Wholesale vs retail: how FFL pricing actually works

New dealers are usually surprised by two things. The first is how thin the margin on a new handgun is. The second is that the same gun doesn't cost the same at every distributor. It's not even the same at one distributor, for two dealers with different accounts.

Here's why, and what you can do about it.

Wholesale and retail are different chains

Retail is simple from the customer's side. There's a price on the tag, maybe a sale, then tax and fees at the register.

Wholesale has more links. A manufacturer sells to distributors. Distributors sell to licensed dealers, and some manufacturers also sell to large dealers directly. Every distributor buys at its own terms, carries its own stock and sets its own prices. Nothing lines those prices up across distributors, and nothing makes them match.

Why the same gun costs different amounts

Each distributor prices on its own. They bought at different times, in different quantities, on different programs with the manufacturer. They're also each deciding how hard to push that item this week.

Your account changes your price. Many distributors have dealer tiers, volume programs and negotiated pricing. The standard price in their feed isn't always what you pay. Log in to their site as yourself and you may see something lower. Some distributors only show pricing once you connect your own login with them.

Freight changes the real number. The price on the screen isn't what lands at your door. Distributors set their own free-freight thresholds, and they change, so check each one's current terms. A cheaper gun on a small order can cost more once shipping is added.

Some guns are only at one place. Exclusive models, like a run a major maker builds for one distributor, have nothing to compare against. You buy them where they are.

Prices move. A distributor's price on a gun can change several times in a week. The one that was cheapest on Monday might not be on Thursday. We've logged millions of these price and stock changes across the distributors we sync.

What that means for how you buy

Compare every order, not once. Checking once and then always ordering from the same place leaves money behind, because who's cheapest keeps changing. If you have three or four accounts, the quickest way to see all of them at once is one search that shows every distributor's price and stock for that UPC.

Compare landed cost. Look at freight and your order size, not just the unit price. Sometimes the right move is to put a few items together at one distributor to clear its free-freight bar.

Use your own pricing. If you've negotiated a better tier somewhere, make sure whatever you compare with actually shows it.

Price from your real cost. Your margin comes from what you actually paid. If you set your sell price from the cheapest cost you've seen anywhere, but you bought from the expensive distributor, the margin you think you have isn't there. Pricing rules let you choose which cost to start from: the lowest, the average, or a preferred distributor.

Retail pricing sits on top

Once you know your cost, retail is about where you sit against MAP and MSRP, and what your customers will pay.

The short version is that your margin is made or lost when you buy, not when you sell. The retail price is mostly set for you by MAP and the market. Your cost is the part you choose.