Liscening for making and selling ammo...

leeblackman

Anyone know what type of liscence you need, and what requirement are needed to obtain that liscence, for manufacturing and selling ammo.

I was thinking about trying to setup to make some extra money on the side selling reloads.

Also who sells insurance, and what type of insurance do you need for it.

Edited by - leeblackman on 04/29/2002 07:10:29

Iconoclast

Lee, I had an ammo manufacturing FFL for about fifteen years in the 70s & 80s. It was something of a hassle at the time because in theory it gave me the right to buy / sell firearms, so I had to jump through those hoops w/ ATF even though I had no interest in being in that end of the business. It was a Class 02 or 04 as I recall. A place of business is required, and certainly more of a setup than the average reloader. At the time, my home was - barely - acceptable. Since the Bubba faction's push to put "kitchen table dealers" out of business, it is likely more BS.

Some factors I suggest you consider:

(1) Liability - insurance is damned expensive, even if one can obtain it. Going "naked" is an invitation to disaster given our litigious society. If somebody damages a firearm or has a personal injury, the burden will be on you to prove it was not your product.

(2) Manufacturing cost / materials - there are several good sized operations doing this. On inexpensive handgun rounds, they obtain their brass for peanuts, have bullet casting machines and, often, professional loading equipment which operates a lot faster than the best Dillons. The only successful small operations with which I'm familiar have a niche market, typically supplying PDs with practice ammo. On exotic ammo, there are outfits such as Black Hills and Old West Scrounger who offer the obsolete calibers for prices on the order of $40/bx. The brass is not readily available except through these sources or by forming it from some "basic" case. The latter requires some very expensive tooling and a lot of labor, the former costs about 50% of the loaded ammo from the same source. Then there is the issue of the bullets. Cast bullets for these calibers require finding older Ideal/Lyman moulds in good shape. Most have been discontinued for many years, so one is competing with both collectors and owners of the rifles to buy them. Alternatively, NEI offers many of the old designs - well made moulds, but expensive, and frankly I'm not a fan of aluminum mould blocks. Jacketed bullets . . . good luck. Either make your own (more equipment) or find a custom maker willing to produce them for a large minimum order. If there were a profit to be made in it, the outfit would be offering them for sale, anyway.

(3) Profit - by the time you factor in your labor, chances are you are working for minimum wage at best. And to realize that profit, you need to charge close to the MSRP from the bigger companies, without the economies of scale or the insurance. Dealer interest will be minimal and direct retail sales spotty. With many potential customers complaining about "paying so much for reloads." If you do go into it, do not *ever* use that term - "custom" loads or something of that nature, never "reloads;" the term alone will marginalize your product.

It can be done, and I'm sure others will assert they do, and profit from it. My comments are based on my own experiences and from those, I cannot recommend it to anyone trying to start up without significant financial resources which would allow them to do it on a large scale.