Ammunition business?

[84ta406]

Well I have thought about it for a long time and done all the research so far for licensing and such. As well as starting my FFL forms and MA AMMO sales license. But I wanted to see what kind of feedback I would get about starting my own ammunition business. It would be based out of Paxton MA but can conduct business in Worcester as well as surrounding towns and sportsman clubs. I dont really intend to get rich, maybe a buck or two here and there but my main purpose is to provide quality ammunition to the folks in MA, for a affordable non jacked up price. Anyways what is your guys thoughts? If the feedback sucks I might not bother but I'm already stepping in the right direction. Example AMMO prices would be typically 10-14 per box of 9mm
.40 S&W is about 13-17 a box and I can get .45 ACP for under 20 a box. Ive also contacted a few places and can do LARGE bulk orders and can track down anything from .32 to .50BMG or 5.7LF rounds.

 

[Love Machine]

Figure out a business plan first. You may discover that even not getting rich, those prices will have to be higher.

 

[enbloc]

Follow your heart, not what others say...

 

[Sweeney]

I think it would be awesome if you could make it work...neighbor...

 

[Nation On Fire]

Don't listen to naysayers that never try anything. If you want something bad enough, you can make it work. Before you dive in however, REALLY examine your costs. It's not just materials and time. Think about rent, insurance, electricity, loss, repairs, etc etc. In any business, it's easy to miss underlying cost and price yourself for failure. With all that said, I wish you he best and hope everything works out.

 

[84ta406]

Figure out a business plan first. You may discover that even not getting rich, those prices will have to be higher.

The intent of my business is to provide a quality and affordable ammunition and reloading source to the people of MA, specifically central MA. With little to no overhead I can provide things at slightly above cost and still make it worth my time and effort. My long term goal is to eventually reload and manufacture my own ammunition for resale purposes.

 

[Christian]

Screw those calibers, make .22lr and bathe like Prince Akeem.

 

[mikelawtown]

I say give it a try, only way to find out

 

[bullseye]

Give it a shot!

 

[FalArAk]

Cool,good luck !

 

[OldeBD]

It sounds like a good idea to me, Ammo is in more demand than firearms are. You may want to consider broadening your potential customers to the entire state.

For example... Build up a network of contacts within all counties that can put together large orders. If you can get a large order together and deliver the ammo to them much cheaper than it can be bought at Walmart, I believe you will build a solid clientele. Clubs and NES are a great place to get the word out of what you have and at what cost. If the prices are great and you have a minimum that you would deliver, I believe you will find your customers doing most of the work finding more customers to fill an order.

 

[Lip]

Hell I'll buy some. I need .223

 

[GlockJock]

NationOnFire really nailed it on the head in post #5...I would certainly do what's in YOUR heart (and not necessarily what's in the heart of others) BUT do what's in your head also. Old friend, a wise old "mensch" type, very successful businessman, advertising/publishing, small publications, was very profitable for him, told me this 30 years ago:
"In business? Never think with this (pointing to his heart), Never think with this (pointing to his crotch)...Always always always think with this" (pointing to his head).

You definitely want to do what makes you happy, of course, but being "happy" owning your own money-LOSING business can turn that happiness into headache quickly. You didn't mention family/married etc but if you're in any relationship and you're also operating a business that is losing money, you'll be surprised at how a little "disagreement" with a significant other can turn into a major, major brawl (ask me how I know). And if there's a child or two in the mix and business is in the toilet but baby also needs Pampers for his toilet? It really can be a major suck (ask me how I know!) but if it works out can be extremely rewarding both mentally and financially (ask me how I know!).

I'd definitely want to make sure I have a backup plan/rainy day fund etc for those days when business sucks, despite what you felt was a great plan yet is slow getting off the ground or just slows down due to mitigating factors etc..Also, since it's a GUN-related business, have a contingency plan for those days (hopefully not) ahead when you suddenly, curiously can't find anything with which to stock your shelves with, cuz yet another wingnut shot up yet another school/church/synagogue etc...and newly elected (hopefully not) President Hillary creates another "shortage" and we're all driving 40 miles or more to grab a maximum of two boxes of crappy 9mm plinkers (maybe a third box if the dude behind the counter thinks you're a cool guy, or knew your old man or simply likes your smokeshow girlfriend you went ammo shopping with)...Just sayin' be prepared for when your happiness gets a little less happy. But if you succeed, you'll be rewarded knowing that you did it despite any naysayers. And if the shop were within driving distance I'd stop in. It's not, but many folks here will probably stop in I'm sure.
Good Luck, Bro.

 

[Silversnake]

The intent of my business is to provide a quality and affordable ammunition and reloading source to the people of MA, specifically central MA. With little to no overhead I can provide things at slightly above cost and still make it worth my time and effort. My long term goal is to eventually reload and manufacture my own ammunition for resale purposes.

I'm going to join the chorus of "go for it" but be careful of that part I bolded above. I don't know what all your costs are or will be beyond the wholesale costs of getting the ammo yourself, but you should know all of them down to the penny before you put your sign up or put a price sticker on the first box.

Things to consider as overhead beyond rent and utilities when calculating prices or deciding on go/no-go:
- Costs of licenses and business registration - the state of MA wants $540/year just to be registered as an LLC in this state, never mind the sales tax and all the special licenses that go along with any firearms-related business

- bookkeeping/accountant - unless you're a CPA yourself, plan on spending a few hundred dollars each year to have someone help you not get hassled by the IRS. We know the .gov loves to scrutinize businesses like this.

- Insurance - you're going to want some not just against loss/theft/damage but also for that rare case of "my loved one bought ammo from you and then committed suicide/murder so we're suing you even though we don't have a leg to stand on"

- Cost of 'stale' inventory - you're going to have some product that sits on the shelf and doesn't turn over as fast. Can you wrap a few thousand dollars up in boxes of ammo you can't/shouldn't open?

You should definitely follow your heart on doing what you are passionate about, but do it smart. Make sure you can cover a basic running cost of $1,500 to $2,000/year on top of rent/utilities while still having enough free cash to keep product going in and out at prices that are good enough to prevent too many people from thinking "I could just drive an extra 15 minutes the other way to save $1 per box more". If you can do that, it may not end up putting as much money in your pocket as you could get working for someone else in that same time, but it should get you some OK returns or doing something that you actually want to do. And that's a pretty darn good thing IMHO.


Best of luck.

 

[84ta406]

The plus side to doing just ammunition and not firearms sales is that you can officially run it out of your house. That is why my overhead would be less than most places. I dont need to pay rent other than my mortgage. I have already contacted the police chief in my town and he has said he would sign off on any of the needed forms and such. So that is a major green light.

As for inventory I plan to supply the most common items like 22LR, .38, .357 .40 .45 .44MAG. etc. starting off with the most common rounds but I can get anything within a couple days if something else is needed like .38 Super or .22LR Eley match rounds and such. Start off simple.

The wife has already given me the green light and a initial budget to stick with. We both agreed if it goes into the red too far to cut my losses. Ive been involved in enough businesses to know when its going belly up or not. I do work a full time job as well so my hours would be late afternoons into the evening which for most is more accommodating. I hate when places close at 5 personally. Also weekends will have availability as well. Id really like to supply the ammunition to local clubs and such for IDPA matches and other shoots where multiple customers at once would be a large benefit as well as taking LARGE orders from groups.

Im sure theres a lot more to figure out but I wanted to reach out and see what the feedback would be for this type of venture. I figure it is a good start without jumping in too far and getting in over my head.

 

[Rob Boudrie]

The tricky part is going to build up connections so you can buy ammo like "real dealers", and not at "shotgun news prices offered to anyone with an FFL". There are buyers groups that are VERY hard to get into, as they only support stocking storefronts. Back when AARMCO was in business, they would literally buy container loads of ammo (I remember one container was in their going to prison auction).

Are you prepared to spend a few tens of thousands on an order to get good pricing? If not, you may find you cannot buy for less than Walmart can sell retail.

For starters, by how much can you beat the Walmart $38/10 price for American Eagle 660gr 50BMG ammo?

As to working from your house - check fire code and storage licensing for large quantities of ammo.

As to "large orders from groups" - are you talking about having a full 10 wheeler or tractor trailer back up to the storage shed at a gun club? If so, compare the prices you will be able to offer to those from Camfour in/near Westfield, or Beikirch's in East Rochester, NY (they have a fleet of ammo trucks and make regular runs to MA).

I don't see you being competitive unless you have at least $100k to invest in initial inventory, as small orders (tens, not hundreds, of cases) will flag you as a "hobby dealer" and you will get appropriate pricing and terms. (Nobody who is really in the business operates on "certified funds to the vendor in advance" - they all have merchant accounts - as a "hobby dealer" you will be on cash in advance). Even my gun club has a merchant account with the vendor and gets a truckload of clay birds and a bill.

I would like to be one of your first customers, with a few boxes of 50BMG and a 8lb keg of Hodgdon Titegroup.

 

[bob6180]

I'll be a customer.

 

[84ta406]

The tricky part is going to build up connections so you can buy ammo like "real dealers", and not at "shotgun news prices offered to anyone with an FFL". There are buyers groups that are VERY hard to get into, as they only support stocking storefronts. Back when AARMCO was in business, they would literally buy container loads of ammo (I remember on container was in their going to prison auction).

I have looked into this and until I get my FFL a lot of places wont even talk about it. But the few places I have talked to have sent me samples of their Dealer pricing sheets and they are very competitive and below what the local LGS have for pricing.

Are you prepared to spend a few tens of thousands on an order to get good pricing? If not, you may find you cannot buy for less than Walmart can sell retail.

I will be the first to admit I cant dump 10k on ammo right away but I can spend a substantial amount to get the doors open so to speak while being successful and profitable.


For starters, by how much can you beat the Walmart $38/10 price for American Eagle 660gr 50BMG ammo?

$32/box of 10 for XM33 or $52/10 for Hornady Match 750gr

As to working form your house - check fire code and storage licensing for large quantities of ammo.

I have talked to the local chief about this and know what directions to go in regarding these.

Also for example I can do Federal .223 for 360 per 1000, other brands vary in pricing obviously.

 

[JayMcB]

I wish you the best of luck and success with this.

Make sure you're making provisions for sales tax, workman's comp for you, liability insurance, etc.

I'd absolutely incorporate, lest some customer has a negligent discharge and you find yourself named in a suit and your house is on the line if a bad m******* judge decides it's at least partially your fault.

 

[drgrant]

Unless you're manufacturing it yourself (eg, like a commercial reloader) you're going to be up against a pretty tough wall.

-Mike

 

[42!]

The plus side to doing just ammunition and not firearms sales is that you can officially run it out of your house. That is why my overhead would be less than most places. I dont need to pay rent other than my mortgage. I have already contacted the police chief in my town and he has said he would sign off on any of the needed forms and such. So that is a major green light.

As for inventory I plan to supply the most common items like 22LR, .38, .357 .40 .45 .44MAG. etc. starting off with the most common rounds but I can get anything within a couple days if something else is needed like .38 Super or .22LR Eley match rounds and such. Start off simple.

The wife has already given me the green light and a initial budget to stick with. We both agreed if it goes into the red too far to cut my losses. Ive been involved in enough businesses to know when its going belly up or not. I do work a full time job as well so my hours would be late afternoons into the evening which for most is more accommodating. I hate when places close at 5 personally. Also weekends will have availability as well. Id really like to supply the ammunition to local clubs and such for IDPA matches and other shoots where multiple customers at once would be a large benefit as well as taking LARGE orders from groups.

Im sure theres a lot more to figure out but I wanted to reach out and see what the feedback would be for this type of venture. I figure it is a good start without jumping in too far and getting in over my head.

You'll need a permit from the FD. And I'd bet you homeowners insurance won't allow this. If you don't have a mortgage you can go without homeowners insurance, I wouldn't recommend it but it can be done.

 

[42!]

The tricky part is going to build up connections so you can buy ammo like "real dealers", and not at "shotgun news prices offered to anyone with an FFL". There are buyers groups that are VERY hard to get into, as they only support stocking storefronts. Back when AARMCO was in business, they would literally buy container loads of ammo (I remember one container was in their going to prison auction).

Are you prepared to spend a few tens of thousands on an order to get good pricing? If not, you may find you cannot buy for less than Walmart can sell retail.

For starters, by how much can you beat the Walmart $38/10 price for American Eagle 660gr 50BMG ammo?

As to working from your house - check fire code and storage licensing for large quantities of ammo.

As to "large orders from groups" - are you talking about having a full 10 wheeler or tractor trailer back up to the storage shed at a gun club? If so, compare the prices you will be able to offer to those from Camfour in/near Westfield, or Beikirch's in East Rochester, NY (they have a fleet of ammo trucks and make regular runs to MA).

I don't see you being competitive unless you have at least $100k to invest in initial inventory, as small orders (tens, not hundreds, of cases) will flag you as a "hobby dealer" and you will get appropriate pricing and terms. (Nobody who is really in the business operates on "certified funds to the vendor in advance" - they all have merchant accounts - as a "hobby dealer" you will be on cash in advance). Even my gun club has a merchant account with the vendor and gets a truckload of clay birds and a bill.

I would like to be one of your first customers, with a few boxes of 50BMG and a 8lb keg of Hodgdon Titegroup.

I remember. AARMCO, great ammo prices...then one day we found out why.

 

[rudiewhitebwoy]

You could do all the gun shows too. Except for the gun shops, most of the tables at gun shows are run by guys that have a full time job and they do this on the side.

As far as state fire ammo & powder storage laws go l believe it's based on a dwelling. A storage shed or container should do the trick.

You'll need a shit load of insurance and make sure you incorporate. I say go for it. Here's my order if you get up and running;

• 200 .50 Bewulf 350 gr JHP
• 200 38-40 180 gr
• 2,000 7.62 x 51 Reloadable Brass
• 2,000 7.62 x 39 Steel
• 2,000 .223
• 1,000 38 Special
• 10,000 22 LR

Assuming you're in a decent price range. I'm trying to round out my subterranean inventory and help a fellow NES'er.

 

[Rob Boudrie]

If you can get a large order together and deliver the ammo to them much cheaper than it can be bought at Walmart

Tough.

To give you an idea how much clout Walmart has, consider that vendors have to pay an application fee to be considered as a possible vendor and allowed to make a presentation to the Walmart buyer, and when Walmart renews an order, they typically walk in an dictate terms as to the amount of the price reduction (yes, reduction) on the renewal.

And I'd bet you homeowners insurance won't allow this.

It's not so much if they "allow" it, but what exclusions it triggers. A biggie is that you would probably not be covered for slip and fall for someone visiting the premises for business purposes (ie, customer).

 

[Love Machine]

The intent of my business is to provide a quality and affordable ammunition and reloading source to the people of MA, specifically central MA. With little to no overhead I can provide things at slightly above cost and still make it worth my time and effort. My long term goal is to eventually reload and manufacture my own ammunition for resale purposes.

And I wish you well with that. I truly want you to succeed, but I've seen far too many people (myself included) going at something without a solid plan and not realizing how far they may end up stretching themselves financially. Especially because you are storing reloading components and could have an accident, insurance costs may be high. Then there can be a ton of other overhead (like incorporation fees in MA and paying a lawyer/account). That can thin the margins rather quickly. So go and do it, but with eyes wide open.

 

[greencobra]

this is going to be an insane amount of work and invested capitol for a not for profit business, good luck.

 

[Rob Boudrie]

One simple preliminary question will tell a lot - can you sell at Walmart prices and make enough profit to cover overhead? Start by checking that out, then look into the zillion other details. If you can't hook up with "unavailable to the public" prices you will not succeed. Remember, you will need to price at low market. Many businesses fail because they price product at "what the vendor needs".

 

[greencobra]

A lot of major distributors use to ask for a photo of your store front before setting up an account. A pic of your cellar stairs doesn't count as their definition of a store front. For a while years ago, I ran a reloading components/ammo business. I was amazed at the volume that had to be brought in to get those deep dealer discounts. It's a good lesson though, I don't cry anymore at what a dealer charges knowing what I know now.

 

[Rob Boudrie]

I ran a reloading components/ammo business. I was amazed at the volume that had to be brought in to get those deep dealer discounts.

I've seen the powder and primer prices that a major stocking dealer pays. They are less than 5% below what I can get stuff for from a big on-line vendor (the shop gets stuff via dealer truck, so it avoids hazmat). Of course, my supplier and this retailer have been out of most everything for over a year now.

You will have a temporary advantage if you can get inventory of popular pistol powder - but that advantage will fade as supply lines open up.

 

[DW357]

Also for example I can do Federal .223 for 360 per 1000, other brands vary in pricing obviously.

I would see if you can beat Walmart prices AND online vendor prices. Federal .223 55 gr can be had for $325-$350/1000 online shipped.

Wolf gold (brass cased) .223 can be had for $300-$320/1000 online shipped.