Getting started 4: Setting your prices

Chapter 4 of 15 of Getting Started with Trinity, by Brad Bussell, 2AData. Also on the web at www.2adata.com/getting-started.

Online, the shopper sees your price next to twenty other stores' prices for the same item, on the same page, sorted low to high. That is the whole business. A store that is 10 percent above the field is invisible on gun.deals and WikiArms, and when it does get a click, the shopper has already seen a cheaper price.

How a price is made

Every item's price is its lowest in stock distributor cost plus your markup. Markups live on the Pricing page as price tiers: a percent and an optional dollar amount for each cost range. On top of the tiers you can add a category markup, a brand markup and a per distributor fee. The result is rounded up to the next whole dollar, and MAP is applied after the markup on your site and on GunBroker. See Set your markups and price tiers: the Pricing page.

1. Price tiers: the percent (and optional dollars) over distributor cost for each cost range
2. Category markups, added on top of the tiers
3. Per distributor adjustments, for distributors that charge you fees

What the stores that sell actually charge

These are real tiers from stores on Trinity, as percent over distributor cost; the columns for our own store and the new store are their Standard ladders, which on their sites now price only non FFL items, and on both stores every gun is priced on a separate firearms profile instead: 7.5 to 9 percent from $100 up at our own store, 7.5 percent from $100 up at the new store.

Cost range	Our own store	The new store, after its cut	The firearms only drop shipper	A store with few web orders
Under $20	45 to 60%	75%	cost + $5, minus up to 26%	35 to 50%
$20 to $100	25 to 30%	35%	cost + $5, minus 12 to 26%	25%
$100 to $500	11 to 14%	7.5%	cost + $5, minus 1 to 10%	18%
$500 to $1,000	8 to 8.5%	7.5%	cost + $5, minus up to 2%	15%
Over $1,000	7.5 to 8%	9.5%	cost + $5, about even to plus 2.6%	12%

Read the drop shipper's column carefully. The firearms only dealer sells most guns at or below what the distributor charges him, plus $5, and makes his money on per distributor fees, volume and a flat shipping charge that covers the real cost. He takes about 57 orders a day. We are not telling you to copy him. We are telling you he exists, and that the shopper comparing prices sees him next to you.

Our own store sits between. On a $600 pistol we are roughly $50 above that dealer and we take about one third as many web orders per visitor. Both are a living. The fourth column is the store with the fewest web orders in the fleet. It is also the store with the highest shipping, and it never got listed on gun.deals.

The lesson from the new store

A dealer launched in early October with markups of 20.5 percent on $100 to $500 and 14.5 percent on $500 to $1,000, and trimmed them to 15.5 and 11.5 a week later. On the same items his prices were still above the other stores, and the price comparison sites ranked him accordingly. He took 11 orders in his first eight days, 1.4 a day, with plenty of visitors. Then he set those tiers to 7.5 percent. Over the next 12 days he took 98 orders, 8.2 a day.

Rules of thumb

• Apart from the drop shipper, whose percentage rises with cost, every store in the table runs its highest percentages on its cheapest items and far lower ones on anything over $100: 8 percent on a $1,500 rifle is $120, and 60 percent on a $5 part is $3.
• Before you launch, pick three guns you stock, look them up on gun.deals and compare the prices shown with your own; that page is what your shoppers see, and your store is on it only after you apply at gun.deals and it starts pulling your feed.
• Different items can carry different tables. Trinity lets you price firearms, accessories, ammunition, in store stock and drop ship items on separate profiles. See Price firearms, accessories and ammo differently.
• Your margins also come from shipping and from the marketplaces' different fee loads; the card fee, if you charge one, offsets the processing cost. Think of the whole order, not the markup alone.
• Change one thing, wait a week, read the numbers. Pricing is a dial.

MAP: minimum advertised price

Roughly 500 brands on the platform carry a MAP rule. Trinity never shows a price below MAP on your site or on GunBroker, and your feeds carry MAP or the Email for price label as the brand requires. For brands that require it, the site shows "Email for price" instead of a number, and the customer gets a private quote by email. MAP governs what you advertise, not what you sell: a privately emailed price can be below MAP, and the dealers use that every day.

What to expect: manufacturers run software that reads gun.deals and your product pages. If a number below MAP appears anywhere, even for an hour, you get a notice by email with the UPC, the MAP price list and the policy. Typical terms give you one business day to fix an online listing or two weeks on the brand's Do Not Sell list; repeat violations run to 180 days or permanent. A blank MAP on a single item is enough to trigger one; the fix is to load the brand's price list by UPC and lock it. The chapter on MAP notices covers what to do.

Previous: Connect every distributor. Next: Shipping fees that do not kill the sale.

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