What is the typical mark up on a gun?

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caseman67

Inactive
I was wondering if anyone knows how much a handgun is typically marked up by a dealer? Is it 10%? 30%? If a gun retails for $800, would the dealer pay $500?

I work in the auto industry and we know what dealer cost is for all cars/trucks. Has anyone ever seen a dealer cost sheet for hand guns?
 
Interesting. But I wonder how much of that "profit" goes to overhead and salary? I do not think there would be a set mark-up on all guns. I would expect different brands/models would be able to command a bigger markup.

I am too lazy to look for it now, but there was a website that offered to help you with getting your FFL and it also had a list of dealer costs for guns and what retail was on them.
 
I don't know exact numbers, but I don't think it's as much as you assume. Add overhead and you can understand why they won't haggle that far down.
 
Typically less than 20%, but seldom less than 10%. A dealer can't make a living selling guns, hence "Sporting Goods" stores, where other items can be as much as 100%+ markup, especially clothing and shoes, and I've seen some items WAY over a 100% markup.
 
What is the typical mark up on a gun?
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I was wondering if anyone knows how much a handgun is typically marked up by a dealer?
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This is actually two different questions. There are very few dealers that do sufficient volume to deal directly with the manufactures. Most acquire there inventory from distributors. The costs the distributors get and charge vary by there volume and the popularity of an item. Hot selling items rarely get discounted much. The factory MSRP has little to do with the actual final cost.

The dealers I know usually charge 15% over cost. The price you pay is somewhat dependent on how good a shopper they are (what price they can get from the distributors).
 
A stores overhead, amount of net profit you want to make and market conditions will dictate what you will sell something for. Hence, low overhead(mom and pop operations) may yield you a better deal sometimes on a firearm they have had a while. Cabelas', Academy, have alot ways to get their desired profit margin. They have the buying power that mom and pop operations don't have. They can also take a hit on a particular firearm and make it up in apparel, shoes etc. Academy and Dicks also deal in volume like any other big box retailer.


But there is a trade off. You sometimes can get a better deal at a big box but the service after the sale is less than desired.

It pays to shop around with everything. You never know what kind of deal you will run into.:D
 
I was wondering if anyone knows how much a handgun is typically marked up by a dealer?
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Guns are typically sold for about 10% markup, more or less. It's hard to say how much individual shops mark up guns, because their cost depends a lot on the volume of guns they sell and how the popularity of a given gun on the market affects distributor pricing. Shops that sell lots of guns might make 15-20%, shops that move just a few guns might make nothing on the transfer. Most gun shops make their money on used guns (typical markup on used guns is 30-50%), accessories like cases, ammo, etc, and services such as gunsmithing, range fees, and the NICS fees. Owning and operating a gun shop is a labor of love, not a money-maker.

Distributors make about 30% on firearms, but they have a large up-front cash layout in their inventory and bonds, and security requirements for the warehouses, plus licensing barriers to keep competition at bay. Distributors do pretty well as a business.

If you want to know who makes all the money in the firearms industry, it's the government. 11% excise tax on all firearms and ammunition.
 
Only one example:
Two years ago while buying a SP101 my local dealer told me his cost was $325. He retailed them at $440. That's a 35% mark-up. Sportsmans Warehouse had then at $450.

Jim
 
The margins on new guns is real tight - and its between 10 and 20% for the most part. I have some good friends that are dealers.

I do have one dealer / if you are a good customer - buying 1 or 2 guns a year - he will sell to you around 10% over his cost on a new gun / but most everybody pays at a 20% margin. To go below a 20% margin ( after he pays labor, employment taxes, insurance, rent, utilities, etc ) ...he's making less than 3% net.
 
"If you want to know who makes all the money in the firearms industry, it's the government. 11% excise tax on all firearms and ammunition. "
+1
I hope at least some of that is earmarked for habitat/range management, but that's probably just wishful thinking and something I do not pretend to understand.

I worked in the outdoor industry for several years and the "mark-up" can vary greatly from one item to the next. Your greatest profit margins were with essentials like tent pegs and Nalgene bottles or well known, high volume brands such as The North Face or Columbia. As JBar put it the "goods". Typicaly the more the MSRP was on an item the smaller the profit margin. Lexan spoon, good. Canoe, bad. We were not a high volume store. A bit closer to mom and pop. Where we made up the difference was in service, fitting, tuning, fabrication and what-not. But I digress...

Around here, between Demming and El Paso, I hve seen firearms going from 10% above dealer cost to well above MSRP. Much of that has to do with the particular shop your in at the moment. So yes, it does pay to shop around. And when you do find that dealer you don't mind doing business with give them as much of your business as your pocketbook will allow. Sometimes just dealing with an friendly customer can net said customer a sweet discount.

When I do bristle at the sometimes high markups on a quality firearm I have to sheepishly shake my head when I remember that little red tag on the seat of my jeans probably meant 100% markup or more...and that was ON SALE!

-French
 
If I want a new gun, my FFL buys it from a distributor and sells it to me for 10% more than he paid. He keeps no little or inventory, and only orders a gun at his customers' request. If a customer wants a used gun, the cost depends on how much the FFL paid for it, and how much the FFL likes that person. :D

Regular gun dealers probably charge more because they have more overhead. You have to pay taxes on your inventory, pay employees, etc.

Few people run their own businesses, so few people have any idea of how little money business owners actually get to keep (AKA "profit"). All my customers think I bank every penny they give me.

BTW - years ago I worked at a womens clothing store. They doubled the price of everything and then added 10%. You think they made a big profit? NO! At the end of the year they were always stuck with boatloads of clothing which were out of style, and had to be discarded!
 
I wondered about this same thing last year when i purchased a XD45.

A stores overhead, amount of net profit you want to make and market conditions will dictate what you will sell something for. Hence, low overhead(mom and pop operations) may yield you a better deal sometimes on a firearm they have had a while. Cabelas', Academy, have alot ways to get their desired profit margin. They have the buying power that mom and pop operations don't have. They can also take a hit on a particular firearm and make it up in apparel, shoes etc.
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^^^ That is what i was expecting when i started shopping for my XD. I thought i would have to buy from the local Gander Mountain to get a decent price; i was wrong in my case. I called a local, non-chain hunting & fishing store and got a price that was exactly $100 more than what i paid. I found the 5" barreled model at a local non-chain sporting goods store for $570, but it was OD green, which i was hesitant about. I went down the street to the CROWDED Gander Mountain (chain store with lots of non-gun sporting goods) to see if i could find a more traditional color 5" XD45 and maybe a better price; the GM price was almost $100 more than the OD green XD at the non-chain sporting goods store, about $10-15 less than the hunting/fishing store that seemed more specialized. I went back to the non-chain store with the OD green XD and bought it. They were very helpful, and i think they threw in a 20 pack of hollowpoints (may have been on ticket, not 100% sure).

How that lil place beat the Gander Mountain price by almost $100 still escapes me, but i will be going back for more. :)
 
We strive for a 33% mark up. Some firearms less but our max is 33%. Pre-paid firearms orders on non-stocked items is 10% over cost since we risked nothing.
 
I can tell you the company I work part time for, which will go un-named, is at 30% profit on used guns and 35% on new.
 
The difference in the cost of handguns by region amazes me. Orangello paid $570 for a XD45. In my local store they are $419 NIB. I have 8 inches of snow outside but the firearm prices are good.

Beentown
 
The difference in the cost of handguns by region amazes me. Orangello paid $570 for a XD45. In my local store they are $419 NIB. I have 8 inches of snow outside but the firearm prices are good.
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$419 is a good deal!
 
As mentioned, remember the difference between mark-up and net profit. The dealer has to factor replacement cost into his pricing, overheads, taxes, insurances, etc. A 35% markup might yield 8% profit, which tends to be the "norm" among big corporations.
 
The shop I work part-time in adds the cost of shipping and tries to stay with a $50.00 mark-up on lower end new guns. Often if it is a slow mover that comes down to $25.00 just to move it. Upper end new guns when we can get them are marked-up to within $25.00-$50.00 of MSRP. Used guns are much more profitable, we could not stay in business if we depended upon new gun sales. Used guns coming in are generally valued at the 60-70% range and sold 80-90% range again, the more desireable models hold a high value. The difficulties of being a low volume new gun dealer is, you are pretty much at the mercy of your wholeseller. Often we are only offered excess inventory (slow movers for him) or odd ball stuff that is difficult to move. Seldom can we get our hands on the latest and greatest in demand guns as the big volume dealers get first pick. Not whinning thats just the way it is.:(
 
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