Howdy guys, quick question
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Old 07-27-2011, 05:02 PM   #1
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Default Howdy guys, quick question

I've got this idea to buy kits, build'em, then sell'em. is this a good idea? bad idea? worthwhile? waste of time? where does the wind come from?
well, anyways, i'm lookin for info about this whole thing before i go gettin too excited about it. ya see, i went through the gun school and need to get my ears wet, and this seems like the perfect (and most fun) way of doin it, so any advice, en- or dis- couragement, or even wisdom about such things would be most appreciated. thanks much fellas!

p.s. i ain't lookin to make rich doin this, only gain the experience and not go broke doin it, if that has any bearing at all on things

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Old 07-27-2011, 05:20 PM   #2
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Couple of thoughts...you will most likely need a FFL-07 or a FFL-01 since you will be in the business of selling and manufacturing firearms. Insurance will also be expensive and required since you are the manufacturer and any liability for the product is most likely yours.

Aside from all that is the question of profit. Buying kits is not the most economical approach since the kit builder is already adding his markup. With an FFL you have access to individual or bulk parts at wholesale. A dozen receivers, barrels, bolts, etc is way more cost effective than assembled kits. Trick to low volume retail is getting as close to the manufacturer as possible so the profit is yours and your supplier doesn't get to set your prices. You are getting into a market with a median price point of about $800. If you can't do it for that and account for your time and material costs plus overhead and profit then you will lose money in the long run. Sorry for being so cut and dry but I evaluate capital investments for a living, it's a habit.

Whatever you choose keep us posted and best of luck.

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Old 07-27-2011, 05:38 PM   #3
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hey, cut and dry is what i need. better to hear the truth about these sorts of things.... so it sounds like before i ever get started i need to crunch numbers, shop about the place, eh? hmmm, the kits i was looking at were the traditions ones. should i just contact them straight out of the gate and figure out how much i can get'em for from them? if that ain't the case, i'm open to suggestions on where to start lookin, lest the oracle google lead me astray.

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Old 07-27-2011, 06:19 PM   #4
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First thing you need to figure out is what market you are going for. Anybody looking for, let's say an AR, can get one damn near anywhere they want. What makes you different? Are you going to do custom work, accurizIng, etc. Next thing is what can you sell it for and make money. Anybody can pay $650 for a bunch of parts and sell it for $500, you can sell a million of em that way right up until you run out of money. What is the cost of your inputs...what is your overhead, remember you will need to sell every gun at a price that exceeds what you paid in parts, the amount left over offsets overhead...after that you have profit. How many will you need to sell to breakeven? A little hypothical here...let's say insurance, licences and shop rental cost $20 grand. If every rifle sells for $700 and you have $600 in parts and labor invested you will have to sell 200 a year just to break even. Easiest way to get the costs down is with a FFL. No manufacturers like Aero, DPMS or YHM are going to deal with you in bulk with it. An FFL gets you dealer pricing on parts and guns, that's the path I personally would explore. Once you nail down some of the variables you will have a better sense of whether you can pull it off.

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Old 07-27-2011, 06:33 PM   #5
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Quote:
Originally Posted by Jpyle View Post
Couple of thoughts...you will most likely need a FFL-07 or a FFL-01 since you will be in the business of selling and manufacturing firearms.
Does this apply on black powder arms? They can ship to your home & not through an FFL.


OP, have you looked on some of the auction sites to see what BP stuff sells for? I would have to think you would need a hook-up on the kits to make enough to support the hobby. Price a kit at Dixie Gun Works & compare to Gunbroker to get an idea of the maximum potential profit without a hook-up. http://www.dixiegunworks.com/default.php?cPath=22_162_192
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Old 07-27-2011, 07:15 PM   #6
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No...don't think the FFL applies to BP. I was being very general and didn't catch any reference to it in the OP. Sorry if I added unnecessary confusion.

Doesn't really change the basic economics. Unless OP wants to retail the kit at MSRP and charge a flat rate for assembly he will need to purchase below street price.

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Old 07-27-2011, 07:24 PM   #7
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Quote:
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No...don't think the FFL applies to BP. I was being very general and didn't catch any reference to it in the OP.
Well it IS in the black powder forum.
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Old 07-27-2011, 07:28 PM   #8
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The price range between kits and the finished product wouldn't be worth your while. You can go the custom route and buy parts from somebody like Pecatonica River but their parts are top quality so your initial outlay per gun will probably be doubled from the standard kit. I know a guy that buys old rifles and then gets stock blanks. He builds a custom stock that's more period correct than the donor rifles and still sells them at a reasonable price but he just does it because he likes to. he says he doesn't really make any money off of it.

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Old 07-27-2011, 07:32 PM   #9
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well i do mean black powder, but no amount of information is ever too much. you're doin fine and i'm enjoyin readin these replies.

http://www.possibleshop.com/rifle-kit.html

these are the kits i have been eyeballin. like i said in the beginning i'm only hoping to break even monetarily since the experience is what i need. this is phase one of my grand scheme: experience. obviously from there i can decide where to go, and the answers here will be in my mind for that phase whence it happens. takin that all into account it seems like maybe buyin a kit or two here, puttin'em together and seein if they even sell would be a good starting point. i figure once i'm familiar enough with these things i can take on tougher projects or move into the field of repairing, so on and so forth. seem reasonable?

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Old 07-27-2011, 07:33 PM   #10
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oh! as i was typin hawg answered the questions!

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