A transfer only gun shop?

Discussion in 'General Gun Discussions' started by Jason_W, Aug 26, 2017.

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  1. Jason_W

    Jason_W Member

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    I've been wondering about the feasibility of being a firearms dealer that keeps no inventory, but only conducts transfers for customers who buy online.

    In my area, most gun shops charge an extortionate transfer fee. $50 is the cheapest I've been able to find with $100+ being fairly common.

    I'm wondering if someone could potentially set up a sort of transfers only gun shop. By not purchasing an inventory and finding other creative ways to keep overhead ultra low, someone could potentially undercut the prevailing transfer fee and still turn a profit.

    Additionally, here in California, a classist new gun law kicking in on Jan. 1 will require all online ammo purchases to be transferred through an FFL (I know :barf:). Word on the street is that most FFLs who hate the existence of online ammo purchases will charge the same extortionate transfer fee for ammo orders that they do for firearms, plus a storage fee. It seems there might be a business opportunity for someone who can charge, say $20 for a transfer and offer 2 days free storage.

    There must be laws or other factors that prevent such a business from existing, right?
     
  2. Doc7

    Doc7 Member

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    Isn't this what a kitchen table FFL does? Hundreds of them around me.
     
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  3. Jason_W

    Jason_W Member

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    Very possible. I wish there were some near me. If there are, I guess it's a "you have to know a guy" sort of situation.
     
  4. jmr40

    jmr40 Member

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    There used to be a lot of "kitchen table" FFL's, but the requirements to get and keep an FFL changed several years ago and it isn't really feasible anymore. You can't just get an FFL and sell a few when you want to. I don't know all of the details, but the regulation changes shut down almost all of them. For one thing you have to have regular posted business hours and many other requirements. You can't just meet people by appointment to make a sale of transfer. Pretty sure the costs to get an FFL will mean you have to sell more than a few in order to break even.

    Fortunately there are several places locally that will do transfers for $5-$10. One firing range will do them for free if you use his range. Another guy's primary business is selling antiques. He has an FFL and keeps a few guns in the back, but does more transfers than anything else. But he already has a business that he goes to every day. He doesn't do it from home.
     
  5. Jason_W

    Jason_W Member

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    I could see keeping regular business hours and finding a business location that isn't my home. I'm really looking at the aspect of not keeping an inventory. Maybe if things go well enough, hire a guy who is good at installing scopes and other similar work.

    While I am a natural capitalist, my underlying motive would be to try and help keep gun ownership and the shooting sports within the grasp of the "commoner" in the state of California. Ever notice how the rhetoric of the anti-gun folk is about making guns "harder to get" but "harder to get" always means more expensive? The implication being that it's perfectly cool for the well heeled to have access to guns directly or by proxy, but us filthy poors can't be trusted with a firearm.
     
  6. ants

    ants Member

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    Generally, it's a good idea. Lots of FFL guys do that in my region.

    Look up your local zoning laws to make sure you can conduct that kind of business at your location.
    The FFL application you need won't be processed if you do not meet local qualifications to do business.
    I know this may sound like stupid advice. It isn't.
     
  7. c1ogden

    c1ogden Member

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    I have a friend who did exactly that. He rented a small storefront, about 8x12 feet and started just doing transfers and special orders for people. He branched out and started buying good deals at gun shows and reselling them locally or through GunBroker. He's also made quite a bit of money reselling guns and related equipment that he purchased from estates.
     
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  8. dogtown tom

    dogtown tom Member

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    Oh good grief. The myth continues.
    The only thing that changed was during the Clinton administration when ATF began enforcing laws and regulations that were already on the books. It wasn't "several years ago" but nearly twenty five.



    Sure you can.
    While you cannot get an 01FFL for enhancing your personal collection, there is no required number of "sales" in any ATF regulation.



    There was no regulation change.....just that ATF began enforcement. Many dealers during the Clinton era were issued FFL's without much oversight from ATF. Those that were found to not be in compliance with local laws were given the opportunity to do so.....many chose to give up their FFL rather than get a sales tax permit, business license or abide by HOA and zoning restrictions.




    Nonsense. Absolute and total nonsense.o_O
    No ATF regulation has EVER required that a licensee post their business hours. My city actually prohibits posting a sign outside a home based business.



    Again, nonsense. I do it six days a week.
    Maybe you should read some ATF regulations before hitting Reply.;)




    Well, yeah. An 01FFL costs a whopping $200 for the first three years and a massive $90 for each three year renewal after that.



    I average 170 transfers a month from my home.......by appointment only.;)
     
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  9. grampajack

    grampajack AR Junkie

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    It's an interesting concept. You would certainly save money on inventory and floor space, but then again wouldn't be making money on those items either. I guess what you have to figure out is if the potential loss of profits are justified by the low startup cost. Without any deep thinking whatsoever, my gut feeling is they would be.

    You would have to get on the map, literally. Lots of different websites have FFL finders, and you would need to get yourself added to them. It's going to be essential, as well, that you're in a centralized area. If you're way out in the boondocks, your business will be significantly less. To make people choose you over someone else, your prices need to be competitive and your location needs to be easy to get to.

    As far as mounting scopes and whatnot, you could get a gunsmith to work under you. You provide him with the space and let him do the work under your FFL, then you get a percentage of his business. It would just be a matter of whether the potential return was greater than the square footage he took up. You could have him do the work out of his own house, and you would simply provide the customers. AFAIK, that's legal. However, don't forget that your rep is riding on his work. I find most itinerant gunsmiths are glorified armorers at best, and most can't be trusted to even touch a customer's gun.

    I would sell guns by special order, as well. There's just no reason not to. You don't have to invest in inventory or take up floor space doing that, so it's free money. I would also have smaller items in stock, like AR lowers and LPKs. You'll get tons of people ordering AR lowers, so no reason not to have the lower parts on a display rack at the counter. You also have to have a counter for the cash register and to fill out paper work, so that counter might as well be a display case, and that display case may as well be filled with something.
     
  10. jmorris

    jmorris Member

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    In my area you would starve to death before you made $100 or more on a transfer. See Tom's signature.

     
  11. AlexanderA
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    AlexanderA Member

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    The crackdown on kitchen table FFL's began before the Clinton administration, in the late 1980's. That's about the time I gave up my FFL. I could have continued it, but I decided it wasn't worth the bother.
     
  12. hdwhit

    hdwhit Member

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    In other words, the industrial bourgeois don't trust the industrial proletariat to have guns? Interesting how the words now written by the self-described capitalist previously flowed from the pen of Karl Marx.
     
  13. MAKster

    MAKster Member

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    If you are retired or work another job from home, I think you could make a nice addition to your regular income. Since you would be sitting at home anyway any money is a plus. But I don't think you could run a full time business from home just doing transfers if that was your sole income. Generating enough customers to be able to earn a real income would require work as well. Would you just rely on being on the FFL list for sellers list Buds or would you advertise?
     
  14. dogtown tom

    dogtown tom Member

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    See the OP's location.......California.
    There are state fees in addition to what the dealer charges.
     
  15. dogtown tom

    dogtown tom Member

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    Statistics don't back that up.
    While I would never recommend FFL123 for anyone looking to get their FFL, he has compiled ATF statistical data on one webpage:
    https://www.hoplofobia.info/wp-content/uploads/2014/03/History_of_FFL_License.pdf
    Note the dramatic decrease in FFL's beginning in 1993, not the late 1980's.
     
  16. Carl N. Brown

    Carl N. Brown Member

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    There are federal laws regulating being in the business of dealing in firearms,
    state laws regulating both being in business and dealing in firearms,
    and local business regulations on businesses to boot.
    As I understand the combination of state and local laws in TN/VA, being a gun dealer goes beyond the federal requirements for an FFL.
    Sounds like California laws, rules and regs are pretty onerous, Texas not so restrictive.

    The opening poster hails from California. I think comments from California FFLs would be more meaningful.
     
    Last edited: Aug 27, 2017
  17. Demi-human

    Demi-human Member

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    In K alifornia, I believe this is exactly how it is.


    As a side note, I hope you and everyone 'here' in Texas escaped Mother Natures wrath.
     
  18. CapnMac

    CapnMac Member

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    That's something os a bone of contention. The current effected "triangle" is Corpus to Travis county to Brazoria--about 300 miles on a side (probably about to be expanded to include the seven metro Houston counties); a huge area. Call it 15-20 counties

    However, there are 254 counties in Texas, quite a few of us are well celar of the weather.

    Now, for perspective, the area around Houston suffereing flooding is about 2200 square miles--about the same area as Delaware.

    But, back on topic, the CA requirements for FFL are pretty onerous. Transfers for $20 may not be enough. However, where the market might be in being $20 less than the competition. If you can get away (e.g. break even) with $75 or $80 transfers (since you are not running a storefront or paying for utilities and payroll and the like) you will be ahead of the competition.

    The elephant in the room will be CA laws. You may not be freely able to just get stuff--there are a bunch of manufacturers and wholesalers who will not ship to CA just to skip the hassles. You may not be able to just freely distribute things within CA (see the approved pistol list and "featureless" banned arms, just for example).

    With that all being said, a local, who knows the ins and outs, who is not trying to keep a brick-and-mortar open, making payroll, etc., might, just might, be lean enough to make some cash.

    Which a rather major caveat that all of this makes predicting the market in CA will not be easy. The products are limited and the requirements manifold and increasing. Listen to Dogtown Tom--he knows what he is about. But, the federal side might be the easiest to get in CA.
     
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  19. CoalTrain49

    CoalTrain49 Member

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    Here in WA every transfer has to be through an FFL. I have a friend who does mostly that from home. I'm pretty sure he doesn't have regular hours, he isn't even home 3 months of the year. He doesn't do ammo sales because we can still have ammo shipped to our door step. Actually the nice UPS lady brings me the ammo but she makes me carry it. :D

    I also know a young guy who just got his FFL. He leases a small space in a shop where he works part time. The shop used to sell guns but they only do ammo, reloading supplies and optics now. I talked to him about his business plan and he wants to do consignment and transfers. He plans on using an internet site and his shop space to sell the consignments. He really isn't too interested in new gun sales. This guy has worked in firearm sales awhile so he knows the ropes. He understands that the big dogs can undercut his new gun sales enough that it just isn't going to work for him.

    So with the new CA law I would say your business model could be profitable. Of course you would have to be able to receive ammo shipments. Storing ammo for transfer and sale could require your county or city to sign off, who knows? Fire marshal might even have some say in that.

    Anyway, if you do your homework I think the ATF is probably the least of your worries. I think most of those folks just push paper, like other federal agencies, these days.

    What are the new CA laws about powder? Have they regulated that also?

    Here is how AmmoFast deals with shipping to CA.
     
    Last edited: Aug 28, 2017
  20. AlexanderA
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    AlexanderA Member

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    There was a time lag, as 3-year term FFL's began to expire. The decline in FFL's was not because they were revoked, but that they failed to be renewed (voluntarily, in most cases). I saw the handwriting on the wall in about 1986.
     
  21. dogtown tom

    dogtown tom Member

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    Didn't read the article did ya?o_O


    Odd that you would mention 1986 as when you "saw the handwriting on the wall" as that was when FOPA was passed that made being an FFL significantly BETTER.
     
    Last edited: Aug 28, 2017
  22. 9MMare

    9MMare Member

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    If you are a member of any kind of gun community or club, it's very likely people know local gunsmiths, folks working out of their homes, that have FFLs. Just need to ask around and we've found they are much more reasonable than commercial outlets.

    So I wouldnt think it would be a good (primary) business.
     
  23. AlexanderA
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    AlexanderA Member

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    Hughes Amendment. I was an SOT at the time.
     
  24. Sniper66

    Sniper66 Member

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    A number of my friends are/were police officers and many of them got an FFL so they could buy their personal firearms and related products at dealer prices. They also got guns for their friends who were all law=abiding people. These cops were members of the kitchen table FFL set. The license was cheap then and requirements much less stringent. After the law changed most of these guys gave up the license because it was too much of a nuisance to maintain. That was the intent of the law change to limit the number of FFLs and make it easier govt monitors to keep an eye on them.
     
  25. dogtown tom

    dogtown tom Member

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    So they lied in their application? The application clearly says an FFL is NOT for enhancing ones personal collection, it is for those intending to engage in the business of dealing in firearms.


    No, the requirement were stringent, but the enforcement was nonexistent until Clinton took office.
    As far as "the license was cheap then...".........it was $12 a year I believe. Now its a whopping $200 for the first three years and a whopping $90 for every three year renewal after that. If the difference in price is prohibitive then maybe they need to stop buying guns and get a second job. (or they could actually start being licensed gun dealers and earn $$$)



    "Nuisance"? The recordkeeping requirements under the Gun Control Act of 1968 have changed very little since then. If your friends weren't abiding by those requirements they shouldn't have applied in the first place.

    Hogwash........the law DIDN'T CHANGE.
     
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