New US AK-47 Manufacturer

[Sky]

You might think about a shop that lets people send you their AK or whatever and you to customize and fix. There are individuals who replace firing pins with their own design or do trigger work and they have been in business for a long time. I do not know if it is a labor of love or a super money making business for them; but they have been around for a while now.

Say someone has a WASP that is not meeting their expectations or want it dressed up with a fix you know it needs. They ship, you fix it, and return the rifle or part better than new. Just a thought on starting small and building up to bigger and better things.

 

[Pingy]

That sounds like a pretty good idea, I did do all that work on my own rifle after all. What would be the licensing or insurance requirements for customizing and fixing AKs?

 

[RhinoDefense]

That would be a simple Type 01 Dealer or Gunsmith FFL.

What you have to be careful of is you can only work on customer owned guns that have already been transfered to them. If you do work on guns that haven't been transfered on a 4473, it's an act of manufacturing and you'll need the Type 07 FFL, etc. Customer brings in a gun direct to you or brings it to a dealer who then sends it to you as a subcontractor for gunsmithing is fine. If you modify a receiver or existing firearm then transfer it, that's manufacturing.

Getting started as an 01 FFL gunsmith for AKs and doing transfers might be a good way to get your name into the market and build up a reputation over a few years. Then when there is demand for factory built AKs like you want, then get the 07 FFL, drop the 01 FFL and start making them. With the 07 you can still do everything the 01 can, but you can also manufacture.

 

[Bubbles]

That sounds like a pretty good idea, I did do all that work on my own rifle after all. What would be the licensing or insurance requirements for customizing and fixing AKs?

Type 01 FFL, insurance is going to be about the same but there are more providers out there. The NRA's insurance doesn't cover manufacturers, just dealers and gunsmiths, so you may be able to get it through them. Manufacturers are stuck with using Joseph Chiarello & Co.

Also be very aware of what the above poster said - the ATF has drawn a pretty sharp line between gunsmithing and manufacturing, and you don't want to cross it. The easiest way to stay clean is to make sure anything that comes in is a complete firearm that belongs to someone else, and you are only charging for parts and labor to repair or upgrade it.

A Type 01 local to me got in a lot of trouble a few years back for buying rifles and scopes, installing the scopes in the rifles, and selling the scoped rifles as a package deal. That got him popped for manufacturing w/o a license. He kept his FFL but the fines were painful.

Also, I don't know who said the OP doesn't have to pay ITAR as he's not making "defense articles" because that is incorrect; the AK is very much classified as one.

 

[Pingy]

I think that was me saying about not paying the ITAR. I know the ATF will shoot your wife and dog, run your house over with a tank, and burn it down with the children inside, but what's the State Department going to do? Talk to me about it?

lol. Yea, I know someone probably does something to you and it's really bad, just wanted to make the joke. Anyway, manufacturing is out of the window so no need for ITAR or anything else.

Anyway, if they're fining people for putting scopes on rifles and selling them I don't think I want to touch that either. Too many stupid laws and too many people (insurance and govt) bleeding you of all financial resources before you even produce the first product.

I need to keep my eye on state laws, there was a State Constitutional Amendment proposed which would nullify any federal gun laws, so long as the guns were stamped "made in Missouri" and not transported out of the state. On the legal side of things all the feds are doing is abusing the Constitutional power of regulating interstate commerce to create otherwise unconstitutional laws.

Anyway, this isn't the forum for politics so I'll just say this. Any and all proposed business plans as of now are a no-go and if I do anything at all it will be as a private citizen in a hobby capacity for myself only. Not sure if they close threads or what, but as far as I'm concerned I think this one has unfortunately run it's course I think I'll make a new one somewhere else about selling my current AK and buying something else.

 

[RhinoDefense]

Maybe do some non-FFL stuff. Get a state retail sales tax license (usually free and done online) and sell AK accessories, parts kits, get in with some distributors (like Graf's) and sell ammunition. Use the non-FFL part of the business to establish your business and build capital. Do it part time and just reinvest the profit back into more inventory while working a full time job. Be honest with you, there is a lot more profit margin on accessories than weapons.

I started my company, Rhino Defense, by buying and selling used ballistic vests from police officers and agencies that were getting new ones. I registered with several states as a supplier, then I could get access to the contracts and bids. When a bid was accepted to purchase new vests, I contacted that agency and put a bid out to purchase their old vests. These I sold to other agencies and officers with low budgets or civilians in legal areas. That lead to buying and selling used police duty belts and gear. Buy from retirees or departments changing gear and sell to rookies just out of the academy or security companies. What do I do now? I make ammunition and suppressors for law enforcement and perform explosives protection research for the Dept of Defense/US military.

Gotta start somewhere. Don't be discouraged, be encouraged.

 

[Pingy]

Sounds like a good plan. I'd like to wait on it though, I'm going to college full time for a business degree so I think there's a few very important things that I could still learn that would make any business attempt much easier for me in the future. I'm glad I did this because I learned a lot, and I'm definitely not giving up, this is more like a strategic withdraw.

 

[xr1200]

Most gun wholesalers will not give you can account unless you have an ffl and a state tax # minimum.

Also trying to sell various gun parts online has a lot of state restrictions and competition from other already established online sites.

The only way you can even think of competing would be to deal directly with the parts manufactures, when ever you deal with the various USA distributors the mark up will be so high that you wll never be able to sell your products online.

Then comes the next problem, in order to get the deep discounts you need from the manufacturers you wll have to place big orders usually $50K - $100 +

In todays online market place, don't even think of selling locally retail. Most local retailers go belly up with in there first year, as they can not compete with online sales.

The example rhino gives of his bussiness, is a good example of niche, bussiness where insider information and contacts can pay off well, but you can't use this bussiness example to every situation.

You have to look closely at the current market, customer type or demographics, existing competition and pricing, market forecast.

One thing you should do is get a few used text books from a local college etc on bussiness 101 and management 101, or even just barnes and noble etc. Get the basics down before you take any deep plunge into loans or inventory purchases.

In doing a bussiness forecast or plan you really need to take into account things like rent, office space, mandatory taxes, inventory, expected profit etc. health care costs alone are about $6000 a year for 1 person and about $10K for a 2 person operation

One of the first issues will be the high cost of overhead, in just rent and utilities etc. you will often find that a lot of small bussiness barely make enough to break even and that it would be wiser to just work a 9-5 job then continue making almost nothing at their own bussiness.

That is why I mentioned to focus on another carrer choice like government service, law enforcement. You really can't beat the GIGS that most cops have $75K - $100K per year with OT and retirement after 20 years at 50% of their last 3-4 yrs. pay, and 80 % after 30 years, + free health care for life.

I know a lot of cops that have retired after 20 yrs. getting $40-$50K per year and full health care and then start their own bussiness or second career.

 

[crossrhodes]

Hit the nail on the head

Rhinodefense has sound advice, heed it and remember it. We have a small shop and was fortunate and thankful for the VA's (VocRehab) help and received grant but, it only happened because we started small and had a very detailed business plan projected five years out on where and how we intended to get there. Semper Fi and good luck on your endeavor.
Guns out.

 

[1stmarine]

IMHO.
If you do not have a business plan yet get one. You will find out if the business works or not. If the business works on paper there is still a chance it will work in a real life (not actual warantee). W/o a business plan in a volume based model there is no chance.

So before the 'how-to's' one has to be able to answer the 'what's' and the 'why's'.

 

[crossrhodes]

YES...The plan

1stMarine is right. We spent about 40 days total with revisions before we had a solid plan. It really inspires you method of madness and puts things in perspective. You have to look at every thing from traffic of potential customers that are driving by to other business's to advertising. Basically your picking fly crap out of pepper on your plan to get something solid. Ask yourself the same questions an investor or bank would ask you.

 

[oldvet53]

for your barrel needs, how about contacting a barrel maker that has a decent reputation and asking them if they can produce barrels to your spec. There are loads of makers out there. Krieger, border, et al for them it will ony be a case of programming the required profile into one of thier mega machines. Cost might be an issue... how about finding out who makes the adams and bennet barrels that appear on midway for $90 usd each?

Adams&Bennett is made by Green Mountain, I have one of the Adams&Bennetts on my Ruger 10 22.