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Northeast Trading For Sale.

Len-2A Training

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Here's an analogy that drgrant will appreciate.

After DEC, I started my own computer business supporting small businesses. Over the years I accumulated lots of cables, PC cards, controllers, modems, etc. that were bought to assist when a customer needed something replaced or added. Technology has moved on since I started that business in early 1993 (I closed that business in 2006). What do you think my inventory is worth today? Who needs a bin full of keyboards with the large DIN connector? ESDI, SCSI, IDE cards?

The message: Over years in business, business changes and old inventory creates a dustbowl of unsaleable items even if new. Nobody wants it and nobody will pay you for it.
 

doxdsgn

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Would seem he has only two real options - sell the biz, which is a long shot. Failing that, an orderly going out of business sale.

Curious if anyone knows-- what multiple would a business like this typically sell for?
 

Goliathan

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Would seem he has only two real options - sell the biz, which is a long shot. Failing that, an orderly going out of business sale.

Curious if anyone knows-- what multiple would a business like this typically sell for?

A business that doesn't outperform its peers, doesn't command a niche, is run by a man with a bad reputation, hasn't upgraded or innovated, has no captive or repeat customer base (or not much of one anyway), carries a lot of risk, and exists in a state that's openly hostile to its product and business model? I think multiple is the wrong word. Divisor, maybe.
 

swatgig

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Would seem he has only two real options - sell the biz, which is a long shot. Failing that, an orderly going out of business sale.

Curious if anyone knows-- what multiple would a business like this typically sell for?

I usually calculate purchase price on a multiple of net profit, rather than annual sales. A ballpark of five times the annual net profit is reasonable, so I'd be expecting a $90,000 profit to meet his asking price. If it doesn't support that, I'll hand my $450,000 to a fund manager.
 
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Would seem he has only two real options - sell the biz, which is a long shot. Failing that, an orderly going out of business sale.
Exactly right. And I'm betting it's going to be the latter. [laugh]

Despite what Len says about those $20.00 Bills for $1.50, etc., I'll bet he is going to put on a disguise and sneak into the Rat's "Going Out Of Business" tent sale anyway... if for no other reason than to watch Ted the Rat cry at all that "premium inventory" of his going for 50¢ on the dollar or less. [rockon]
 

Dennis in MA

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Would seem he has only two real options - sell the biz, which is a long shot. Failing that, an orderly going out of business sale.

Curious if anyone knows-- what multiple would a business like this typically sell for?

It's not a multiple type of business. It's an inventory type business. Unless his profit was astronomical, the profit # will always come under the inventory #. (Unless, in his case, the inventory is as ugly as the profit.)

As mentioned, you can start up with your own business without the choking lease and crap inventory for less money. So a multiple winds up being moot.
 

Asaltweapon

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Like a crappy bar that's closing-down, this business sounds as though it only has one asset - the license (FFL). Are those transferrable, or expensive to obtain?

A store front, proper zoning location, good credit to open accounts, funds to get started, submitting the application to ATF and getting CLEO to sign off is a start.
 

Len-2A Training

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Like a crappy bar that's closing-down, this business sounds as though it only has one asset - the license (FFL). Are those transferrable, or expensive to obtain?

No licenses are not transferrable. Any new owner starts the process all over again with the local police and BATFE. Using an existing location MAY get you the following benefits (if no rules have changed): existing zoning, existing alarm/security system and safe, existing lease (may be an asset or liability depending on terms/time left).

Credit doesn't "transfer", new owner has to establish that with each supplier, reputation DOES transfer however . . . if good that is a huge asset, if bad (like this place) it is a terrible liability.
 

xjma99

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Drove by there today, for sale real estate sign out front, and some junk in the parking lot. Too bad.

I just realized that I thought this was blue northern trading....that's the one I drove by. Oops.

Don't know the guy that this post is actually about, and from the discussion I am glad!
 

doxdsgn

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No licenses are not transferrable. Any new owner starts the process all over again with the local police and BATFE. Using an existing location MAY get you the following benefits (if no rules have changed): existing zoning, existing alarm/security system and safe, existing lease (may be an asset or liability depending on terms/time left).

Credit doesn't "transfer", new owner has to establish that with each supplier, reputation DOES transfer however . . . if good that is a huge asset, if bad (like this place) it is a terrible liability.

Sounds like the only option for a sale is to sell to someone with an FFL already or, delay the actual sale till a buyer is able to get all the licenses and permits in place. Seems the odds of a sale are pretty long.
 

Goliathan

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Sounds like the only option for a sale is to sell to someone with an FFL already or, delay the actual sale till a buyer is able to get all the licenses and permits in place. Seems the odds of a sale are pretty long.

Good luck finding an FFL in the neighborhood who doesn't already know him and his history [laugh]
 

markcemo

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Here's an analogy that drgrant will appreciate.

After DEC, I started my own computer business supporting small businesses. Over the years I accumulated lots of cables, PC cards, controllers, modems, etc. that were bought to assist when a customer needed something replaced or added. Technology has moved on since I started that business in early 1993 (I closed that business in 2006). What do you think my inventory is worth today? Who needs a bin full of keyboards with the large DIN connector? ESDI, SCSI, IDE cards?

The message: Over years in business, business changes and old inventory creates a dustbowl of unsaleable items even if new. Nobody wants it and nobody will pay you for it.

I know a guy that sold a partially eaten bag of potato chips on Ebay. It seems there's a market for just about anything.
 

drgrant

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Here's an analogy that drgrant will appreciate.

After DEC, I started my own computer business supporting small businesses. Over the years I accumulated lots of cables, PC cards, controllers, modems, etc. that were bought to assist when a customer needed something replaced or added. Technology has moved on since I started that business in early 1993 (I closed that business in 2006). What do you think my inventory is worth today? Who needs a bin full of keyboards with the large DIN connector? ESDI, SCSI, IDE cards?

Jesus H Len... do I know that scene. Several years ago I filled a dumpster, and if I got another dumpster I could probably fill that one halfway. [rofl] I remember about 5 or so years ago taking carloads full of old CRTs down to CRT Recycling in Brockton. Those were the days. At least I'm down to about 2 of those things from a high of 20 in my house.

-Mike
 
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A few weeks ago, I saw a FFL for sale on Craigslist. Was waiting for the info to become public, because they wouldn't mention the shop in the ad.....
 

Len-2A Training

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Jesus H Len... do I know that scene. Several years ago I filled a dumpster, and if I got another dumpster I could probably fill that one halfway. [rofl] I remember about 5 or so years ago taking carloads full of old CRTs down to CRT Recycling in Brockton. Those were the days. At least I'm down to about 2 of those things from a high of 20 in my house.

-Mike

Yup, about a year ago I brought one Rubbermaid tub full of keyboards to Savers, along with a stack of in-the-box brand new keyboards. I got rid of all my CRT monitors back when they ran a free electronics drive at Patriot Place some years ago. I filled up my car and my Wife's car and both of us drove down there. I also put out probably 15 computers on the sidewalk in groups of 2 and 3 at a time a year ago, scavengers grabbed them within a day each time. All HDDs had been removed. I still have a ton more computer stuff to go when I get the time to sort thru it all. I know I have another bin full of keyboards downstairs and they are easily reachable.
 

swatgig

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The message: Over years in business, business changes and old inventory creates a dustbowl of unsaleable items even if new. Nobody wants it and nobody will pay you for it.

Computer equipment is much more perishable than guns. Let's say you stuffed away $10,000 of brand new computers in 1993. Maybe a few of IBM Thinkpads (retailing at $4,300 for 25MHz 486SLC, 4MB RAM and a 120MB Hard Drive). You would have three or four of those. How much would you sell those for?

On the other hand, in 1993 you could have spent that $10,000 on some Colt AR15s (ban? What ban?). How many could you have purchased for $10,000 and how much would they be worth now?
 

amm5061

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Computer equipment is much more perishable than guns. Let's say you stuffed away $10,000 of brand new computers in 1993. Maybe a few of IBM Thinkpads (retailing at $4,300 for 25MHz 486SLC, 4MB RAM and a 120MB Hard Drive). You would have three or four of those. How much would you sell those for?

On the other hand, in 1993 you could have spent that $10,000 on some Colt AR15s (ban? What ban?). How many could you have purchased for $10,000 and how much would they be worth now?


In fairness, those AR15s wouldn't be worth anywhere near half as much in free states as they are in this shithole. Most guns do not appreciate in value in such an extreme way as pre-ban ARs do in Mass.
 

swatgig

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In fairness, those AR15s wouldn't be worth anywhere near half as much in free states as they are in this shithole. Most guns do not appreciate in value in such an extreme way as pre-ban ARs do in Mass.

True, but guns aren't perishable like computers. Len mentioned 1993, and it was too hard to resist.
 

Dennis in MA

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You assume his old inventory is guns and not accessories that he took a whim on 5-15 years ago and they never sold. That isn't the case. Several people here have said they were in within the last few months and the gun inventory is non-existent.

He's listing the inventory at clearly retail prices. He paid wholesale at some point in the past. Let's say his markup is 50% on average. That cuts it in half. THAT'S where the negotiations end. (Not start. I'm not starting on the HIGH number. But that sets the high number.)

Anything of true value, you would keep and sell on your own FTF later. Why "give" it to the new owner. OR, a current customer HAS to have it now b/c it's valuable. Nothing worth anything is included in the sale. It's trash. It's been a long time since I've darkened that door, but the merch wasn't that great back then and some of it was pretty old.
 

drgrant

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Computer equipment is much more perishable than guns. Let's say you stuffed away $10,000 of brand new computers in 1993. Maybe a few of IBM Thinkpads (retailing at $4,300 for 25MHz 486SLC, 4MB RAM and a 120MB Hard Drive). You would have three or four of those. How much would you sell those for?

On the other hand, in 1993 you could have spent that $10,000 on some Colt AR15s (ban? What ban?). How many could you have purchased for $10,000 and how much would they be worth now?

You're assuming that his inventory has a lot of guns in it, namely ones that people want. If its fudd stuff or accessories, a lot of it is probably junk.
 

Goliathan

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You're assuming that his inventory has a lot of guns in it, namely ones that people want. If its fudd stuff or accessories, a lot of it is probably junk.

This is precisely what 90% is the inventory is. Much of it collecting dust, the newer accessories are priced on par with Bass Pro (read: too much). There are a couple of nice Sigs, etc., but again, the prices are nothing special. I'd rather get them from Gartman.
 
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