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Getting Your Own FFL – The Pros and Cons

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By Brandon L. Maddox

Articles on the subject of getting your own Federal Firearms License have been generated a lot of discussion, but there seems to be a lot of confusion out there as to the process of becoming a license holder. So let’s start with answering some of the FAQs.

Q: Can I get a FFL for only personal usage?

A: No, the Bureau of Alcohol, Tobacco, Firearms and Explosives (BATF or ATF) will not issue an FFL for 100% personal usage. Do you have to sell guns? No. Perhaps you have friends you can help with FFL transfers from GunBroker.com handgun purchases, for a small transfer fee? If so, your FFL wouldn’t be 100% personal use . . .

Q: If I have an FFL, can the ATF show up day or night and harass me?

A: Per federal law, ATF can only inspect your firearms business location once every 12 months and can only do that during your hours of operation. ATF can only look at your ATF paperwork for record keeping. And they can only inspect FFL firearms inventory, not your personal firearms. Selecting appointment-only for hours of operation is possible in some situations, which would require a phone call before a compliance inspection.

Q: Do I need a storefront to get an FFL License?

A: Our research shows that more than 64% of all FFL locations are from home or residential addresses. United States federal law does not have conflicts with residential addresses. Massachusetts has a state law about residential addresses, but a work-around exists for online-only firearms dealers. Home is a viable option. (Check with local law enforcement.) 

As a responsible person entering into a new adventure, it’s always good to create a list of pros and cons:

PROS of getting a home-based FFL

  • Low cost and overhead to start. No safe or alarm system is required.
  • Access to manufacturer direct and wholesaler pricing on guns, ammo and other sporting goods; ordering online 24/7.
  • Part-time, hobby income; money wife does not know about.
  • You don’t have to sell firearms. Many part-time niche adventures are possible, including gunsmithing, DuraCoating, internet transfers, hydro-graphics, Class 3 silencer sales, auction sales, internet sales, etc.
  • Market demand from gun owners is at all-time record highs; Hillary in the background only helps.
  • Help friends get good prices on hard-to-find firearms.
  • No background checks or hassles to get firearms mailed to you directly.
  • You can also work gun shows to gain exposure.
  • All activities with this new gun shop adventure are often tax deductible; reduce your taxes.
  • Often state gun-control laws do not apply to FFL holders. No waiting periods, no background checks; and you are often able to  purchase items prohibited to non-FFLs.

CONS of getting a home-based FFL

  • Security — You need to only invite those you know and trust.
  • Paperwork needs to be kept for 20 years and kept well-organized.
  • The license application fee is based on the type of license that you apply for. There are eight license types – Type 01 (The most common, for Dealers in Firearms Other than Destructive Devices), 02, 06, 07, 08, 09, 10, and 11. A Type 03 FFL, or Curio and Relics (C&R) license is a special license for the collector of curios. Unlike most FFLs, which are for dealers, gunsmiths, manufacturers and importers, the Type 03 FFL is intended to make gun collecting easy. There is a bit of confusion between a Class 03 FFL for Curio and Relics and a Class 03 Special Occupancy Tax (SOT) for manufacturers and dealers of NFA items. Often people are referring to the Type 03 SOT when they say Class 3 FFL. The Class 3 SOT is a special license and tax for businesses engaged in the manufacturing and/or dealing of NFA items like silencers, destructive devices, machine guns and short-barrel rifles or shotguns. The FFL application fees range from $30 to $200 and cover the first 3 years. Yes, the ATF will take a credit card on the application. The FFL renewal cost is $90 every three years afterward (which is only $30 per year).
  • ATF does make FFL list public.
  • To make largest profits, eventually you will need to focus on a niche market or grow the volume.
  • Inventory can sometimes be hard to find quickly with demand being so high.
  • Shipping to a home address can be tricky with a day job. ATF allows off-site storage and alternate mailing addresses, which helps.
  • ATF can inspect your federal firearms licensee records every 12 months, only during your stated business hours. Industry average for a non-pawnbroker home-based FFL dealer is once every 30 years.

A large number of FFL holders initially started small, operating from home. And there are those predicting that the demand for firearms is head only one way — up. So your very own Federal Firearm License might be more than just a huge convenience. It can also be a good business opportunity.

Brandon Maddox is CEO of ffl123.com.

More information:

How to Get an FFL — A Brief Step-by-Step Guide
New Illinois Gun Dealer Licensing Act Drives Over 50% of FFLs Out-of-Business
ATF Website
Application Process
ATF Forms (including Fingerprint Cards)
ATF FAQs (including explanations of the Types of FFLs and answers for the manufacturer of firearms)

0 thoughts on “Getting Your Own FFL – The Pros and Cons”

  1. ATF would not renew my license because I could not predict or guess at how many sales I would have over the 3 year renewal.
    Therefore, I did not fit the definition of a federal firearms licensee.
    At least they gave me my 90 bucks back.
    Now I have to pay retail for scopes, mounts, parts, mags, etc…

    Reply
  2. We all know what this is really about. Look at the figures of those incarcerated. Any question about which way they’ll vote? You just grabbed another huge block of democrat voters.

    Reply
  3. Interesting article. On the street one just has to do the best they can with what they have. I have written here and will say it again, if you prevail in a fight on the street do NOT hang around and talk to the police or anyone else. Exit the area, pronto. The police are not your friend in these cases and, as we saw in the Zimmerman case, neither is the prosecutor.

    Reply
  4. All LE Agency’s should be made to have all their firearms micro stamp retrofitted in order to protect the public and officer in case the officers gun is stolen and used in a crime.
    Anyone that went along with this is a Nazi.
    Did you ever wonder if any of those non-booked guns from the phony and illegal gun buy backs ever made it back on the streets ? No way of knowing because they were not purchased legally through an FFL and entered into an A & D Book ? Good way for criminals to have evidence go missing.

    Reply
  5. Serving a prison sentence does NOT repay a “debt to society”.

    A rapist cannot “unrape” their victim. A murderer cannot “unmurder”.

    When a con finishes their prison term, all it means is that they are out and about to offend again.

    Someone who rapes, robs, or murders should NEVER be allowed to have a say in who gets elected to public office.

    Now, the other side of that coin is that we call too many non-violent crimes felonies. That needs to change also.

    Reply
  6. I like the response they left on the FBook to a comment

    Rosenberg Police Department Duke Clermont…encourage a constitutional right? Of course we would…in fact we took an oath to protect it.
    60 · February 6 at 10:41pm

    Nice.

    Reply
  7. Yep, it’ll fail eventually.

    But I’ve owned a few AK’s that were trash right out of the box. And I saw another perfectly functioning AK break a firing pin. One second it worked, the next it didn’t. The AK is the most reliable design short of a hammer, right?

    So any gun can fail. A Glock is cheaper, but I’d trust a good 1911 just as much.

    Reply
  8. The hard-shell cover with microfiber lining inside is nowhere near
    as pretty as Logitech’s but this i – Pad buddy does
    offer superior protection. After all, I’m not going to write a novel on
    this thing. Dell’s first tablet PC followed,
    then the i – Phone, and now the i – Pad and i – Pad 2.

    Reply
  9. I went to an ivy league school. Smart kids. Very expensive. Looking back, wonder if it was worth the debt given other lawyers I work with who went to state schools generally make the same and didn’t have to pay back $100k+ of debt. Just saying – being Black and Having an Ivy League degree is nice but . . . I could have a porsche by now

    Reply
  10. “To have laws that tell people that they can shoot first and then ask questions later is a violation of our civil rights. I believe that law is inherently wrong,” Sharpton said before the march began. “The law in effect says based on your imagination — if you imagine I’m a threat — you have the right to kill me.”

    Sharpton is proving, once again, that he is an idiot. SYG is not about killing someone because you imagine them to be a threat. It is about the state not being able to persecute someone because they capped the bad guy in their living room without having to retreat to the back yard. It is about self defense but that defense must be reasonable.
    What Demented Al does not realize is that the right, an inherent one at that, to self defense is a civil right. He is factually incorrect both in the law and the civil rights application.
    SYG is a good law that needs to be in place in all jurisdictions. Trayvon called the tune and paid the bill with his life. It is not the fault of a lw that was not proffered as a defense in any event. This is b.s.

    Reply
  11. “But for these people, there was nothing in any shape or form abnormal about me wanting to do this; [their guns were] a perfectly normal extension of their lives.” That’s the message that needs to get out.

    Reply
  12. I am a track and field official. In researching buying blank shells for our organization to use at track meets, it seems that they are requiring an FFL to ship them to me. I didn’t need it before. Is this because of the new gun laws in NY state? If so, then there are going to be track meets run without using a starting gun very shortly when we run out of blank shells.

    Reply
    • Im not sure of the problems with buying blanks, I am however an experiance metalic cartrage reloader. If you use a .22cal pistol for your starting gun then you might want to look at your local Home Depot, they sell .22cal blanks for nail guns. If your looking and cant find it or you use a larger caliber pistol you can pick up a reload kit for very in expenive and just reprime your shells. A primer only shell fired out of a pistol is loud enough to be hear for several hundred yards away, it does not affect your pistol negitively (other then not cycling Auto pistols), and the spent casings will not become altered do to firing. I hope this helps

      Reply
  13. Leave some space between the various perennials you choose for more impact.

    Perhaps you want to do landscaping on the side and go
    full-time when you already have a steady list of clients.
    Chances are you rent or lease the property upon which your business is located,
    and really have no idea about the types of trees and shrubs that are planted and why they are planted where
    they are.

    Reply
    • Has anyone completely deciphered this yet?

      Best I get is that he wants an FFL so that he can buy a Ham and Cheese sandwich therefore he may eat a Smith and Wesson.

      Reply
  14. My dad has been reloading his own ammo for quite some time. We were thinking of starting a small reloading business and getting our type 06 FFL. Anyone have any suggestion or advice on that? We have a lot of questions and very few people in the business are willing to answer them. Thanks.

    Reply
  15. So at my workplace my employer gets me an employee possessor explosives permit. Can I use it to buy a handgun online without going through an FFL dealer? Is my FEL as good as an FFL for getting guns or is it only for getting explosives (boring).

    Reply
  16. The political comments about Sar supporting terrorism are just ignorant, so I won’t go any further about it.
    The super stiff safety thing seems common on Turkish guns for some reason. Get a little exercise and flip the thing on and off a hundred times and problem solved. A friend’s Tristar P-100 took about 200 flips to loosen up. The “sperm” on one of my guns, (Made in the USA, BTW) was resolved by taking my thumbnail and scraping off the “tail”. It took about 3 seconds. I haven’s shot a Sar 9, I’m kind of a hammer and TDA guy, but the one I dry fired seemed OK, like a lot of “split” or bladed triggers. Another thing I don’t like.

    Reply
  17. the spirit of Smokey Yunick lives on in finding ways to comply with the letter of the silly laws california passes, while completely circumventing the intent of those laws authors

    Reply
  18. The problem with previous belt fed AR uppers was the lack of a quick change barrel, so this is a big improvement. If I had a few grand to spare for something useless, or if I was a hardcore prepper I would definitely get one of those.

    Reply
  19. “Money the wife doesn’t know about”…gee, thanks for that dickish comment. I am the wife and I’m the one looking into my husband and I getting an FFL. My husband knows guns, I know paperwork and keeping records organized. Seems like a great partnership business opportunity and a way to do something productive together…not a way to hide something from the spouse. Obviously this is a male-dominated industry, but don’t write off the women in the world who have a solid head on their shoulders. We aren’t all sheeple.

    Reply

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