Believe it. When I worked in a shop 20% on new guns was normal. Gun shops don't make money selling guns. They sell guns to get people in the store to buy things with higher profit margins, like clothing and accessories.
Curious about mark-up prices
- Thread starter gbclarkson
- Start date
Aguila Blanca
Staff
And if the markup is 20 percent, that doesn't come close to explaining the price drop in the original post. If a Bersa was selling for $400 a few years ago, at a 20 percent markup that means the gun store was paying $333. If they were selling guns that cost them $333 for $250 ... they wouldn't be in business for long.
So the crux of the question isn't the markup. Bersa has apparently achieved sufficient sales volume that the economies of scale allow them to sell the guns for less than they used to.
So the crux of the question isn't the markup. Bersa has apparently achieved sufficient sales volume that the economies of scale allow them to sell the guns for less than they used to.
Wholesaler
I am a wholesale guy by trade. Dealers buy product from me to resell.
First off we need to consider the GPM, that's the gross profit. The dealer discount varies by manufacturer. Some manufacturer's publish retail pricing, some others do not.
I don't "do" consumer goods. In the case of consumer goods invariably the manufacturer does publish a retail price.
In many cases that published retail price may be a fantasy. It is typically what the dealer discount is based upon.
The consumer sets what I and many others refer to as the "street price" IE: what the product actually sells for at "retail"
The dealer discount might be 40-50 percent off the list price. That does not mean much when the street price is far lower than the list or retail price.
Can't make a level playing field, like many small dealers "wish for" since the golden rule always applies.
He who has the gold, makes the rules.
Bud's or CTD will get a better price wholesale, their wholesale representative will discount further based on volume. Perhaps an extra 5 or 10 percent. They have the "gold" to buy 100 of that model. and price it to the consumer based on that Addl. discount. Thus the street price that the mom and pop can't match.
Mom and pop will focus on all the things the above retailers can't or won't. Service and accessories of course.
Computer hardware is similar, no margin in the hardware, the sellers make their money setting them up and maintaining them. Most don't really care where you buy the hardware as long as it's good quality.
I am a wholesale guy by trade. Dealers buy product from me to resell.
First off we need to consider the GPM, that's the gross profit. The dealer discount varies by manufacturer. Some manufacturer's publish retail pricing, some others do not.
I don't "do" consumer goods. In the case of consumer goods invariably the manufacturer does publish a retail price.
In many cases that published retail price may be a fantasy. It is typically what the dealer discount is based upon.
The consumer sets what I and many others refer to as the "street price" IE: what the product actually sells for at "retail"
The dealer discount might be 40-50 percent off the list price. That does not mean much when the street price is far lower than the list or retail price.
Can't make a level playing field, like many small dealers "wish for" since the golden rule always applies.
He who has the gold, makes the rules.
Bud's or CTD will get a better price wholesale, their wholesale representative will discount further based on volume. Perhaps an extra 5 or 10 percent. They have the "gold" to buy 100 of that model. and price it to the consumer based on that Addl. discount. Thus the street price that the mom and pop can't match.
Mom and pop will focus on all the things the above retailers can't or won't. Service and accessories of course.
Computer hardware is similar, no margin in the hardware, the sellers make their money setting them up and maintaining them. Most don't really care where you buy the hardware as long as it's good quality.
Controlling fixed costs(labor, rent, insurance, etc), aggressively attacking their 'target market(not try to be everything to everybody), and customer service..soft goods, accessories, LGS specifics, service and even 'free' advice. Go into a LGS, get a really friendly, informative and accurate conversation from somebody...and lots will have a tendency to return and buy there, even if the $ is higher..Some won't..talk a LGS person's ear off then go buy online..price of biz these days..(don't be one of 'those' guys
)I owned a bicycle shop for almost 15 years..small, personal, very successful...the goals and specifics of retail is the same regardless of what ya sell.
Don't compete with 'them', make them compete with you.'