for those of you who became firearms dealers

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sernv99

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I live in VA and was thinking to start a side business of selling firearms and class III items.

How hard is it to get into this business? I know of a couple places by me where the dealers work by appointment only and list a residential address as the place of business. I was told by others on another forum that the ATF will drop by to inspect your "place of business" to check it out and you better have a gun safe to store your weapons and items.

I'm not interested in doing this just to get a few guns at wholesale price but as a real business.

anyone from VA who has done this I would like to know what your experience was like.

Thanks.
 
I used to live in VA, am now in WV, and just went through the process (07/02).

The first thing you need to do is check your local county/city ordinances to see whether or not your zoning regulations permit an FFL at your residence. Also check your HOA covenants and restrictions. The ATF will not issue you an FFL if your local ordinances don't allow such a business in a residential area.

Contact your homeowner's insurance company and let them know you're considering running a C3 FFL business out of your home. Get separate business coverage, unless you'd like to pay out of pocket for an M60 you're transferring to a customer when it burns up in a house fire. You may decide that the cost of insurance (ours doubled) makes this plan unworkable.

If local regulations and insurance premiums haven't put you off, retain an attorney (you'll want one on call anyway, might as well form the business relationship now) to form a Virginia-based corporation (S-Corp, C-Corp, or LLC). This is not the time for a DIY kit, as if the corp isn't formed properly and you happen to have a customer's NFA toy in your inventory, the ownership of that weapon will be in question. Pay an attorney a few hundred bucks and make sure it's done right.

Once the corporation is formed, it needs an Employer Identification Number (EIN) from the IRS.

The corporation is the entity that will hold the FFL. Get the application from the ATF, fill it out, get your passport photos and fingerprints done, etc. Send it in along with the FFL fee, and wait a few months. At some point in the process an ATF inspector will visit for a site inspection, and to go over certain processes (e.g. accessing NICS) and federal laws with you. The visit is also (my impression only) to ensure that you do plan on running an actual business and you aren't going to use the FFL to procure toys for personal gain. Our meeting took about two hours, and occurred about ten weeks after we submitted the application. Our FFL arrived in the mail about five weeks after the meeting.

After you receive the FFL you can submit the paperwork and check ($500) for your SOT. SOT years run from July 1 through June 30.

Plan on spending more time running the business (e.g. doing sales/use and income tax forms, accounting, bookkeeping, record keeping, etc) as you do selling guns.
 
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WOW!!!

I was a class 1 (I believe) dealer for 6 years before Brady, I called the A.T.F. and asked the agent what I needed to do to get a ffl, He said "What's your address, We will send you the app".

I told him the address and about 5 days later I had the form, I filled it out and sent in my $30.00 fee, about 10 days later I had my ffl,
In 6 years of bussiness (hobby) I never saw an inspector of any kind.

PS; Brady s**ks
 
Is the normal FFL license a class III?
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Generally, no. Most shops (or kitchen-table dealers) have an "01" FFL. That's the most basic level of FFL, expect for the 03 (C&R) FFL. To handle NFA stuff, they need to be a Class III SOT dealer, or an 07 (manufacturer) dealer. The difference between the licenses, among other things, is money. Where the 01 dealer pays under $100 for their license, the Class III/SOT dealer pays upwards of $500, plus whatever it is to renew.

I'm pretty sure I got the numbers of the different licenses right, someone please correct me if I'm wrong.
 
So what is the easiest route (if there is one) to get an FFL license to use generally for hobby purposes of getting dealer pricing and not having to deal with getting guns shipped to an FFL? Perhaps receive guns for friends as well...?
 
With the exception of the C&R, an FFL is a business license. If you are not in the business of selling firearms you should not have an FFL. It is not intended as a means for people to buy their personal guns at wholesale and through the mail. In the late 1980s and early 90s a large percentage of people with FFLs were doing just this and the ATF cracked down. Even if you made enough sales to look legitimate it wouldn't make sense financially. Gun sales are a low profit business so you're better off just paying $20 to a FFL to do your transfers.
 
Currently I'm a type 06 FFL, ammunition manufacturer. I'm undergoing the process to become a type 07 FFL, firearm manufacturer and will be paying the class 2 SOT for NFA weapon manufacturer. This will allow me to manufacture and deal in both title I (normal) firearms and title II (NFA) firearms.

It's been about 4 weeks since my 07 FFL application went out. Should go a little quicker the second time around, according to the ATF.

Here's a link that explains the different FFL and SOT types.

http://www.quarterbore.com/nfa/class3.htm
 
So what is the easiest route (if there is one) to get an FFL license to use generally for hobby purposes of getting dealer pricing and not having to deal with getting guns shipped to an FFL?
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That's your problem right there. FFLs are not given out for hobbies. They are given for businesses. If you are found to have obtained an FFL and are not conducting an ongoing business, you will have your license pulled and there could be criminal charges. Do not play around with it. People that pull that crap spoil it for the rest of us.
 
My ATF Inspector wants me to average 100 guns per year. I live in a town of 2800 and there are two other FFL's in town. I never meet this goal but I do enough that they can tell that I do it for profit and renew my license.

If you want guns at cost many dealers sell on gunbroker at or just above cost.
 
2 guns a week average, that's not too much really. Auctions can get you that. With the uncertain political climate, gun sales are up.
 
Do NOT use your residence as your business address. The ATF can "inspect" any FFL's premises at any time without a warrant. Don't open this door for them. Rent an office or warehouse space.
 
I had different experiences..I have an 07 Manufacturers FFL. I got it mainly for installing the bottom metal I make. My Inspector was the coolest Govt guy I have ever seen.. he didn't give a flip if I sold 1 gun, or if I did it out of a doghouse..as long as it was legal with local zoning and all that BS.. Took me 4 weeks total and I was in business.

I have zero desire to play with NFA stuff..Im mainly a precision rifle/pistol guy..Although cans(Suppressors) are a part of my world, theres enough guys around doing that..;)
 
I operate out of my home. No zoning restrictions so there is no separate building payment, etc I have to make. I hope in 2 years to have a separate shop, but you gotta start somewhere.

CDignition, my ATF dude is very cool too. He was very respectful that my business premises is my home and when I tried to lead him to the other room (office/reloading) to show him my FFL was displayed, he asked and wanted clear confirmation that he could go farther into my home than the 3 feet he already was. Keep an eye on the .gov, but he's very cool and down to earth. For crying out loud he even owns a transferable MP5-10mm!
 
I'm not interested in doing this just to get a few guns at wholesale price but as a real business.
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As one who represents several FFLs, including NFA Dealers, bless you, sir.

What I would add, and stress, is the importance of a solid accounting system (not just a computer program but a method of handling the firearm through your business). For example, sometimes minor inventory problems ("now where did that shipment of Glocks go?") can turn into admin law nightmares with ATFE.
 
Not to mention the first thing you need is a big, quality safe this will set you back a good $2000-$3000 at the minimum, if you do not already have one.
 
FWIW....I don't not own a shop, but I've worked in several.

I'd suggest being REALLY careful with record keeping and serial numbers. For example, if someone brings a gun in for repair, write a repair tag with the owners name and the firearm model and SN immediately.

If someone brings a gun to sell on consignment, make sure you've got a paper trail. If the BATF shows up and you've got something that's not recorded, they can really give you a rough time. This is one of the potential problems of mixing personal stuff with business inventory.
 
ATF wont normally hassle u over small things.. I even asked my inspector about abbreviations(every dealer I ever dealt with was all freaked out about it).. he said thats nonsense.... He said the one thing that will screw you bad is not doing the NICS check or documenting it properly.

Even on site storage of the weapons inst required(he told me I can keep my inventory at the house, I live 3 miles from the shop) just HAVE to have the Bound book on premises.IF they inspect me, they will just ask me to go get stuff.. They wanted me to be comfortable with the level of storage and security. There isn't any regulation that sez u have to lock anything or have a safe.

I have closed circuit Video, and a safe, so I keep my stuff here..but when I did the interview, I wasn't sure what I was going to do. We get alot of traffic from another business thats unrelated to guns, so I didn't want anything walking away.
 
The inspectors in my area want state's names spelled out, not abbreviated, so they will bitch about "MI" and make the buyer come back and change it. They want "Michigan" written down.

ATF inspectors are essentially accountants. They care about paperwork and paperwork only. They don't care what you do or have as long as you have the proper paperwork in order.
 
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