maybe just a tad higher), but then upsell them services.

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Originally posted by corsair:
Having helped a friend set-up and see shut-down of the lone gun store in San Francisco, there's a lot the gun industry does that tilts the tables. THere's two ways you can run a brick n'mortar store: High volume/low margin (walmart model) or, select product, great service, modest margins; is it better to buy the lowest price from a jerk or, be a repeat customer and pay $100 more but, get great customer service?

Most small independent stores are short on capitol and unable to carry a couple million dollars in firearms alone, thus they rely on distributors who eat up the margin from manufacturers. Stores that are able to carry a high volume of firearms are able to survive while the smaller shops either find alternative ways to make up margin (classes, service, peripheral sale merchandise, etc...) or, they plod-along not realizing they really shouldn't be in business.

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Originally posted by BBMW:
There's a third way. Sell at near minimum prices to get people in the door, then sell them services, particularly those that are hard to set up and inconvenient to transact over the internet. How would this translate to the gun business? Have an on-site range. Have rentals, have training classes. Have an armorer/gunsmith on staff who can do minor work while the customer waits (Ie, sell a gun and ugrade sights, and install them right away.) Keep prices close enough to internet minimums that customers will still buy (if maybe just a tad higher), but then upsell them services.

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Originally posted by corsair:
Having helped a friend set-up and see shut-down of the lone gun store in San Francisco, there's a lot the gun industry does that tilts the tables. THere's two ways you can run a brick n'mortar store: High volume/low margin (walmart model) or, select product, great service, modest margins; is it better to buy the lowest price from a jerk or, be a repeat customer and pay $100 more but, get great customer service?

Most small independent stores are short on capitol and unable to carry a couple million dollars in firearms alone, thus they rely on distributors who eat up the margin from manufacturers. Stores that are able to carry a high volume of firearms are able to survive while the smaller shops either find alternative ways to make up margin (classes, service, peripheral sale merchandise, etc...) or, they plod-along not realizing they really shouldn't be in business.

Firearms will take up a vast majority of your inventory capitol, tying that up at a near loss-leader, would require a massive amount of non-firearm merchandise to make up for that short-fall, not to mention a consumer base that could appreciate service. In an age of e-tailing, self-service warehouse stores and bottom-feeding discount stores, most American consumers are in a race to find the bottom at the expense of everything else. Most shops are unwilling to do this given that many are cash poor. Pile on top of that the many are four-sided horror stories of (perceived) bad service, and bad visual merchandising standards. Ranges have an inherent advantage, to the owner it's a cash cow, however most don't want to deal with all the administrative issues of dealing with a fully developed retail operation and all that it entails.