Reloading side business

[tbl-leo]

Im sure some members here will advise against selling your reloaded ammunition, and I respect that. I have a few questions regarding the sales of hand loaded ammunition even so.

Since I have started reloading, friends and family have peaked interest and while shooting request me to make them some. They offer to pay the going costs because our obvious shortage in the market today.

If I did decide to start making ammunition on the side what would it entail?

FFL? What type?
Insurance?
LLC or .inc?

Thanks in advance,

Jeff

[David2011]

Type 06 FFL, insurance and LLC. I wouldn't hesitate to sell cast boolits and reloading components commercially but wouldn't consider selling loaded ammo.

David

[runfiverun]

if you make it and sell it you have to have the ffl and business license in place.
don't matter if it's ammo, brass, primers, or boolits.

[Parson]

I have had a type 6 FFL for over 30 years. The single biggest headache in my opinion is the 11% excise tax. If you furnish the brass and sell reloads, even one single round you owe the 11%, and file quarterly from then on rather you sell more or not for as long as you maintain your FFL

[Ickisrulz]

They want ammo from you because there is a shortage on ammo and components. Where will you be getting all the components?

[Jim]

I would also add a phenominal ($1,000,000) liability insurance policy. My fault, your fault, nobody's fault, if something goes south and somebody hires a lawyer to sue you, you're screwed and glued.

[Boyscout]

How about BYOB (Bring Your Own Bullets) and let them reload under your watchful eye using all of their components? What would be your liability? I have made this offer and, so far, I have not gotten any takers. It's probably not worth it if you are not in it all the way.

[bobthenailer]

Thats what i offer to any one who askes me to reload for them bring your componets and load them on my equipment ! a friend is in the process of doing just that 1,000 each of 40 S&W & 9MM & 500 - 380 and 150 - 45 LC , he's currently about 1/2 done.

[historicfirearms]

No offense, but as an experienced shooter I will not buy anyone's reloads. I think the market would be pretty limited, especially for the investment you would have to make. Just try to buy components and beat the ammo factories in price, it doesn't leave much profit.

[462]

Discounting the licensing, availability/non-availability of components, insurance premiums, and start-up costs, how would you feel if one of your friends were to be injured or killed and one of your rounds were to be determined to be the cause.

Kabooms have happened to forum members -- one very recently -- who have many years of reloading experience. And, how many of us have experienced squib loads, over charged loads, a primer that failed to ignite, etc.? Stuff happens.

It's still a relatively free country, allowing you to capability of following through with your idea, but it's not something that I'd ever do or recommend.

[gbrown]

Discounting the licensing, availability/non-availability of components, insurance premiums, and start-up costs, how would you feel if one of your friends were to be injured or killed and one of your rounds were to be determined to be the cause.

Kabooms have happened to forum members -- one very recently -- who have many years of reloading experience. And, how many of us have experienced squib loads, over charged loads, a primer that failed to ignite, etc.? Stuff happens.

It's still a relatively free country, allowing you to capability of following through with your idea, but it's not something that I'd ever do or recommend.

+1 on that, several times over. Stuff happens. I have several boxes of various caliber ammo loaded by my best friend, now deceased. I have no qualms about shooting it. He and I sat at his reloading bench many hours, and we had countless conversations about loading. He and I started loading together, me 15 and him 16. However, I've encountered problems from my reloads before. Better to encourage them to get to reloading, learn to do it themselves, on their equipment.

[Bonz]

and probably the most important of all: If you reload some ammo and give or sell it to family or friends, you are ethically and morally responsible if you did something wrong and the ammo blows up while they are shooting it. For me, that would be very tough to live with, especially if someone were injured or killed. My wife told me that if her gun ever blows up with my reloads, she is going to shoot me ;-)

[blackthorn]

I would also add a phenominal ($1,000,000) liability insurance policy. My fault, your fault, nobody's fault, if something goes south and somebody hires a lawyer to sue you, you're screwed and glued.

A $1,000,000, policy really is not all that much these days! I would double or even triple that!

[starmac]

Aren't there several companies that sell reloaded ammo, some specialty stuff, and some just cheap ammo? Even wallmart here sells a couple of brands of ammo here that I think started out as reloads in someones reloading room. I know there are some commercial reloaders in the area, I don't know what all they had to go through to get the business started, or what kind of equipment they have or what safety nets they have in place, but there has to be a way.

[TES]

There is and I am going to do just that.

Work up a very safe plinking round and inspect every round twice for powder throw and end weight. Take a page from what Hornady has done. Find a powder that will fill the case enough so that a double charge is not possible and you really don't have much to worry about.

If you can believe this....I had a ffl here in state tell me not to get insurance because if you have it they will sue you. I nearly fell over! Get insurance and start an LLC so that in the event of everything going wrong they can only attack your LLC and not you personally or your personal assets!

[gbrown]

My big problem with such a venture is how much information would you have to supply to which governmental agency or agencies, and what about inventory and sales records? Then, in most States there are now sales taxes which would indicate to someone the volume of sales. My whole life I have tried to keep a low profile and fly below everyone's radar screen. I just don't see this as a great idea.

[TES]

The interview with the BATFE was so simple. It is more of a what you can and cannot do type of thing. It is the same amount of info you supply to the DMV when getting a drivers licence. You just have to have a legit address and allow them to pop in if they so desire. Yes if you own any business you need to either keep impeccable records or find someone to do it for you! The BATFE agent that I spoke with was really nice and said since you are only doing ammo components I would imagine that you will never see me again. In my entire state there are only 5 or 6 agents. As long as you play by the rules they really have better things to do then come check on you. Now zoning and fire chief issues where you live are more of a challenge than the BATFE or anything else. Oh and if you cant do it in your home....good luck finding a place that will rent you a space to do it!

[bob208]

i did it for years. had no problems. even loaded for some small town police dept. it got so all i did was load and cast. i would only use a single stage press. that way i could controll the process. it takes longer but you can cut off a lot of problems. you want to do it go for it

[Hardcast416taylor]

Ask yourself, "Is it worth all the material things that I have worked so many years to acquire just to supply some beer guzzling can shootin` guys a good time or have an "OOPS" moment by getting mud in the barrel of a dropped firearm then fired"?Robert

[dbosman]

That quote should be a sticky all by itself.


Ask yourself, "Is it worth all the material things that I have worked so many years to acquire just to supply some beer guzzling can shootin` guys a good time or have an "OOPS" moment by getting mud in the barrel of a dropped firearm then fired"?Robert

[starmac]

Ask yourself, "Is it worth all the material things that I have worked so many years to acquire just to supply some beer guzzling can shootin` guys a good time or have an "OOPS" moment by getting mud in the barrel of a dropped firearm then fired"?Robert

That is for sure something to think about, but no business of any kind would start up if every scenario was considered. But then many big businesses would not stand a chance if they were starting up these days with the regulations we have now.

[TES]

Ask yourself, "Is it worth all the material things that I have worked so many years to acquire just to supply some beer guzzling can shootin` guys a good time or have an "OOPS" moment by getting mud in the barrel of a dropped firearm then fired"?Robert

That's why you form an LLC to protect your personal assets. I would like for them to prove that one in court! Most issues are shooter negligence. Didn't fire? Did you clear your gun and check the barrel? That's their problem / stupidity if they didn't.

[Case Stuffer]

It is very likely that by the time one obtains a Class 6 FFL ,State ,County and perhaps City Licence and Tax numbers the ammo shortage will be over.

I held a Class 6 FFL and other necessary licensees for a number of years ,loaded and sold tens of thousands of rounds of 9mm..38 special, .357 MAg.45ACP , .44 MAg. and made good money per hour but in the end I could make more money and have a lot less issues to deal with working for someone else.

[shooter93]

There is a guy here who just started a similar business a few months ago. I don't know if he's using new or fired brass but he uses lead bullets, bulk powder and primers. He has several progressive presses set up for various calibers. After all the fees, insurances etc....and you may need permits from the town/county you live in....and adding the profit he figured he needed he is charging 35 bucks a box of 20. Sales are dismal to say the least.

[WILCO]

you want to do it go for it

I agree. Start off with doing the research needed to put together a business plan and go from there. Any business is a numbers game. They all add or up or they don't.

Here's a neat link: http://www.ssarmory.com/ammunitionmanufacturingequipment.aspx

[azrednek]

if something goes south and somebody hires a lawyer to sue you, you're screwed and glued.

Years ago, mid 80's I was acquainted with somebody that was reloading ammo as a business. He was doing so well he quit his job, ran ads in Shotgun News. Long story short, he assumed his liability insurance included in his homeowners insurance would cover him. He failed to read a section that excludes business activities. Had he loaded a small amount for a friend he may have been covered but he was engaged in a for profit business. After signing over his house to his attorney to defend him in a lawsuit, his wife left him and he eventually committed suicide. His wife even though the divorce settlement held him responsible for the debt. She was responsible with Arizona being a community property state it also means community debt as well. She eventually bankrupted her way out of the debt. Typical case where the only one that comes out ahead were the lawyers.

From what a neighbor told me. Somebody filed the suit after after an antique British revolver came apart. The shooter had to have eye surgery.

EDIT:
Years ago when I took on firearms into my uniform business. My liability insurance excluded coverage on re-loaded ammo. Later when the policy re-newed surplus firearms were also excluded. First re-newel excluded military surplus handguns. The third year it excluded all military and police surplus firearms and ammunition of any kind.

[bangerjim]

Not worth the hassle, taxes, insurance, and liability. I allow VERY good close friends to use my reloading stuff if......IF they bring ALL their own stuff.....and I supervise 100%.

I would NEVER buy reloaded ammo from ANYBODY.....even a good friend. If my gun blows up, it is MY fault!

And this Obama-scare induced ammo shortage will come to an end (probably in 3.5 years!) and your investment may not be worth it. It would take a HUGE profit margin potential to get me personally into any venture like you are looking at.


Good luck! [smilie=1:

bangerjim

[azrednek]

Not worth the hassle, taxes, insurance, and liability. I allow VERY good close friends to use my reloading stuff if......IF they bring ALL their own stuff.....and I supervise 100%.


With you supervising you could possibly be negligent if something goes wrong.

I would NEVER buy reloaded ammo from ANYBODY.....even a good friend. If my gun blows up, it is MY fault!


It is a lesson I learned from the School Of Hard Knox. Not once but foolishly twice before I wised up.





Good luck! [smilie=1:



bangerjim


Best advice I got from two attorney relatives. First of all "don't" second "deny, deny ,deny". "If he was shooting my reloaded ammo he stole it from me" or "I have never reloaded that caliber". "I was with him when he bought it at a gunshow". The burden of proof is on the greedy person filing the suit. Might be pretty difficult to prove he was shooting your ammo with your permission if you claim otherwise.

[TES]

There is a guy here who just started a similar business a few months ago. I don't know if he's using new or fired brass but he uses lead bullets, bulk powder and primers. He has several progressive presses set up for various calibers. After all the fees, insurances etc....and you may need permits from the town/county you live in....and adding the profit he figured he needed he is charging 35 bucks a box of 20. Sales are dismal to say the least.

UM...he's doing it wrong. $1.75 per round?

[starmac]

He is doing it very wrong, There is a commercial caster and reloader here that sells 357 mag rounds for .30 cents a round, 9 mil at .25 a round up to 44 mag for .45 cents a round. From .5 to .10 cheaper depending on the caliber, if you exchange brass.
This is todays prices and he has ammo, I doubt he is doing it to break even. lol

[TES]

um who is this?

[starmac]

It is a guy I met at the range a week or so back. I won't give his name out without his permission, but will likely see him in the next week or so.

If I am not mistaken, our member Bullshot used to reload commercially. He is a super nice guy and would likely have some pointers for you.

[TES]

Any advice from someone who has done it would be worth its weight in lead...shoot me a PM if I can speak with the guy.

Thanks

[Reg]

Well, you asked a honest question and I think you have received all kinds of honest answers. Any and all would apply , really. You are going to have to sort through all of this and see where you fit in and find what is comfortable for you. Let me tell you about one of our locals who decided he wanted to go into custom reloading just as another viewpoint.
Ben loved guns , shooting and reloading-- period. After a nasty divorce he decided he had little to loose ( he lost a lot ) he decided he wanted to go into custom reloading. No license, no insurance-- nothing. Just reload and to heck with it and he did. For years he was a regular at all of our out of the way gunshows where he held court in all matters of reloading. People waited for months to talk to him. He loaded cast and jacketed, berdan and boxer. He did keep most of his loads on the moderate side and about the only time he ever got into trouble was when he drank a bit too much. People forgave him and kept on buying.
A horse went over on him and crushed his spinal cord and that was the end of his casting but he kept right on loading with jacketed.
We used to take our lunches together and go shoot prairie rats just out of town and I will never forget the day he showed up with a full auto M-16. You never knew what he would have next. He just loved guns and shooting and by then it was about all he had left.
A couple of years ago, he finally passed on. His funeral was attended by all and his effects auction brought in plenty. Without exception you will find few who don't miss Ben and his reloading. He had a good life and I miss him.
No license---- no insurance---- just the love of the game.

Where do you fit in.

[starmac]

I used to buy reload shotgun shells at SCHOOL from one of my teachers, we may have had a bit of hope and change since them days though.

[tbl-leo]

Wow, thanks for all the great replies. I was never planning on getting into this business to become rich, but perhaps pay off all of my reloading expenses. The risk doesn't seem worth it in my opinion though.

[bob208]

there are a lot on here that point out the risks. but it you are carefull take pride in your work and protect youself with ins. you could do ok maybe really take off. i did it for years sold cast bullets too. three things made me quit. the cci primers of the early 80's that would not go off. to this day i will not use cci. wal-mart cut prices so bad i could not make any money. and i just bruned out.

if you only hear the nay sayers. the wright bros. would have never got off the ground. we would not have ford cars.

[MBTcustom]

No offense, but as an experienced shooter I will not buy anyone's reloads. I think the market would be pretty limited, especially for the investment you would have to make. Just try to buy components and beat the ammo factories in price, it doesn't leave much profit.

Unless of course you trust that loader. Lots of people trust Mr. winchester, Mr. Remington, and Mr. Federal to load for them all the time.
Any business is about your client base and whether they trust you or not.

Now, if you are trying to start a business, the name of the game is go big or go home. If your "business" is a hobby, then it will fail becasue you will not be willing to do what is necessary, nor sacrifice what is needed to make it float.
Starting a business is like jumping into a boat that is almost sunk and start bailing until it rises to the surface, plug the holes, and get it home. Do all this fast enough to say that it was cheaper than going and just buying one. it had better be a really good boat to be worth it savvy? Just like your business had better be worth it.

Now, I think there is a place for a guy to supply ammo to a local community, but you had better be the best at what you do. In other words, all the things a normal reloader struggles with, you need to be able to blow right past it and get usable ammo on the table.

BTW, another legal requirement, (if you're wanting to keep it all above board) is the little matter of the annual $1200 ITAR licence that you must buy to sell ammo to american citizens. That was the deal breaker for me, because I am trying to keep everything above board and square with uncle sam. Sometimes I wonder if it's really worth it.

Also, an LLC is like a firing squad. You can't pin the blame on one individual because he is part of a group. If you are a sole proprietorship LLC, then you are a firing squad of one, and any good lawyer will go through your LLC like half a sheet of cheap toilet paper. It means nothing if you dont have at least two or three members!

At the end of the day, its a risk. You hang out your shingle, and try to stay below the radar and keep a good reputation.

[ffg]

Just remember, every bullet shot has a lawyer going down range with it !

[TES]

Just remember, every bullet shot has a lawyer going down range with it !

Yet we all`shoot lots of them....bullets that is[smilie=1:


ITAR...I had the ATF agent here and asked her specifically about that...We read over a few lines that only applied to import export. We both agreed that it did not apply to ammo reloading.

However after reading the ITAR hand book....

http://www.pmddtc.state.gov/regulations_laws/itar_consolidated.html

I find this insulting and a bunch of **** but..

(a) Any person who engages in the United States in the business of either manufacturing or
exporting defense articles or furnishing defense services is required to register with the
Directorate of Defense Trade Controls. For the purpose of this subchapter, engaging in the
business of manufacturing or exporting defense articles or furnishing defense services requires
only one occasion of manufacturing or exporting a defense article or furnishing a defense
service. Manufacturers who do not engage in exporting must nevertheless register.

$2,250 per year

[Love Life]

I think Goodsteele hit it pretty good.

If it is something you really want to do, then do it. Do what needs to be done to stay legal, and give it hell. Push to be successful, and eat the elephant one bite at a time.

I have looked into doing it many times over the years, but I move to much.

Seriously, loading good ammunition is not hard if are willing to put the time and effort into it. If you load a bad round, then of course you deserve to be held liable!!! Put the time and effort into it and I believe you would do fine.

Whatever you decide, I wish you the best in your endeavors.

[TES]

You can file for an exemption from ITAR on reloading. Sounds like a lengthy process but how much of your time does $2,250.00 buy?

Well said LL.

[Adam10mm]

You can file for an exemption from ITAR on reloading. Sounds like a lengthy process but how much of your time does $2,250.00 buy?

Well said LL.
I've been a part time commercial bullet caster and reloader since 2006. Lots of ups and downs.

You can file for a commodity jurisdiction but you won't get it approved. The State Department stopped approving commodity jurisdictions when Hillary took over the department. You are screwed and pretty much it's cough up the $2250 or stay home. Reread that last line for the ITAR paragraph you posted. That is very clear and non-negotiable. My harsh opinion is if you are in the situation that $2250 annual fee will make or break your business, you should just save your effort and not go into business, as you're pretty much a hobby that pays for itself at that point.

Business is 80% business skills and 20% about the product or service. Making quality ammunition is pretty easy. It's the business part of it that is difficult and not for everyone. I learned that the hard way. I've got a lot of people on many different forums PMing me for advice about this type of business. Couple things they all have in common are they have no real business skills, they want to stick with commodity cartridges, and they are unrealistic about growth and distribution. So many people get worked up about the paperwork but that's not the half of what they need to be concerned with in this industry.

Worst time to start in this industry is times like this. Good luck getting any sort of consistent supply of anything. Even the larger regional reloaders are still coming up short with components.

[TES]

I don't think that the itar is a make or break...in my previous business my insurance for Liability cost more than that. It just sucks when something that does not apply......well...applies! I wholly disagree that now is a bad time. You just have to sell what you can make which could be one component or all of them as a completed round. I also plan on taking 90% of profits to turn right around and automate what I can or what makes sense to automate. Do this through the first few cycles and then start worrying about profits. I am starting way small and doing what I can when I can. So...we will see!

[nicholst55]

I would also add a phenominal ($1,000,000) liability insurance policy. My fault, your fault, nobody's fault, if something goes south and somebody hires a lawyer to sue you, you're screwed and glued.

I wouldn't consider going with less than 5 million - not that I could afford the premiums. IMHO, that would be the deal breaker right there - liability insurance. Well, that and the lack of available reloading components.

[nicholst55]

Aren't there several companies that sell reloaded ammo, some specialty stuff, and some just cheap ammo? Even wallmart here sells a couple of brands of ammo here that I think started out as reloads in someones reloading room. I know there are some commercial reloaders in the area, I don't know what all they had to go through to get the business started, or what kind of equipment they have or what safety nets they have in place, but there has to be a way.

Hornady started out selling reloads made on USGI .30-06 brass - in the ammo department, anyway.

[Adam10mm]

Hornady started out selling reloads made on USGI .30-06 brass - in the ammo department, anyway.
Joyce Hornady and Vernon Speer went into business together by making a machine to swage .224 caliber bullets from fired rimfire cases. They broke up and Speer moved to Idaho to form his own company, Hornady stayed in Nebraska. Hornady then moved on to make his .30 caliber 150gr SP bullet, the current #3031, in a rented garage.

[Adam10mm]

I wouldn't consider going with less than 5 million - not that I could afford the premiums. IMHO, that would be the deal breaker right there - liability insurance. Well, that and the lack of available reloading components.
The more insurance you have, the more your company can be sued for, and the higher the premiums will be if you can recover and not get dropped.

[Adam10mm]

I don't think that the itar is a make or break...in my previous business my insurance for Liability cost more than that. It just sucks when something that does not apply......well...applies! I wholly disagree that now is a bad time. You just have to sell what you can make which could be one component or all of them as a completed round. I also plan on taking 90% of profits to turn right around and automate what I can or what makes sense to automate. Do this through the first few cycles and then start worrying about profits. I am starting way small and doing what I can when I can. So...we will see!
Ninety percent isn't enough. If you have a full time job, keep living off that and reinvest 100% of profit. Businesses fail because the owners take a salary from a startup too early. When your business profit matches your FT job net income for a year, then it's maybe time to evaluate the next step.