Anyone have an FFL?

[Up1911Fan]

Was thinking about getting a 01 FFL. It would be home based, not looking to open a business front, just transfers for myself and people I know. If anyone has one, what was the process like? Did you do an LLC? What about insurance? Thanks.

[JRB]

Was thinking about getting a 01 FFL. It would be home based, not looking to open a business front, just transfers for myself and people I know. If anyone has one, what was the process like? Did you do an LLC? What about insurance? Thanks.

I'm a named 'responsible person' on an 01FFL - basically a partner of the FFL holder that can also use the FFL accordingly, but it's out of the home of a very close friend.

Our biggest struggle in maintaining it has been with city ordnance/city code.

Make sure the named address is zoned in a way to work for a local small business license for an 01FFL. The biggest battle we've fought is our local city ordnance sees an FFL as a 'retail store' despite explaining that we're appointment only and carry no inventory. The ATF, surprisingly, was very helpful in sorting all that out for us at our last renewal and even offered to assist when this turned into a problem. The ATF inspector was apologetic but very clear that if we couldn't get the business license renewed, that he'd have to shut us down. But we got it all worked out.
This was all on a small LLC with a business license and Tax ID. LLC's are easy so we went that route.

The other hiccup/annoyance is that every personally owned firearm at that address technically has to be labeled 'not for sale' to clearly separate what's in our bound book and what is personally owned.
Recently, we went to two different safes - a small one for incoming FFL purchases or 'on the books' weapons, separating my buddy's personal safe for his own guns, and labeling the outside of both accordingly. Our helpful ATF inspector said he was okay with that, but a stickler for the rules might gig us on it in the future, so make sure to keep 'not for sale' tags handy just in case.

Maybe 1-2 times a year one of us will get a fishy phone call from someone wanting to buy a bunch of guns, usually stuff like Glocks and cheap AK's or AR's, and they'll often specifically ask about paying extra to circumvent the law in some way. Most of those feel like ATF fishing expeditions, but a couple have genuinely seemed nefarious. When in doubt, say you don't take new customers unless they're referred from your existing customer base and that you will not violate Federal law for any reason. Easy day.

Otherwise, dot your i's and cross your t's and keep your bound book straight and your 4473's correct and the ATF will generally treat you pretty well. In the ~15 years my buddy and I have been in on this together, I can only recall maybe one or two interactions with an ATF employee or agent that seemed anything less than 100% professional. IMHO they're looking for dirtbags and people who are sloppy in recordkeeping or dismissive of the laws. So if you keep clean books and obviously aren't selling guns to dirtbags they'll check the proverbial block and call it a day.

As for business insurance, we decided on a rider for his homeowners insurance to cover fire/theft/etc affecting the home business, since we don't carry inventory or have any real business owned property that sits around.

Oh yeah -and make sure you pay your taxes! - seems obvious, but depending on your volume you might have to file quarterly and that can sneak up on you.

[Up1911Fan]

I'm a named 'responsible person' on an 01FFL - basically a partner of the FFL holder that can also use the FFL accordingly, but it's out of the home of a very close friend.

Our biggest struggle in maintaining it has been with city ordnance/city code.

Make sure the named address is zoned in a way to work for a local small business license for an 01FFL. The biggest battle we've fought is our local city ordnance sees an FFL as a 'retail store' despite explaining that we're appointment only and carry no inventory. The ATF, surprisingly, was very helpful in sorting all that out for us at our last renewal and even offered to assist when this turned into a problem. The ATF inspector was apologetic but very clear that if we couldn't get the business license renewed, that he'd have to shut us down. But we got it all worked out.
This was all on a small LLC with a business license and Tax ID. LLC's are easy so we went that route.

The other hiccup/annoyance is that every personally owned firearm at that address technically has to be labeled 'not for sale' to clearly separate what's in our bound book and what is personally owned.
Recently, we went to two different safes - a small one for incoming FFL purchases or 'on the books' weapons, separating my buddy's personal safe for his own guns, and labeling the outside of both accordingly. Our helpful ATF inspector said he was okay with that, but a stickler for the rules might gig us on it in the future, so make sure to keep 'not for sale' tags handy just in case.

Maybe 1-2 times a year one of us will get a fishy phone call from someone wanting to buy a bunch of guns, usually stuff like Glocks and cheap AK's or AR's, and they'll often specifically ask about paying extra to circumvent the law in some way. Most of those feel like ATF fishing expeditions, but a couple have genuinely seemed nefarious. When in doubt, say you don't take new customers unless they're referred from your existing customer base and that you will not violate Federal law for any reason. Easy day.

Otherwise, dot your i's and cross your t's and keep your bound book straight and your 4473's correct and the ATF will generally treat you pretty well. In the ~15 years my buddy and I have been in on this together, I can only recall maybe one or two interactions with an ATF employee or agent that seemed anything less than 100% professional. IMHO they're looking for dirtbags and people who are sloppy in recordkeeping or dismissive of the laws. So if you keep clean books and obviously aren't selling guns to dirtbags they'll check the proverbial block and call it a day.

As for business insurance, we decided on a rider for his homeowners insurance to cover fire/theft/etc affecting the home business, since we don't carry inventory or have any real business owned property that sits around.

Oh yeah -and make sure you pay your taxes! - seems obvious, but depending on your volume you might have to file quarterly and that can sneak up on you.

Thank you for that. There's another guy in the same township with an 01 so getting that approved shouldn't be an issue. I hadn't considered the tax aspect, but don't plan on making money. It would be mainly for myself and transfers for a few buddies at work. I hadn't considered the second safe, but that's also a good idea.

[HRoark]

I hadn't considered the tax aspect, but don't plan on making money. It would be mainly for myself and transfers for a few buddies at work.

This is none of my business, but don't tell the ATF that. Getting an FFL for the purpose of enhancing your personal collection is a hard no go. You may not have to make money doing it, but you need to run a business if you want the ATF to approve a FFL.

If the answer to question 17 is yes, (Do you intend to use your license ONLY to acquire firearms to enhance your personal collection?) your application will be denied.

[Up1911Fan]

This is none of my business, but don't tell the ATF that. Getting an FFL for the purpose of enhancing your personal collection is a hard no go. You may not have to make money doing it, but you need to run a business if you want the ATF to approve a FFL.

If the answer to question 17 is yes, (Do you intend to use your license ONLY to acquire firearms to enhance your personal collection?) your application will be denied.

Oh it would be a business, just not a storefront. Has nothing to do with enhancing my personal collection.

[DaBigBR]

I am an 07/02 FFL/SOT (manufacturer) and have been since 2018. If you have the option to get an 07, I think there's some value there. The price difference is negligible but you can do things like receivers with your FFL info on them (I have had them done via marking variance) and your potential access to machineguns is better if that interests you. I ended up getting my license after meeting a guy on another forum who was relatively local to me who made it sound fairly "doable."

I ended up finding an article about getting an FFL that referenced a website that sells a guide to getting an FFL. I ended up paying for the website, but in the end, the article I read was probably good enough. I set up an LLC (I used LegalZoom but if I could go back, I would probably just hire a local attorney). I have had no issue with my LLC but I don't feel like I got much for my money out of them. You'll also want to get an EIN (free and easy) and license to collect sales tax. I would also suggest setting up a bank account for your business.

The biggest thing that will jam you up in the application process is zoning. Don't assume that because you live in the country or in a city that is conservative, or whatever else that you're going to be good to go. I live on an acreage in a rural, sparsely populated, conservative county and I ended up having to go to the board of adjustment for a zoning variance. The process was simple, but took a little time. When I filed my variance application, I listed "sales, repair, and training" and not "manufacturing", which required the ATF IOI to go to the county zoning people to verify that manufacturing would be covered under my variance. If you're in the city limits, be prepared for "NIMBY" issues. I've seen that come up for several guys. It doesn't matter how little business you want to do, somebody will assume you're going to be doing machinegun demos in your backyard and will try to stop you.

My business serves three functions:

1) I support my friends for transfers and ordering some guns in.
2) I sell a limited number of firearms and a decent amount of accessories (lots of pistol optics) online.
3) I support my own habit both by buying things at a discount and by turning any meager profit I make back around to buy guns, ammo, and related stuff.

It does what I need it to, but I would not expect to get rich or make any real money. You'll find that the markup on guns, at least online, is generally pretty low. A lot of sites may not charge sales tax in your state (and I'd suggest you be an adult and register with your state government to collect sales tax), so you'll find that your buddies can get a lot of guns online for what you would charge or less, but then not pay sales tax. Even with your transfer fee, they'll end up ahead. Some accessory items do better, mostly because of minimum advertised price policies. MAP policies limit how much you can advertise something for sale for, but you can actually sell for any amount in most cases. If you are primarily doing business with friends and family and not posting items for sale on a website or third party market (eBay, Amazon, forums, etc.), you will have an edge on MAP protected products.

If you're going to sell stuff, you're going to need to find a place to buy stuff. A lot of wholesalers will not work with home-based guys. Some will only sell non-firearm items to home-based guys. I set up wholesale accounts with a lot of vendors (Lipsey's, Davidson's, Zanders Sporting Goods, RSR Group, Crow Shooting Supply, Silencer Shop, and MGE Wholesale) and have over time figured out which ones work best for me. A lot of times it comes down to how helpful your account rep wants to be. They will all likely make you pay as you go via ACH at first (most also take cards, but will charge you more). I have kept my terms as ACH so I don't get stuck with a big bill for merchandise at the end of the month. There's also the issue of collecting funds. Credit card processing companies that do "high risk" businesses (which firearms are) are not common and generally charge more. I do not mess with cards. That will cost you some business.

I agree with the poster that said not to tell the ATF that you don't intend to make any money. You need to be "engaged in the business..." to get your license. Do some transfers for your friends and make a few bucks.

Overall I would say that if you don't mind the initial tedium, it can be worth it. If you have specific questions you want to take to PM, I'm happy to try to help.

[Up1911Fan]

I am an 07/02 FFL/SOT (manufacturer) and have been since 2018. If you have the option to get an 07, I think there's some value there. The price difference is negligible but you can do things like receivers with your FFL info on them (I have had them done via marking variance) and your potential access to machineguns is better if that interests you. I ended up getting my license after meeting a guy on another forum who was relatively local to me who made it sound fairly "doable."

I ended up finding an article about getting an FFL that referenced a website that sells a guide to getting an FFL. I ended up paying for the website, but in the end, the article I read was probably good enough. I set up an LLC (I used LegalZoom but if I could go back, I would probably just hire a local attorney). I have had no issue with my LLC but I don't feel like I got much for my money out of them. You'll also want to get an EIN (free and easy) and license to collect sales tax. I would also suggest setting up a bank account for your business.

The biggest thing that will jam you up in the application process is zoning. Don't assume that because you live in the country or in a city that is conservative, or whatever else that you're going to be good to go. I live on an acreage in a rural, sparsely populated, conservative county and I ended up having to go to the board of adjustment for a zoning variance. The process was simple, but took a little time. When I filed my variance application, I listed "sales, repair, and training" and not "manufacturing", which required the ATF IOI to go to the county zoning people to verify that manufacturing would be covered under my variance. If you're in the city limits, be prepared for "NIMBY" issues. I've seen that come up for several guys. It doesn't matter how little business you want to do, somebody will assume you're going to be doing machinegun demos in your backyard and will try to stop you.

My business serves three functions:

1) I support my friends for transfers and ordering some guns in.
2) I sell a limited number of firearms and a decent amount of accessories (lots of pistol optics) online.
3) I support my own habit both by buying things at a discount and by turning any meager profit I make back around to buy guns, ammo, and related stuff.

It does what I need it to, but I would not expect to get rich or make any real money. You'll find that the markup on guns, at least online, is generally pretty low. A lot of sites may not charge sales tax in your state (and I'd suggest you be an adult and register with your state government to collect sales tax), so you'll find that your buddies can get a lot of guns online for what you would charge or less, but then not pay sales tax. Even with your transfer fee, they'll end up ahead. Some accessory items do better, mostly because of minimum advertised price policies. MAP policies limit how much you can advertise something for sale for, but you can actually sell for any amount in most cases. If you are primarily doing business with friends and family and not posting items for sale on a website or third party market (eBay, Amazon, forums, etc.), you will have an edge on MAP protected products.

If you're going to sell stuff, you're going to need to find a place to buy stuff. A lot of wholesalers will not work with home-based guys. Some will only sell non-firearm items to home-based guys. I set up wholesale accounts with a lot of vendors (Lipsey's, Davidson's, Zanders Sporting Goods, RSR Group, Crow Shooting Supply, Silencer Shop, and MGE Wholesale) and have over time figured out which ones work best for me. A lot of times it comes down to how helpful your account rep wants to be. They will all likely make you pay as you go via ACH at first (most also take cards, but will charge you more). I have kept my terms as ACH so I don't get stuck with a big bill for merchandise at the end of the month. There's also the issue of collecting funds. Credit card processing companies that do "high risk" businesses (which firearms are) are not common and generally charge more. I do not mess with cards. That will cost you some business.

I agree with the poster that said not to tell the ATF that you don't intend to make any money. You need to be "engaged in the business..." to get your license. Do some transfers for your friends and make a few bucks.

Overall I would say that if you don't mind the initial tedium, it can be worth it. If you have specific questions you want to take to PM, I'm happy to try to help.

Thank you for the detailed and thoughtful respose.

[Archer1440]

None of my business and not in my lane, but it’s worth noting that in the past few months, BATFE has been doing very thorough inspections of every small FFL I am aware of in my area. In at least one case, several agents spent eight hours at an acquaintance’s home based shop going through everything they could find. There were no issues found in that particular case, but keep in mind that they have the right to do this sort of thing, and they appear to be well motivated to find issues- apparently with a goal of weeding out as many holders as possible.

[HCM]

None of my business and not in my lane, but it’s worth noting that in the past few months, BATFE has been doing very thorough inspections of every small FFL I am aware of in my area. In at least one case, several agents spent eight hours at an acquaintance’s home based shop going through everything they could find. There were no issues found in that particular case, but keep in mind that they have the right to do this sort of thing, and they appear to be well motivated to find issues- apparently with a goal of weeding out as many holders as possible.

ATF (acting at the direction of the current administration) is doing this at all FFLs, not just the little guys.

[rcbusmc24]

Our last ATF inspection took 8 days... That is normal for a decent sized shop. We only had one IOI on deck for the last one, previous inspection there was three. Dude was a bro tho, and was not looking to burn places down. Was extremely helpful and his main stated goal was to help FFLs maintain compliance. He also made a phone call while on deck to check on my last two pending form 1s from the amnesty, they got approved soon after. I'm not saying all IOIs are like bro dude but he really dispelled a lot of ATF angst that we all had... Now I pretty much laugh when people start loosing it about them and wonder what was actually going on at the shops claiming they are being squeezed by the ATF...