Making Money By Breaking Even
Thinking beyond your next move is not only important in Chess but in Business as well. Often it can take 2-4 moves to come out ahead. The secret is breaking even during the first few moves so that you come out ahead in the end. A lot of what I cover is old hat to expert marketers, but for today’s firearm retailer, sometimes it doesn’t make sense. In this article I am going to cover how to make money while breaking even using online auctions and store inventory control.
We always here about the guy who sells guns 10% over cost, hey you might even be one of them. There is a want and desire to keep up with the competition, so your feeling compelled to do so—only it’s leaving you strapped for cash. I can tell you for a hard fact I have never met the man who did more than just get by selling 10% over cost. The greatest myth today is Wal-mart sales strategy. Here is the hard fact on that myth. Wal-Mart WILL NOT sell any items that don't have a 45%+ return. Their floor space is too valuable for slow moving low profit items. Well, we are going to put some cash in your hands and make money doing it. While that sounds reduntant its not there is a difference between cash in hand and real money in your pocket. This technique was employed by me and took me from 20 people a day on my website to 10 million a year. Let’s lay some ground work information about your store.
First we have to think to ourselves and for ourselves: What do my customers want? Why are they online looking for a gun? Three reasons have been repeated to me over the years: price of product locally, availability of product locally, terrible attitude of dealer who has the item in stock. While I was selling 6000 firearms a year online, I kept hearing these same three items over and over again. They were doing business with me because I solved all three.
Make your store a GUN STORE
First, we’ll look at price. Don’t let other retailers dictate your price. Trust me. They are only a click a way, and a race to the bottom on prices will get you added to my DDL (Dead Dealer List). In the price category I hear from all the retailers that Wal-Mart is killing them. But most retailers don’t realize that Wal-Mart doesn’t have the power to even dent you—if you set your inventory up properly. Wal-Mart doesn’t sell reloading supplies or didn't until we opened the market for them. This is an opportunity for you to fill the void. A great starter would be $500 worth of Hodgen Powders. Other components can be bought in bulk. I cruised the gun shows for someone who was making lead bullets. Buying in quantity from a small outfit gave me the best price and allowed me to use “MY OWN LABELS.” Yes, private labeling is great advertising. Picking these up at the gun show also saved shipping costs. A box of 500 45acp shipped to a consumer runs about $36-45. You can put it on your shelf for $29 and be making 10 bucks a box and saving your customer $6 bucks. FACT: A person who reloads buys or trades 5 times as often, on average, as a non-reloader. You want these gentlemen in your stores. We reload a lot in the winter. Frankly, it’s just too cold to do much else. We can reload up to 50,000 rounds a week preparing ammo for our test shoots that next spring and summer. Most reloaders are this way—though they might not reload in such quantities.
Rifles are good but pistols are better. Pistols outsell rifles 8:1 in the summer and 4:1 during hunting season. Be careful when stocking your hand guns. We have a saying "ugly sells" guns I would never pesonally own are often the best selling firearms. Pearl handles, Stainless finish, Gold triggers. Yuck, but fast movers and you shouldn't argue with your customers tastes.
Finally you have to stock your store. Not with the "Popular" items either. 7mm-08 ammo, quality steel shot, Offset scope rings(probably the best investment in any town with a Wal-mart), Powder, primers, handgun bullets, grips and holsters. And I mean stock your shelves not just one or 2 one-size fits all items. Having a selection will get you REFERALS. Inventory on your shelves IS a marketing plan. GunMuse will work with you and Manufactures to work out better programs than what we have seen in the past to support this effort.
Attitude-Your customers are not poor helpless children.
Next, let’s look at retailer attitude. Your customer wants to be engaged, and just asking “Can I help you?” is not engaging your customer. You have to ask question that need to be answered with more than just yes or no. Avoid any question that can have a negative answer.
Wrong way
You: “Do you reload?”
Customer: “No.”
Right way
You: “Have you ever thought of reloading your own ammo to save money?”
Customer: “Yes, But>>>>>>>>>>>some long excuse why”
You: “Let me show you how easy it really is.”
This customer is now engaged. Only 1 in 10 shooters reload, and I found the perfect way to change that ratio in my area. Dillon precision has a dealer program that will allow you to buy a display reloader at half-price. Get a 550B, and set it up ready to reload right in your store. Let a customer turn out 15 shells in a minute, and he will want that Dillon reloader. I also found that Dillon Quick Change Heads are HOT sellers when they are stocked. No one likes to try and put their powder back in the can or reset-up their dumps if they don’t have to. In short if you haven’t been engaging your customers YOU’RE the attitude they don’t want to do business with. This is a challenge for most retailers because successful salesmen have to engage total strangers with confidence.
We can get you Anything!!!
Now let’s consider local availability. While your thinking is positive with the order it as you need it attitude I will bet that if you count the number of customers you lost to not having the gun they were looking for and not being able to find it is at least four times your sales rate. This is where you can grow your business online by leaps and bounds. We have a few thousand people a day go through Gunmuse.com looking for firearms and other hard to find items. Problem is, when dealers start putting items up for auction hell they want full retail, are selling common and easy to find items, or start auctions out with get it anywhere at that price openers—not the reason a consumers came to the auction house. They feel slighted by those who do that, and they haven’t even purchased from them. Auctions are ADVERTISING, and you need to call them such. This also ties in with poor service at your brick and mortar. I will bet as you’re reading this, you don’t have a CHEAT SHEET. A cheat sheet is a small book of all the distributors and the product lines they carry. If you don’t have it you should know where to get it. There is no firearm that is for sale today that you can’t get. Let a customer see you call 7-10 distributors on their behalf. They will be impressed and talk kindly about you.
Example: It’s May and you just traded for a Savage 110 in great shape, and you’re into for $180 bucks. Now this rifle will bring $220-$240 come fall, but you don’t want to sit on your money. You need items that sell in May not September. Blue Book on this rifle is $275, so start a NO RESERVE AUCTION at $180 dollars. That’s a STEAL, and some lucky kid will get a rifle for his birthday at that price. Put your Bid increments at $1 this creates “action” around your product and cause more people to check out what folks are bidding on. Our auctions allow you to put HTML into the description box. If you don’t know how to write enough HTML to put a banner linked back to your website in the description box, it’s definitely worth learning. Let’s say the Savage sold at auction for $180. You just sold a rifle for less than its value with intent as an advertising expense, allowing you to take $95 bucks off your taxes for the loss which earns you $30 in tax savings by breaking even. You have to look at the whole sale as a promotion in order for it to be valid deduction.
Now, we dropped a dead rifle, and we can buy something to replace it. HOLD ON. First handguns are the best sellers--8:1 during the summer and 4:1 during hunting season. So let’s think about WHAT we are going to buy. Stainless outsells blue. Automatics outsell revolvers. So if you’re building up your stocking inventory, stainless automatics that retail between $450- $650 are the prime choices.
If you’re in need of filling in some rifle holes because you have been doing well at the auctions, again stainless outsells blue 3:1. But here’s the kick, buy a LEFT-HANDED rifle. 1 in 7 people are left handed and 99 out 100 guns are right handed. Guess what’s hard to find. Right handed Prairie dog hunters use left handed 22-250’s when they can find them—you don’t lose sight picture while reloading. You will find that many lefties settle for automatics rifles and lever action rifle, so great stocking items are the Ruger Mini-14 , Browning automatics, Browning Lever actions, and AR-15’s These items tend to get you some GREAT trades. Now that we showed you how to get out from under your trade and make a small profit doing it, you can never fear taking a trade.
Finally stock something weird. Try 45-70 Side-By-Sides or a CZ 458 WinMag Over/Under. VERY few will want this gun, but when you find that customer you better treat him right because it usually means he has money and is a Gun Nut. But the best part of a weapon like that is the word of mouth about that odd ball gun. It’s also a great ice breaker when engaging. “Want to see something ODD?” Those who have been around me for a few years remember my 4 gauge pump shotguns. NO distributor would touch them because every dealer said they couldn’t sell them. So I bought all 25 that were in the country for $400 a piece, and sold them at $1400—in one month. You know, sometimes people are just Collectors of strange and new things.
If you follow my engagement and stock rotation advice, you will notice your impulse buys in your store keep climbing. Keep a positive attitude, expand your reloading section, and keep your inventory rotating, so you don’t have to bury your prices. Move your trade-ins onto the web as soon as possible. A shotgun that is worthless in
New Mexico is highly regarded in New York. Where a Ruger that is worthless in New York brings top dollar in the Southwest. Try placing bids No-Reserve starting at $1 on Good items. They will usually bring what they are worth. If they don’t then they weren’t worth what you thought.
Author: GunMuse Date: Wednesday Sep 22 2004 20:08:52 pm
