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July 16, 2019

From the Counter: Gary’s Guns

By Peter B. Mathiesen

“From the Counter” is NSSF’s timely industry perspective provided by firearm retailers across the country. Our goal is to identify and highlight innovative market strategies helping retailers compete more successfully. Lessons learned will be drawn from an array of regions with diverse market economies. This month we focused on a small, family-owned independent retailer in western Michigan, 100 miles north of the Indiana state line.

Gary’s Guns, Muskegon, Michigan

Sitting just a few miles from downtown Muskegon, Gary’s Guns is located on Route 46 on the outskirts of town. With 1,500 square feet, the store keeps more than 500 firearms in stock, as well as a mix of hunting, home-defense and reloading inventory.

The shop keeps the two owners, Gary Foster and his wife, Peggy, as well as two part-time employees busy throughout the year. The firearms inventory is a mix of bolt guns, MSRs and popular handguns and shotguns, along with a strong inventory of used guns, all of which suit the needs of the shop’s wide range of customers, including hunters, families and the local populace seeking self-defense firearms.

Gary's Guns - Retail Counter

Coming to the Gun Business

Like many gun store owners, Gary Foster started selling at shows as a hobbyist and collector. When a piece of property came up for sale just outside of Muskegon, he moved in and started his dream business. It has been a little more than 20 years since this retailer’s inception, and saying the seasons have changed is an understatement.

“Our industry has certainly evolved in the last two decades, and so have our customers. While deer season is still considered an honorary state holiday, it’s not nearly the customer rush it once was,” he said.

Additional changes include a historic surge in the handgun business in the last decade and the evolution of the MSR in the hands of everyday shooters. “Like many people in the gun business, I don’t shoot as much as I once did. Today, I work to stay ahead of trends and pricing to keep my store profitable,” said Foster.

Sanding the Oxidation off the Rust Belt

Like many medium-sized Midwest towns, the Muskegon area has a new patina. Today, the job market is tied to big-box retail stores and health and general services industries. Hunters, shooters and home-defense patrons have added variation to their collections, and the handgun counter drives Foster’s summer business.

“Our 2019 summer handgun traffic is really strong this season. Our customers either want the least expensive or the best; the numbers we turn on SCCY pistols and Colt 1911s are about the same,” he said.

Foster attributes the price sensitivity to the local market demographics. His customers skew to the ends of the income continuum from executives to those in basic retail jobs. “Our high-paying factory jobs have just about all packed up and left. There are a few small well-paying manufacturers, but not many,” he said.

With an influx of lower- and middle-income customers, Foster has learned pricing is critical to keeping traffic moving. There’s an absolute magic number. In the late 1990s it was $100. Today, it’s $200 and, on occasion, it edges $300.

“The store must have a pistol that comes in around $200. A $10 difference can block a sale from closing. As an example, our scope sales are through the roof because of Leupold’s new Freedom line,” Foster said.

Foster also commented that MSRs are finally tempting the last few holdouts. “Customers who have never really been interested in them are making comments like, ‘Okay, for $475 I have to own one of these,” he said.

Magic numbers also apply to cased ammo.

“As long as we sell 9mm for $200 a case and .556 at over $300, there seems to be a steady stream of first-time case buyers,” he said.

Used Guns Make the Day

It’s no secret that used guns are profitable. The used gun counter has been a stronghold since Gary’s Guns opened. Yet, in the last three years Foster has seen some changes in this market.

“The first big change is with traditional hunting guns. It’s harder to tell what will bring a high price. We simply try to keep the listed price reasonable. The goal is for the store to earn a solid 20 percent,” he said.

Foster said one of the most significant changes has been toward selling moderately priced used SIGs and Glocks. “It’s really hard for us to sell a new handgun in the upper $400 to upper $600 range. However, if I put a used sticker on it for $299 to $375, it’s gone in a couple of days. I swear I could sell a new handgun for near retail price if I would just mark it used,” he joked, laughing.

Lessons Learned from the Counter

  • You don’t have to be in the northern Midwest to recognize that many stores have experienced customer upheaval in their demographics. This retailer understands what his customer base wants and needs. He is realistic about always having something in the store that’s new or used and affordable. Making adjustments to fit the needs of a changing customer base is a realistic way to keep traffic and profits intact. To move your sales to the next level, you need to find your customers’ magic number.
  • This retailer is playing the long game. He anticipates price-sensitive customers will want to trade up later. This long-term focus meshes well with strong product knowledge from in-store experts. Although always changing, this retailer is confident about the industry’s future.
  • It’s not just about the sale — at times it’s about building store traffic. One sound strategy is to foster the needs of less-experienced shooters by providing access to the sport with value-added products. This, in turn, produces more active sporting shooters and foster loyalty.
  • This retailer has learned one way to move the profit needle is by tapping into the customer’s perceived value. Gary’s Guns has found that promoting middle- and high-priced used firearms at a half-price sales point is a stronger sales motivator for his customers than selling a new gun.

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