credit and distributors

Discussion in 'NFA/Class 3 & FFL Discussion' started by mattybock, May 16, 2012.

  1. mattybock

    mattybock New Member

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    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.
     
  2. wjnfirearms

    wjnfirearms New Member

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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.
     

  3. FFL01user

    FFL01user New Member

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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.
     
  4. silverado113

    silverado113 New Member

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    How do you like Square? Has it been reliable, etc?
     
  5. mountainman13

    mountainman13 New Member

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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.
     
  6. silverado113

    silverado113 New Member

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    Mountain, who is your merchant account holder? I'm looking for one now.
     
  7. mountainman13

    mountainman13 New Member

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    Idk I'd have to ask. I'll shoot an email over.
     
  8. silverado113

    silverado113 New Member

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    Thanks, I appreciate it.
     
  9. wjnfirearms

    wjnfirearms New Member

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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.
     
  10. mattybock

    mattybock New Member

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    Thanks to everyone for the information. I will be doing cash or check only, no credit.
    I may sound stubborn about it, but credit card fraud and firearms just scares me to no end, cash is real to me. Maybe it's just mental.
    I was not aware that merchants... are they the same as distributors... charge a monthly fee.
    Seems kind of like bad business to charge someone to do business with you and then make more profit on top of that!

    Even if it's but 10 bucks, money is money in this economy.:mad:

    I had a look at a distributor's web site and found that they had Mossberg 500's for $160 or so. The only local dealers about are Wally world, and a pawn shop.
    The pawn fellow had a last ditch arisaka... $130. Forgive him for he knows not what he does. A used and cut on Mossberg 500 was $350. Forgive him.
    Wally had 500s for $210. So I figure that I can undercut a good deal of Walmart's prices.
    Even with S+H, the price through me is still lower, so you know what?... I'm feeling good about this. :)

    Thanks to everyone for your help. I just got my finger prints in today, and had words with the chief of police about pricing for guns. Things are sunny side up!
     
  11. phoenixbob

    phoenixbob New Member

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    Waiting for my license to come in I have been slowly setting up my business. I looked at Costco’s merchant services because of their low rates. I contacted the company servicing for Costco and asked if they support business in the shooting sports arena? They quickly emailed me back a response containing the following
    “Good afternoon Bob,
    I received your question about supporting your type of business. You had asked “Do you support business in the shooting sports arena? “

    For most businesses the answer is yes, the exception is for Firearms, Ammunition and some accessories being sold through a website.”

    Well scratch them off the list.
     
  12. BenLuby

    BenLuby New Member

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    So...they support business in the shooting sports arena...unless there's firearms involved?
     
  13. mountainman13

    mountainman13 New Member

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    I finally got a response. He said just use your bank. Lol
    He's kind of a funny old vet. I sent him another email explaining your looking for a better setup. We'll see if he has any input.
     
  14. silverado113

    silverado113 New Member

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    Yeah I'm still waiting to see what rates my bank will offer. I'm also looking for a POS system or a cheap way to create a POS. Thanks, let him know I'm a retired Marine with too many bumps on the head...maybe that will help :D

    @wjnfirearms what POS setup do you have if you don't mind me asking?
     
  15. mountainman13

    mountainman13 New Member

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    I'll be in there Sunday. I'll see if I can get more info if he doesn't email me back.
     
  16. hiwall

    hiwall Well-Known Member

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    Starting out I would not bother with a POS system. It is not needed. You can use a simple cash register.
     
  17. silverado113

    silverado113 New Member

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    I was looking at one of those systems that hook up to an existing laptop but it seems there are a lot of mixed reviews on the software. Looks like I'm going cash register and merchant though.
     
  18. wjnfirearms

    wjnfirearms New Member

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    That's what I'd do, silverado. Keep it simple.

    I keep records as required on paper. I'm not going to spend for software with lower sales. Doesn't make sense to me. I use regular receipts from Staples and a rubber stamp for them I got through iprint.com. My merchant service costs me nothing unless I use it and having one smartphone based is good for if I ever expand to do shows. My wife keeps excellent books as she's qualified to do so and uses QuickBooks as we already have it for other things. I could use QuickBooks to print receipts, but it's easier just to do them long hand. Ok, I'm old school. Down the road, I'm going to have receipt books made with my info and logo on them. No rush now. My business cards I make on the computer and they look pretty nice if I do say so myself. Having a publishing program helps. I use it also to print fliers that I post around the area where I'm able to. I do pay for a hardline phone mostly for the fax machine, but I use it as the shop number also. As I use it frequently and the wife does also for her notary and land agent dealings, it is money well spent.

    The key when you're a hobby business is to keep it cheap, but accurate. You can write everything off that goes exclusively into your business, but first, you have to put out the money to get the stuff. It takes time to recoup those funds. Look at what you may already have that you can dovetail into the business to save you $$.

    Here's how I saved major money and still have a fully fuctional and asetically pleasing office. My counter that I have in the office to conduct business across I built out of a sliding wooden door and two wooden two drawer file cabinets that we already had. Turned out great and serves the purpose very well. It looks nice also. My desk speakerphone I bought at a garage sale. I bought the printers we use when I found them deeply discounted and shopped around until I found what suited our needs. The small glass showcase I have I got for free and the table it's mounted on, yes, a garage sale. Works just fine and looks good. Bulletin board, flea market. File cabinet, garage sale. Storage cupboards, flea market. Find the inner picker in you and see how well you can set up shop on the cheap.
     
  19. FFLMike

    FFLMike New Member

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    I also use Square. No problems. When I order a firearm for someone, I try to get 10%, but never below 5%. I use a credit card to order (I have to pay 2% and sometimes 3%, but it is usually cheaper than COD and much easier. Without being a stocking dealer its hard to get a line of credit. I do transfers for $20 and make almost as much as if I sell the gun without the liability. I was doing 8 to 10 a week, but we moved to Waco from Austin and I'm lucky to get 3 a week now. I am retired though and get great write offs so its ok.