New US AK-47 Manufacturer

[Pingy]

Good thing I'm not manufacturing "Defensive articles" then. I've checked with the Sheriff's department and will be working VERY closely with the local ATF bureau to ensure legality. I called them the other day and talked to an agent for about an hour, and he was actually very helpful with recommendations about checking into zoning, local ordinances and whatnot. I told him exactly what my plans were, exactly what rifles I was manufacturing, and he said all I needed other than the above was my 07 and to pay excise tax. I looked it up and any manufacturer who makes less than 50 rifles per year is exempt from excise tax.

The only thing he really stressed was that I NOT attempt to make them automatic which is a no-brainer. I'm not quite sure why everyone is so paranoid about the ATF, but I haven't seen anything to make me leery. Well, other than Ruby Ridge and Waco, but not lately. I'll be sure to ask them specifically about the ITAR though.

I'm going to be visiting family this week so I might not get back on until next weekend. I look forward to continuing our conversation when I get back though and I'll also look into SCORE then too.

 

[sarduy]

that's a cool logo for an ak

 

[john wall]

The ITAR concerns making defensive items (or services) which COULD be shipped internationally.

Contact the State Dept, the BATFE has nothing to do with this. A totally different agency.

If you are going to manufacture less than 50 rifles annually, just admit you are engaging in a HOBBY. Save your money. Why would I want to pay that kind of money for an AK when I can get a Century Arms for less than $400? Ugly guns that I have no desire to own.

Once again, look at the VZ-58, if you want to deal with a (relatively) attractive MSSA (Military Style Semi Automatic).

This is from a former class 07 licensee.

 

[RhinoDefense]

If you are going to manufacture less than 50 rifles annually, just admit you are engaging in a HOBBY. Save your money.

There are manufacturers that make less than 50 weapons annually and they make a living off it. It's a specialized niche they fill and it certainly isn't a hobby. Most custom benchrest rifle manufacturers make fewer than 50 per year. Don't be quick to judge quantity.

Why would I want to pay that kind of money for an AK when I can get a Century Arms for less than $400? Ugly guns that I have no desire to own.

Because anything Century Arms is junk. That's why they are $400. Arsenal AKs are much better quality and that's why they are $700+.

 

[Telekinesis]

Please excuse any misspellings, I'm typing this from my phone and am having a hard time reviewing and editing my post.

Do you have a business plan that you can show us/distribute? I would be interested in seeing it. Mainly I'm interested in what you see as your direct competition and who your target market is as well as your projected sales considering that we've recently seen the end of an unprecedented boom in sales of ARs and AKs.

Also, I would recommend that you delete any comments about finances now that they're irrelevant to the conversation. This thread comes up as the 8th result in a google search of your company (right behind your website's various pages), and I think it's very hard to believe that an investor or bank (or potential customer) won't at least look through the first page of google results when trying to decide o they want to loan you money or do business with you.

I'm not going to comment on your statements to others in your industry (or potential customers) except to say that I have hear several people say (online) that they will never do business with XXXXXX suppressor company because the owner is a ******* who likes to talk down about his competition and others. Take from that what you will.

As to your comment that we at this forum are not your market because we research our purchases before we buy, I would like to disagree. While most people won't want to dig deep enough to figure out what kind of trigger group you're using, be prepare for someone to say "I've never heard of these guys, let me run home and do a google search before I drop $1,000-2,000 on a gun." remember, this thread is on the first page of a goggle search. This IS how your future customers will see you. But is this the way you want to be seen by them?

I think it will also be unlikely that yours will be the only AK in the shop leading to an impulse purchase when a FFL can buy 4 WASARs to every one of yours (of course depending on your final price point.) from your price point, I expect you will be competing with not only Arsenal, but also other AR manufactures and possibly the Sig 556 type rifles.

 

[Pingy]

I think I'm really starting to get it now and have taken your advice. All irrelevancies to the discussion, financial and asinine, that were in my posts have been removed from here and my site (if you find something I missed just PM me please so I can fix it). It would be great and a big help if anyone referring to one of those comments could remove that from their posts as well. You don't have to if you don't want to of course, but telekinesis is right in what he says and it would help me a lot.

I'll include in my business plan a section on "public perception" and a sort of "code of conduct" which will enable me to succeed at achieving that goal. Ok, heading out now officially, catch you guys later

 

[renegade-rick]

I have been self employed as a full time gunsmith gunshop now for 3 years. yes when King-O got elected we all had sales through the roof. I originally planned on getting my 07 and building AR 15's. After numerous phone calls with ATF and trying to understand how to meet there guide lines I swapped my 01 FFL for a pawn. I can still do gunsmithing as well as retail sales. It was my understanding that first you had to manufacture a receiver then get ATF to approve the serial number then machine it on. You also have to get set up with the IRS to pay the Pittman Robertson tax on the value of the firearm you are building for sale. You need to talk with ER Shaw they produce a quality barrel at a reasonable price but they require a contract for at least 50 barrels. What I do is go in with another manufacturer and add my order to his. That way i can buy 10 AR barrels and he only has to find other dealers to make up the rest of the order. I build complete uppers not complete rifles. There are a zillion people mfr AR's and i don't recommend getting into that. I recently had an Arsenal AK through the shop which is suppose to be about the best quality AK around. It sells for around $750. Has some US parts and over all not a bad AK. By and large though and i will probably get some hate mail for this but the AK market is generally brisk in the lower end of the sales spectrum. I have sold many romanian, mak90's, and WSR type AK variants and all in the $400 to $450range. A $700 AK is a tough sale. Also you might consider changing the caliber. Clinton banned importing the cheap chinese ammo who knows what -O- may do before he is out of office. If they ban the importation of military type 7.62x39 or put a 500% import tax on it which leaves you to shooting rem and win. The ak will become a door chock. There will always be plenty of 5.56 and 308. Just my 2 cents

 

[renegade-rick]

www.cedarridgetactical.com

 

[renegade-rick]

The cheap crude manufacturing of the AK is what makes the AK so desirable. Its inexpensive and it flat works. You can throw one in a pond and come back next week and it will throw lead down range. Its not the most accurate rifle out there however. But if you start tightening up tolerences to improve accuracy it might not be so reliable. The AK was originally manufactured with a milled receiver but it ran into heat issues.

 

[renegade-rick]

If you can produce it for retail sale in the mid $400 range and make a profit you will be fine.

 

[RhinoDefense]

It was my understanding that first you had to manufacture a receiver then get ATF to approve the serial number then machine it on.

Horribly incorrect.

You also have to get set up with the IRS to pay the Pittman Robertson tax on the value of the firearm you are building for sale.

Nope. You pay the FET to the TTB, not the IRS. Also, it's not the "value of the firearm" it's the sale price of the firearm.

"A $700 AK is a tough sale", but I know for a fact Arsenal/Kvar sells more AKs than Century Arms. Doesn't seem like it is really.

 

[xr1200]

What is your exact conception of a custom ak47 and how much do you intend on selling each gun for.

There are already a lot of custom and USA made ak out there, so trying to be the new kid on the block with a old item is really a bad bussiness plan.

Anyone who knows anything really about ak47 is not really going to spend much more than $500-$750 for these rifles, there is only so much you can do with the ak47 design.

Knowledgeable shooters know that its better off to put money into an ar10 style platform , than it is to sink a lot of money into an AK design.

 

[RhinoDefense]

There are already a lot of custom and USA made ak out there, so trying to be the new kid on the block with a old item is really a bad bussiness plan.

Kimber seems to be doing well making 1911s that have been around for 80 or so years before they came about. Remington, Ruger, Winchester, Savage, Stevens, Jarett, Dakota Arms have been doing quite well with that old turn bolt action rifle made in the 19th century. Black Hills and Georgia Arms are doing quite well. So is Hornady. All those companies entered a well established market and are profitable year after year. Don't be so confident. A saturated market needs a game changer.

Anyone who knows anything really about ak47 is not really going to spend much more than $500-$750 for these rifles, there is only so much you can do with the ak47 design.

Quite the opposite. Those that know AKs spend the money. Hit up Krebbs.

Knowledgeable shooters know that its better off to put money into an ar10 style platform , than it is to sink a lot of money into an AK design.

Facepalm.

 

[xr1200]

There isn't much you can do to accurize or even make an ak shoot better. The design has a lot of faults. Most of the accessories you can buy for them are simple dress up items , stocks, light, lasers, hand guards, all equal to the "Street Dork Section" at your local auto parts store.

Don't get me wrong I 'm not saying the ak is not a good design as an assault rifle. Im my mind its probably the best. As an end of the world weapon it would be my first choice.

But from a point of selling or making a high grade ak or accurized target version, there is only so much you can do to one.

Problems are scope mounting system bad, short sight radius, bad ergonomics,
Barrel mounting and barrel not being free floated, to much play in action tolerances, no good mounting platform for sights and lights ( you can't mount sights to a moveable handguard.)

AK 47 is a great gun if used as designed, as I simple infantry assualt rifle, nothing more.

 

[RhinoDefense]

AK 47 is a great gun if used as designed, as I simple infantry assualt rifle, nothing more.

If someone were breaking into my house and my tossed me an AK47, I sure wouldn't turn it down. Weapons have other uses than simple warfare.

 

[xr1200]

So is a stick, but I wouldn't start a new bussiness making high end sticks.
When you compare to the AK47 to the AR platform there is no comparison in terms of accuracy accessories or modifications, AK's just have to many limitations.

 

[dacavasi]

heat treatment and the proper facilities to do it are a fair amount of art mixed with science. you will need to do a major amount of research in that area if your intent is 'quality', and, it will not be cheap...

 

[Gord]

My target audience is the guy who walks into the local gun store and says "Wow, that rifle looks SWEET" because it's the only AK-47 in the place and has the disposable income to pull out his wallet and buy with cash.

So what you're basically saying is that you aspire to build AKs that only get bought on impulse by people who don't know any better? Classy. Maybe you should start hanging Tapco stuff off of your rifles after all. Don't forget the green lasers and strobe lights. Your target audience will eat 'em up.

I actually did pay a guy from Slovakia $20 to design my Penguin logo

You could have mentioned "new gun company" and gotten about two thousand submissions from guys on Photoshop forums for free.

Quite the opposite. Those that know AKs spend the money. Hit up Krebbs.

I daresay some of our most knowledgeable AK guys (paging nalioth) would disagree with you. The ones who buy $1500 AKs are the ones who buy into the gun-board BS and nothing more. I'd surely hope that I would outsell Century if I put that much money into marketing and snazzy logos, too...

 

[RhinoDefense]

You are sorely misinformed and your posts show it.

 

[Dreamcast270mhz]

@Pingy

You don't necessarily have to use the official helix magazines to begin with, start off with a calico hexlix magazine in 9x19mm and from there you could make your own based on their design. The only catch is you either have to make it as a pistol (no stock) or a 16 in barrel must be used.

Another possible start point would be to chamber it in 7.62x25, use a shortened AK barrel, and use a PPSH magwell and magazines, until you begin making actual helix magazines.

I like your idea and would buy a Bizon AK from you, as a pistol and put a folding stock and NFA it if you ever decided to, just make sure it is competitively priced (~250-300 would be fine)

 

[bubba in ca]

No crystal ball, but if the govmint doesn`t ban the imports you are stuck with a lot of cheap end competition from places with much lower costs than yours. If they see a market change for more quality, they can jump in and ship a boat load before you know what hit you. And the existing US ones are your high end competition...

I think you need a gimmick, such as an ak in a different calibre, or stainless steel, or a gold plated one like Saddam`s. Something the others don`t have and don`t want to bother with. Even then, you still have all the quality and name recognition problems.

Another choice is import all the secondary parts like stocks and magazines and just do the barreled actions and assembly yourself.

I wish you luck. This country could use more domestic maufacturers so we don`t end up someday with just Chicom stuff like the 870 and Ithaca clones.
Think like Ruger and come up with unique designs or manufacturing methods that pencil out.

 

[james_bond]

I am in the market for my first AK and I know I want to see VALUE. Stamped is fine mil-surp parts are fine, imported parts are fine.
I bet a quality/clean, lightweight, handy, affordable AK if done right could change the way the US gun market sees AKs, because right now there are basically two options, a messy canted $400 wasr or a $999 US Arsenal a middle ground would be intriguing to me.

 

[Pingy]

Unfortunately I won't be able to get started, once I started looking into the general and product liability insurance for my business it put the costs WAY over my maximum acceptable risk level.

Again, I appreciate all the support and knowledge you guys gave. As a consolation prize I think I'll sell my WASR and put that money towards something better, maybe a 5.45 or 5.56 AK.

As far as the WASR, I've refinished the stock, cleaned up the bad machining so the action works smooth, and have a side mount, scope, and barrel clamp rail system with a laser on it. Just bought the laser today to help it sell, maybe put a 650 round ammo can with it as well. I personally think it looks silly, but the gunshop owner by my hometown said people dish out big money for that sort of thing all the time. Honestly, with the AR market and how some people will put 20 lbs worth of gear on an AR-15 that is 60% rails I'm inclined to agree.

I'll try for $1250 with the ammo can (640 rounds) and extra accessories (I have 3 flash hiders, 3 mags, mag pouch, etc.) but I still highly doubt anyone would pay that especially since I'm going to tell the God's honest truth that it's a WASR-10 that won't feed HP or SP ammo, and post pictures, but maybe someone will have the money and not care.

 

[Pingy]

Still waiting for someone to troll the price tag. lol. Seriously though, considering the market conditions I described as well as the product, anyone have a suggestion or two?

 

[xr1200]

If you do gun related bussiness check out the NRA they have the cheapest gun shop bussiness insurance out there, but they may not offer it to a manufacturer.

Another good company is the Hartford.

Generally your looking at $2000-3000 a year just for product liability, the problem with anything gun relate insurance companies will treat you like a leper.

If you look deeply into the gun bussiness it is not really that profitable and you are always open to a lot of risks, financial, laws, liability etc. The actual margins gun dealers operate at does not really make them rich.

If your looking at starting your own bussiness landscaping is actually one of best that you can get into and right now about the only other thing left in the USA to do is either government work or health care related, BTW nursing is still one of the best fields to get into.