At the urging of my readers and consulting clients, in this piece I’m going to go over the basics of running a gun show business. Renting gun show tables and then selling and/or trading items for tangible gain can be quite fun and rewarding. I rent show tables to make trades, primarily to improve my personal collection. For example, this weekend (Friday and Saturday only–Oct 25 and 26, 2019), I’ll have three tables at the Butte, Montana gun show. I won’t be there on Sunday.
To begin, I must start with some caveats on why renting tables is not for everyone. It takes an outgoing personality. It also takes a commitment of time–not just to travel and attend the shows but also the requisite hours of technical and market research. You also need to be in good health. Hauling your merchandise in and out of shows takes a bit of physical strength. And just standing up for 9 or 10 hours a days is demanding for some folks.
It also takes money to buy inventory. This falls in the category of: “It takes money to make money.” Unless you have at least $5,000 in cash or the equivalent in gun-related items that you already own and are willing to turn over in trade, then you should probably not consider a gun show venture. The alternative–that is, starting out with less than $500 worth of goods and gradually “trading up” to a large inventory–would probably prove to be a long and frustrating quest. It really does take some money to make money, in retail sales.
I must also mention that the current legislative war, if lost, might very well destroy gun shows as we now know them. (That is, at least in the 37 states of the Union that currently allow private party sales of post-1898 guns.) So put that risk into your decision matrix.
To fully understand American gun shows, you need to understand both the American gun-owning mentality and the essentials of retail arbitrage. Guns shows are perennially popular in the U.S. because they tap into the gun-owning bedrock culture of America. Free-wheeling guns shows are an almost uniquely American phenomenon. Yes, there are some gun shows in Europe, but they are tame and infrequent, by comparison. And there are the souks of Pakistan and Yemen, but that is the subject of a separate article.
The core of American Gun Culture is this: We are ‘Mericans and we own lots and lots of guns! And we don’t like anyone saying otherwise. We are exercising a right that pre-dates the Constitution itself. Suffice it to say that the average American gun collector owns far more guns than he will ever need or shoot. We also buy guns to benefit our kids and grand-kids. And we buy them as investments–partly as a hedge on inflation of the worthless scrap known as the United States “Dollar.” A $100 bill tucked under my mattress in 1980 would now buy only the equivalent of $29 worth of goods. But consider $100 spent in 1980 to buy a brand new Colt M1911 that was oiled and tucked in my gun vault. That gun is now worth around $1,000. So well-selected guns are indeed a good hedge on currency inflation.
The Last Bastions of Free Enterprise
When you come down to it, American gun show are one of the last bastions of genuine free enterprise in American society. This is a market where people are expected to dicker. This is a place where knowledge is power. This is also a place where newbies and suckers often get fleeced. Remember the Ferengi aliens from Star Trek, and their Rules of Acquisition? Those are your average gun show dealers. They can be just as ruthless. They just have smaller ears. For some humorous further reading, see the brief “Gun-Trading” chapter in the book Rubber Legs and White-Tail Hairs by the late Patrick F. McManus.
Most retail trade is essentially a form of mutually-beneficial arbitrage. (That is: taking advantage of price differences within two or more markets at the same time.) Your potential arbitrage leverage in the trade can stem from a variety of factors:
A.) Time. You bought back when they were cheap and plentiful. Now they are expensive and scarce.
B.) Your knowledge. You know more details than the other guy, and hence you are the more qualified judge of exact value and marketability.
C.) Imperatives. He needs (or wants) it now, and you have it now.
D.) You bought at wholesale and are now re-selling at retail.
E.) They aren’t making any more of X, and you have X.
F.) He needs money more than he needs grandpa’s Mauser.
G.) You had cash when he needed cash. Now you own his old Winchester.
H.) He’s lost interest in X, and now wants Y. He’s willing to trade you X for Y, at a loss.
I.) He needs a shotgun for an upcoming hunt, and has an extra rifle available to trade, but little cash. You have a good shotgun available. But to complete your trade, he is getting your shotgun at retail and you are getting his rifle at wholesale.
J.) Legislative: You bought your ARs between the periods of gun banning frenzy. But now you are taking your profit.
K.) Incisive trading. This may sound cold-hearted, but there is no profit in a perfectly-balanced trade. You make your profit in taking a reasonable advantage of timing, circumstances, and the weaknesses of your trading partner. The ideal guy walking up to your table with a gun for sale is either: 1.) An old guy who has developed infirmities who no longer hunts, or 2.) Someone going through a divorce and who is forced to sell some guns at a loss. Sad, but true.
The Bottom Line
To be a success at the gun show game, you need to make a profit on nearly every transaction. Consider your costs: Fuel, motel rooms, meals, and the cost of your tables. Also consider the “opportunity cost” of taking time away from your other money-making ventures. If you are dentist and could make more money doing two extra fillings than you would in the profit in the entire weekend of a gun show, then you probably shouldn’t add a gun show business, as a side venture!
Note: Because gun shows can be hit or miss seasonally, or even because of the weather, it is important always have a few low-cost items on your tables alongside your high-dollar guns. Thus, even if you don’t sell any guns at a “slow” show, then you can at least cover the cost of your table(s) and travel.
First: Decide on Licensing
One of your first key decisions is whether or not you want to be Federally licensed. Licensing has great advantages, but it also opens up your home (place of business) to ATF searches without a warrant. You also need to consider that if licensed, you will be creating paper trails for both you and your customers. So, in a small way, you’d then be part of The System, and contributing incrementally to tyranny. At least that is the way that I judge it. Your mileage may vary.
I had one old friend who got around the warrantless search issue by keeping his vault of inventory and his gunsmithing tools in a free-standing garage next to his house that he had legally assigned a different street address–with its own mail box marked with that address and brief posted business hours, two days a week. That garage was the licensed address for his FFL, so only it could be searched without a warrant–not his home. I’ve also met some dealers who have chosen to get a Curio and Relic (“C&R”) license, rather than a regular Type 01 dealer’s license. The C&R class license limits the varieties of guns that they can buy and sell, but it also makes them very unlikely to ever have their transaction books and papers audited by the ATF.
I’ll have further comments about legalities, in Part 3.
Pick a Specialty and Do Your Research!
To be successful at gun shows you really need to do your research. The single-most import reference for post-1898 guns is the Blue Book of Gun Values. And if you want to buy, sell, or trade pre-1899 antiques, then Flayderman’s Guide is a must. And I might be biased, but I think that you should also print out a hard copy of my free Pre-1899 Cartridge Guns FAQ.
You can’t know everything about every type of gun, so you should develop a specialty (or two). But try to concentrate on a category of guns that you believe will grow in popularity. In deciding this, consider generational and cultural differences. Old Colts, Winchesters, and S&Ws will always be popular in the U.S., because they are practically ingrained in our culture. And of course the Hollywood producers are still making western movies. But interest in Japanese Arisaka rifles will likely die out, along with The Greatest Generation.
Once you’ve selected a specialty, then gather lots of references on those particular models, both on-line and in hard copy. If some of your references are on your laptop’s hard drive, then consider buying a large (300+ Watt Hours) battery pack and a 12 Volt DC adapter for your laptop, so that you can run it all day. This is because power outlets are few and far between, at gun show tables. Even if you rent a “wall” table, it might not have a 120 VAC power outlet. Also, consider that wireless Internet is still uncommon at most gun show venues, and even cellular reception can be spotty in a few buildings. So don’t rely on just online references. You can keep the equivalent of a huge box of reference books in PDFs, on your laptop.
(To be continued tomorrow, in Part 2. – JWR)