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Customary Consignment Percentage

Discussion in 'Shooting Related Threads' started by coveybuster, Apr 5, 2010.

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  1. coveybuster

    coveybuster Member

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    In your experiences, what is the percentage dealers will charge to sell a gun on consignment? Thanks. MAC
     
  2. stokinpls

    stokinpls Well-Known Member

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  3. bridgetoofar

    bridgetoofar TS Member

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  4. Barrelbulge(Fl)

    Barrelbulge(Fl) Well-Known Member

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    20% around Pittsburgh.
     
  5. ysr_racer

    ysr_racer TS Member

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    20% in So Cal too. Free here.
     
  6. KEYBEAR

    KEYBEAR Active Member

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    And I was thinking my local gun shop was high at 10% .

    The only thing that gets me is at 10% a 500 dollar gets the shop 50 bucks . But a 5,000 dollar gets them 500 and takes up the same space ?
     
  7. BDodd

    BDodd TS Member

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    Recent inquiries, while expecting 10%, I got told 20% was the rule any more.....breakemall.....Bob Dodd
     
  8. ysr_racer

    ysr_racer TS Member

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    >>Most shops run an overhead of 14% to 17%..at 20% they make a true 3% after costs of running the business...

    How is there any overhead in a gun I paid for and they have nothing in?
     
  9. coveybuster

    coveybuster Member

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    I must be woefully naive about this process. Dealers chime in and teach me something. I thought 15% would be outrageously high. What does the shop have to do for their percentage; paperwork, a couple phone calls? I realize they have expense in their FFL, light bills, insurance, etc., but they would have that regardless if they were selling my gun or not.

    What we are paying for is the use of their FFL, and the greater exposure to a exclusive buying public. What is that worth? 20% I guess! Seems high to me. Do dealers make 20% on selling a gun through Davidson's? They don't have any front money in that gun (just like mine). They handle the paperwork (just like mine). They deliver the gun (just like mine).

    What am I missing here? MAC
     
  10. chuckles

    chuckles Member

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    Dealers and Traders have expertise, contacts, connections, know how, gun knowledge, etc, etc...

    If they can sell your gun for you at a fair price they deserve every penny of 20%....

    If you feel it is unfair then sell it yourself...

    Otherwise consider yourself no longer "woefully naive"....

    regards
     
  11. likes-to-shoot

    likes-to-shoot Well-Known Member

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    You are using their business, their customer base,their insurance, their ffl and their time to answer questions about your item and you want them to sell your item for free. lol

    The whole idea of owning a business is to make a profit to earn a living but yet you think your items should be displayed and sold by someone else for little or nothing. What about your wages? Don't you think some one thinks they are to high? Is that different because its you making a living for your family? Bottom line is if you feel its too high, pay for ads in the paper and sit at home waiting for the customers to come flocking in.
     
  12. mixer

    mixer Active Member

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    Would a flat fee be better, say $100 per gun? Just wondering.

    Eric
     
  13. JTEA

    JTEA Member

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    I was going add what skeet2day and likes-to-shoot wrote. They also forgot to mention TAXES and more TAXES on their list. How about the time spent keeping track of and paying them? If you have a manufacturing business, add all the replacement equipment due to OSHA. Graze the cord on a power tool or extension cord - out it goes for repair or replacement.

    Ever wonder why fine art is expensive? The commission (really the same as your consignment) is now commonly 40%; sometimes 50%. Not too long ago it was 1/3. If a foundry is involved that's also typically 1/3 of the cost.

    JT
     
  14. phirel

    phirel TS Member

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    A 20% gross profit sounds very high to anyone not operating a business. A 20% gross profit seems very low to anyone operating a business. A 20% gross profit for a retailer would be reduced to probably less than a 5% net profit. Selling a $500 gun at a 5% net profit puts around $25 in the dealers pocket. He had better sell a lot of them to stay in business.

    Pat Ireland
     
  15. W.P.T.

    W.P.T. TS Member

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    15% at the dealers I deal with here in Arizona ... WPT ... (YAC) ...
     
  16. ou.3200

    ou.3200 Active Member

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    A dealer is going to have overhead regardless of whether he has guns on consignment or not. He has no money tied up in the consignment guns whereas he most likely has to buy the other inventory in his store. I would think that having consignment guns, especially quality guns that are not in current production, would increase the traffic in the store. If the dealer can get 20-30% more than the individual can get selling it privately the 20% commission is worth it. What percentage do dealers make on the new guns they sell?

    Independent retailers such as Sears are able to contract for appliances etc. at lower prices because the manufacturers cut them a break on the price to sell additional units over and above those they sell under their own brand names. That reduces the average overhead cost per unit manufactured and the same principle would apply to retail dealers. I would think that anything the dealer gets on consignment sales would be icing on the cake.
     
  17. Harv Shell

    Harv Shell Active Member

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    ou3200, think of the consignment gun as competition to what the dealer owns and sells. Do you see why he needs the markup now?
     
  18. sptnclays

    sptnclays Member

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    Anybody know what Jaqua's charges?
    For that consignment fee I would be willing to pay more that 10% if the dealer actually took a active part in selling the gun/advertising.
    Yes it is competition for his current stock that he had to pay something out of his pocket to get it on his floor but the more choices the better chance of a sale. Some money is better than no money.
    10% of a 1k beretta is a lot different than 10% of a high grade k gun.
     
  19. mixer

    mixer Active Member

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    Think of it as a sales tax.

    Eric
     
  20. trapshooteraa27aa

    trapshooteraa27aa Active Member

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    Being a basement rat gun dealer im glad to be able to operate at a lower cost. Able to give people a better chance at getting there stuff alittle cheaper and to be able to afford to shoot alittle more. I suggest you try to sell your stuff on here or on gunbroker where the fees are ALOT less then 20% to sell. That will give the non basement rat dealers more to gripe about.
    Chris
     
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