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Old September 29, 2011, 04:24 PM   #1
Ruger4Life
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Starting an ammo mfg business

I'm planning on starting a ammo manufacturing Business and I would appreciate any pointers anyone can give that would help me get started: i.e., regulations, licenses needed, marketing strategies, etc,.

thanks!
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Old September 29, 2011, 04:31 PM   #2
Doyle
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Let me get this straight - you want to start to manufacture ammo but you don't know what you need in order to do it legally?
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Old September 29, 2011, 04:45 PM   #3
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I take it that you haven't been studying this business plan in great detail yet. It is probably beyond the scope of this forum to give detailed meaningful advice on such a plan. All I know is the short answer to your question about regulations is there are a LOT!

There are a lot of die hard knowledgeable reloaders here who have no doubt pondered the idea of commercial ammo making. It doesn't take them long to realize the answer to such musing is "nope, no way, no how, just forget it".

I don't mean to sounnd so negative, but if you're serious about it, you need to do some basic research on the internet for yourself. An afternoon of reading Google searches will make you understand that you have layer upon layer of different government agencies that are determined to thwart your dreams. Between the regulations, insurance, taxes, and startup capital, you will understand why there is not a multitude of small ammo makers out there.
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Old September 29, 2011, 04:59 PM   #4
Chaz88
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An afternoon of reading Google searches will make you understand that you have layer upon layer of different government agencies that are determined to thwart your dreams. Between the regulations, insurance, taxes, and startup capital, you will understand why there is not a multitude of small ammo makers out there.
Agree. I spent many hours looking into this and other gun related business ventures. For most of them and the amo production in particular I could not make the numbers work as a stand alone amo business. If it was part of a larger business based on a well developed business plan it could help the bottom line. I have done the same kind of research on other business ventures that I was passionate about. But passion does not pay the bills, the numbers have to work.
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Old September 29, 2011, 05:00 PM   #5
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Having worked for a great man that had his own business in reloading and manufacturing lead bullets there are two things you need to look into before you start.
Liability insurance: This went up so much he closed down the business and this was back in the 90’s
Home insurance: If you’re planning on doing this in your home, then you’re starting a business handling flammable products and in large quantities.
Your home insurance will be voided if something happens. You need to change your home insurance into business insurance. Granted this might depend on the state you live in.
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Old September 29, 2011, 05:16 PM   #6
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As a retired CPA, I always told anyone with an idea about going into business to first compute the gross profit (sales price, less cost of components) and determine how many you would have to sell to pay the rent every month. That was the end of the discussion about 99.9% of the time.
I know about this because I was self employed for over 40 years.
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Old September 29, 2011, 05:28 PM   #7
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And you have to deal with OSHA, local state OSHA, the EPA, local fire codes, and insuance people.
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Old September 29, 2011, 11:40 PM   #8
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Not to add to the negativity...
But I've watched a few small ammo companies start from nothing and see to where they've gone. I mean -- not up close and personal, but I've followed some of their progress through forums and whatnot.

We had a young guy that was totally gung-ho on the project and really got himself going in a fairly strong manner and was supplying local PD's with training and practice ammo and a couple of bad business decisions and some bad luck just completely ruined the guy's life. I don't think he's completely out of the hole he fell in to yet.

I've seen another boutique maker very nearly throw in the towel when his "right to the edge" loads (which is what so many people actually want) don't mesh well with certain platforms and a gun get destroyed and the story spreads on the 'net like wildfire.

I've seen another guy go from being the premier experimenter in a particular caliber that REALLY needed someone to cater to it, to building a business out of the idea -- and I've seen that business really get trashed in a lot of forums when end-users can't seem to replicate the claims on the website and printed on the box of ammo with their own guns & chronographs.

It's my opinion that you'd need to be very, very wealthy to even have a snowball's chance in hell to succeed in commercially making ammo.

We've got a guy or two that stops in here on occasion who has been down that road and is no longer in the business. Like when he posts on just about anything, I really hope he drops a post in this thread and we can all learn more about it.
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Old September 30, 2011, 02:35 AM   #9
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Say you start with the cheapest GI brass you can find, and pay someone to take out the primer crimp for you and you can buy it for 93 dollars per 5000 lot.

Say you buy a 75 gr BTHP bullet from Wideners for 613 dollars per 5000 dollar lot.

Say you think that 23 grains of TAC powder it what you think is safe and accurate in your load.

And finally you decide to use Wolf 5.56 primers because they are the cheapest that you can get.

You are looking at 29.4 cents per loaded round just for components.

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Old September 30, 2011, 08:13 AM   #10
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Ammo Business Advice

After starting, operating and selling three successful business ventures, my advice is 1) pick a different business; 2) stick with your current day job.

++What dick and jag said.

Find yourself a lawyer and a cpa - listen to what they tell you.
Don't hire friends and family.
How do you compare to all the other commercial reloaders - cheaper; higher quality; fast service?
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Old September 30, 2011, 11:01 AM   #11
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Not that I would discurage you, but the first thing you need is a good lawyer.

Incorporation, Federal Class 6 FFL, State business lic, local permits, fire department inspections, insurance requirements, building permits, zoning regulation changes, EPA and OSHA inspections, more insurance (LOTS), and permission of the neabors who's homes or business you will be next to (or blow up.)

These are necessary before you buy your first commercial press.
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Unless you will working in the middle of nowhere with no towns or phone service or electrical service or water (could do a well), the biggest thing that will kill your business, is the zoning laws and requirements, will shut you down faster than you can sneeze.
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Old September 30, 2011, 11:12 AM   #12
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I thought about it, too. The conclusion I came to was that I would have to move out of the US to embark on such a venture.

Didn't feel like moving to Russia.
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Old September 30, 2011, 11:19 AM   #13
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Thanks for all the advice.
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Old September 30, 2011, 02:21 PM   #14
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I am thinking there is likely some very compelling reasons why a company like, let's say Powder Valley for example, isn't cranking out home grown. They surely get good pricing on the components plus they should have no need to worry about zoning code there in the boonies, yet I don't think they're producing ammo. Wonder why?
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Old September 30, 2011, 02:56 PM   #15
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I'd say that the most obvious reason why PVI isn't making ammo is because they are likely kicking some major butt in what they already do.

I mean... McDonald's probably has enough capital to start up a food delivery business and compete with all the local pizza joints, but McDonald's is too darn busy counting all the money they make every minute of the day.
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Old September 30, 2011, 06:31 PM   #16
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Mfg'ing ammo as a business ...

strikes me a little like building a boat in your back yard out of concrete....it can be done ... but it requires some knowledge ...and commercial general liabiltiy insurance ( that you'll be lucky to get for under $ 25K a year ) ...and you cannot do this out of your home and keep your homeowner's insurance ...

and now you start to realize why ammo is expensive ...

reload for your own needs ...forget selling ammo ...its a bad idea !
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Old September 30, 2011, 08:17 PM   #17
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No one seems to have mentioned ITAR fees - 2500/year just for that one, IIRC

10,000,000 in liability insurance, local licenses, permits, zoning OK, corporation to keep personal assets separate, EPA/OSHA and on and on as mentioned

If you think you are going to be using a Dillon or two and make any money, you need to rethink this - you will need to buy primers in huge quantities, like a million at a time, powder in kegs by the hundred weight, bullets by the ton, etc., etc.

You REALLY need to understand business before you do anything, THEN talk to the lawyer and CPA - if you get that far
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Old October 1, 2011, 08:34 AM   #18
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All that having been said, there are good reasons to do your research and focus your lines. If your dream is to begin an ammo company, there's simply the challenge of getting it right. There are some small ammo companies out there that succeed and there's no reason why you can't succeed if you know what you're doing and work hard at it.

Back in the early 1980s I was a young cop and like all cops, we had to qualify yearly with our firearms. Training ammo costs money and we were having problems with the quality and cost of training ammo. Someone mentioned a little start-up company in Ruleville, MS who was making training ammo. Nothing special, just good quality ammunition at a very attractive price. Our firearms instructor looked at the price sheets and ordered a dozen cases. The ammo was just exactly what it purported to be. It was all .38 special ammo, with every headstamp imaginable, but it was good, clean consistent ammo and for many years that's all our agency shot for training. Those guys had found a niche and had capitalized on it. I'm talking about Precision Delta ammo and those guys are still in business, cranking out ammunition.

It's possible to start an ammunition company even today. You've got to do your market research, start slow and build steadily.

Listen to they nay-sayers. They're trying to keep you out of trouble, and all the things they're telling you is true. If you're building something that goes bang, you're going to need permits, licenses, insurance, all those things. But, if starting an ammo company is your dream, then pursue your dream, just pursue it intelligently. This is still America and we need good ammo.
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Old October 1, 2011, 09:43 AM   #19
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Quote:
All that having been said, there are good reasons to do your research and focus your lines. If your dream is to begin an ammo company, there's simply the challenge of getting it right. There are some small ammo companies out there that succeed and there's no reason why you can't succeed if you know what you're doing and work hard at it.

Back in the early 1980s I was a young cop and like all cops, we had to qualify yearly with our firearms. Training ammo costs money and we were having problems with the quality and cost of training ammo. Someone mentioned a little start-up company in Ruleville, MS who was making training ammo. Nothing special, just good quality ammunition at a very attractive price. Our firearms instructor looked at the price sheets and ordered a dozen cases. The ammo was just exactly what it purported to be. It was all .38 special ammo, with every headstamp imaginable, but it was good, clean consistent ammo and for many years that's all our agency shot for training. Those guys had found a niche and had capitalized on it. I'm talking about Precision Delta ammo and those guys are still in business, cranking out ammunition.

It's possible to start an ammunition company even today. You've got to do your market research, start slow and build steadily.

Listen to they nay-sayers. They're trying to keep you out of trouble, and all the things they're telling you is true. If you're building something that goes bang, you're going to need permits, licenses, insurance, all those things. But, if starting an ammo company is your dream, then pursue your dream, just pursue it intelligently. This is still America and we need good ammo.
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Old October 1, 2011, 10:28 AM   #20
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Call the ATF, hire a good accountant and a very good lawyer versed in ATF regulations.
Be prepared to spend big $$$ up front and not make any personal income for, at least, two years.
Enjoy.
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Old October 1, 2011, 11:51 AM   #21
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My opinion, probably worth what you paid for it, but here goes:

Do you have any experience in the ammunition business? For starters I would say that you make contacts with someone in the business and pick their brain. You need to be a subject matter expert on ammunition and more than a passing familiarity on how the business side functions. Someone who has never held a job in the restarant busness shouldn't open a restarant unless they have an experienced partner who can school them on the issues they will face. If you've never been in the business, you will be caught flat footed by all the things you never thought of.
You are going to try to get into a manufacturing business which is a challenge in itself. Ask yourself why many manufacturers are moving to Mexico or China. To add additional complication, you wish to manufacture a product that is subject to heavy govt oversight and regulation. In addition to someone who is a subject matter expert on ammo, you would be well served to have an expert on compliance issues. Thanks to the "big govt is better govt" theory that we have been operating under for the last 40 years, compliance will likely be a large piece of your overhead expenses.
EPA, OSHA, ATF are just the beginning of the alphabet organizations you will need to keep happy. State & local govts will want their pound of flesh as well, Zoning restrictions, fire codes licensing... Oh yeah, employees and compliance with labor laws and tax witholding and Obamacare regs on the horizon.
I don't wish to urinate in your Wheaties. Just trying to illustrate that you will have probably hundreds of issues to deal with before you even start devoloping & marketing your product.
I know it doesn't sound like it, but I really do wish you good luck if you choose to pursue this venture.
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Old October 2, 2011, 12:08 PM   #22
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Please read my signature line

Frankly, I retired due to mass production taking the joy from it, and dealing with weenies.

Oh, and lead is heavy. Bullets are made with lead.
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Old October 2, 2011, 12:51 PM   #23
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Distribution is another area you have to know.
One of my favorite stories is of a friend of mine in the early 70's when bass fishing was exploding.
He decided he wanted to manufacture a lure, so he experimented for some time and finally came up with a nice lure that was not a copy of the standard spinner baits. I did the research for him on taxes, regulations, etc. He got his molds, packaging, etc., and had his wife and kids working on them during the day.
Once he got everything together he took them to a local guy who was the sporting goods distributor to TG&Y in Oklahoma. He sat down and showed him his product and the guy was impressed. He said, OK let me have 100 gross to start with!
My friend nearly fell out of his chair. He said, "I was thinking more like 10 dozen." The guy said, that wouldn't even let me get one to each store!
End of business.
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Old October 4, 2011, 07:13 AM   #24
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I'll double down on what PawPaw said.

Good Luck.
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Old October 4, 2011, 10:35 AM   #25
ammorelds
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06 ffl from batf is required....insurance is not required but is good practice $2100 a year for the cheapest i could find.....mine is through www.firearmsinsuranceagent.com

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