I've Heard it Said - Guns Are A Poor Investment

I was reading a post in a gun forum today wherein the poster stated that guns are not a good investment. I agree whole heartedly that guns are poor investments but only with it being contingent that you plan to sell them to someone like an FFL dealer and the poster in that forum used an attempted sale of guns to an FFL dealer as an example to back his claim.

You rarely make even a decent profit when selling to a dealer of any sort (unless maybe the dealer is buying for his personal collection), let alone a gun dealer. Dealers are dealers, after all, and are in business for the purpose of making money, not giving it to you or at least giving as little as they can to you so they can profit off of the deal. If they can low ball you, they make more money. It is like that show Pawn Stars, they often offer what seem to me to be lowball prices. Then the arsehats selling the item accept those offers
(many probably just to get on TV). To tempt the seller to take a low offer, the pawn shop dealer gives every reason as to why he cannot pay more, such as: there will be too much work and expense to restore it, he will hold onto it for a long time before it sells because it is not in high demand right now or there are limited buyers for that type of item, it is only worth precious metal content instead of appreciated value (for things like jewelry or decorative items made from gold or silver), my price is better than an auction house because if you try to sell it at auction they take a 25% seller premium (no auction house or online auction I have ever been or used have seller fees that high, in fact the online gun auction site - GunBroker.com - takes much less, only about a 3% final value fee plus any listing extras, a basic listing is free). You get the picture, a dealer is a person who wants to get an item for the lowest price possible and then sell it for the highest price he can get. Well, firearms dealers are much the same - maybe worse - friggin tightwads at best. That is, I suppose, how some stay in business or at least how they wind up laughing all the way to the bank.

I have bought several guns that I have later sold. I will estimate that at least 90% of the ones I have sold, sold for a tidy profit and that means a net profit. That has been after me using them for some time; I have only sold a few guns without either firing them first or only firing them a time or three. Some have sold for almost double what I paid for them. Someone, quick, please tell me again how guns are good investments - and figure out a way to make me believe it. There is no way that me putting my money into an interest bearing account is that good of an investment nor as safe of an investment.

If you want to invest in guns, with the idea of maybe selling some of them at a future date for a decent net profit (such as a collector might do to augment his collection), as opposed to selling them at a loss, then you need to follow pretty much common sense rules. Now, mind you, I don't buy guns with the intention of dealing in them. My purchases are more in line with a hobby, or hunting and for self defense. Every now and again, I will sell one or more with the intent of at least breaking even so I can put the money I get into buying more guns. The thing is, I usually net some cash when I do that because I bought smart (although I must admit some stupid impulse purchase son my part) and followed some rules.

 

So yes, most times I have sold a gun, I have netted a profit and it is better that many other investments would have been, especially short term investments. Sure, you can always damn the rules and then get lucky and buy something you later sell for a profit but to sell for a net profit consistently is another thing. Note here, I am talking about any kind of gun too – not just ones that may be in vogue when you buy them and that you hope will be in vogue later. So what are those rules?

First – make sure everything you are doing is legal. Then buy quality firearms. I am not talking about expensive firearms, just ones that are made well and the makers of which have a good reputation. Make sure they are in very good or better condition. Know how to determine condition. Buy at the best price you can get them at and don’t impulse buy merely because you want a certain firearm and then maybe wind up paying way too much for it. Know when to buy. There are times of the year when guns, at least certain guns do not seem to sell as well. Late spring into summer come to mind for hunting rifles. Look for them then at a better price. This does not hold as true as it once did because of the current/recent politically fired gun buying frenzies but it still holds true sometimes. On the other side of that same coin, know when to sell. Sell a hunting rifle the month or two before hunting season opens. Sell any type of gun right after another anti-gun law or action has been proposed, or an anti-gun politico type has been newly elected, but this especially works for guns that politicians want to ban.

Not only do you want to know when to buy and or sell a quality firearm from your collection, but you need to know the costs and other conditions that go with selling it. Learn how you can legally buy or sell firearms, there are varying laws in all 50 states plus federal laws and regulations you must follow (remember that was the first rule above). Once you get the legality figured out for your personal situation - and note I am only talking about personal sales of firearms not commercial sales because I only make personal sales and am not a dealer - you need to know how much it will cost to buy and or sell a gun. Here in NY, if I buy a pistol I have to pay $10 to have it added to my license. If I sell it, it cost an additional $10 to take it off of my license. If I buy it from a dealer in upstate NY, and this is only for handguns, I have to pay to get there, pay for the handgun, pay to et home, bring the receipt to my county PD, have them give me a purchase document, pay to return to the dealer, give the dealer the paperwork and take the gun, pay to get home, then go back to the PD to have it put on my license. That could cost me well over a $100 in addition to what I paid for the pistol and the $10 fee to add it to my permit. The only legal way around that is to have the dealer ship it to me at a local FFL but that will cost at least $40 just for the FFL transfer. Rifles and shotguns have no such expense – for me here in NY. As for handguns, it used to be my county PD gave you a purchase doc beforehand and you filled it out wherever you bought the handgun, gave a copy to the dealer and took possession of your gun then and there, it was a lot less expensive that way. Now the expense of going a distance to buy a handgun can be super expensive and thus I anticipate buying very few handguns outside of my local area; unless, of course, I buy several at one time at an upstate auction or want to use the excuse of going back and forth as a chance to get away from home.

The word "auction" as reminded me there are the other fees to sell or buy a firearms, if you do so at auction. For instance GunBroker.com does not charge a fee to register. Nor do they charge to list an item with a basic listing but they do charge for extras relative to your listing. So, for example, if you want you item subject line to appear in boldface or color, there are fees for each. After your gun gets sold, GunBroker charges about 3% as a final value fee. That is how they make there money. It is nowhere nearly as much as the bald headed dude from the pawn shop show would have you believe it costs to auction off an item, at least when he is the one trying to lowball you for whatever you are selling. By the way, GunBroker has a pretty decent amount of reference guide material on how to do buy and sell guns online.

Some other things that will assure you continue to be able to sell for a decent profit, or to even continue to sell at all, are that you need to be honest in how you describe what you are selling. Likewise, only buy from dealers or individuals with an honest reputation. Sites like GunBroker have a feedback capability whereby you can rate a buyer or seller and they can rate you too. Works great for the most part but depends on people actually doing it and being honest. 

You can also browse a site like GunBroker to see at what price what guns have been selling and if they have been selling at all at the time you are considering selling them. If not selling, or selling way below what you thought they are worth, hold off and wait for better times. If you must sell something, say you are short of cash (which is the worst reason to sell a gun)then sell a different gun that is in higher demand. Same thing with buying, I look to various references to determine what a good buying price would be and then buy only if a good price is offered (took me a long time to learn that). Some of those reference materials are: 'The Standard Catalog of Firearms – The Collectors Price and Reference Guide' and 'The Blue Book of Gun Values' (I signed up for that one online).

Be extremely careful about stating the condition when selling. Try not to let it be subjective but determine it through your use of a grading standard. Ask which standard was used to grade it when purchasing and state the standard used by you when listing the item. The NRA has one standard and some firearms reference books use their own. Remember – be honest regardless of which grading standard you use. I go as far as trying to offer only a very conservative estimate of a gun’s grade when I sell it. The result has been that many of the feedback comments reference my sales state the items was better than described. A happy buyer means future buyers. One buyer did not leave feedback for me because I used what amounted to a subjective description of pitting on a gun (he felt it was more pitted than I had stated despite me stating, in my item description that  it had extensive surface pitting). We finally agreed to disagree and he kept the gun and did not accept my offer of sending him his money back and him keeping the gun. That will not happen again because of any misunderstanding based on my idea of surface pitting and its extent as opposed to what a buyer's idea of the same would be. Next time I will not "over" describe an item; I would just say it is pitted I there is pitting. Sometimes, when you try to be blatantly honest and give what you think is a very conservative description, it winds up your buyer disagrees and says it was worse than you said. You just cannot please everyone and a buyer may think your description was deceitful even though you were being honest. In such cases, offer the money back for a return - even if you have a no returns policy, that is what I did. It just pays to eat the sale so as not to have someone screw with your reputation. Then just offer it for sale again.

Just one last thing, this about the prices I sell at. When I sell via an online auction, I do not set a reserve bid price. Reserve bid price means that you can start bidding at any price but the item will not sell unless you meet or exceed the reserve (which is usually kept secret). However, I do sell at a minimum acceptable bid. So, I set a minimum bid that I will accept for the item and in order to bid on it at all, you have to bid at least that much. I almost always set it at less than I want for the gun but still at the bare minimum I am willing to accept – which by the way is virtually never at a loss.

Sure, there are others things I do, when buying and selling guns, that I could have included here and probably yet other things you could think of in addition to them that would help assure a purchase at a good price or a profitable sale. What is here though should be more than enough to get you pointed in the right direction and help assure you do not get screwed when buying a gun and that your investment is a profitable one should you ever decide to sell it. 

 

All the best,

Glenn B