Gun Store Question

Question
Hello,
I am interested in possibly starting a gun store in the St. louis area, and I am wondering if the gun retail industry is a profitable one. Do you know what type of margin a gun retailer could expect to apply? I understand that this question is fairly off-topic, but I am having a hard time finding a subject area that fits this question more closely.

Thank you,
Andy

Answer
Andy,

In general, the best place I'd suggest that you check is the National Shooting Sports Foundation.  They are an industry association for shooting sports retailers of all types and can probably provide you with some information on opening a gun store.  Their website is www.nssf.org

A lot can depend on what type of emphasis you are going to have in your store.  Will you cater to hunters?  Law enforcement?  In my experience, margins for firearms are not that great.  There are a lot of large sporting goods stores like Cabelas that use their size and buying power to get good deals on guns that they pass along to the consumer.

The size of community and the number of other stores selling firearms will also have an impact on what you can charge.  In general, I'd say that the primary margins come from sales of things other than guns (holsters, ammo, cleaning supplies, hunter attire, flashlights, knives, etc).

Check with the NSSF.  They also sponsor the largest national trade show for the shooting sports industry...the Shot Show.  All of the vendors of items for the shooting sports industry are there to demo and sell their goods to dealers.  They also have lots of seminars at the Shot Show oriented to firearms retailers.

Finally, you should understand that you can just 'open' a gun store.  You must be approved by the Bureau of Alcohol, Tobacco and Firearms as a licensed firearms dealer or FFL.  That process requires a good deal of paperwork and a background check.  There are some physical requirements that your store must meet in terms of security as well.

You might want to check out the BATF website for more information regarding becoming a federally licensed firearms dealer..

That should give you some stuff to get you started...good luck on your research.

Best regards,

Doug