I’ve heard from several gun dealers in recent weeks that their profit margins on guns are extremely low…like $20 on a $1000 rifle. Is this true? If so, where do gun shops make all their money? From ammunition?
Well, the dealers you talked to may have been telling the truth, but the gun dealers I know make a significantly higher profit, along the lines of $25 off of a $175 .22 rifle, about $50 off of a $400 pistol, and maybe $100+ off of a $1000 rifle.
And yes, they do make a lot off of the ammunition sales. That’s why I always ought from K-Mart. Or used to, until “Rosie’s Army of Lies and Hypocricy” forced them to let their stocks run out.
The profit on the gun will be around 10%. Then they make 20-40% profit on the slings, scopes, scope mounts, gun case, ammo, cleaning kit, etc. They sell the gun cheap so they can get you to buy the other stuff. And the buyer keeps coming back to buy more ammo.
Ammunition is MUCH cheaper in bulk. And that’s still at retail, I presume stores get it even cheaper.
That’s why people shouldn’t find it suspicious when they heard of someone having thousands of rounds of ammunition. It doesn’t mean they’re stocking up for a militia or something. It’s just that it’s so much cheaper in cases of 1000 rounds or so, and it doesn’t go bad, so they’ll use it for practice or plinking eventually.