doublegunshop.com - home Forums General Discussion DoubleGun BBS @ doublegunshop.com Gun Sale Gone Wrong

Ithacaman - Profit is the amount of your revenue that exceeds your expense. Profit here is calculated based on what you sell for. If you pay $50, sell for $100 (100% markup), your profit is $50 -- 50% of your revenue.

GregSy - So much for disdain of hairsplitting. Would you say your profit % is infinite? One could think of an infinite number of examples of selling something that supposedly cost nothing. I can't tell you how, but trust me that business/tax accounting rules cover them and yet preserve the definition of profit.

And your markup is 100%. Markup is gross profit dollars divided by cost dollars (GP$/C$).

Best,

Mike

If gunshops were as profitable as some of you think there would be a whole lot more of them. Instead there are fewer every year. The markup is very little on new firearms and the big retailers (mostly Walmart) can sell the cheaper guns that used to be the bread and butter of a gunshop for less than a small dealer can buy them. Likewise ammunition and some basic supplies and gear.

That leaves gunsmithing and higher priced and custom stuff for a decent profit, but even with used guns the average is still nowhere near the 40 to 50% of gross that other types of sporting goods get for regular retail sales.

Out of that the owner has to pay rent, utilities, insurance, licensing, salaries if he can afford to hire anyone, and a lot of other stuff. He has to live on what's left.

I considered going into the business. I decided it was a good way to make a small fortune .... If I started with a large fortune.

There are good and bad business men in every business the gun business is no different.If plan to go toe to toe with the big box stores you will lose.If you have a good acess to used guns that the sellers did not buy (widows and divorces) you can hit lots of doubles and while waiting for a big score's to come to you.
Its been said before here many times.
You don't make money on a gun when you sell it,you make your money when you buy it!

It really depends on what type of gun you are talking about when you talk about gaining or losing a certain percentage on a sale. For instance: if you have a Mossberg that you what to get rid of, and you pay someone $50.00 to take it off your hands? You've gained 100% on the sale. If you need anymore expert advice, please ask. But I don't come cheap.............Denny Crane

This is absolutely true, I swear it.

a) Percent profit is based on selling price, so the highest percent profit is indeed 100%. So if you got it for free and sold it for $200 you made 100% profit on the sale. If some one paid you $800 to take it off their hands and you sold it for $650,000 you still made 100% profit on the sale. Does it mean the two examples are equal in every way imaginable, no it does not, are they equal in percent profit made on the sale, yes. As another poster said you cannot be 110% pregnant, 100% is the max.

b) Sit down for this one, there is both gross profit and net profit. Gross profit doesn't take into account any associated costs of the business. So you buy two guns for $300 and sell them for $500 so your gross profit on the two sales is $200/$500 or 40% Gross profit. But it cost you $80 in gas, rent of the table at the gun show, and lunch, so your net profit is $200-$80 = $120 or $120/$500 = 24% Net Profit.

It's amazing that anyone makes any real money selling either new or used guns, it's best as a hobby business.

Ithacaman, think of it this way, you did make a 100% markup from your acquisition price, or another way to look at it you doubled your money on the deal. But by the actual accounting legal definition the % profit made on the sale is the percent of the selling price that the profit on the sale represents. Just as to keep order in firearms there is legal/standard definition of bore size, lands, grooves, etc so everyone can speak in the same terminology and understand what is being referred to, the same needs exists in accounting terminology so everyone stays on the same page.

It doesn't mean it was the "only" way to correctly define it at the time, there could have been many ways available, it simply means that it was THE way it "was" defined and is now the standard way to always compare apples to apples

Always remember and never forget: maximize return; minimize profit. Maybe it would help if we simply changed the wording from 100% profit to "all profit". That vernacular usage does very well to suggest that no part has been deducted from the pot O gold to pay for buying map to pot, digging it up, etc. Ya just looked down and there it was! Could be things were a lot easier in the days of the "five-fold increase".

jack