“It’s suicide for a retailer not to carry a line of entry-level 9mm handguns,” says Scottsdale Gun Club’s retail buyer, Paul Sherman.
That’s a pretty strong statement, but he’s not the only retailer out there who feels that way. Some shops say entry-level 9mm handgun sales account for upwards of 70 percent of their sales.
By carrying a stock of entry-level or budget-priced handguns for those who need to be able to defend themselves but just can’t afford to spend $1,000 or even $600, the smart retailer is able to satisfy that customer, keep him from walking out the door to the competitor down the street and possibly create a repeat buyer.
There’s no doubt there are a lot of new handgun buyers entering the market these days, and while many of them will buy only one gun and use it for self defense, a significant number will discover that they really enjoy shooting and decide to buy more guns. If a retailer can make that first sale, the likelihood that the repeat buyer will return to his store instead of his competitor’s increases. And those repeat sales help the bottom line.
Retailers we talked to mark up handguns only about 15 percent over the wholesale cost, and while there is not much profit to be made in selling a single budget handgun, entry-level handgun buyers often buy more than just the gun. Additional purchases include premium self defense and ball ammunition as well as a holster and eye and ear protection. All these items go towards increasing the profit per customer.
Every retailer we spoke to had a different price point for the upper limit of an entry-level or budget-priced handgun. It ranged from a low of around $200 to a high of about $500. But all the retailers had one thing in common: In deciding what guns to carry, reliability of the gun and a low rate of customer returns was an overriding factor.
Scottsdale Gun Club
The Scottsdale Gun Club, located in an upscale suburban community, is a large retail store that also operates a shooting range. And with 24 lanes and memberships that include reserved lanes and a shooters lounge, the outfit definitely caters to a high-end clientele.
Ron Kennedy, general manager, is very aware that the types of products sold help position the store in the minds of customers, and for that reason will not carry products that have quality problems or high return rates. Through trial and error, the Canik TP9SA was chosen to carry as an entry-level handgun with a price of about $300.
Scottsdale Gun Club also carries the Bersa CC9 and the Ruger LC9 and SR9. But when customers have the chance to rent the TP9SA and try it on the range, the gun sells well and has become very popular.
With handgun sales of about 3,000 per year, an annual inventory turnover rate of about 10 and a great number of return customers — some of whom have a great deal of discretionary income — the Scottsdale Gun Club still values those entry-level handgun sales.
Guns Etc. is housed in a large single-occupancy building located on a busy road with many retail and some service businesses nearby. The owner, Ron Sega, used to be a competitive shooter and now devotes his energies to making Guns Etc. a successful retail business.
He spends a good deal of money running entertaining radio commercials in the local market on very highly rated radio stations. After many years in the business, Sega has concluded that the price point in his market for an entry-level 9mm handgun is $400 or less. Like all the other retailers we interviewed, the primary criteria for selecting which guns to sell in this category are reliability and low frequency of customer returns.
Guns Etc. carried the least expensive 9mm handgun of all the stores surveyed for this story — the Hi-Point C9 at about $180. And they sell very well.
While his store has gunsmithing services on site and he services the guns he sells, the one exception is the Hi-Point, which is returned to the distributor, MKS Supply, for warranty service. Interestingly, the return rate according to Sega is only about 1 percent.
Other entry-level 9mm handguns Sega carries include Bersa and Kel-Tec. Sega says that nearly 20 percent of his handgun sales are the Hi-Point brand, and he sells about 10 times more handguns than long guns.
But carrying a line of entry-level, budget-priced handguns has not hurt the image of his store at all. He still has customers who are seasoned gun buyers, many of whom are in the $500 to $800 handgun market.
With an annual inventory turnover rate at a respectable 2.5 to 3 times, he devotes plenty of resources to attracting new gun buyers by advertising in certain non-gun-related publications. He also maintains an interactive video shooting simulator on premises where participants shoot laser-equipped guns at images projected on a large screen.
Programs include everything from police training videos to square range simulations. Using this equipment, Sega has sponsored shooting simulator parties for local non-gun-related organizations, which have resulted in sales of entry-level handguns to first-time buyers.
Tombstone Tactical is located adjacent to a large regional shopping center near a main freeway and finds that the price range for entry-level 9mm handguns in its market is about $250 to $450. The stock on hand includes the Kel-Tec P11 and PF9, Smith & Wesson M&P Shield, and Ruger LC9 and SR9.
Although Tombstone Tactical marketing director Zac Campbell says the store will order a Hi-Point on request, it does not stock them.
In addition to the Phoenix store, Tombstone Tactical operates a small store in Chino Valley, Arizona, and has an online sales presence. The handgun sales strategy the company employs appears to be working well, because about 300 handguns are sold per month. And about 70 percent of those sales are entry-level handguns.
Campbell added that Tombstone Tactical is selling more guns to first-time buyers than ever before.
The last retailer who spoke with us was Legendary Guns, which is a bit different than the other three stores because it specializes in cowboy-style guns and is located in a small strip mall instead of a single-occupant building.
Nevertheless, owner Dave LaRue says that many buyers are interested in entry-level 9mm handguns, so he carries a solid variety. The price point ranges from about $300 to $450, with the Ruger SR9 and Smith & Wesson SD9 included in the mix.
Legendary Guns warranties all guns so that customers can bring the pistol back to the store if a problem is encountered instead of having to return it to the factory. LaRue commented that only 2 percent or less of Rugers and S&Ws come back for reliability issues.
Despite the fact that the store’s core customer is interested in old-West-style guns, they are not put off by seeing budget-priced, modern 9mm autoloaders in the same store. Many first-time buyers come through the door as well, and about 25 percent of handgun sales are entry-level guns. Given a healthy annual inventory turnover rate of about 2.5 times, the sales strategy is obviously working.
Make It Work For You
Each storeowner or manager must decide how to position his store in the market and then offer products that his customers want. Retailers have to consider the geographical area they’re serving and the buying power of the people living there. But even specialty shops and ones that cater to the well-off have an opportunity to sell to the first-time, entry-level shooter.
The store owners and managers who spoke to Shooting Sports Retailer know their customer base and what they want to buy. They also know that first-time or entry-level handgun buyers constitute a large percentage of the market and that it makes sense to carry inventory to satisfy that segment.