Thanks for the feedback.
Typically the issue with consignment is the haggle with the interested party and the expected payout from the owner. So, lets go with a 25% margin then.
A $1000 gun payout is now $750 to the owner and the store gets what it gets.
How does that sound?
I think that is still a little bit high, but it is your business and therefore your decision.
I didn't mean to sound so harsh earlier. It was just my initial reaction.
When I worked behind the counter, many eons ago, consignments were a double edged sword. You had some that were priced correctly and they got moved. Others wanted too much for them and they just sat there forever.
The way I look it is as follows. Every spot in the glass case and every slot in the rifle rack is a piece of real estate. You can put an item in there and the hope is you'll sell it and make a few bucks off of it. What you put there is a tough decision. You can either:
1. Put something in there that is in demand and priced to move. So you're turning over that spot often but at a small margin.
2. Put something in there that is in demand that is priced as high as you think you can get away with. It won't sell quickly but you'll make a nice profit on it.
What are other shops in the area doing that makes them profitable? Fuquay Gun is undeniably profitable. They price their stuff reasonably and they have a very large selection. Their goal, as best I can tell, is to move things and have a lot of activity. I used to work at a shop that priced things a bit high and though we did sell a bit here and there, our volume was significantly lower than a place like Fuquay even when we both had about the same square footage / space.
The place I used to work is out of business. Fuquay Gun is not.
If I had a gun shop and wanted to deal with consignments along with my other stock, I'd establish the following rules:
1. If the item is used and the customer wants to sell it too close to the price of a new one, I would refuse to take the item on the grounds that it will sit there forever. That has to happen up front. It is also dependent on the item. For example, a Shadow Systems is a nice pistol but they depreciate more than a Glock, so a set percentage approach isn't going to work with that item. This method isn't easy because you have to either a) know all of this off the top of your head or b) take a few minutes to figure it out while your customer is standing there. So be it.
2. Once the price has been established along with the percentage markup or dollar amount or whatever margin you're going to get as the shop, you have to track that somewhere. You can't put it on the tag because the shopper can see it. Therefore you have to have a master spreadsheet that is faithfully updated to track not just the margin but also the lowest price the customer selling the firearm will take. If you establish this up front, you won't have to call the seller and become a middle-man negotiator. That means you have to get the absolute bottom dollar amount the seller will accept.
This is why a lot of gun shops don't like working with consignments. It often involves you becoming a middle man on some sort of deal between two individuals. It is the tradeoff for having stock for which you don't have to carry the full cost.
Personally, I didn't mind consignments because, if priced right, they move just as well as any other guns in the case. You're not going to get rich off consignments and you also have to be willing to simply say "no" when a customer wants way too much for something. Being able to say no is the key. If you've got a certain clientele that frequents the shop and the mall ninja special is gonna look super weird sitting next to an LMT MARS Rifle, well, maybe that item isn't a good fit for the shop.
Everything is a tradeoff and that's a decision each business owner has to make when it comes to the type of shop they are trying to be. Trying to do a large volume is daunting given the fact that places like Palmetto State Armory exist. However, I was in Fuquay Gun the other day and bought a bunch of parts I could easily have gotten online. There was a guy in there young enough to be my son and he was buying used optics that I know for a fact could have been bought cheaper online. Some people just want to shop at a brick and mortar. Thank goodness that is still the case. Local shops are a treasure.
So is Eastwood Outfitters. I've been in there a few times and it is an excellent shop that I've recommended to others.
