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Old July 15, 2012, 09:52 PM   #1
Fastercat
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License to sell ammo?

I'm looking to provide a cartridge reloading service, sell precision handloads etc. on a small scale. Can anyone fill me in as to what FFL or special licensing I'll need?
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Old July 15, 2012, 10:27 PM   #2
ScottRiqui
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You have to get an FFL (I think it's a Type 07, as long as you're not planning on making armo-piercing ammo). That fee's pretty reasonable - I think it's something like $150 for three years.

You also have to register with ITAR, even if you're not going to be exporting ammo. The fee for that starts at $2250 per year.

There's also a Federal Excise Tax of 11% on all the ammo you make. I *think* the only way to avoid this is if the customer provides the brass, and you reload *those exact same cartridges* and then sell them back to the customer.

Then there's the biggie - insurance. I'll let others chime in on just how much you need, but I'd say that $1 million would be the bare minimum.

You'll also have to deal with a lot of federal, state and local regulations regarding what quantities of components you can have on hand, how they have to be stored, etcetera.

I don't know if commercial reloading can really be done on a small scale - it's always seemed like a "go big or go home" proposition to me.
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Old July 16, 2012, 07:50 AM   #3
Don P
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+1 for Scotts response.
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Old July 16, 2012, 10:50 AM   #4
Fastercat
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Ok, buzzkill. Thanks for the info. So much for that idea.

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Old July 16, 2012, 03:33 PM   #5
k4swb
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Quote:
Ok, buzzkill. Thanks for the info. So much for that idea.
My cousin ran into this exact same dilemma back in the '80s.
His solution was to open a small shop specializing in selling reloading supplies, ammo and some other stuff and offering free classes (if you bought from him) and classes with a small charge if not.

Did pretty darn well for about 14 years.
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Old July 16, 2012, 05:10 PM   #6
carguychris
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FWIW I believe(!) that a license is required to conduct business in making ammo, but is not necessarily required simply to sell a few handloads now and then. IOW it's similar to selling the occasional gun at your local gun show.

Example:

"Hey buddy, I've noticed that those .308 handloads of yours shoot really well. Can you load 40 rounds for me? I'll give you some money to cover your costs." - OK

"Can I buy 200 boxes to stock my gun store?" - NOT OK

Mandatory Disclaimers:
  • I could be wrong about this. If so, someone please edu-ma-cate me- I'm curious, and you won't hurt my feelings.
  • I do not intend to suggest that I would personally engage in this type of transaction. I wouldn't, due to my fear that one of my handloads might blow up someone else's pride and joy.
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Old July 17, 2012, 12:19 AM   #7
Frank Ettin
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Quote:
Originally Posted by carguychris
...FWIW I believe(!) that a license is required to conduct business in making ammo, but is not necessarily required simply to sell a few handloads now and then...
Yes, but --

From what the OP wrote, it really looks like he was contemplating starting a business:
Quote:
I'm looking to provide a cartridge reloading service,...
That sound like a business to me.
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Old July 17, 2012, 12:46 AM   #8
FrankenMauser
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Quote:
FWIW I believe(!) that a license is required to conduct business in making ammo, but is not necessarily required simply to sell a few handloads now and then. IOW it's similar to selling the occasional gun at your local gun show.
Nope. If you manufacture the components or loaded ammunition and sell it, you must be licensed. Anyone can sell loaded ammo or components that they did not produce, but the manufacturer must be licensed to sell their product.

**The ATF classifies even cartridge casings and bullets as "ammunition". So, the license is required even to sell cast lead bullets.


Quote:
You also have to register with ITAR, even if you're not going to be exporting ammo. The fee for that starts at $2250 per year.
It has come to my attention, recently, that ITAR registration might not be mandatory. (Even though they claim it is.) There seems to be a loophole that allows certain types of manufacturers to skip ITAR registration, in favor of "piggy-backing" on an export company's registration. I can't find the actual regs, though. Consulting a lawyer with relevant experience would definitely be necessary (and should be done for anyone engaging in this type of business, anyway).
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Old July 17, 2012, 04:50 AM   #9
vranasaurus
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Quote:
Originally Posted by Frankenmauser

**The ATF classifies even cartridge casings and bullets as "ammunition". So, the license is required even to sell cast lead bullets.
Actually it was congress that did that in the Gun Control Act of 1968.

Quote:
18 U.S.C. 921(a)(17)(A)

The term “ammunition” means ammunition or cartridge cases, primers, bullets, or propellent powder designed for use in any firearm.
Not trying to be an ass but the ATF takes a lot of crap for their "interpretations" when it is simply the law. (In other areas they deserve the crap they get.)

I believe a vast majority of the GCA is a bit ridiculous. But I wouldn't manufacture ammunition for sale even if the law didn't require a license. Ammunition manufacturing exposes you to a great deal of liability (and other issues) and I'm not sure there is enough money in it to justify the hassle.
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Old July 17, 2012, 08:10 AM   #10
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...I wouldn't manufacture ammunition for sale even if the law didn't require a license. Ammunition manufacturing exposes you to a great deal of liability (and other issues) and I'm not sure there is enough money in it to justify the hassle.
There are plenty of avenues available to protect yourself and your business, but you do need to ensure that your product is not faulty.

There are two basic approaches becoming a manufacturer:
1. "Go big or go home" - the common choice (your choice) would be going home.
2. Create a business model that is sustainable with small quantities of premium ammunition. - again, the most common choice is to just forget about it, and not even try.

There's no reason to less of anyone that isn't willing to try. It's just that some people are more willing to take the risks involved.
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