I see lots of folks suggesting getting an FFL in order to do gun transfers, either as a home-based business or as a way to generate some cash in a fledgling brick and mortar operation. As an Type 02 FFL (pawnbroker) who does a fair number of transfers, I'd like to offer a bit of insight . . .

Doing transfers is not what you think it is. It is not the gun business. It is paperwork. That's it. You barely see the guns. They're not yours. You don't get to handle them much, if at all. Instead, you unpack boxes, fill out forms, take out the trash and then fill out more forms. You might as well get a job down at the driver's license bureau. If fact, doing transfers is to the gun business what issuing drivers' licenses is to the car business.

At BEST, a gun transfer only requires you to attend to/revisit a single transaction about a half dozen times and takes no more than a half hour total (including initial contact with customer, transmitting FFL to sender, receiving package, unpacking box, logging gun, waiting on transfer customer, examining 4473, conducting NICS check, logging disposition, taking out the trash, etc.). All too often, it drags out into a giant clusterfuck as shipper's fax/e-mail doesn't work, seller doesn't include information required for A&D book, customer can't fill out a 4473 properly or doesn't have up-to-date ID, etc. At worst, you get dragged into dealing with damaged shipments, gun returns, customer DELAYs or (worst case) DENYs. A bad transfer transaction can take hours of your time and require you to revisit the same transaction a dozen times or more.

Nowhere in any of this is the fun stuff that made you think you wanted to get into the gun business in the first place. When you're in the transfer business, you are just a paper pusher and shipping clerk. You're not a gun seller. In fact, you're helping a potential customer buy a gun from somebody else. All you're there for is to dot i's and cross t's. You're just a bitch.

If you look at transfers as anything other than a way to people into your shop so that you can sell them something else, you're thinking about it all wrong. Transfers are NOT a business model. They're probably not even a money maker at all.

Yep, too true.

Gun  transfers are the gun business. The only difference is you didn't buy the gun with your capital. Lately there is more to be. Add on the transfer then a firearm these days too.

Wut?

Quoted:
Doing transfers is not what you think it is. It is not the gun business. It is paperwork. That's it. You barely see the guns. They're not yours.
Who gives a shit that they aren't mine? They ain't sitting on a shelf tying up my $$$$


You don't get to handle them much, if at all.
Hopefully, you don't either.......who wants to buy a gun that the pawnbroker has fingerfucked all day?



Instead, you unpack boxes, fill out forms, take out the trash and then fill out more forms. You might as well get a job down at the driver's license bureau. If fact, doing transfers is to the gun business what issuing drivers' licenses is to the car business.
All of which is exactly what YOU do......but I do it from the comfort of my home. How many drivers licenses are issued at someone's kitchen table?
You analogy needs a bit of work.



At BEST, a gun transfer only requires you to attend to/revisit a single transaction about a half dozen times
and takes no more than a half hour total (including initial contact with customer, transmitting FFL to sender, receiving package, unpacking box, logging gun, waiting on transfer customer, examining 4473, conducting NICS check, logging disposition, taking out the trash, etc.).
You must really suck at the gun business...........I did fifteen transfers and one outright sale last night. I only "worked" from 5-8pm......and by "worked" I watched TV, ate dinner, played with my dogs and did everything else I do when at home+ answering emails and completing those transfers. You must really be jealous or you plain suck at time management.


All too often, it drags out into a giant clusterfuck as shipper's fax/e-mail doesn't work, seller doesn't include information required for A&D book, customer can't fill out a 4473 properly or doesn't have up-to-date ID, etc. At worst, you get dragged into dealing with damaged shipments, gun returns, customer DELAYs or (worst case) DENYs. A bad transfer transaction can take hours of your time and require you to revisit the same transaction a dozen times or more.
WOW. How many of those "giant clusterfucks" do you have a week? I've experienced zero clusterfucks in 5,000+ transactions. If your transfers are that difficult...........maybe its you.



Nowhere in any of this is the fun stuff that made you think you wanted to get into the gun business in the first place. When you're in the transfer business, you are just a paper pusher and shipping clerk. You're not a gun seller. In fact, you're helping a potential customer buy a gun from somebody else. All you're there for is to dot i's and cross t's. You're just a bitch.
Bullshit. Business ain't about "fun"............it's about making money. I happen to enjoy doing transfers and REALLY enjoy being able to supplement my income.

And BTW you are a bitch...........but with inventory and a storefront.





If you look at transfers as anything other than a way to people into your shop so that you can sell them something else, you're thinking about it all wrong. Transfers are NOT a business model. They're probably not even a money maker at all.

What a load of horseshit.

It is every bit "the gun business"...........just not YOUR version of the gun business.

While doing transfers is a large part of my "kitchen table" business, I also order guns for customers, sell at gun shows, sell on GunBroker and keep a few bags, magazines and ammunition in stock as well.

I do 1,800 - 2,000 transfers a year........part time. At an average of $15 per transfer that's pretty good for being nothing more than a shipping clerk.

You know less about the "transfer model" than you think.

My, so much anger in one post . . .

I had no idea my post would touch a nerve like that.  

Bullshit, you knew exactly what kind of response you would get.

Tom, I've always though of you as a pretty reasonable guy, so I'm a little taken back by your response. I think you're reading a whole lot into my thread that isn't there . . . or wasn't intended to be there. It sure as hell wasn't intended as a personal attack on you or the way you do your business. You seem to be taking it that way, though. I honestly can't understand why.

Suffice it to say that we hold a different opinion on the topic. Folks are free to read both opinions and take away what they will. I'm not going to get into a pissing match over it. If you like filling out 4473s and running NICS checks, more power to you. It sounds like you're very successful at it. I've got a brick and mortar store and I don't do 5 transfers a day like you. And I sure as hell can't imagine having a dozen people over to the house at dinner time. You're right, I don't know about that sort of business model. Can't say I want to.

Instead of exploding at me, why don't you provide a counter argument. Tell us a bit more about how you structure your business and  how you attract so many transfers. Don't just say I'm full of shit. Show us how I'm wrong by providing the other example.

I applied for an 01 FFL here in a town 120 miles from the nearest FFL in ANY direction.

Everyone in town wants me to make it.. I had a guy give me $20 outside to make sure I ate for a few meals..

My other RP (on the FFL) has put in $3900 of his $ so he's tapped out.. this is a store front and overhead is about $650/month and is 26' x 20'.

I got somewhat lucky as this bldg 20 years ago was a gun/pawn shop so people still know it as such.

Total to open with just ammo and some AR parts was $4980
Dec .sales were $1200.. ammo orders and supplies were like $1440
Jan. was basically a repeat with another order for 22LR going in before 1/31 which made a $200 difference to the negative side.

I am hoping/praying that stocking initially 6-9 rifles/shotguns and 4-5 pistols (common cals and types) once we get out FFL and also ALOT of transfers kicks us up..

We have an online store for parts up and ready as well..  

I plan on doing Davidsons, GA, GB and any other means to advertise once I get the FFL 'in-hand'...

Again, you're taking this personally and as a reflection on you. It's not. I constantly see people coming to this forum and announcing they're going to get into the gun business. Most don't seem to have given any thought to what they're getting into beyond the fact that they like guns. This thread was intended solely as a reality check. It was not intended to belittle anyone. It was meant to get people to think beyond whatever romantic notions they had of being gun sellers.

Sorry you took offense. That was not my intent.


ETA: My original post was not a "my way is better than your way" message (though that's how Tom seems to have taken it). It was a "be careful what you wish for, you just might get it" message. To address one of Tom's responses: Yes, of course I run paperwork and NICS checks. That's the point. Running NICS checks is not the same a horse trading and handling guns all day. It's handling paperwork. The point of the message is to understand what you're signing up for. Nothing wrong if you enjoy that sort of thing, just be sure you know what it is.

This thread just goes to show you that there is a way to make money or lose money with any business.
For a new FFL, don't count on making a ton of money doing transfers - but clearly if you handle things right, it can be done.

I don't know about the OP but when I was hot and heavy into transfers I made a nice little side income. Yeah, its paperwork but its a pretty easy gig.

IN..before kitchen table FFL's should be banned.

Man, I guess I need to brush up on my communications skills. Seems like everybody missed the point of what I was trying to say.

"Doing transfers is a, or can be a, major PIA for such little money."

Does that about sum it up?

BTW, I agree with that statement.  I'm not a fan of the paperwork or taking out the RIDICULOUS amount of boxes....

Yes, that. But also, it may not what you think of when you dream of being a gun dealer. If you're imagining surrounding yourself with cool toys . . . whether that be über-tacticool Tier 1 operator stuff or finely engraved, beautifully stocked Fudd guns . . . you don't get that by doing transfers. Yes, you can make a little bit of money doing transfers -- maybe a LOT of money — but you're basically a clerk. Nothing wrong with that, unless it's going to be a disappointment because it doesn't match your expectations. Personally, I view transfers as mainly a way to get people into the store and as a service for the local gun community.

Do you fondle yourself while looking at those guns? How can you bear to sell one?
They are product, no different than canned soup.
The biggest dealers and wholesalers in the country don't even have guns on display......they stay in that beautiful cardboard box.




Bullshit.
I "get" to fondle every gun I transfer. Big. Fucking. Thrill.
I AM surrounded by "uber-tacticool Teir 1 operator stuff" and "finely engraved, beautifully stocked Fudd guns"...................and I don't have a single penny tied up in them.

This week:
In addition to the Glocks, M&P's and AR lowers, I see a GREATER variety than you............because I'm not limited by what RSR or Sport South has in stock.
Shipped an $8,000 Barrett .50cal. 82a1 yesterday.......did you?
Received an Ed Brown Kobra 1911, an MOA Evolution rifle, MSAR stg556, Remington 1903A4 and a $7,000 Blaser R93 rifle.

How many of those you got sitting on your shelf?





And a dealer who doesn't do a single transfer is EXACTLY the same....he's a clerk with inventory.

Tom,

You're still suffering under an impression that I'm engaged in some sort of dick measuring contest. I'm not. I'm the first to admit that I'm a small time gun dealer. In fact, if it weren't for being able to do loans on guns I probably wouldn't bother with an FFL. So, can we just agree that you're the biggest big shot in the ARFcom gun seller universe and I am a little flea. Yours is a wonderful business model and you are the fucking Donald Trump of gun transfers. There, does that make  you happy?

Sorry bub, but I think nothing of the sort.
What I dislike is your condescension toward kitchen table dealers and the belittling tone towards those who do transfers. Considering that you have no experience with being a kitchen table/ transfer dealer (or "clerk") how the fuck can you offer insight or advice?

Since I joined this forum I've yet to read a post by any kitchen table dealer who laments his disillusionment because doing transfers isn't what he thought. On the contrary, many kitchen table dealers (who start out doing nothing but transfers) go on to getting a storefront and begin a business with inventory.........the "job" didn't change, the location and possibilities did.

Your statement: "If you're imagining surrounding yourself with cool toys . . . whether that be über-tacticool Tier 1 operator stuff or finely engraved, beautifully stocked Fudd guns . . . you don't get that by doing transfers." is so full of complete and total ignorance it defies words other than BULLSHIT.......especially when you admit to doing very little but loans on pawned guns. What fucking guns are you surrounded by that are better than what I listed above?

You belittle transfer dealers as little more than "clerks", yet admit now that "if it weren't for being able to do loans on guns I probably wouldn't bother with an FFL" . I'll bet you do substantially MORE paperwork than any transfer dealer.

Jesus, Dude. Read the first sentence of my original post: "I see lots of folks suggesting getting an FFL in order to do gun transfers, either as a home-based business or as a way to generate some cash in a fledgling brick and mortar operation . . . "

You just WANT to be offended, don't you?  I think it's time for you to get your meds checked.

It's what follows your first paragraph that is insulting, ignorant and belittling.
And your subsequent posts are no better.

Well, I'm sorry that you're offended. I didn't intend any. I don't know what else to tell you.

My 2cent the 2 ffl dealers I've used most have just emailed me a copy of their ffl to use at my leisure. It's easy for me all I do is tell them hey I have xx gun incoming and I don't have to bug them when I wanna order something. If you hav frequent buyer might do that to help yourself.

Yeah, I have quite a few customers who do the same thing. I don't have a problem with it since my license copies are marked up to discourage any attempt to use them for face-to-face deals.

BTW, the BATFE seems to be heading in the direction of discouraging dealers from providing license copies to non-dealers. They just sent out a warning about Internet scams involving misuse of licenses. In that letter they encouraged dealers to simply provide their license NUMBER (in abbreviated form) and tell non-licensed sellers to verify the license location using the EZ Check system. I'm not sure the community of on-line sellers is ready to embrace a shift to EZ Check only, but that sure seems like what BATFE would prefer:

https://www.atf.gov/sites/default/files/assets/Firearms/FirearmsIndustry/030714-final-advisory-fraudulent-ffls.pdf



If they think we shouldn't provide licenses to non-licensed sellers, I suspect they would also think allowing non-licensed buyers unfettered access to our license was a bad idea as well.

I do $15 transfers and they pay my rent.  I do em cheap as a middle finger to the other shops who all charge $40.  Gets me lots of other biz too.

i decided to do "transfers only" because of the impact of Bud's, Kentucky Gun Co,,Grab a Gun, etc that seem to be able to sell and ship free for 5 to 10$ over the cost (that I can see) on my dealer web-sites.  The good part about the explosion of low margin internet sellers is that they still need to send the bargain gun to an FFL for the transfer.  I also do a little bit of consignment selling on gunbroker and other sites for customers that want to sell a gun.  I charge for the actual listing/sell fees, a small fixed fee for pictures and doing the shipping by USPS.  Those that choose this service appreciate the lower shipping price and not having to deal with UPS, FedEx and the USPS.  Good communications and quick shipping helps build up my A+ feedback on these sites, and I get a new FFL contact in places that I might need someday.

I put my name on gunbroker, auction-arms, guns-international and as many seller sites as I can, and it really made my business take off.  I charge $25 for transfers ($15 for CHL holders) per gun and seem to be doing okay.  Nothing to me is more gratifying (and nothing pisses my wife of more) than having 2 or 3 customers come over at the same time.when it gets really  busy.

I have 10 or 12 "regular" customers that are heavy duty collectors of weird bolt action rifles, high dollar shotguns and old revolvers and they love my price and convenience and come back often.  I've learned about old calibers, why they were developed, and what makes different features valuable to collectors without having to experiment in collecting myself. Some of my customers, like the guy that bought the .30-30 revolver, even invite me out for shooting their new toy.   i do get to handle the guns I log-in and transfer, so it's kind of like going to a little gun-show every day.  

Yep, it's a hassle to deal with sellers that won't ship to my UPS box (requires a trip to the depot) and private sellers that insist on a copy of my FFL and the effort required to continually retrain my local post office clerks on their rules and regs for mailing a gun.  I even had a brush with a Homeland Security agent where i think I successfully helped him realize there were real federal laws and post office instructions that covered gun sales and shipments that he could refer to when he had questions about this subject instead of making up his own.

And while i have not achieved the operations level of Dogtown Tom, I'm enjoying enough business to generally be able to buy a new toy whenever I want to.  I like being able to get accessories cheaper (may have to wait and place a big order) and it's neat being "the guy" people know that can do a transfer for them.  I qualify to go the SHOT Show and that lets me take the wife to Vegas for shows and entertainment and I get to spend a week looking at wonderful new toys. I've met a lot of new friends and I think i'm generally having a good time and enjoying the way I've decided to work this.

I dabbled for a while in the used gun sales model, but  the capital required,  my day job and family commitments interfered with chasing bargains to make sure I had some margin to make it worth the time commitment for buying and selling.  (if this is your business model, please go for it and I appreciate all you go through to find and sell).

the good thing about where the gun business seems to be today is that there seems to be a niche for just about any business model, you just have to realize that the key to any of those niches is the word "business".  

Peace, hope, and good luck to anyone that wants to live the capitalist dream.  There is room for everyone to do their own thing.

Interesting thread. I've been thinking of doing the 'transfers' type business model myself (early stages...just merely 'thinking' about it now...havent researched or anything, besides knowing I should either S corp or LLC to seperate personal assets so they are protected, but that's just plain business common sense.

I have several friends and family I could do these for. And it would start off simply as a means to earn extra cash and probably fund my own collecting desires. But who knows, maybe I would decide to advance it further later down the road.

The corporate "veil" won't do you a bit of good when you are the only person involved in the business. If you are doing transfers from your home, what makes you think an LLC or S Corp protects your personal assets?

If YOUR actions are negligent, both your LLC/S Corp/whatever will be named as a defendant as well as you personally.
See: http://en.wikipedia.org/wiki/Piercing_the_corporate_veil

Yea well...that's the jest of the entire legal system. Name anyone and everyone that's even associated in any fashion with the person(s) and see what you can squeeze out of them. I'd obviously consult with Legal and CPA to determine how best to protect myself. To keep that from happening. But you can't stop some people that just want a free ride. But you can cover yourself best you can. Can't imagine if you do things by the book how anyone could every find quote "Your Actions" as negligible.

Not negligible, negligent .........huge difference.

Think about these possibilities:
-Customer slips and falls because you didn't keep your premises doorway clear of ice and snow.
-Customer weighs 800lbs and your dining room chairs can't support more than 600lbs.
-Customer you transfer firearm to goes out and commits a crime. His victim claims you should have known he was a wacko.
-Customer takes home his new firearm and shoots himself. Claims you should have shown him how to safely use the gun.
-Customer decides to try out one of your holsters on his carry gun, shooting himself or another customer in the process.

While you may operate "by the book" you can't always predict the behavior of others. This is why we have insurance.

Yea speaking of....whats the insurance typically run?

Amazing the things people will sue for.  I tend to place the blame that we don't let mother nature weed out the stupid ones from the gene pool :-)

It comes down to whether you do transfers in the middle of nowhere in the south with few/lower educated gun buyers filling out the paperwork wrong.

Or your in the rich north suburbs of Atlanta with a high population and lots of gun buyers

How do you transfer model guys handle state sales taxes? Is it on the transfer fee or is it one the cost of the gun?

In my state, a transfer is a service. No sales tax liability involved . . .

It's not any of my business, but I always assume that the person buying the gun out of state will report the purchase and pay use tax at the end of the year as required by law . . .

Hmm I had an FFL 15 years ago and did a few transfers but fee structures were different then and I can't remember how I handled that. I rejoined the military and after my second deployment, I gave up the FFL. I have been thinking of doing it again with just transfers and minor smithing in my retirement. My father in law suggested that after I fixed his mauser broom handle that he broke 40 years ago and couldn't find a smith who would touch it locally.

 

That depends on the state.
In Texas, no sales tax on a transfer, only on the sale of a firearm.

In some states the receiving dealer is required to charge sales tax on the value of every firearm he transfers. (WA & CA are two)

None assessed on the value of the firearm in WV, but there is a tax on labor/services.  I roll the tax into the advertised OTD fee.  So, if I charge $25, in reality I get just over $23 and the state gets the rest as sales tax.