Just three weeks after my interview the IOI, my FFL arrived! Its sending was completely unceremonious, using the FFL itself as the address for the envelope. I wasn’t expecting major fan-fare, but I would think the Government would at least include a cover letter and maybe send tracking information that a Federal License was on its way. I digress…
With the due diligence now done, bank account open, and business credit card in-hand, I was keen to start building inventory as fast as I could and start selling. I mean, what is the point of an FFL, if I cannot get product and sell it on (and technically, the ATF requires you to use your license “engaging in a business” or you can lose it).
Brimming with enthusiasm, I immediately ran into roadblocks. Many of the largest distributors would not accept home-based FFLs and or required a large initial buy-in. Being a small company and not flush with cash (and further, only a credit card), it became difficult to get inventory in. As such, I had to spend some time hunting through policies, being rebuffed, and enjoying the occasional success getting through and set-up to get product.
Who will Accept Small and/or Home-Based FFLs?
Not everyone, that’s for sure. The largest and most established distributors typically will not touch the home-based FFL. I don’t understand why… My only theory as it may be the effort to sell to them may not be worth the volume.
So, I had some additional due diligence to complete. To save others the trouble, below is the results of my searching. The list may not be complete or may have changed, as time has passed since my search and this publishing:
Distributors Accepting Home-Based (Non Retail Location) FFLs:
- RSR Group
- AGS Armament
- MGE Wholesale
- Shooting Sports Wholesale
- Williams Shooters Supply
Updated 12/23/2015 @ 6:06 PM – A few other distributors & companies contacted me to indicate their small-business friendliness.:
- Interstate Arms
And those who will not:
- Jerry’s Sports South
- Big Rock Sports
- Bill Hicks & Company
- Camfour / Hill Country Wholesale
- AmChar Wholesale
- Ellet Brothers
- LM. Burney
There are also a few OEMs who work directly with FFLs and do not use wholesalers or will have a hybrid arrangement where wholesales sell some high-volume product and the OEM sells others direct. The list is not exhaustive, but it does have a few notable companies:
- Faxon Firearms
- Fostech Outdoor
- Elite Iron
- Liberty Suppressors
- Rock River Arms
- Rhino Arms / AP Customs
- SB Firearms
- Mag Tactical
- Lone Wolf Distributors
- Stag Arms
- Devil Dog Arms
- Sun Devil Manufacturing
- Huntertown Arms
- Allen Arms Tactica
To sign up with an OEM or Distributor, one will typically need to do the following:
- Fill out an application with details on the business & register on a website (if applicable)
- Send in a copy of their FFL
- Send a copy of their Tax Certificate
How to Order?
On the larger distributors, the wholesaler will have sales representatives who can accept a Purchase Order or will call on a semi-regular basis to check-in and notify you of specials. If you have a sales rep, USE THEM, these people can help you get hard-to-find firearms (especially if you order more than just the one gun). The two that stood out to me was RSR Group and Davidson’s who both have excellent sales staff’s.
*Author’s note – I want to thank Mike Mantie from RSR who spend many hours with me as a small shop when I was getting off the ground. He got “allocated” firearms sent my way on a regular basis and was just a stand-up guy.
On the other hand, as a small FFL you may not be assigned a sales rep or they are inactive given the small size. In these cases, the companies typically have a website that you can login with on dealer credentials to place orders (Lipsey’s uses this practice).
How Do I Pay for an Order?
The policies vary across the board. Typically wholesalers will require payment at the time of order (credit card or wireless ACH) where the smaller OEMs can often extend terms after the first order (which will require another application). For wholesalers, its very typical to have orders offered on Cash on Delivery terms (meaning Fed-Ex or UPS will actually collect payment as part of the delivery).
ACH, COD, and similar payment methods require cash in the bank to pick up the inventory. Being a small company, I did not have much of that, which hampered my business with quite a few of the of the distributors. For example, Davidson’s does offer terms but without a solid established sales history or a compelling business status, getting terms as difficult. Further, they did not accept credit cards.
So, to get the inventory rolling, I was limited to companies that would accept Credit Cards. Often, this came at a small percentage of sale fee, but it was a small price to pay for being at least able to bring the inventory in. Of the wholesalers I signed up, two really stood out on service, selection, and accepted credit cards:
- RSR Group
Further, a few of the smaller outlets were good to go:
- Midwest Gun Exchange
- Shooting Sports Wholesale
Between the four of them, I was able to pick up nearly anything I or a customer could want. Most offered free shipping once a certain minimum order was met (typically $750-$1000), though handguns could often be extra, as they are required to ship overnight).
So, I quickly maxed out the company credit card and had inventory flowing in which brought up the next question: how to sell the inventory?
That will be the focus of Part 9 which will cover the successes and tribulations of attempting to move on-the-shelf inventory.