Part 10: Getting a Home-Based FFL: Lessons From First Sales

    I know, I know. I’ve been a bit remiss at completing the Home-Based FFL series complete. Fortunately, there are many passionate TFB readers who are able to light, maintain, and grow a bonfire on my derriere to keep it moving. My thanks for the motivation!

    At the last instalment, the FFL & SOT had arrived and I was in the throes of getting signed up with distributors and setting up direct company accounts.With maxing out my company credit card to bring in inventory, I was bent on turning the inventory as fast as possible. Credit cards do have required payments and I did not want to have to cover the payments from personal monies. After all, I was in the business of selling firearms!

    For Transfers, People Are Coming to your HOME. 

    In something that I should have been more comfortable with prior to getting the FFL, for a customer to do a transfer, they must come to the licensed premisis, meaning they must come to the address on the FFL. Since the address is your home, this means customers are coming to your home. This means perfectly good strangers are going to enter your home to buy a gun. As part of this, they will likely have a gun on them and then will know your address. Further, as you are bringing in strangers, prepare for all types of personalities and demeanours including the creepy and potentially dangerous.

    You must be comfortable with this if you are going to sell retail or by appointment. If you are not, only sell online (more on that later) or do not get the FFL. Even then, an FFL is public record that anyone can look up and see the address where you have guns.

    What Inventory Should I Buy?

    When I got started, I picked up an eclectic mix of firearms including personal favourites. I ordered many Glocks & M&P’s, but also went for Beretta 92’s, random AR-15s, and whatever I could get my hands on (remember, this was at the tail end of “the panic”).

    Unfortunately, this was the wrong choice. As a small FFL looking to move inventory, one must pick up inventory that will sell to the public, not just what you would buy. The Glocks moved reasonably quickly, the M&P’s about as well, but the eclectic guns sat in the safe collecting dust. Frankly put, they were money pits that I ended up having to sell on GunBroker for nearly cost after sitting on them six months.

    As you are working to grow your inventory, I will reiterate that you should pick up units that sell to a wide range of people. 9mm handguns, basic AR-15s, and 10/22s are all great bets. Do NOT pick up the expensive or unique guns for the sake of selling for profit. Those are only profitable if you have a following and traffic (more on that later).

    If you are able to build a relationship as I did with a distributor sales person, picking up allocated firearms will ensure you can sell them at a decent margin. Allocated guns are in high enough demand that distributors play favourites on who gets what.

    The Gun Sales Market Is SATURATED

    Even in my small city of Fort Wayne, Indiana, there was stiff competition from firearms retail stores. In the city, I remember at least six of them including a store that was the retail arm of a distributor. These were constantly able to undersell me by sheer volume in both units sold and units purchased. To meet their prices, I would often have to sell a $500 firearm at only $50 mark-up. No much profit margin in that with lots of risk.

    Remember, these retail stores also have a big advantage over the home-based guy. They are open to the public and have the guns on display. As a home-based FFL, you typically have to set appointments and advertise online. You will work harder to bring customers in than they will, but it’s a great opportunity to build relationships with customers for repeat business.

    Selling Online

    My original intent was to sell only online via GunBroker and ship to other FFLs. It is a stable business, but extremely low margin for the amount of work. Just to sell a firearm, you have to:

    1. Take photos
    2. List online
    3. Answer questions
    4. Sell It
    5. Collect Payment
    6. Get the FFL for transfer
    7. Ship the Firearm

    Each step is a lot of time. Combined with fierce pricing competition from fellow online retailers, it was a tough gig. The only way I made decent money at it was to sell large quantities of items to offset the large time requirements.

    This ignores all the times customers did not pay or the FFL gave me heartache…

     Doing Transfers

    I mentioned briefly that I had difficulty with other FFLs on shipping in guns for customers who bought from me online. FFLs are typically territorial and many view the outside purchase of a new gun (one that they can get and sell) as a betrayal from the customer or bad faith between FFLs. I dealt with all sorts of annoyances sending guns to other companies including transfer forms (not required legally), fees charged to me (not just the customer), rejection of shipments as it arrived on days they were not in (nor told me they were not there), etc. Good grief.

    This perplexed me. I found doing transfers for customers one of the best sources of long-term revenue. One, I was able to charge a transfer fee for having no risk of inventory and two, I was able to build a relationship with a customer which led to many repeat sales.


    As a home-based FFL, you will likely have far more flexibility for hours on pick-up. Considering most gun shops are open during “normal” working hours, having the ability for someone to pick up a firearm at 9:30 at night when it was convenient for them drew in an incredible amount of good people.

    Long Term Business Will Come from Relationships, Not Pricing

    I found that once I had a customer, I generally kept them. Home-based FFLs are a more intimate environment where you get to know your customers on a personal level. You make up for lack of inventory with personal service and attention. For example, when someone stops by to pick up a gun, ask what they are looking for and go find it. Call the customer and let them know you can get it.

    6 times out of 10, they got it from me right there on that phone call.  9 times out of 10, they got it from me later.

    Profit, Even Small Profit, Will NOT Come Quickly

    Sure, I made money on each gun sale, but the time it took for each sale was incredible and still left me feeling like I lost on each sale. It was only when I was finally able to build relationships with many customers that I felt the FFL was starting to be worth it. They directed friends to me, did custom sales for high-margin guns, and did constant transfers.

    You should steele yourself for a long grind with only small gains in profit and satisfaction. At some point, if you work at it and build those relationships, it will turn into a decent side-gig, but it takes work. If you’re not willing to work it, simply put, its not worth it. You won’t recoup the costs just to get the FFL.

    To catch up on previous installments, check out the links below:

    Nathan S

    One of TFB’s resident Jarheads, Nathan now works within the firearms industry. A consecutive Marine rifle and pistol expert, he enjoys local 3-gun, NFA, gunsmithing, MSR’s, & high-speed gear. Nathan has traveled to over 30 countries working with US DoD & foreign MoDs.

    The above post is my opinion and does not reflect the views of any company or organization.