If you were starting out as an NFA dealer today what would you do?

[Richard.G2G]

If you are a dealer starting over today, what direction would you head in?

 

Which models do you think will appreciate the fastest over the next 1-5 years? 

 

What direction do you think the market will head in over the next 5-20 years?

 

What would you have done differently in hindsight? 

(These questions are just meant as prompts to get the conversation started. Consider this thread a dumping ground for any advice you wish you had heard in the beginning.)

Any responses or advice are greatly appreciated. 

 

[Thumpy]

I believe most of the NFA rules will be repealed in the next 5-20 years an we will be able to have cheap brand new machineguns again. The reason I believe that is there because there is a huge amount of folks that are completely ignoring the laws an doing what they want. An politicians are starting to push/ campaign on wanting to to real back NFA regulations. Change is coming.

[taylorwso]

31 minutes ago, Thumpy said:

I believe most of the NFA rules will be repealed in the next 5-20 years an we will be able to have cheap brand new machineguns again. The reason I believe that is there because there is a huge amount of folks that are completely ignoring the laws an doing what they want. An politicians are starting to push/ campaign on wanting to to real back NFA regulations. Change is coming.

that will never happen, maybe cans might become easier to get but they are not giving up the tax money.

they couldnt get the hearing act passed with a full R govenment

Edited April 4, 2022 by taylorwso

[taylorwso]

50 minutes ago, Richard.G2G said:

If you are a dealer starting over today, what direction would you head in?

 

Which models do you think will appreciate the fastest over the next 1-5 years? 

 

What direction do you think the market will head in over the next 5-20 years?

 

What would you have done differently in hindsight? 

(These questions are just meant as prompts to get the conversation started. Consider this thread a dumping ground for any advice you wish you had heard in the beginning.)

Any responses or advice are greatly appreciated. 

 

It sounds like your mixing collecting questions with the appreciation aspect. Business is not built on asset appreciation, its build on turnover and margins.

I'm relatively new and small time, so this is how I did:

2 ways to go IMO.

Specific market/niche items OR general business with decent margins. 

I went with general business model:

1. You make the most money on services, barrel threading, cerakote (can be niche), general gunsmiths, initial investment in tools but after that its basically 80-100% profit. I'm cheap on shop hours at 50/hr but I get repeat clients because its cheap enough that they don't have to mess with it.

2. Transfers are 100% profit, I undercut most brick shops, get more repeat customers. Some people don't do them, but 10 X 20 dollar bills for minutes of work is nice.

3. new gun sales are terrible for small guys, very little profit/ margins are crap. I don't even try to sale new guns anymore unless I get a deal, and then add "extra value" to generate more profit (get a bunch of ARs on a deal, cerakote in popular colors) then blow them out at moderate prices.

4. suppressor sales have the biggest margins IMO. I'm a home bound ffl so I can undercut the big stores MSRP, and I make the most money with it, besides services. Eforms has made me more money this 1st quarter than most of last year. If it gets better it will be a great way to make money.

5. ammo, dont even mess with it. margins are low and you can get killed as a small timer if you time incorrectly.

6. building guns can make a profit but you need scale, or you get into the niche guns, where a decent money can be made.

I got into it to build/sale guns, but have found out services+ suppressor sales make the most money.

If you want to make the most money, just sell cans.

 

Edited April 4, 2022 by taylorwso

[johnsonlmg41]

I would have bought more transferables.  Yes asset appreciation is a real thing.  I can sit on a pile and make 50K a year without even needing an SOT.  I can't imagine how many suppressors I would have to sell to make that?  Paperwork, tax collections, aft audits, etc.  is a gigantic time sucker.  Gunsmithing is a great side line, but to make money the 10's of thousands in good equipment needs to billed out at way more than $50 an hour.  That equipment needs to be running a lot to make it pay.  Mine sits, but it's a necessary evil for the guns I mess with.

I'm not going to tell you what models will appreciate the fastest, because those are the one's I'm buying and don't need any competition.  

The market always follows the broader economy.  Where do you think that's heading?  If you are good at predicting that, then an SOT is a waste of your time, you can hire people for the gun stuff?

Hypothetical questions are often fun.

 

[Thumpy]

1 hour ago, taylorwso said:

that will never happen, maybe cans might become easier to get but they are not giving up the tax money.

they couldnt get the hearing act passed with a full R govenment

Indeed we did not but look at all the boomers in office when we where trying to get the hearing protection act… in the next 5-20 years most of them thankfully  will die off an the younger folks who will be replacing them have a lot more pro freedom stance from what I’ve seen. I’ve spoken with a lot of the next generation of politician an every single one has mentioned repealing the NFA. So just because your generation allowed tyranny to rain superior I personally do not believe mine will. But we are all free to our own beliefs. In my state we have a bill that was just drafted to remove personal property tax will it pass? Who knows but it shows me that there are politicians who are willing to try now adays unlike the ones who where in office before them.

[Mark2]

Don’t build a business model on the NFA laws related to machine gun manufacturing being repealed, it ain’t never gonna’ happen. Pipe dreams are nice, but their just smoke. 

[Ryo]

You're late to the game now that MG did a major price hike.. But there are a few that had the potential of still appreciating. 

Raising 50 for some reason have not gone up in price. MACs sent up but has a lot of room to move up more, especially with the Lage options floating around. 

Premay HK MP5 would be worth it even though they are more costly.. They are fun. 

[taylorwso]

12 hours ago, johnsonlmg41 said:

I would have bought more transferables.  Yes asset appreciation is a real thing.  I can sit on a pile and make 50K a year without even needing an SOT. 

 

and to do that you need to tie up 100s of K,  I do that with only a few thousand in inventory

[BrettBaker]

Just a heads up Thumpy, in Ohio we got rid of personal/business property/inventory taxes, but got a new business receipts tax to help replace it. Definitely an improvement, but not a case of something for nothing.

We probably won't get the NFA repealed. But eliminating the SBR/SBS category, reducing suppressors to a $5 tax stamp or passing HPA ,and reopening the registry might be possible.

[rhouston8]

 

 

Which models do you think will appreciate the fastest over the next 1-5 years?    ----- I'd say % wise...Mac family of guns and Uzis. In beltfed the 1919 is WAY overdue for appreciation. Investor grade (as opposed to shooter grade)  C&R guns and those with provenance --ie, auction guns.... can be good but you must have very specific knowledge in that area.

 

What direction do you think the market will head in over the next 5-20 years?       -------same trajectory as now. I'd build in a 5% annual appreciation .

 

What would you have done differently in hindsight?     ----- Buy ONLY transferables and more of them. Price them high and just wait for the price to climb to you...if you have the time. You only other choice is flip them at lower margins faster.

[mstrmstr]

On 4/3/2022 at 6:41 PM, Thumpy said:

I believe most of the NFA rules will be repealed in the next 5-20 years an we will be able to have cheap brand new machineguns again. The reason I believe that is there because there is a huge amount of folks that are completely ignoring the laws an doing what they want. An politicians are starting to push/ campaign on wanting to to real back NFA regulations. Change is coming.

In 2019 from ATF statistics over 2.3 million transfers were done..No politician is going to promote the loss of that tax income nor lose the employees that are assigned those jobs.

It is rarely mention but they ARE considering raising the stamp fees. The holdup is it does take an real act of Congress but they don't want to open that can of worms.  I have been to the Dirksen Senate office building and face to face with quite a few Senators. They all state the same message "Why,Sir, would we change a gun law that has worked nearly

perfect since 1934?"