Ammunition Manufacturing Business

In case anyone's thinking about starting an ammunition manufacturing business, I found a useful bit of info on THR regarding the requirements:

You will need
to comply with local zoning for a firearms and manufacturing business
Type 06 FFL $30 for 3 years
ITAR registration* for $2250 per year

*ITAR is the International Trade in Arms Regulations and is the US State Department's jurisdiction (ie the ATF can't and doesn't enforce it directly). Basically in a nutshell everything firearms related including ammunition and components is a "defensive article" and the manufacturers must be register and pay that stupid fee. I have found an exception and will share it, but will not hold anyone's hand during the process or offer any additional advice beyond what's posted here.

If you are a manufacturer of "whatever" and intend on solely selling it to
Domestic civilains
Domestic dealers or distributors or wholesalers
Domestic civilian law enforcement agencies (ie cops)

you can submit a Commodity Jurisdiction Request to the US State Department requesting determination of whether your products are "defensive articles" having a military application. This must be a letter from scratch (no form letter is provided or "out there") detailing what you make, whom you sell to, and whom the end user is. You will need to submit drawings, blueprints, techinical documents, etc. If they determine you are not manufacturing for any military or paramilitary force, they will not make you pay ITAR.

That's it for the licensing BS.

Now the business aspect.

Marketing is fun and a PITA all at the same time. Buy the book "Guerrilla Marketing" and read it cover to cover. Not the gospel but gives a different perspective than "buy a magazine ad and wait for the phone to ring" mentality of marketing. The book explains it all but here's my perspective:

Marketing isn't about getting a sale. It's about setting up a client relationship. The last thing you want is a customer. A customer comes in, buys some ****, and leaves. That's not good. You want a client. You want long term, loyal, repeat business. Marketing is showing them your product/service, informing them of the value, and showing how you will be there to support them after the sale.

OK, now insurance. If you think you can form a fancy corporation and be protected you are dead wrong and I just saved you millions of dollars. GET LIABILITY INSURANCE!!! It's a couple thousand dollars a year (as in less than $200 per month) for a basic $1 million policy. If $2,000 a year is too much, STOP. You are not cut out for this business. Operating without liability insurance is simply retarded for any business. That's settled. Get insured or go flip burgers.

Equipment. Have to go blue here. Dillon is your brand. Learn it, love it, live it. For the type of loading you are doing, you will need volume but not primer pocket swaging. Get at least one Dillon 650 press with case feeder for each press. Get one set up for small primer and large primer. Then change out the other stuff for caliber changes. This will give you 800-1000 rounds per hour production. That's a good start. If you can't load at least 500,000 rounds annually, it will be a hard living, even as a part time retirement income source.

Then there's the FET or Federal Excise Tax (I don't care if it helps wildlife crap, it's retarded and a burden to my business and you end up paying the tax anyway because me and every other manufacturer rolls it into the cost of the ammunition). Tax is 11% on the sale price of ammunition you load. Exceptions are
Local (non-federal) law enforcement agencies
Department of Defense including the Coast Guard
Reloading customer brass

Hit up www.ttb.gov for more info. Basically if you buy brass, load it, and sell it as ammo, FET is due. If you sell to law enforcement other than federal or DOD, no tax due. If you reload customer brass and you ship it as ammo (no substituting your brass for their brass or replacing worn brass with your brass to make even count), no tax due. Tax on ammunition is 11%.

That's about it. The rest is on your own just like I learned the hard way. Give 'em hell!

The excise tax kind of impacts profit, and the ITAR registration and insurance definitely eliminates anyone thinking of a small-time operation.