selling ammo as a business

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  • miguel

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    If someone wanted to start a business that sold ammunition (from companies like Federal, Winchester, Blazer, Wolf, etc.) would they need to have an FFL or are companies that sell ammo and accessories not regulated by the ATF?

    To clarify, I don't mean selling reloaded/remanufactured ammo, I mean a new company that would be buying ammo from a manufacturer or wholesaler as a business and then reselling it to consumers via a store, gun show booth or a website.

    EDIT: I think the answer is no, based on this, but still would like some thoughts on the idea: ATF Online - Firearms - Frequently Asked Questions - Conduct of Business (Licensees)
     
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    Cwood

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    If you sell ammo you do not need an FFL whether its new or re-manufactured. Now if you manufacture the ammo you need a FFL to sell it.
     

    CountryBoy19

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    If you sell ammo you do not need an FFL whether its new or re-manufactured. Now if you manufacture the ammo you need a FFL to sell it.
    This ^^^

    Selling ammo (retail etc.) doesn't require an FFL. But if you want to manufacture and sell ammo (either retail or wholesale) then you need an FFL.
     

    kevinj110

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    The Hardware store I work for doesn't have an FFL and they buy ammo from the companies or from a distributor which ever is running the best deal with shipping and such.
     

    CountryBoy19

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    Not sure any of the big distributors will sell to you with just a State retail sales license. I think most will require an FFL. You will also want to carry liability insurance.
    I know AIM surplus will. A few years ago my dad, brothers, myself, and some friends all went in together on a pallet (60,000 rounds) of 7.62X39 ammo. No questions asked other than where we wanted it delivered. ;)
     

    miguel

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    Not sure any of the big distributors will sell to you with just a State retail sales license. I think most will require an FFL. You will also want to carry liability insurance.

    Any certain kind or will the insurance man know what I need?
     

    451_Detonics

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    Your Insurance man should know or know who to recommend for retail liability. You can make money doing this as there are always going to be people who want a box now rather than a case later from online but I think it will be tough if you plan a storefront as the profit margins aren't going to be that big. I would price places like Dick's, Dunham's, etc and see if you can make money selling at the prices they sell at. I would think an investment of about $75,000 up front would be needed to get started even in a small way. $125,000 would be more realistic. Also a C&R can get discount from some distributors, you might consider that as well. As long as you don't try to use a C&R selling firearms I see no problem with the Bat Boys using it for discounts on ammo.
     

    miguel

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    Your Insurance man should know or know who to recommend for retail liability. You can make money doing this as there are always going to be people who want a box now rather than a case later from online but I think it will be tough if you plan a storefront as the profit margins aren't going to be that big. I would price places like Dick's, Dunham's, etc and see if you can make money selling at the prices they sell at. I would think an investment of about $75,000 up front would be needed to get started even in a small way. $125,000 would be more realistic. Also a C&R can get discount from some distributors, you might consider that as well. As long as you don't try to use a C&R selling firearms I see no problem with the Bat Boys using it for discounts on ammo.

    Thanks for the tips.

    I know it would probably be a tough row to hoe, but it just seems like there needs to be a middle ground between high volume online sites like AIM, etc. and the tables at the small to mid-size local gun shows where some guy has three boxes of eight different calibers that look like they've been in his basement since 1964.

    Walmart is still probably going to be the king for plinking/target type sales for many shooters, but I think offering additional manufacturers products might attract some interest at the these shows.

    Sounds like I need to write a business plan and run it by someone with some real world experience in starting their own business.
     

    CountryBoy19

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    Aim isn't a wholesale distributor, they are a retailer. They will sell to anyone at the listed prices which are significantly higher than someone like Ellett Brothers or RSR.
    That's a good point. But if you go to a place like AIM and tell them you want a whole pallet of ammo, the price gets very, very close to wholesale price. I know that we could get it from AIM cheaper than any other place would sell it to us, including 1 distributor.

    So why not just go through AIM on the calibers that they carry. They will definitely deal on price if you ask.
     

    Zimm1001

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    If you sell ammo you do not need an FFL whether its new or re-manufactured. Now if you manufacture the ammo you need a FFL to sell it.

    Above is 100% Correct.

    Please note: In order to set up a vendor account you will need to be a business with retail merchant certificate etc. Your ability to buy from these vendors at a reasonable price will be determined by volume. Depending on the manufacturer they may make you buy from other tier 2 or 3 dealers which adds cost at each level. My point: You may not be able to get the product at a price where you can make a profit.

    For example: This is why some mom and pop shops can't buy product for resale at the same price Wal-mart is selling it. Not a knock on Walmart. I love Sam Walton and highly reccommend his auto biography.
     

    khickey3492

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    Sounds like I need to write a business plan and run it by someone with some real world experience in starting their own business.

    This is a great idea, the Indiana Small Business Development Center can be a great help. Best of all, it's free. I used there services and can say they are really serious about helping you get set up.

    Good Luck!
     

    Zimm1001

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    To be honest if you like to reload you might want to think about just reloading and selling the ammo. the FFL license is only $30 every three years. The major cost for you will be liability insurance. As long as where you are reloading is zoned ok then you are good to go with the FFL. You will need the FFL before you can buy reloading supplies at wholesale. Unlikely you will be able to buy directly from the manufacturers but still should be profitable for you especially if you specialize in harder to find calibers or reload for people who bring in their own brass etc. Just a thought but I really do not see your being able to purchase product at a price where you can effectively sell it enough of a profit to make it worth your while.

    Just my two cents.
     

    bulletbaron

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    You fellows need to contact someone that DOES produce & sell ammunition to see what is actually involved, not just what you heard.

    To produce ammunition commercially, you need a Federal TAX I.D. Number, a Class 06 License, you must collect 11% Federal Excise Tax and send them money twice a month (3 times in September), along with an Indiana Retail Business License, you must incorporate as a Commercial Business, and then collect 7% Sales tax when you sell at Indiana Gun Shows and send that to the state. (Ditto if you sell at Illinois Shows Then you will need a minimum of a $1 Million Product Liability Insurance Policy that is based on your sales.

    Now, if you are planning to do this at home, there is the nightmare of bureaucratic licenses, zoning & permits. Or to rent or buy a building, the same scenarios plus rent/ building payments, utilities, & more insurance. Then lets not forget about equipment costs & upkeep, the more machinery you have, the greater cost of maintenance there is.

    Now you will need allot of capital to invest and will have to go through either a Jobber or the component producing company directly and then will have to compete with well established companies whether at Gun Shows or e-commerce. Now this is just for producing/selling reloaded ammunition.

    As for Factory Produced ammunition, to go up against Wal-Mart, Dicks, Cabella's, Bas Pro or whoever, you will need allot more that $125,000 to invest to get any type of good pricing, and remember, there are already allot of e-commerce sites out there already!

    So, all I can say is...GOOD LUCK!!!
     

    Zimm1001

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    You fellows need to contact someone that DOES produce & sell ammunition to see what is actually involved, not just what you heard.

    To produce ammunition commercially, you need a Federal TAX I.D. Number, a Class 06 License, you must collect 11% Federal Excise Tax and send them money twice a month (3 times in September), along with an Indiana Retail Business License, you must incorporate as a Commercial Business, and then collect 7% Sales tax when you sell at Indiana Gun Shows and send that to the state. (Ditto if you sell at Illinois Shows Then you will need a minimum of a $1 Million Product Liability Insurance Policy that is based on your sales.

    Now, if you are planning to do this at home, there is the nightmare of bureaucratic licenses, zoning & permits. Or to rent or buy a building, the same scenarios plus rent/ building payments, utilities, & more insurance. Then lets not forget about equipment costs & upkeep, the more machinery you have, the greater cost of maintenance there is.

    Now you will need allot of capital to invest and will have to go through either a Jobber or the component producing company directly and then will have to compete with well established companies whether at Gun Shows or e-commerce. Now this is just for producing/selling reloaded ammunition.

    As for Factory Produced ammunition, to go up against Wal-Mart, Dicks, Cabella's, Bas Pro or whoever, you will need allot more that $125,000 to invest to get any type of good pricing, and remember, there are already allot of e-commerce sites out there already!

    So, all I can say is...GOOD LUCK!!!

    He knows his stuff. I have toured his facility and it is an A-1 class operation.
     

    snapping turtle

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    Do you have an established market that would generate enough demand that you could sell it in the volume you need to make the margin for expenses

    I mean running such a business could/would allow you to join say a shooting club or two, Matches and events plus gas and lodging paid for so to speak. You still would have to sell quite a bit in volume to even be profitable over time.

    If you want to just have some side business and low scale everything lots of people make a living repairing cars in the back yard and growing veg's and going to farmers markets almost all of the little crafts stores in small towns can make money. Many of the big online AIM type ofits started as you are talking about at one time. They just caught the internet wave on the upswing. Heck lots of people make a living on craigs list and ebay.
     
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