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Old February 10, 2011, 05:24 PM   #1
maillemaker
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How to become an FFL dealer?

So I was annoyed today as I went to buy a striped AR receiver (my first AR, hooray!) from AIM Surplus today, and it dawned on me that this is a "firearm" and must go through an FFL. Called around town and one place wanted $45, and another $50 to do the transfer! Finally a friend hooked me up with a guy who works out of his house and has an FFL and does transfers for $25.

I know they have clamped down over the years on what it takes to get an FFL, but how hard is it to do? Can I set up an "in home" internet-based gun store? I don't have a brick-and-mortar place to be a store except for my home. I have a shop room that can constitute an actual "place of business" easily enough.
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Old February 10, 2011, 05:49 PM   #2
dogtown tom
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Quote:
maillemaker
I know they have clamped down over the years on what it takes to get an FFL, but how hard is it to do? Can I set up an "in home" internet-based gun store? I don't have a brick-and-mortar place to be a store except for my home. I have a shop room that can constitute an actual "place of business" easily enough.
It's easy as filling out the application and mailing it in with a check.

It is internet myth that a brick & mortar storefront is required by ATF- never has been, never was, likely never will be. If you can legally operate a business at your proposed "licensed premises" then ATF will issue you a Federal Firearms License. That "licensed premises" can be your dining room, spare bedroom or a tin shed with dirt floor in your backyard. The "licensed premises" is is the only place where you can conduct business (other than a gun show).

Operating legally means holding all permits, business licenses, sales tax certificates, etc as required by you state, county, city and even homeowners association if you have one. If your home is zoned residential and home based business is not allowed.....no FFL for you. ATF will check to see that you meet all these requirements.

An FFL is only issued to a person or business who intends to be in the business of dealing (or manufacturing) firearms. You will not get a license if you plan to use it to enhance your personal collection.

There are numerous threads on this forum and many others that detail how to go about getting an FFL. If you go to ATF.gov they even have "How to Become an FFL" http://www.atf.gov/firearms/industry/
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Old February 10, 2011, 06:43 PM   #3
5.56RifleGuy
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Local laws may have a problem with retail from the home, so you have to check with them also.
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Old February 10, 2011, 07:53 PM   #4
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Operating legally means holding all permits, business licenses, sales tax certificates, etc as required by you state, county, city and even homeowners association if you have one. If your home is zoned residential and home based business is not allowed.....no FFL for you. ATF will check to see that you meet all these requirements.

An FFL is only issued to a person or business who intends to be in the business of dealing (or manufacturing) firearms. You will not get a license if you plan to use it to enhance your personal collection.
Take the above quote as the Gospel. The only FFL you can have to enhance "your " collection is a C&R FFL (curio & relics)
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Old February 10, 2011, 09:34 PM   #5
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Oh I have no doubt of that. I would have to run a legitimate business in order to also have the benefit of being able to buy guns through the mail. It's a shame one has to jump through such hoops, but I'm about fed up enough to do it.
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Old February 11, 2011, 03:19 AM   #6
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Find out how much your city charges for a business license and if your state has any requirements such as sales tax. Remember that if you have an FFL your house is subject to search at any time and that your name and address will be part of the public record as a gun dealer.

Just curious - if you get your FFL how much are YOU going to charge to do transfers?
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Old February 11, 2011, 03:28 AM   #7
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Yeah, I've run a business before and it's pretty easy to do the paperwork in this state (Alabama).

Is there a cost associated with running something through NICS? If not, I can't see charging anything to do a transfer, unless I ended up doing lots of them so that they took up my time. But every time I've gone through NICS it's been like 3 minutes of time. $10?

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Old February 11, 2011, 05:44 AM   #8
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And here I thought that to become an FFL dealer, you have to be the child of an FFL dealer or save the life of an FFL dealer.
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Old February 11, 2011, 07:31 AM   #9
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I work at a gun shop. I am also in the final stages of receiving my own type 1 FFL. Originally I wanted to go through my home for my business, but that was out because of zoning. I then used the address if the gun shop, with permission, and filed for my FFL. There are multiple pages of questions to answer. You must supply a 2 inch x 3 inch photo as well as supply 2 sets of finger prints that must be taken by the local LEO. All that info gets mailed in and then you wait. It took me 2 months to get the call back.
Then I scheduled a time so the federal inspector could come to the place I will be conducting business and had about a 3 hour talk about regs and procedures. As well as answer questions about security and any future intentions for Internet sales, ammo sales, reloading supply sales and a few other things. After that interview is complete he has to double check with local zoning and file his paperwork with his office so they can go over it once again. Then you wait again for up to 4 weeks. The hole process takes up to 3 months. So yes I would agree with the jumping through hoops terms you used. The fee for a type 1 FFL is $200.00 every 3 years.
As far as charging for transfers. I don't think $25.00 is out of line at all. After all you must keep those 4473's for a minimum of 20 years, or until you close the business. That's a lot of filing and paper storage responsibility for 25 bucks. Most of the guys are raising the transfer fees because of the Internet sales. The dealers are getting tired of loosing sales because of them.The usual mark up on a new gun at a shop is about 75 bucks. Well when people bypass them and just order them on line they only get the transfer fee. So that is why they are jacking up the price of transfer fees. I envision a day that all brick and mortar dealers will be charging $75.00 for Internet transfer fees. It is the only way they will be able to keep the lights on and make a living.
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Old February 11, 2011, 09:58 AM   #10
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If not, I can't see charging anything to do a transfer, unless I ended up doing lots of them so that they took up my time.
Your business and you can do as you please as far as pricing goes. 4473's and keeping a bound book up to date may just change your mind on doing transfers for free. Are you willing to absorb the cost of the phone calls?
I purchased a rifle recently and at 9:20 am the store waited 20 min on hold for the NICS. Just something else to ponder
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Old February 11, 2011, 10:36 AM   #11
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Every time I have to deal with putting a firearm through the mail this issue makes me madder than hell. This whole idea of having to deal with and pay and drive to a middle man just to buy something over the freaking internet is retarded. I'm surprised they don't make me send my purchase order by carrier pigeon written in Morse code.

There is no reason why the person doing the selling can't do the background check. If they trust who I am enough to accept my credit card payment and get paid, then they should be able to trust who I am sufficiently to do a background check.

This whole thing is simply a mechanism to try and make it harder to buy firearms. The last thing they want is national competition for firearm sales.

Quote:
Then I scheduled a time so the federal inspector could come to the place I will be conducting business and had about a 3 hour talk about regs and procedures. As well as answer questions about security and any future intentions for Internet sales, ammo sales, reloading supply sales and a few other things. After that interview is complete he has to double check with local zoning and file his paperwork with his office so they can go over it once again. Then you wait again for up to 4 weeks. The hole process takes up to 3 months. So yes I would agree with the jumping through hoops terms you used. The fee for a type 1 FFL is $200.00 every 3 years
Yeah, I actually went through all the paperwork and almost sent it in about 4 years ago - the last time I tried mailing a firearm to someone.

Question: Can you legitimately apply for an FFL solely to set up an internet-based gun store? What other sorts of legitimate businesses could you set up that don't require a retail front-end? Gunsmith? Engraver? Firearm cleaning service?

Quote:
Your business and you can do as you please as far as pricing goes. 4473's and keeping a bound book up to date may just change your mind on doing transfers for free. Are you willing to absorb the cost of the phone calls?
I purchased a rifle recently and at 9:20 am the store waited 20 min on hold for the NICS. Just something else to ponder
I've had pretty much free long distance for years now. I currently use MagicJack - $20 a year for unlimited local and long distance calling.
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Old February 11, 2011, 12:47 PM   #12
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Is there a cost associated with running something through NICS? If not, I can't see charging anything to do a transfer, unless I ended up doing lots of them so that they took up my time.
NICS is free. It's just the part you see. You don't see the receiving packages through the mail/UPS, unpacking them to log them in, calling the sender to get his address for your log book, the cost of your insurance policy (you are going to insure all the guns in your inventory or are you just going to assume the liability for all the other people's guns you have in your house?), not to mention your time for logging it in, logging it out, repacking it and shipping it back when the customer refuses it, etc, etc, etc.

EVERY SINGLE one of them is going to take a lot more time than you think. If you do them for free and word gets around, you'll end up doing nothing else. Eventually either you'll be broke or you'll end up charging $25 just like everyone else.
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Old February 11, 2011, 03:45 PM   #13
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natman: ....Remember that if you have an FFL your house is subject to search at any time ...
Horsehockey.
A search requires a warrant issued by a judge pursuant to a criminal investigation . ATF is ONLY allowed to inspect your records and inventory.

If ATF is searching your sock drawer you have bigger problems than a typo in your bound book.

Quote:
your name and address will be part of the public record as a gun dealer.
Which makes having a successful business possible. Lord help him if he wants to print business cards that also include a phone number.

The price of tin foil is skyrocketing!!!!!!!

Quote:
maillemaker
Is there a cost associated with running something through NICS?
The FBI NICS is a free service & a toll free call. Not every state uses the FBI for the Brady Law background check, preferring to have their state police or a state agency do it and collect a fee for doing what the FBI provides for free.

Quote:
If not, I can't see charging anything to do a transfer, unless I ended up doing lots of them so that they took up my time. But every time I've gone through NICS it's been like 3 minutes of time. $10?
Free transfers? Good luck with that business plan.

Quote:
raftman And here I thought that to become an FFL dealer, you have to be the child of an FFL dealer or save the life of an FFL dealer.
The first rule of being an FFL is not to talk about being an FFL.......


Quote:
911JB The fee for a type 1 FFL is $200.00 every 3 years.
Not quite.....$200 for the first three, $90 for the next three year renewal period.

Quote:
As far as charging for transfers. I don't think $25.00 is out of line at all. After all you must keep those 4473's for a minimum of 20 years, or until you close the business. That's a lot of filing and paper storage responsibility for 25 bucks.
Exactly.

Quote:
maillemaker There is no reason why the person doing the selling can't do the background check....
Huh? The dealer is required by Federal law to run a NICS check on every firearm sale.

Quote:
This whole thing is simply a mechanism to try and make it harder to buy firearms. The last thing they want is national competition for firearm sales.
Again.......HUH? It isn't dealers who require a NICS check....it's Federal law that requires it. Blaming gun dealers for the NICS check is like blaming the car salesman because you have to have a drivers license to drive the car.

Quote:
Question: Can you legitimately apply for an FFL solely to set up an internet-based gun store? What other sorts of legitimate businesses could you set up that don't require a retail front-end? Gunsmith? Engraver? Firearm cleaning service?
Reread my first post. ATF does not require a "retail front end" whatever that is..........simply a "licensed premises". If you do any business involving a firearm such as gunsmithing, engraving, cleaning.............you are required to possess an FFL.
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Old February 11, 2011, 05:42 PM   #14
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maillmaker, you do not value your time, do you? If it takes you over 30 minutes per transaction (receive firearm, sign for firearm, inventory firearm, call waiting customer, waiting for customer to show up, filling out paperwork, checking to make sure customer is legal, transferring firearm, submitting paperwork, filing & keeping the papaerwork, etc) and you charge nothing, you are dishonoring your time with your family. As a business person, one must charge enough at each transaction to make investing the time and energy worth the effort. So I believe that $25-$30 per transaction is not out of line to pay someone for helping me obtain the firearm I want to own. Please don’t minimize the value of your time!

I understand your frustration with the system and applaud the fact that you want to do something about it. But your effort should be rewarded as an investment. Your effort needs to be rewarded with cash. Use it to buy your wife some flowers or taking the family to the movies.
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Old February 11, 2011, 07:40 PM   #15
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Quote:
Originally Posted by maillemaker
There is no reason why the person doing the selling can't do the background check.
Other than the fact that the dealer transferring the firearm to the owner is required by law to run a background check, you mean? Might that not be a reason?
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Old February 11, 2011, 10:46 PM   #16
911JB
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Quote:
Question: Can you legitimately apply for an FFL solely to set up an internet-based gun store? What other sorts of legitimate businesses could you set up that don't require a retail front-end? Gunsmith? Engraver? Firearm cleaning service?
I believe internet sales is OK. Also gunsmithing would be OK. However zoning must be OK with it. As well as if you are getting the gunsmith license , while you can receive and transfer a few firearms, the want you to change your license to retail sales if you do many at all. Or at least that is what I was just told.

Quote:
Not quite.....$200 for the first three, $90 for the next three year renewal period.
That is correct, my mistake. Thank you for pointing that out.
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Old February 11, 2011, 11:54 PM   #17
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911JB ...As well as if you are getting the gunsmith license , while you can receive and transfer a few firearms, the want you to change your license to retail sales if you do many at all. Or at least that is what I was just told.
There's no such thing as a "gunsmiths license", to do gunsmithing you'll need either an:
01FFL Dealer in Firearms
07FFL Manufacturer of Firearms

Holders of either license may do gunsmithing........but an 01FFl may only work on firearms given to him by customers.

Example1: A customer brings in an AR stripped lower and wants dealer to install the parts kit, buttstock & pistol grip- that is considered gunsmithing and requires either an 01 or 07 FFL.

Example2: Dealer buys stripped AR lowers, parts kits, stocks, etc AND complete AR uppers....intending to build them and offer them for sale in his shop. He needs an 07FFL as that is considered "manufacturing".

ATF has changed how they view "manufacturing" over the last two years. Be careful.
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Last edited by dogtown tom; February 12, 2011 at 12:00 AM.
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Old February 12, 2011, 04:24 AM   #18
natman
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Quote:
Remember that if you have an FFL your house is subject to search at any time ...
Horsehockey.
A search requires a warrant issued by a judge pursuant to a criminal investigation . ATF is ONLY allowed to inspect your records and inventory.
OK, the word "house" was a bit broad. As you say, the ATF can search your inventory. In the OP's example it was in his house.

Quote:
Quote:
your name and address will be part of the public record as a gun dealer.
Which makes having a successful business possible. Lord help him if he wants to print business cards that also include a phone number.

The price of tin foil is skyrocketing!!!!!!!
You may feel differently when your local newspaper prints a banner headline:

GUN DEALERS IN OUR NEIGHBORHOODS!!!
with a hysterical story how your children are in danger, etc, along with a handy burglar's guide listing the names and addresses of every home FFL in the county.

Including yours.

(Yes, this has actually happened.)

I'm not saying he shouldn't get an FFL because of these considerations. But he should be aware of them beforehand.

Last edited by natman; February 12, 2011 at 04:50 AM.
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Old February 12, 2011, 07:16 AM   #19
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There's no such thing as a "gunsmiths license", to do gunsmithing you'll need either an:
01FFL Dealer in Firearms
07FFL Manufacturer of Firearms
Yes and no.
While it is a type 1 license they write it up as gunsmithing in the business description. They want you to state weather you will be a smith or a salesman, or both at the time of application. I know that because I started out just writing it up as a smith and when the inspector talked to me he said I should add the term retail sales of firearms to my job description now or I would need to tell them in the future if I started selling. I'll give you my inspectors name and # if you want to ask him yourself.
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Old February 13, 2011, 03:29 PM   #20
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Quote:
911JB
Quote:
Quote:
There's no such thing as a "gunsmiths license", to do gunsmithing you'll need either an:
01FFL Dealer in Firearms
07FFL Manufacturer of Firearms
Yes and no.
While it is a type 1 license they write it up as gunsmithing in the business description. They want you to state weather you will be a smith or a salesman, or both at the time of application. I know that because I started out just writing it up as a smith and when the inspector talked to me he said I should add the term retail sales of firearms to my job description now or I would need to tell them in the future if I started selling. I'll give you my inspectors name and # if you want to ask him yourself.
Again, there is no such thing as a "gunsmiths license". To gunsmith you need either an 01 (Dealer) or 07 (Manufacturer) FFL. If you have an FFL with "Gunsmith" on it please post it. What you put on your application is immaterial.
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Old February 13, 2011, 10:59 PM   #21
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Huh? The dealer is required by Federal law to run a NICS check on every firearm sale.
My point was that the people selling these things through the mail ought to be able to do the background checks. We shouldn't need a middle man. I understand this is not how things actually work today.

Quote:
Again.......HUH? It isn't dealers who require a NICS check....it's Federal law that requires it. Blaming gun dealers for the NICS check is like blaming the car salesman because you have to have a drivers license to drive the car.
The way it stands right now unless you are buying some unique firearm there is little incentive to buy from a non-local dealer since you will end up paying more to receive it with shipping and FFL transfer fees. This, of course, is quite convenient for all FFLs, as it eliminates competition in the marketplace.

I would not be surprised at all to find out that the legislation was lobbied to be just that way.

Steve
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Old February 13, 2011, 11:03 PM   #22
maillemaker
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maillmaker, you do not value your time, do you? If it takes you over 30 minutes per transaction (receive firearm, sign for firearm, inventory firearm, call waiting customer, waiting for customer to show up, filling out paperwork, checking to make sure customer is legal, transferring firearm, submitting paperwork, filing & keeping the papaerwork, etc) and you charge nothing, you are dishonoring your time with your family. As a business person, one must charge enough at each transaction to make investing the time and energy worth the effort. So I believe that $25-$30 per transaction is not out of line to pay someone for helping me obtain the firearm I want to own. Please don’t minimize the value of your time!
You need to understand, I want an FFL solely so that I can buy firearms directly through the mail for myself. Yes, I understand you are not supposed to do this, and that you have to be a "real" dealer in order to get an FFL. So if I'm forced to be a real dealer in order to have the ability to buy firearms directly through the mail, that is something I am willing to consider. But I don't see myself doing lots of FFL transfers for people. I certainly don't want to do them.

Quote:
I understand your frustration with the system and applaud the fact that you want to do something about it. But your effort should be rewarded as an investment. Your effort needs to be rewarded with cash. Use it to buy your wife some flowers or taking the family to the movies.
As I said, I'm mostly frustrated with the fact that I have to go through a middle man and pay a tax to have a firearm shipped to me in the mail. I don't really want to run a firearms business and would only do it for the side benefit of what I'm really after in the first place.

This is not to say that I would not run an absolutely to-the-the-letter-of-the-law business. I just wouldn't worry about it making money or not.
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Old February 13, 2011, 11:05 PM   #23
maillemaker
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with a hysterical story how your children are in danger, etc, along with a handy burglar's guide listing the names and addresses of every home FFL in the county.
Well, that is a good point I had not thought of. Nothing like a public record that says, "This house is a good place to steal firearms from."

Steve
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Old February 13, 2011, 11:09 PM   #24
maillemaker
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While it is a type 1 license they write it up as gunsmithing in the business description. They want you to state weather you will be a smith or a salesman, or both at the time of application. I know that because I started out just writing it up as a smith and when the inspector talked to me he said I should add the term retail sales of firearms to my job description now or I would need to tell them in the future if I started selling. I'll give you my inspectors name and # if you want to ask him yourself.
Well this sounds promising. You could obtain an FFL without the expectation of conducting a lot of retail firearm business.

Steve
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Old February 14, 2011, 02:06 AM   #25
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You dont want it!! really :cool:

Getting an FFL is not worth the hassle unless you really want to be in the firearms business full time. Simple pen and ink mistakes can cause you to have huge legal bills. There are so many ways to find your self behind the eight-ball it is not worth it. (IMHO)

Lets not forget little things like insurance... Call you local state farm agent and ask what it will cost....

I have bought many guns off of internet and I shopped around and found FFL holders that charged reasonable fees. $20-$35 I will be legal, but I want as little interaction with the ATF as possible.

I had a C@R license and did not renew it for the simple reason it was not worth the head ache. If I bought a rifle and upon receiving it found that its barrel is hopeless pitted I wanted the clear cut freedom to modify the rifle. This according to the letter of the law is not legal.

I knew people that got a C@R and bought up scores of rifles with plans to sporterize them. Will the ATF ever come to their house and cross check their records to inventory? How many rifles in your C&R collection can you sell or trade each year?

Less paperwork more happiness
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