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advice on ammo manufacturing - custom reloading

Discussion in 'Handloading and Reloading' started by rvrbraun, Feb 27, 2004.

  1. rvrbraun

    rvrbraun New Member

    i have the equipment, the experience, and will soon be retiring - considering starting a small custom reloading business. anyone been there, done that and willing to advise on regulations, pitfalls, lessons learned?
  2. bogie

    bogie Well-Known Member

    Insurance, so that when Bubba figures out a way to blow up his rifle with your perfectly good ammo, and then blames you for it, you still have a retirement...
  3. cordex

    cordex Well-Known Member

    "Custom reloading"
    What market will you be selling to? Rare ammo? Working up loads for competition shooters who don't reload?

    Or do you just intend to start up a little reloading business for common calibers?
  4. ocabj

    ocabj Well-Known Member

    I know you need a permit to sell ammunition (at least here in California), but won't you need some kind of Federal permit to manufacturer ammunition for commercial sale?
  5. Jeeper

    Jeeper Well-Known Member

    I think there was a topic like this about 3 or 4 months ago where someone was starting this. I would try a search and contact that person about it.
  6. rvrbraun

    rvrbraun New Member

    target (go ahead and groan) market is CAS and SASS, plus pistol/revolver "practice" loads for non-reloaders who shoot a lot. current equipment can produce 6-900 rounds per hour.

    liability plan is to incorporate, carry errors and ommissions insurance.

    ? is the permit process. did a general search of the web and got no useful info.
  7. ocabj

    ocabj Well-Known Member

    It looks like you need a permit. The ATF FAQ makes a reference to one (http://www.atf.gov/firearms/faq/faq2.htm#h1):

    I couldn't find a form to apply for a license to manufacturer ammunition on the ATF forms webpage (http://www.atf.gov/forms/5000.htm), though.
  8. kimbernut

    kimbernut Well-Known Member

    Custom reloading

    About six years ago I was looking into getting a Gunsmithing FFL and in the process of reading over the info packet from the Tampa BATF office I noticed that an FFL was also required for ammunition manufacturing.
    Good Luck in your endeavor - I would think if you're on the CAS/SASS trail anyway (I thought I detected a twinkle in your eye through your keyboard when you mentioned CAS/SASS) you might as well have it help pay your expenses anyway.
  9. Quantrill

    Quantrill Well-Known Member

    "FITZ", the moderator has been there and done that. He is a wealth of information. Quantrill
  10. redneck2

    redneck2 Well-Known Member

    WeShoot2 custom reloads...might pm him
  11. BluesBear

    BluesBear member

    You'll need a 06 license if you want to load ammo for anyone except yourself. Even if you want to give it away to your friends you'll need a license.

    It's $30 for 3 years.

    The Federal Excise tax on ammo is 11% of the price you sell it for. You don't have to pay tax on ammunition loaded in customer supplied casings.
  12. Quantrill

    Quantrill Well-Known Member

    When I tried to get an FFL about 30 years ago to manufacture ammo, the ATF took my application and kindly informed my insurance company that I had a ammunition factory in my basement. Needless to say, I canceled the the application and told the insurance company, it was a hobby. Quantrill
  13. cxm

    cxm Well-Known Member

    Commercial Reloading

    I operated a commercial reloading business in the 1970s.

    It is a LOT of work, not only to make the ammo, but to get shelf space in stores to sell it. The sales part is much harder than the technical part.

    My advice is find a retired salesman (good one) to sell on straight commission. An alternative is to set up a route salesman and sell to shops on consignment... it is much easier to get space on consignment...though there are risks there if the shop's has bad cash flow.

    As someone else noticed, insurance is a must. Also business license, tax certificate, a manufacturer's FFL to start out... if you have employess there is even more.

    The profit level is greater if you cast your own bullets for the lead loads, and you have to have good soruces of brass (always several sources for all supplies...never just one) and other supplies...and buy in BIG quantities... the profit margin is pretty small in this business.

    You will need a business location that is zoned so you can conduct such a manufacturing business.

    You will also want to find a supplier of new brass with your headstamp and jacketed bullets for your new business... not hard to do, but takes a good bit of cash up front.

    Let me know if I can answer any specific questions.


  14. BluesBear

    BluesBear member

    When I recieved my first 06 license in 1978, I was doing it in my basement and the ATF didn't tell anybody anything. I renewed that license 11 times.

    50,000 pieces, per headstamp, for the initial order plus die/setup fees. Reorders are 100,000 pieces.
    Each caliber or variation is a separate headstamp. If you were doing .38 Special and .38 Special +P that would be two separate headstamps and two separate charges.
  15. Dannix

    Dannix Well-Known Member

    Hate to bump such an old thread, but I'm getting started in reloading and have a few friends that would like get some plinking reloads from me to save a few bucks. Very much a hobby, but how does the profit in "for the purposes of livelihood or profit" work? If I factor in the labor (and at least initially the cost of equipment) in no way would I be profiting.

    And at what point does money have to be declared on income taxes? I've googled but couldn't find it. I assume paying a neighborhood kid $30 to mow a law isn't illegal, but at what point does it become so? Gifting, iirc, is limited to $13k/year for off-the-record gifting, but this is a transaction not a gift.
  16. RandyP

    RandyP Well-Known Member

    Income is figured the minute it hits your wallet. Legitmate business expenses are just that, when you fill out the correct IRS business tax forms.

    If you charge anything for your reloads, even to your friends, that is:

    A. Income

    B. You operating an ammunition manufacturing facility which is now federally regulated, plus any zoning issues.

    C. YOU who now are massively liable in the unlikely (or likely) event of a mishap that causes injury to any of your customers/former friends. And you better believe that the instant injury, medical bills, disability etc get involved, friendship leaves town in a hurry.

    D. at this point do you even care if there is a D? LOL
  17. Dannix

    Dannix Well-Known Member

    "If you charge anything for your reloads"
    Gross profit = Net sales – Cost of goods sold.
    Net income = Gross profit – Total operating expenses.
    So yeah, apparently labor is irrelevant. Charging COGS (cost of materials in this case) appears to be OK.

    Good point on liability. Plinking loads is what's on the menu, but there's always the, however remote, possibility of overcharging despite precautions.
    Last edited: Dec 27, 2009
  18. RandyP

    RandyP Well-Known Member

    And I (thankfully) am neither a lawyer nor an accountant -lol - but were I thinking about starting up a business, even a tiny cottage industry, I would be talking to both professions just to cover my aging keester.

    Always remember the mantra of those who help out their friends....."No good deed goes unpunished."
  19. Dannix

    Dannix Well-Known Member

    Yeah, putting this on the back burner until if/when I've got every duck possible in a row.

    It would be nice if we had the economic freedom of yesteryears. :(
  20. evan price

    evan price Well-Known Member

    You need an FFL '06 which is $30 for three years to the ATF.

    Then you need to register with ITAR via the US State Department, even though you do not ever intend to export anything, you are now a producer of war materials. Cost is $2250.00 per year to start and goes up from there.

    Plus you need insurance. Plus excise taxes. etc.

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