Feasibility of Swaging as a Business

[Zee]

Hi all,

I'm new to the forum/swaging, and wanted to get y'all's opinions on swaging as a business model. Given the extreme high demand for ammunition for at least the past year, I decided to research what it would take to start making my own bullets, and came across Corbin, and the great information he has on the site. After researching for a few weeks, I've decided custom bullet making is something I'd like to pursue, but don't want to go in blindly. My plan is to purchase a Corbin Hydro-Press and automatic jacket maker, along with the additional components needed to produce the most popular bullets.

But since the custom bullet market is relatively new to me, here's where I think I really need advice--is it worthwhile to invest in a swaging setup with the intent to produce "regular bullets" (think FMJ/Hollow Point/Ballistic Tip 5.56/.223/300BLK etc.) for the time being, and once the demand for those types of common bullets subsides, move over into the true custom world? Dave Corbin has a lot of information on his site about the profits custom bullet swaging can produce, but given the high demand for "common" bullets right now, are the profit margins still there? Of course, a small business venture like mine would not be able to keep up with the likes of Hornady and others, but if the margins are still good for "common" bullets, and the market buys everything I make due to the current high demand, shouldn't it still be profitable? Or am I missing something?

Thanks for any advice y'all can provide, and I appreciate your time in advance.

[Dsltech1]

Well there’s the need for a 06/07 FFL, ITAR registration, insurance, and the current 11% excise tax on ammunition. Since the components of ammunition are also considered ammunition.

[Zee]

Thanks for the reply. I'm preparing my 07 FFL application now, but was under the impression that ITAR was being removed.

[Dsltech1]

I haven’t heard anything about ITAR being removed. It has been awhile since I looked into any of this though. There was a way to apply for exemption but approval was nearly impossible. If it is being removed that would definitely help.

[Zee]

I think it's being removed. This article is from 2018, but I believe the policy is being changed at the end of this month.

https://blog.princelaw.com/2018/05/1...and-gunsmiths/

[Dsltech1]

That’s definitely a plus. Looks like it may have been March of last year.

[jdfoxinc]

Component mfg. Does not require a 7 FFL. Only loaded ammunition mfg.

[ReloaderFred]

You need to consider the value of your time in a venture such as this. The Hydro Press makes one process at a time, and it's not like a punch press, which works fast, because it doesn't. Making/swaging bullets is a multi-step process.

Here's a view of the individual steps it takes to swage a bullet:

https://imgur.com/mXaQI9m

There's also the huge investment, not only in machinery, but in materials. Base material prices are high right now, and the supply chain is slow. The cost of a set of dies for just one bullet will take a lot of sales to even break even, and that's not counting your time. After all, time is the one thing spent that can't be repurchased. With the backlog Dave Corbin usually runs, you might wait months for a set of dies, or get lucky and only wait a few weeks. He runs a small shop, with just a few employees.

I think you need to talk to someone who has actually gone down this path before you start investing money. You might try contacting Jake Wilcox at Rocky Mountain Reloading about it. Just go to his website at RMR and use the "contact us". I'm sure he can tell you how hard, and expensive it is.

Hope this helps.

Fred

[ReloaderFred]

Here are the individual steps it takes to make most swaged bullets, not counting the jacket itself.

[ReloaderFred]

Making jackets is also a multi-step process. All of this is time consuming, which translates to very expensive. You really do need to talk to someone in the business who has done this, both successfully, and unsuccessfully.

Hope this helps.

Fred

[ReloaderFred]

Just for clarification, here's a top view of the steps, from case to core, then core seating, notching (you can skip this for some bullets), nose forming, final forming and then adding the cannelure (you can skip this for some bullets, too).

[Zee]

You need to consider the value of your time in a venture such as this. The Hydro Press makes one process at a time, and it's not like a punch press, which works fast, because it doesn't. Making/swaging bullets is a multi-step process.

Here's a view of the individual steps it takes to swage a bullet:

https://imgur.com/mXaQI9m

There's also the huge investment, not only in machinery, but in materials. Base material prices are high right now, and the supply chain is slow. The cost of a set of dies for just one bullet will take a lot of sales to even break even, and that's not counting your time. After all, time is the one thing spent that can't be repurchased. With the backlog Dave Corbin usually runs, you might wait months for a set of dies, or get lucky and only wait a few weeks. He runs a small shop, with just a few employees.

I think you need to talk to someone who has actually gone down this path before you start investing money. You might try contacting Jake Wilcox at Rocky Mountain Reloading about it. Just go to his website at RMR and use the "contact us". I'm sure he can tell you how hard, and expensive it is.

Hope this helps.

Fred

Fred,

Thank you for the response--that's exactly the advice/direction I was looking for. I will reach out to Jake for further guidance. I'm mainly looking to produce jacketed rifle rounds (primarily FMJ and Hollow Point), which from what I read on Corbin's website is a three step process, averaging about 3+ bullets/minute. Please let me know if I'm misunderstanding.

[rancher1913]

I believe corbin has a list of people using his equipment that are in the business that you want to pursue, I'd go see one of them.

[Winger Ed.]

I've thought about swaging my own from time to time just for myself & a few buddies.
And certainly admire anyone else for doing it.

However;
As a for profit business--- that's not for me.

1. I figure my head to head competitors would have about a ga-zillion dollars worth of production equipment that was already paid for.
2. A 20-30 year head start in the market.
3. I've heard bad things from people who got off into a business they didn't know anything about.

[ReloaderFred]

Zee,
You mentioned in your original post about making jackets, too. That's also a process that takes several steps, and once again is time consuming. You have to put a value on your time in any business venture/adventure. I hate to sound so pessimistic, but I've seen people spend a fortune starting up a business like this, only to lose their shirts and end up selling off the high value equipment at a great loss.

I swage bullets because I can, but if I had to sell one of my handgun bullets, I'd probably have to charge something like $10.00 each, like in per bullet. I've got a couple thousand dollars invested in what I have, but it's for me personally, and by most standards, primitive. I like to experiment, and get satisfaction out of making a product I can be proud of for my own personal use. Until I got a kiln, I spent hours just annealing enough cartridge cases by hand over a torch to make a few hundred handgun bullets. Then there's casting the cores, which takes the same amount of time as casting bullets. I've got several hundred pounds of lead wire, but I've never been able to get the weight accuracy cutting cores with my Corbin and C-H Core Cutters that I can casting them.

I've toured the Sierra Bullet factory and the Nosler Bullet factory (twice for Nosler) and have seen what it takes to make bullets at the commercial level. It's not for me. There's a lot more to it than meets the eye, believe me. On top of that, if things level out, the big manufacturers will once again flood the market, and start ups will fall by the wayside, especially when it comes to the common calibers.

Hope this helps.

Fred

[Bent Ramrod]

The guys who are successful in the swaged bullet business are typically addressing niche markets.

A top benchrester like Berger, who shoots his own bullets and wins can parlay his product into a business this way, selling to those who hope to win, and willing to pay extra. Or, if you decide to service the people looking to shoot their .20 Calhoons, their .401 Winchesters, their Ross rifles and the like, you can set up for calibers like that.

I don’t know how you would judge such a market, since any new caliber will require an immediate capital outlay for new dies for drawing and swaging. You might need a rifle and a loading setup as well for quality control.

For a while, I had a Remington Model 8 in .25 Remington with an oversized bore. I bought 0.260” jacketed bullets from an outfit called DKT at $1.00 apiece. They were very nice bullets, but obviously not sustainable as a plinking proposition. After 50 or so, I found it cost-effective to make a push-through die to size down 0.264” jacketed bullets to 0.260”. Eventually I took the even more practical step of selling the rifle to a collector. Perhaps there was still enough of a market out there for DKT to continue to sell their product; I don’t know. But many specialty markets do eventually get saturated, whether for 0.260” bullets, .32 Rim Fire Ammunition or Yamaha SR-500 motorcycles.

Vernon Speer and Joyce Hornady did start their businesses making popular caliber bullets in a period of postwar scarcity, but surplus equipment and skilled labor was not as costly then as it is now. Making conventional caliber bullets at home for sale now is competing with roomfuls of automatic machinery, and an uphill climb getting capital equipment, with the likelihood of the big operations catching up with demand sooner or later. I sure wouldn’t be qualified to be the loan officer going over your business plan for viability. Best of luck.

[Zee]

The guys who are successful in the swaged bullet business are typically addressing niche markets.

A top benchrester like Berger, who shoots his own bullets and wins can parlay his product into a business this way, selling to those who hope to win, and willing to pay extra. Or, if you decide to service the people looking to shoot their .20 Calhoons, their .401 Winchesters, their Ross rifles and the like, you can set up for calibers like that.

I don’t know how you would judge such a market, since any new caliber will require an immediate capital outlay for new dies for drawing and swaging. You might need a rifle and a loading setup as well for quality control.

For a while, I had a Remington Model 8 in .25 Remington with an oversized bore. I bought 0.260” jacketed bullets from an outfit called DKT at $1.00 apiece. They were very nice bullets, but obviously not sustainable as a plinking proposition. After 50 or so, I found it cost-effective to make a push-through die to size down 0.264” jacketed bullets to 0.260”. Eventually I took the even more practical step of selling the rifle to a collector. Perhaps there was still enough of a market out there for DKT to continue to sell their product; I don’t know. But many specialty markets do eventually get saturated, whether for 0.260” bullets, .32 Rim Fire Ammunition or Yamaha SR-500 motorcycles.

Vernon Speer and Joyce Hornady did start their businesses making popular caliber bullets in a period of postwar scarcity, but surplus equipment and skilled labor was not as costly then as it is now. Making conventional caliber bullets at home for sale now is competing with roomfuls of automatic machinery, and an uphill climb getting capital equipment, with the likelihood of the big operations catching up with demand sooner or later. I sure wouldn’t be qualified to be the loan officer going over your business plan for viability. Best of luck.

Thanks for the reply. Everything you said is essentially what I've seen in my research, but I'd like to get some further thoughts from you.

I do believe the swaged bullet businesses out there typically address niche markets, and there's no way a small bullet swaging business like mine would be would be able to compete with the likes of Hornady or Speer as far as production goes. However, since there is currently a scarcity in the market of common caliber bullets due to the high demand right now, why would it be a problem to produce those common calibers, and sell just what I make. Sure, I can't produce millions of bullets in a short period of time, but if I could make 1,000 per day with a profit margin of $0.30/bullet, that's still $300/day = $109,500/year. It may not last forever, but it would surely cover the initial investment, right?

Corbin states on his site, "A typical benchrest quality bullet made with the best commercial jacket available would cost about nine cents. A bonded core, partitioned, rebated-boattail heavy-wall ultra-low drag .475 bullet might cost you as much as twenty cents in materials, if you bought them all in small quantity (copper tubing and lead wire, for instance)." If that's accurate, the margins on a common caliber bullet should be pretty good, but please correct me if I'm wrong.

Thanks again for everyone's input.

[MUSTANG]

Thanks for the reply. Everything you said is essentially what I've seen in my research, but I'd like to get some further thoughts from you.

I do believe the swaged bullet businesses out there typically address niche markets, and there's no way a small bullet swaging business like mine would be would be able to compete with the likes of Hornady or Speer as far as production goes. However, since there is currently a scarcity in the market of common caliber bullets due to the high demand right now, why would it be a problem to produce those common calibers, and sell just what I make. Sure, I can't produce millions of bullets in a short period of time, but if I could make 1,000 per day with a profit margin of $0.30/bullet, that's still $300/day = $109,500/year. It may not last forever, but it would surely cover the initial investment, right?

Corbin states on his site, "A typical benchrest quality bullet made with the best commercial jacket available would cost about nine cents. A bonded core, partitioned, rebated-boattail heavy-wall ultra-low drag .475 bullet might cost you as much as twenty cents in materials, if you bought them all in small quantity (copper tubing and lead wire, for instance)." If that's accurate, the margins on a common caliber bullet should be pretty good, but please correct me if I'm wrong.

Thanks again for everyone's input.

I believe you will find that the Corbin's statement you cite is several years old and has not been updated. The true costs have escalated considerably since then. As an example:

buying 1300 jackets for .30 caliber bullets costs $290.00 before shipping costs. That translates to 22.3 cents per round just in jackets; does not include lead nor smaller costs such as lube, cleaning, polishing etc..

http://www.swagedies.com/mm5/merchan..._Code=RIFLEJKT


You will need to use current costs, delivery availabilty/timelines, etc.. as part of your assessment.

[MUSTANG]

I believe you will find that the Corbin's statement you cite is several years old and has not been updated. The true costs have escalated considerably since then. As an example:

buying 1300 jackets for .30 caliber bullets costs $290.00 before shipping costs. That translates to 22.3 cents per round just in jackets; does not include lead nor smaller costs such as lube, cleaning, polishing etc..

http://www.swagedies.com/mm5/merchan..._Code=RIFLEJKT


You will need to use current costs, delivery availabilty/timelines, etc.. as part of your assessment.

As an aside; I make jackets from 5/16 copper tubing - but buying from the cheapest sources I can find; the cost per jacket is still 9 to 10 cents per jacket.

[Zee]

I believe you will find that the Corbin's statement you cite is several years old and has not been updated. The true costs have escalated considerably since then. As an example:

buying 1300 jackets for .30 caliber bullets costs $290.00 before shipping costs. That translates to 22.3 cents per round just in jackets; does not include lead nor smaller costs such as lube, cleaning, polishing etc..

http://www.swagedies.com/mm5/merchan..._Code=RIFLEJKT


You will need to use current costs, delivery availabilty/timelines, etc.. as part of your assessment.

Great information. I was planning to draw my own jackets from strip copper, which is $798/50lbs on Corbin's site. Where I struggled is calculating how many jackets I could make out of 50lbs. Corbin gives a calculation (x=jacket grain weight/.8; then x/350,000), but unfortunately, I don't have the data to complete it. He says usually "several thousand." Assuming I could make copper jackets for the same $0.09/$0.10 per jacket that you can, and assuming a jacket weight of about 15 grains, and lead core weight of 47 grains (thus creating a 62 grain .223 bullet), that should yield a cost of $.03 per lead core, and a rough total bullet cost of $.12/$.13, right?