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Old 05-16-2012, 06:39 AM   #1
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Default credit and distributors

I have two little questions about distributors.
You see, I'm new to this, on my way to an FFL, and my business plan is to sell firearms to customers on an as ordered basis from my home, taking a profit of $10 off of each gun sold.

My only competition is Wally world, so we'll see how tough that is.

I'm terrified of credit card, and equally afraid of debt. Do firearm distributors accept money orders for purchases?
I know it sounds foolish, but I'd like to avoid credit cards and debit cards as much as possible.

Also, it seems many distributors will not deal with you unless you rent a space, have a store front and are in the yellow pages. I home business simply can't do that.

Can anyone recommend a distributor, or a list of them, that is okay with the little man?

Thank you.

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Old 05-16-2012, 08:03 AM   #2
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As to price, what you mark up is up to you. As credit cards, they're a necessary evil. I use Square right now as there is no monthly service fee. I quote a cash price and tell the client that if he/she wants to use plastic, there will be a service fee for credit. Many small guys do this. Nobody has complained. I'm looking into Intuit's new service which is exactly like Square, smartphone based, as they have no issue with firearm businesses while technically Square does. You will lose clients not accepting plastic.

As to distributors, I was in the same boat. I found several that offer cash sales through check fax or ach debiting and deal with the small guys. They are;
Zanders
Williams Shooting Supply
MGE Wholesale
Lipseys
Shirk Supply
Grice Wholesale
Southern Ohio Gun
RSR Group
Davidsons

Basically, all they'll ask for is your FFL, sales tax license, and bank account info for those that do check fax or direct debiting. You will have to fill out an application and some can be done online. Others need faxed. A couple don't offer either and you have to mail them a money order or pay 3% to use plastic.

So do two things now. One, open a business checking account with a debit card. You can get free business basic accounts at some banks. Next, get a fax machine. You will need it. I already had a multifunction printer that does stand alone faxing. Made my life much easier especially with fax checking and dealer to dealer transactions where you have to share FFL info.

Anything else, just ask away.

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Old 05-16-2012, 03:05 PM   #3
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If you're planning on only making $10 profit on each transaction you're wasting your time. It's not worth it to even do a transfer for that amount. You do not need to accept credit cards, your customers can pay by cash or check. It's possible some will want to pay by credit card only though so you may lose a little business there. Through the years it has never been a problem for me. I won't be bothered with them. You do not need a business bank account. When signing on with distributors set things up as cash accounts. Many you can pay with fax check and they'll pull directly from your personal account. In some instances you'll want to prepay to avoid COD charges. In this case they'll accept bank/certified checks that are drawn from your personal account as well. You may want a business account, that's up to you.

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Old 05-16-2012, 03:34 PM   #4
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Quote:
Originally Posted by wjnfirearms View Post
As to price, what you mark up is up to you. As credit cards, they're a necessary evil. I use Square right now as there is no monthly service fee. I quote a cash price and tell the client that if he/she wants to use plastic, there will be a service fee for credit. Many small guys do this. Nobody has complained. I'm looking into Intuit's new service which is exactly like Square, smartphone based, as they have no issue with firearm businesses while technically Square does. You will lose clients not accepting plastic.

As to distributors, I was in the same boat. I found several that offer cash sales through check fax or ach debiting and deal with the small guys. They are;
Zanders
Williams Shooting Supply
MGE Wholesale
Lipseys
Shirk Supply
Grice Wholesale
Southern Ohio Gun
RSR Group
Davidsons

Basically, all they'll ask for is your FFL, sales tax license, and bank account info for those that do check fax or direct debiting. You will have to fill out an application and some can be done online. Others need faxed. A couple don't offer either and you have to mail them a money order or pay 3% to use plastic.

So do two things now. One, open a business checking account with a debit card. You can get free business basic accounts at some banks. Next, get a fax machine. You will need it. I already had a multifunction printer that does stand alone faxing. Made my life much easier especially with fax checking and dealer to dealer transactions where you have to share FFL info.

Anything else, just ask away.
How do you like Square? Has it been reliable, etc?
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Old 05-16-2012, 03:39 PM   #5
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I'm gonna side with wjn on this one. With a home based setup you will need to work with cards. I've seen guys come in ,say they want a gun, find out they can't use the card, say they are going to get cash and never come back. We just got a card machine and business has picked up. The traffic hasn't changed It's just the difference of convenience.

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Old 05-16-2012, 04:07 PM   #6
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Mountain, who is your merchant account holder? I'm looking for one now.

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Old 05-16-2012, 04:12 PM   #7
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Idk I'd have to ask. I'll shoot an email over.

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Old 05-16-2012, 04:16 PM   #8
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Thanks, I appreciate it.

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Old 05-16-2012, 04:17 PM   #9
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No problem

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Old 05-16-2012, 08:33 PM   #10
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I've had no problems with Square at all. It's reliable and secure. The only reason I'm looking into Intuit is that Square states they don't want firearm businesses, but they approved me and haven't said anything.

The regular merchant services charge you a monthly service fee and some charge for statements along with the cost of the machine to process cards. Some offer free machines but get their money on the fees instead charging higher rates. I used to have one and got fed up with paying the service fee when I didn't have any credit sales. Yes, it's tax deductable as a cost of doing business and was only paying $10/month, but you still have to pay it out on the front end. I don't do enough credit sales now to justify putting the fees out of pocket.

I do agree with the $10 profit margin. I've cut my profits to make a sale at times, as have other small guys, but never for $10. I look at what guns are selling for on average at the local brick & mortar stores, not the chain ones either, and gauge my prices accordingly to the local market. I've managed to be competitive as a result and often lower.

Also, as you will see after you set up with distributors, the pricing to you will vary from distributor to distributor. I don't quote a price until I know who has what someone wants and how much it will cost me. Out of my list, I've found Zanders and Williams the most cost friendly and Lipseys the most expensive. MGE rates better also. You will start to get sale fliers from some and there will be unadvertised sales come up too. Don't forget that they all charge shipping ranging from $15 per unit to $25. You have to figure that in to the cost of the gun to the client.

With the market being as active and volatile as it is, inventory is an issue right now. Don't commit to a sale until you know that the gun you want for someone is actually in stock somewhere. This is becoming an issue. The manufacturers will not commit to shipping dates for any guns to distrubutors and haven't for a long while now. This creates delivery problems that trickle down to the retailer fast. If nobody has a particular gun in stock that someone wants, which is happening with increasing frequency, don't bother calling the manufacturers. I tried a couple times and got nowhere on when they might be getting orders filled to my distributors.

There ends up being a bit more involved with retailing in our industry than one may think to do it right even on the hobby scale that I am on right now and you are starting into. It's good that you are asking questions and that we are willing to be forthcoming with answers. One thing that has helped me is that I'm not afraid to approach the local guys that I have come to know personally and set up a network. Once, I needed a Walther for someone that had cash in hand and nobody had any in stock. I got one from a local shop at a discount, figured my margin and made the sale. He made a bit still on selling me the PPK discounted, I made a bit on resale, and my client was happy. Developing the client base is important to guys like us and sometimes it's better to make less and make the sale than to turn him away all together. I have several repeat customers as a result of my practices and the willingness to make less at times to that goal. It also comes back in referrals because you treated someone well both service wise and on price. Going the extra mile pays off. I had someone that I knew called me with a question about a problem he had with a shotgun that he already posessed. His older Mossberg cracked the receiver and he didn't know how to approach the issue. I told him to package the gun up for shipping and to get it to me. If he would pay shipping, I'd ship it to Mossberg and see what they could do about it. I told him that it might be better if a dealer did it even though he could on his own. End result was that they replaced his gun for free, I looked good for my efforts, and he bought stuff from me as a result later. All it cost me was the time to take the package to be shipped and I was able to do it in the course of other travels so I didn't even use extra fuel to do it. It's stuff like that that helps to establish us little fish in the big sea that we become a part of.

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