Need info on Starting an FFL

[daehawc]

My friend and I are both Active Duty Marine Officers currently stationed in Florida. We have been kicking around the idea of getting an FFL for the purposes of buying weapons at wholesale for us and the guys in our units. Does anyone have any good advice or information on what is involved in doing this? Due to the nature of being active duty, we will be moving from state to state every few years and the two of us may not be stationed in the same region. Also, with how often we move we tend to rent houses. Any help or direction to look would be appreciated. Thanks.

 

[ilbob]

you will need to show you are running an actual business. includes a fixed location dedicated to the business with its own entrance, business licenses, proper zoning, etc.

the batf no longer allows kitchen table dealers.

 

[daehawc]

So do all of these internet sales FFL's just set up someplace small and then do the bulk of their business online or is there any way around the "fixed location?"

 

[Owens]

Daehawc,

My suggestion would be to contact the BATFE field office for your area and ask to speak to agent in charge of such affairs.

People can be different, but the agent I have dealt with was very polite, informative and helpful. They can tell you if such activities are permitted or not in the area you wish to do this in. Local ordinances and laws can vary widely.

Example: Where I am located (west Texas) it is perfectly OK to run an FFl out of your home. Other places such as (Odessa, TX I think is one) that does not allow such due to local law.

A good BATFE agent can be a great source of info. Besides, you will have to contact them anyway to request the license application packet.

Hope that helps.
Owens

 

[dogtown tom]

ilbob: you will need to show you are running an actual business. includes a fixed location dedicated to the business with its own entrance, business licenses, proper zoning, etc.

the batf no longer allows kitchen table dealers.

HUH?

I can name six FFL's within twenty five miles that operate out of their home.
Nothing in BATFE regs that prohibit home based FFL's.

 

[ilbob]

ilbob: you will need to show you are running an actual business. includes a fixed location dedicated to the business with its own entrance, business licenses, proper zoning, etc.

the batf no longer allows kitchen table dealers.

HUH?

I can name six FFL's within twenty five miles that operate out of their home.
Nothing in BATFE regs that prohibit home based FFL's.

I did not say you could not operate out of your home. I said it had to be a fixed location (i.e. - you cannot operate strictly as a gun show or Internet dealer), and dedicated to that business. You could certainly dedicate a part of your home for that purpose. You also need to have the proper licenses and zoning that is required in your area. Some areas allow such business in homes, others do not. You won't get issued an FFL unless you have a legal business setup.

 

[RNB65]

I can name six FFL's within twenty five miles that operate out of their home.
Nothing in BATFE regs that prohibit home based FFL's.

The ATF requires you to have a fixed place of business in order to get an 01 FFL. The place of business can be your home, but you have to be able to show a business license issued by your local government which authorizes you to do business from your home. Some localities permit home based businesses and some don't. Depends on local ordinances.

You'll also need liability insurance. The first time someone gets drunk and shoots themselves in the foot with a gun you sold them, you're going to be sued. Even better, you should setup a corporation to handle gun sales so your personal assets are shielded from liability.

 

[waterhouse]

the batf no longer allows kitchen table dealers.

This is not true. They renewed my license less than a month ago.

What is true is that your local laws apply. Some places don't allow home based businesses, and the ATF will not grant a license for a home based operation if your locality prohibits it.

Due to the nature of being active duty, we will be moving from state to state every few years and the two of us may not be stationed in the same region. Also, with how often we move we tend to rent houses.

These things will be problematic. You need to have set store hours during which the ATF may visit the premises. You have to plan on buying and selling guns as a business. When you do move you have to apply to the ATF for the move and you cannot do business out of the new location until it is approved, which can take a while. Also, if you are renting there is a section on the application (I didn't read it too carefully as I own) where I think your landlord must approve the business.

Your first step should you decide to go forward is go here:
http://www.atf.treas.gov/dcof/index.htm

and have them send you form 5310.12 (not the CR one). This is the basic application. You'll also need Form 5300.42, 5330.20, FBI FD-258FA fingerprint cards, and perhaps some others (It has been a while.)

While not impossible, the situation with you renting and moving certainly complicates matters.

 

[mikec]

the batf no longer allows kitchen table dealers.

Yes and no, the ATF requires you to follow local business rules. So if you live in a city that has zoning laws that prohibit home businesses then you are out of luck. One dealer that I know of in FL has posted that in his city it is a no no, but if he lived outside the city it would be OK.

Compliance with state sales tax laws is also needed.

The issue of not being in a fixed location might be an issue. What happens to the inventory if both of you get deployed at the same time? Do you have spouses?

I'd love to hear what the ATF says on this.

 

[ilbob]

the batf no longer allows kitchen table dealers.

I always associated the term "kitchen table dealer" to the guys who got FFLs to buy guns cheaper and never ran a real business.

As I understand it, if you are allowed to run such a business in your home by local laws, you can get an FFL to do so. But you have to dedicate a space to the business. You can't run it from your kitchen table anymore (unless you move the kitchen table to the dedicated space).

My understanding from an FFL who has such a license to run a gun shop out of his home in this area, is that it is considered a violation by the BATF if you even allow someone to use the restroom in your home who is there to pick up a gun, if the rest room is not part of the dedicated space. he also told me the BATF said he had to have an entrance directly into the dedicated space. e.g.-you can't use a spare bedroom unless it has an outside door to access it.

you also have to have regular business hours.

 

[waterhouse]

As I understand it, if you are allowed to run such a business in your home by local laws, you can get an FFL to do so. But you have to dedicate a space to the business.

My understanding from an FFL who has such a license to run a gun shop out of his home in this area, is that it is considered a violation by the BATF if you even allow someone to use the restroom in your home who is there to pick up a gun, if the rest room is not part of the dedicated space.

I can't find this requirement anywhere in the law.

There is nowhere on the Federal Firearms License application where you list which parts of your house are dedicated to your business, so how could there be a violation? There may be paperwork at a local level where you have to list which part of the home is being used for the business, but this does not apply at a federal level. In other words, what you say may be true where you live, but it is not true everywhere.

If my customer or the ATF cares to use my restroom while here on a premises inspection they are welcome to use it.

 

[MDW GUNS]

Even if you are properly be able to get the FFL, it would not be worth the trouble.
Check the prices on the internet and then find a FFL with a small transfer fee.
Most of the guns you find on the internet are $20-30 over the distributor price.
There are very few cases where you really save money.
One area where you safe some money is with NFA weapons.
This is only however, if you do more then 4 every year!

 

[hotpig]

When I first got a FFL I was surprised that there was such a small profit margin on guns. It surprises me to see dealers on gunbroker selling at cost. The only profit would be from charging more on shipping than it actually costs.

 

[Sir Aardvark]

I finally gave up my FFL here in California after doing business for 6 years due to the increased bureaucracy. For me it was no longer worth the hassle to be so tightly regulated with so little profit to show for the time spent.

I needed seven (7) separate licenses, permits, and certificates to legally sell a handgun.

I could only sell handguns that were on an approved list.

Only one handgun every 30 days limited my sales.

No sales of "assault" weapons or "Hi-Cap" magazines to non-LEO's.

I could be "inspected" at any time, not only by the ATF, but also by the State's Dept. of Justice Inspectors.

So... depending on what state and locality you do business in, you might find that with the business requirements (business license, Fire Marshal inspection fee, burglar alarm inspection fee, building codes, must own a Safe, etc.), fees, taxes, etc. you will actually end up losing money instead of saving money.
The Internet has opened up many avenues for bargains - your business is no longer just competing with the gunshop two blocks over, you are now competing with every online gundealer in America (you have just gotta love capitalism!).

The ATF has a strict requirement that you actually run your FFL as a business.
When you renew your FFL you are legally required to report how many firearms you have "sold" to yourself in the preceding 3 years and taken into your own personal collection, so they keep track of people who just hold an FFL to increase their personal collection.