Thinking of FFL

[jumeda33]

Hi everybody. I am new to the forum and hope I am in the right place. I am thinking of getting my FFL and doing it out of my home. I have a full time job and this would just be for extra cash. All I want to be able to do is be a transfer point for people needing an FFL dealer. I don't want to sell or stock inventory. My questions are: What license should I apply for? (1 or 2). Is it dangerous in any way to have people coming to your house for this type of stuff? (you know, people knowing where you live and dealing with weapons etc...) Does the weapon have to be shipped to the home business address, or can it be shipped to where I work? The reason I ask this is that no one is usually home during work hours but I am always at work to be able to receive the item.
Thanks in advance for your help and advice.
David

[Skans]

One of the first things you will need to find out is whether your city/county zoning permits you to operate a "gun shop" from your home. If you live in a restricted neighborhood, that could be an issue as well - in that case you will need to check your Declaration of Covenants and Restrictions.

Most likely you won't be able to use your home address as your place of business and do business elsewhere as a gun shop without obtaining the necessary local licenses there as well. Also, I believe your transfer log and firearms need to be located on the site of your gun shop in the event BATFE wants to do an inspection.

The bottom line - if you can legally run a hair salon or used car lot from your home, and State laws permitting, you shouldn't have any problem.

[Fishing_Cabin]

jumeda33,

I had a home based FFL until last year, and now my brother is working on picking everything up with his FFL. You will have to search locally as to the zoning etc. I will put your questions in order below, with my answers...

1 Getting my FFL and doing it out of my home. I have a full time job and this would just be for extra cash.
That meets the basic requirement for an FFL, which is being actively engaged in business, basically "for profit." The ATF tends to not like people getting an FFL to enhance their personal collection only.

2 All I want to be able to do is be a transfer point for people needing an FFL dealer. I don't want to sell or stock inventory.
Being just a transfer point is fine. I will tell you that you will miss out on a few sales if you are unwilling to do special orders for them. Its really not much trouble at all. Most wholesalers have a website that you can order from, and pay with a debit/credit card, or you can save the fee if your credit is good enough to open an account with them.

3 What license should I apply for? (1 or 2).
You will be applying for an 01 DEALER IN FIREARMS OTHER THEN DESTRUCTIVE DEVICES. Or in other words, just the plain ole 01 FFL since you didnt mention you wanted to sell/transfer any NFA or DD. If want to do NFA stuff let me or others know and we can help advise you better.

4 Is it dangerous in any way to have people coming to your house for this type of stuff? (you know, people knowing where you live and dealing with weapons etc...)
It can be dangerous. Thugs if they want, can search online for various dealers, and decide to break in, etc. Or they may do that at random anyway without such info. In the past I had some strange random calls about, "Would I convert this/that" or "I cant pass the background, but I will pay extra" or "I need a gun now, no paperwork" or any other things...Had someone call wanting 20 AR lowers once as well. The 20 ar lowers was probably someone putting them up for future use, but it still spooked me, and I decided to turn down the sale. Basically, its about as dangerous as you want to make it. Any business is risky.

5 Does the weapon have to be shipped to the home business address, or can it be shipped to where I work?
The firearms MUST be shipped to the address that is on the license. Lately, the ATF is allowing business to place a seperate mailing address on the license as well, but the information is sketchy if the mailing address can be used to ship to as well. I would say it would not be legal to ship to the mailing address, but there again, I am conservative and dont take chances.

6 The reason I ask this is that no one is usually home during work hours but I am always at work to be able to receive the item.
You will have to work something out if this is going to work for you. I have known my UPS guy for years, and he would always call me when I had anything that he needed to deliver. I also had lunch for him sometimes too. Pays to be nice and work with each other.

7 Thanks in advance for your help and advice.
Doubtful I helped any, but I hope it points you in the correct direction.

[RedBowTies88]

what are the average costs involved with something like this? License fee's and whatnot.

Im sure it varies from place to place but just an average would be nice

[Fishing_Cabin]

RedBowTies88,

The application fee for the 01 FFL is $200. Other licenses the cost vary. Its around 90 to renew I think, I dont have a renewel form with me to confirm the fee. On top of that would be your local business license, which could be $10 bucks and up. Mine was around $200 a year I believe. Beyond that its just collecting and reporting the sales tax. Other cost, such as overhead, insurance, and record keeping are also cost that vary but is a part of doing business. Also you may be required to pay ITAR each year depending on what you are doing. The ITAR fee is $1750 a year I believe. Thats the rough basics as far as the feds are concerned. Beyond that its the state and local cost of business license etc, as well as the normal business expenses.

Keep in mind with the industry in the shape it is in, every other dealer is willing to cut the others throat for a loss in profit it seems, I would not look at starting a firearms business as a true business venture. The people I have known that have an FFL and do well, are those that the FFL business is only a smaller part of the overall business. Kinda like a convenience store. A convenience store sells gas at or close to cost, just to get people inside to buy items with a higher mark-up. Anyone seeking to start a business dealing with firearms needs to understand mark-up and that the break even point isnt $0, its a percentage of the item, but varies with each business.

Frankly, and I know I am in a slim minority with my opinion, a $15-$35 buck fee for an appointment and transfer fee is very low compared to other occupations. If one gets an appointment with a lawyer, I would say $100 an hour up. If I want an appointment to get my haircut its around $50 bucks, if I want to go to a regular babershop and wait in line its $20. While I know and understand that money is tight and people always want the best deal. If your going to be in business, you need to make a profit, or else you might as well just start handing out a few bucks to every other person, because in a failing business, thats about what your doing. Slowly giving away and going broke.

I suggest to anyone considering an FFL do not look to only sell firearms and ammo as the main source of business. Sell other items as well, such as out door supplies, tents, backpacks, clothing, etc. Diversify! A business is an investment, so treat it as such. Plain and simple. If you want to do it as a small side business, I would not expect to make that much money just off of transfer fees.

Folks, dont get me wrong, I am all for saving money...But there comes a point to where it just doesnt work from a business stand point. Im speaking purely on the business side. I also understand that sometimes you have to give away alittle at times to get future business, but you need to ensure you are going to be in business in the future to recoup the loss.

Below is a chart from http://www.rmgo.org/bardwell-faq-on-...nal-tax-stamps

Type FeeDescription
---- ----- ----------------------------------------------------------
01 $200/ - Dealer, Including Pawnbroker, in Firearms Other than
$90 Destructive Devices
[Note: $200 for initial license; $90 for subsequent
renewals.]
03 $30 - Collector of Curios and Relics
06 $30 - Manufacturer of Ammunition for Firearms Other than
Ammunition for Destructive Devices or Armor Piercing
Ammunition
07 $150 - Manufacturer of Firearms other than Destructive Devices
08 $150 - Importer of Firearms other than Destructive Devices or
Ammunition for Firearms other than Destructive Devices, or
Ammunition other than Armor Piercing Ammunition
09 $3000 - Dealer in Destructive Devices
10 $3000 - Manufacturer of Destructive Devices, Ammunition for
Destructive Devices or Armor Piercing Ammunition
11 $3000 - Importer of Destructive Devices, Ammunition for
Destructive Devices or Armor Piercing Ammunition

[dc88]

I dont have any experience, but lemme know how it works out for you, sounds like a good way to earn some extra cash so i might be interestted, good luck!

[RedBowTies88]

must be renewed every year i presume?

I'll be honest it would be 1/2 for my own collection and have to make money on the side for transfers and maybe special orders.

[Fishing_Cabin]

The FFL renewel is every 3 years. Forgive me for not including it in my prior post.

[Don H]

Don't forget that you also may have to get a business license, a state tax number, there may be insurance issues since you will be conducting a business from your residence, possibly a zoning variance since you will be having people come to your residence for business purposes, etc.

[dogtown tom]

Fishing_Cabin

The firearms MUST be shipped to the address that is on the license. Lately, the ATF is allowing business to place a seperate mailing address on the license as well, but the information is sketchy if the mailing address can be used to ship to as well. I would say it would not be legal to ship to the mailing address, but there again, I am conservative and dont take chances.

ATF has listed the second "mailing address" on an FFL for several years....it isn't recent.

There is nothing "sketchy" about having firearms shipped to an address other than the premises....matter of fact it is so perfectly legal that ATF reminded licensees about this in the March 2006 FFL Newsletter:http://www.atf.gov/publications/news...er-2006-03.pdf

Q. Can an FFL ship a firearm to an address
that is different from the business
premises address identified on the
license?

Yes. Neither the GCA nor its implementing
regulations contain specific provisions,
requiring that an FFL have firearms shipped
to their licensed business premises when
receiving firearms. To that end, an FFL may
lawfully receive firearms at their mailing
address, storage location, or other address
where the licensee intends to ensure safe
and secure receipt of the firearms.

ATF Industry Circular 74-13 outlines
“Guidelines for Verifying Identity and
Licensed Status of Transferee.” It states, in
part, that “when the shipment is to be made
to an address other than the transferee’s
premises as listed on his or her license or on
his or her certified list, it is suggested that
the transferor verify the address as being
that of the transferee.” Furthermore,
pursuant to section 922 (b) of the GCA, it is
unlawful to ship a firearm interstate to an
unlicensed individual.
We encourage that FFLs verify to the best of
their ability that the shipping address is a
valid location where the licensee is prepared
to receive and subsequently possess the
firearms. In addition, if an FFL has customers
that require frequent delivery of firearms to
an address other than their licensed business
premises, we recommend that the shipping
address be placed on file with ATF’s Federal
Firearms Licensing Center (FFLC) as an
additional mailing address.
It should be noted that any FFL receiving
firearms at locations other than their
licensed premises must maintain accurate
records of acquisition and disposition of
firearms. The acquisition of firearms must be
recorded by the close of the following
business day or, if commercial records are
maintained, within 7 days following the
acquisition (See 27 CFR 478.125(e) and (g)).
In the event of an ATF compliance
inspection, the FFL must make all records
and firearms inventory available for
inspection. In addition, if the location is
used as a continuous off-site storage facility,
the FFL must notify the FFLC so that the
address can be placed on file.

[Fishing_Cabin]

thanks dogtown tom. When I asked the ATF inspectors in the past about the different mailing address, I received conflicting information. One saying it was ok, and the other saying that it was a violation. I just always tried to stay as conservative as possible to avoid any issues.

Back in 1998 when I got my FFL, at the initial visit, I was specifically told no, it was not an option to have a different mailing address listed. I only learned of the change a few months back, when my brother had his initial visit from an ATF inspector, before receiving his FFL. That inspector specifically asked if he wanted to list a different "mailing" address.

[essohbe]

Well, if it helps to know, my FFL is a home address and does his business there full time so anything he gets in the mail he signs for right there. You have to post the hours on the doors but that's about it he says, as long as the county allows what he does to transpire. I don't think you can really make money off of doing this part-time.

He has cameras and the neighbors all watch also. You have to have a safe or something where you store the firearms when your not open also.

[dogtown tom]

essohbe You have to post the hours on the doors...

No such requirement in federal law or ATF regulations.

I don't think you can really make money off of doing this part-time.

Sure you can. I do.

You have to have a safe or something where you store the firearms when your not open also.

No such requirement in federal law or ATF regulations. There is not even a requirement to have a lock on your front door.

[Fishing_Cabin]

Originally Posted by dogtown tom

Quote:
essohbe You have to post the hours on the doors...

No such requirement in federal law or ATF regulations.

I will add that while its correct, you do not have to have the hours posted on the door or wall, the ATF provides space to list the hours of operation on the FFL application, item 13. ATF E-Form 7 (5310.12)
Link: http://www.atf.gov/forms/download/atf-f-5310-12.pdf



and also on the ammended FFL. ATF E-Form 5300.38 item number 16.
Link: http://www.atf.gov/forms/download/atf-f-5300-38.pdf



Also, in the Federal Firearms Regulations Reference Guide, page 40, it mentions normal business hours.

§ 478.23 Right of entry and examination.

(a) Except as provided in paragraph
(b), any ATF officer, when there is reasonable
cause to believe a violation of the
Act has occurred and that evidence of the
violation may be found on the premises of
any licensed manufacturer, licensed importer,
licensed dealer, or licensed collector,
may, upon demonstrating such cause
before a Federal magistrate and obtaining
from the magistrate a warrant authorizing
entry, enter during business hours (or, in
the case of a licensed collector, the hours
of operation) the premises, including
places of storage, of any such licensee for
the purpose of inspecting or examining:
(1) Any records or documents required
to be kept by such licensee under
this part and
(2) Any inventory of firearms or ammunition
kept or stored by any licensed
manufacturer, licensed importer, or licensed
dealer at such premises or any
firearms curios or relics or ammunition
kept or stored by any licensed collector
at such premises.

(b) Any ATF officer, without having
reasonable cause to believe a violation of
the Act has occurred or that evidence of
the violation may be found and without
demonstrating such cause before a Federal
magistrate or obtaining from the magistrate
a warrant authorizing entry, may
enter during business hours the premises,
including places of storage, of any licensed
manufacturer, licensed importer,
or licensed dealer for the purpose of inspecting
or examining the records, documents,
ammunition and firearms referred
to in paragraph (a) of this section:
(1) In the course of a reasonable inquiry
during the course of a criminal investigation
of a person or persons other
than the licensee,
(2) For insuring compliance with the
recordkeeping requirements of this part:
(i) Not more than once during any
12-month period, or
(ii) At any time with respect to records
relating to a firearm involved in
a criminal investigation that is traced
to the licensee, or
(3) When such inspection or examination
may be required for determining
the disposition of one or more particular
firearms in the course of a bona fide
criminal investigation.

I do not know anyone here locally that has a FFL, and does not have any hours of operation or business hours listed with the ATF, since they are able to make an inspection, or to inspect records for a firearm related to a crime. I will say I do not know of any law or regulation requiring any business hours, but with that said, the ATF has a right to inspect, as noted, during a FFL's regular business hours.

I have heard in the past online that some FFL's operated "by appointment only," though the inspectors I have spoke with from 1998 and as recent as September 2011, all "politely" have asked for the hours of operation to be listed on those forms, and if needed, updated in the future, so the ATF can contact or visit. I have been told that a FFL doesnt have to be open to the public during those hours, but should be available if the ATF wants to check your records for some reason during that time.

Its possible that inspectors in a different field office may have a slightly different interpretation. So if you decide to obtain an FFL I would speak to the field office in your area, to find out their views on anything you are not clear on. If you have any questions, an ATF inspector should (always has around here at least) visit you before the license is issued.

FWIW, YMMV

Edit to add: Though I know the question was about hours posted on the door, I wanted to let others know that the ATF does ask for your hours of operation so they would not be surprised.

[Fishing_Cabin]

Originally Posted by dogtown tom

Quote:
You have to have a safe or something where you store the firearms when your not open also.

No such requirement in federal law or ATF regulations. There is not even a requirement to have a lock on your front door.

There is no requirement as far as a safe that I know. I can speak as to the requiments of the local field office though. They do require a notice stating, " It is unlawful to store or leave a firearm that can be discharged in a manner that a reasonable person should know is accessible to a minor." The local field office also requires the ATF poster on the Youth Handgun Safety Act to be posted as well. This seems to go un-noticed locally since all of the FFL's have the same posters up.

While dogtown tom and I may have different views, it goes without saying that each field office has its own views. Even the DOJ has noted this in 2004, with the difference in FFL inspections. Link: http://www.justice.gov/oig/reports/ATF/e0405/exec.htm

I would say that anyone wishing to get their FFL to contact their respective field office to get their take on things. While we know the regulations and law may say one thing, the local interpretation may be something else.

[essohbe]

I was talking about my county laws but you're also right on the Fed thing.

Your county is who you will need to square most everything away with.

[Fishing_Cabin]

Originally Posted by essohbe

I was talking about my county laws but you're also right on the Fed thing.

Your county is who you will need to square most everything away with.

Correct, as well as your local ATF field office, and state. essohbe, I wish you and every one else who wants to get their FFL the very best in everything. Please understand that not only locally, but also with each different ATF office, there can be a difference of opinion, like it or not.

You and others interested can either post a topic or send me a private msg to me and I will help you what I can. I will add to please be careful, and document things. Get everything you can in writing as well if you can. While my experience with the ATF has been good, it seems from reading on the internet other inspectors are ready, willing, and trying to set you up to fail. Hence why most people on all the different firearm forums say to avoid any contact with the ATF like the plague. All I have dealt with are ready and willing to help an FFL though if you are honest and trying to do the right thing. I have never had one to say "No, I cant help." Most will say to "do this or that" depending on the circumstance. It is up to you to work with them. In my experience they are more then willing to work the the FFL holders.

As far as the money aspect, I guess it depends on what you call money, your area, and your FFL saturation. Locally, there are 9 store front dealers, as well as multiple home based FFL's. There may be others I dont know about. The closest FFL dealer to me? The next street behind me, literally. Going through the woods, less then 100 yards away. My brother who has an FFL is 2 miles away, The closest store front FFL is 1 mile away. I pass a second one going to my brothers. Locally speaking, some FFL holders do transfers for free just to have transfers on the books and take the loss in time. As I said, I dont know where you are, but locally, its more of a hobby business, unless you have a range, pawnshop, etc, that helps to diversify your investment. They are at MOST, less then a 15 minute drive or so, if not way closer.

I hope that anyone who invest time and money in to seeking a FFL makes enough to instantly retire off of, just as they would like, but locally, it just isnt the case.

Edit to add: It more depends on your local area. I know here, I cant hardy walk a few steps without stumbling on a FFL, I have heard of other areas that have none within a reasonable drive. As with anything else you read on the internet, take things with a grain of salt.

[James K]

FWIW, some background. There were problems in the past where someone got hold of a dealer's license, used it to buy guns, and had them shipped to a rental address, and disappeared, to establish another another address of convenience for more guns. That was when BATFE asked that shippers given a shipping address different from the one on the license verify that it was valid. They also encountered FFL copies with altered addresses, which is why they post dealer's info on their web site so an FFL can be verified.

Jim

[taurus4life]

lets say you could find a cheap office to rent, so you can comply with zoning issues. can the firearms be stored anywhere other than that address(say you wanted to take them home just incase your business get broken into or your going to be going to a gun show).

[ClydeFrog]

I did not read all the forum posts here yet but I wanted to reply too.
There was a ad in the printed NRA magazine for new FFL applications & applying for a new FFL. Check www.FFL123.com . I never used it but you may want to research it.

The FFL process can be complex, I'd get a good lawyer or small business expert who can guide you through the local/state/federal laws.
The NRA, www.nra.org may help & any local gunsmiths, gun dealers may also assist you.
Be aware of all the business, insurance & related legal issues too.

CF
www.USA.gov www.gunlawguide.com www.ATF.gov www.sba.gov www.vetbiz.gov www.handgunlaw.us

[dogtown tom]

ClydeFrog .....The FFL process can be complex...

I disagree.
It was easier than getting a passport. And the wait was just a little longer.

If you can fill out a form and read as well as a fifth grader you can complete a Form 7 all on your own.

FFL123 doesn't tell you anything that ATF.gov already provides for free.

[ClydeFrog]

By complex I mean the total concept of starting a small business where a person gets a FFL to buy & sell firearms.
That is never easy. Not for cupcakes, cars or Glocks... .

ClydeFrog

[ttolhurst]

I disagree.
It was easier than getting a passport. And the wait was just a little longer.

If you can fill out a form and read as well as a fifth grader you can complete a Form 7 all on your own.

+1. Getting an FFL is a little more complex than ordering a cheeseburger, but not as complex as ordering coffee at Starbuck's.

Don't waste money on FFL123.com.

[Fishing_Cabin]

Clydefrog, the ffl123 site is not really worth the money as others have said. There are other similar companies offering the same as well. They are basically selling you the forms and advice that you can get for free from the ATF. The only thing that you get from these companies that you dont get from the ATF is most include a bound book for your record keeping, but then again, these are generally only a few bucks, and you can even print your own.

The process and running the business isnt hard at all really. You do need to be mindful that you watch out and do not violate any laws, and that the paperwork is done properly.

taurus4life, as to your question,

lets say you could find a cheap office to rent, so you can comply with zoning issues. can the firearms be stored anywhere other than that address(say you wanted to take them home just incase your business get broken into or your going to be going to a gun show."

Yes the firearms may be stored at another location per the ATF. The link and a quote is below.

Link: http://www.atf.gov/firearms/faq/licensing.html

Q: May one license cover several locations?
No. A separate license must be obtained for each location. However, storage facilities are not required to be covered by a separate license, although the records maintained on licensed premises must reflect all firearms held in the separate storage facility. Firearms may be shipped directly to separate storage facilities as long as they are properly recorded as an acquisition in the licensee’s records.

[27 CFR 478.50]

Edited to add: taurus4life, since you mentioned that you were considering an office so you can comply with zoning issues, and mentioned the possibility of "storage of firearms for resale" at home, I will add that you should also double check with your local laws and zoning. Reason being is if they prohibit the retail business activity at your home, they may prohibit you receiving shipments at your home for your business, as well as storing goods for resale. If your zoning doesnt allow "retail sales," they may not allow "warehousing" there either. Also, the ATF requires you to be in compliance with local, state, and federal laws. I just wanted to mention this to help ensure you stay in compliance with the laws.