doublegunshop.com - home Forums General Discussion DoubleGun BBS @ doublegunshop.com 28g. H&H Hammergun -- somebody got a bargain

After the computing of the BP, you get an odd figure.

Estates are funny business. Often times the family just wants the matter resolved and care very little as to the value of the auctioned items. A friends knows quite a bit about time pieces and he said the big money stuff in this auction was the watches and clocks, not the guns. This was a very wealthy man and likely he had many other investments. My guess is his heirs will be just fine. Would have been a great auction to attend though.

I would not want to be a retail storefront gun dealer operating in our sphere of interest. After 35 years of working with retailers, from little golf and tennis pro shops, medical clinics and other specialty retailers right up to Walmart, JC Penny and Sears, I have some first hand experience in the kinds of strategies they employ to try to make a profit.

A couple rules of thumb.....the first is hard goods (sports equipment, hardware, guns) retailers can afford to take a shorter (less) margin because the product does not go stale as fast as with soft goods (clothing, shoes). The second is inventory turn (the speed with which you buy, hold and then sell something) is the single biggest determinate of annual gross profit and therefore net profit at the end of the year.

Because the retail gun industry has so many channels of distribution with wildly different levels of overhead (retail stores, gun show sellers, private sales, auction houses) with wildly different motivations, those rules of thumb I described earlier get turned on their heads.

One thing I had concluded at some point in my career is I wanted to stay away from working with retailers who were in love, personally, with their product and that's why they were in the business. They often suffer from business irrationality. Give me someone with a pure profit motive and I can make sense of and predict their behavior.

This auction is a perfect example of the apparent irrationality that fine gun retailers like Kirby have to deal with. Although a credible auctioneer, little effort was made to get market value for these lots because, in the disposal of the estate overall, these guns were likely an insignificant portion. No cash was invested by the auction house in inventory, no carrying costs and no initial cost of goods. And their margin is guaranteed. It is a difficult competitor to deal with if you are a fine gun retailer.