thinking about getting my FFL.........

thinking about getting my FFL.........

This is a discussion on thinking about getting my FFL......... within the FFL Dealer Discussion forums, part of the Related Topics category; I have been putting some real consideration into getting my FFL to start a internet based business. I'm not looking into getting it for personal ...

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Thread: thinking about getting my FFL.........

  1. #1
    Member Array J0eyg86's Avatar
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    thinking about getting my FFL.........

    I have been putting some real consideration into getting my FFL to start a internet based business. I'm not looking into getting it for personal use but to actually start a small internet based business out of my home. I know many people have said that trying to get information about doing something like this is going to be really hard b/c people who have gone through the process and run a business are not going to want to help possible competition out getting started. I understand this stance but an hoping I can get some kind of info from people here.

    Here's what I want to do:
    Internet based out of my home w/ only doing local transfers to close friends and family and maybe local Leo. I want to keep it small to start out at least to not get overwhelmed by it. Try to get my name out there and mainly ship with a good price.

    Here's what I know:
    I will have to apply and meet the requirements by ATF to have the FFL, I know they come out do an inspection and ask questions and if ur approved you get ur licence if not they tell you what you have to change or improve then you try again. After that point I will need to make contacts and create accounts w/ distribution companies and possible straight from the manufacturer. Then from there I need to manage the website and set up ways to bill.

    Here's what I don't know:
    How hard is it to set up and manage a web site with billing?
    Are there companies out there that I can use for billing, or can I just set up a business account and bill through that account, using a local bank??
    Is there any insurance issues I need to consider with home owners insurance and running a business out of my home even though I will not really have any foot traffic coming through? If need be I would be willing to do no foot traffic to avoid this problem and if I were to do a transfer do it at buyers house, like I said I would only do it for family and friends.
    Do i need to consider some kind of business insurance for this, and if so to what level? With not wanting to start big so I'm not planning to have many weapons or accessories around at any given point and time, and not wanting to have foot traffic coming through I dunno what I would need. I would think this would be more necessary if I were to get bigger and get a store front or start doing local gun shows.
    Should I look into getting a lawer to start up?


  2. #2
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    If you are detail orientated you should get one. I was thinking about it and a neighbor got one. So I have him do all of my transfers. I no long plan to get one. He had to go to a town meeting. Since he runs his "business" out of his home. Some anti gun neighbors turned out and made some noise at the town meeting. The town approved it anyway. He has to keep really good records but it has its advantages.

  3. #3
    VIP Member Array ccw9mm's Avatar
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    Quote Originally Posted by J0eyg86 View Post
    How hard is it to set up and manage a web site with billing?

    Are there companies out there that I can use for billing, or can I just set up a business account and bill through that account, using a local bank??
    Check with Davidson's (aka, Gallery of Guns). A number of smaller out-of-the-home FFL's go with them for the web site, and (I believe) the purchase is all done with the customer via that online, Davidson's-maintained software. Uncertain how the billing works. You'll still need to keep all the appropriate paperwork, per your agreement with the BATFE.
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  4. #4
    Member Array JoeK's Avatar
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    Saw this site and am still considering it: http://www.ffl123.com/

    For billing you can use Intuit Payment Network and accept checks for $.50 and CCs for 3.25%. Once it gets too busy to do billing manually, you can switch to a real time payment gateway.

    I'd love to open a range, myself.

  5. #5
    Member Array Gunsmoke16's Avatar
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    Think you have to have an OFFICE....ex: one room like a garage or room that's converted to code specs for entry/egress from outside, lockable storage like a big safe, etc. You are aware that they can inspect your records and etc at any time... meaning they might show up at 3:59am to roam through your entire house checking records, looking for violations and paperwork errors, etc. (since it would be a connected piece of real estate). An outside workshop/garage would probably be best I would think. Wonder how it would work with the drop-ship method? Anyone here know the BATF laws pertaining to all this stuff?

  6. #6
    Member Array J0eyg86's Avatar
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    Quote Originally Posted by Gunsmoke16 View Post
    Think you have to have an OFFICE....ex: one room like a garage or room that's converted to code specs for entry/egress from outside, lockable storage like a big safe, etc. You are aware that they can inspect your records and etc at any time... meaning they might show up at 3:59am to roam through your entire house checking records, looking for violations and paperwork errors, etc. (since it would be a connected piece of real estate). An outside workshop/garage would probably be best I would think. Wonder how it would work with the drop-ship method? Anyone here know the BATF laws pertaining to all this stuff?
    i have spoken to some people in regards to this and have heard that that it is a little misunderstood. They can come by anytime and inspect however it must be during listed business hours, and most likely will be during their regular working hours. The way it was explained to me was it would be like them coming to a store front at midnight and knocking trying to inspect and wondering why they couldn’t get it. This was one thing that was a big reason why i haven’t really considered perusing it till this point; i was always learly of this.

    now i could be wrong of here so if someone knows otherwise or has had and inspection at 10 oclock at night from a home business let me know that would be a big deal to me.

  7. #7
    Senior Member Array Phillep Harding's Avatar
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    You might have trouble with people who do not want competitors nearby, but dealers need to have contacts in other towns in order to have someone to ship to, so you are going to have plenty of help.

    This "drop ship" part puzzles me, though. I drop ship (other products) for several companies, meaning they buy and I ship to their customer. No way in the world could I do that with firearms. Ship to a local FFL, maybe. Not to the customer.

  8. #8
    Senior Member Array DaGunny's Avatar
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    Another thing to look at is what happens if/when you sell your home. If you take advantage of the tax breaks for using all or part of your home (or building on your property) as a business, you could run into issues when you sell the property. Check with your CPA and/or a real estate lawyer.
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  9. #9
    Member Array J0eyg86's Avatar
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    Quote Originally Posted by DaGunny View Post
    Another thing to look at is what happens if/when you sell your home. If you take advantage of the tax breaks for using all or part of your home (or building on your property) as a business, you could run into issues when you sell the property. Check with your CPA and/or a real estate lawyer.
    To be honest i never even thought of this factor, using the tax breaks of the home. I figured at most i would be able to write off losses maybe something with vehicle due to advertising with it, never even thought of the home factor with a tax break. I will have to talk to my CPA about that. It honestly may not even be worth trying to do that with the fact that I’m considering starting so small, but i will have to speak to him about it.

    Thanks for bringing that up.

  10. #10
    Distinguished Member Array Diddle's Avatar
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    FWIT, you do not need any of the FFL kits. The paperwork is a very easy to fill out and if you have a question, just see the instructions. You can download the initial application and read it over. Then go back to the on-line application, fill it out, print it. Everything you need to know and do is listed HERE .

    The whole process is rather painless until you get to the point of dealing with distributors.

    my steps were:
    Apply for FF license
    work on a business plan in the mean time (your IOI will / would like to see and review it)
    apply for a city business license (assuming you need one)
    get approvial from Codes and Zoaning (you WILL have to have this for your IOI interview and your IOI will contact your local Codes department for verification)
    obtain a state sales tax ID if that applies to your state.

    Once your FF licenses is approved, generally your IOI will give some indication of their disposition during their interview - about 4 hours minimum you will need to open a checking account.
    There is a 99.9% chance your bank, regardless of how long you have dealt with them, in my case, 30+ years, they will treat you very differently than the last time you opened an
    account or took out a loan. 9/11 changed a lot of stuff. You will also have to have a EIN number. It is free and can generally be done on line. Even if you have NO enployees, as a firearms
    dealer, you are required to have a EIN. Even of you are a sole prop. entity using your SSN. When you go to open a checking account, you will need, all local licenses, EIN and tax certificate.
    I thought this was incorrect until I read "who must apply for a EIN"

    Your bank may require you to have a Certificate of Assumed Name if you are a DBA (ex. John Smith DBA Fantastic Firearms) One bank told me this and I called their hand - grumpy old woman - and informed her that the EIN preempted that nedd for a certificate of Assumed Name .

    I wish you my best.

    --N O T E-- Posted information above does not apply to states, cities or burbs..
    My experence is that getting the FFL is far easier than handling the business sutup activities.
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  11. #11
    Member Array GoldwingElf's Avatar
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    I would recommend any small business venture set up as a LLC or S Corp to protect your personal assets.

  12. #12
    Member Array J0eyg86's Avatar
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    Quote Originally Posted by Diddle View Post
    FWIT, you do not need any of the FFL kits. The paperwork is a very easy to fill out and if you have a question, just see the instructions. You can download the initial application and read it over. Then go back to the on-line application, fill it out, print it. Everything you need to know and do is listed HERE .

    The whole process is rather painless until you get to the point of dealing with distributors.

    my steps were:
    Apply for FF license
    work on a business plan in the mean time (your IOI will / would like to see and review it)
    apply for a city business license (assuming you need one)
    get approvial from Codes and Zoaning (you WILL have to have this for your IOI interview and your IOI will contact your local Codes department for verification)
    obtain a state sales tax ID if that applies to your state.

    Once your FF licenses is approved, generally your IOI will give some indication of their disposition during their interview - about 4 hours minimum you will need to open a checking account.
    There is a 99.9% chance your bank, regardless of how long you have dealt with them, in my case, 30+ years, they will treat you very differently than the last time you opened an
    account or took out a loan. 9/11 changed a lot of stuff. You will also have to have a EIN number. It is free and can generally be done on line. Even if you have NO enployees, as a firearms
    dealer, you are required to have a EIN. Even of you are a sole prop. entity using your SSN. When you go to open a checking account, you will need, all local licenses, EIN and tax certificate.
    I thought this was incorrect until I read "who must apply for a EIN"

    Your bank may require you to have a Certificate of Assumed Name if you are a DBA (ex. John Smith DBA Fantastic Firearms) One bank told me this and I called their hand - grumpy old woman - and informed her that the EIN preempted that nedd for a certificate of Assumed Name .

    I wish you my best.

    --N O T E-- Posted information above does not apply to states, cities or burbs..
    My experence is that getting the FFL is far easier than handling the business sutup activities.
    so it really seems like from what im hearing that the most difficult part of this whole process is the business side of things and not the FFL side of things.

    with wanting to do this as an online venture what should i be looking at as far as listing for hours of operations??

  13. #13
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    Put whatever you want for buisness hours. The ATF doesent care.
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  14. #14
    Member Array SFCDan's Avatar
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    How much does it cost to maintain the license? I have heard that it is more of a hindrance than a benefit for most people who really don't run a full time shop.
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  15. #15
    Distinguished Member Array Diddle's Avatar
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    Quote Originally Posted by SFCDan View Post
    How much does it cost to maintain the license? I have heard that it is more of a hindrance than a benefit for most people who really don't run a full time shop.
    Initial application fee -$200 good for 3 years - Then $90 every 3 years to renew.
    Diddle
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    NRA Life Member

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