# Starting a Ar build business?



## Vance1012 (Apr 1, 2015)

I have been thinking a lot lately and wanted to get some input and serious responses. What are youre guys thoughts on starting a "business" where one would either build custom ar's to a customers specs or build them to basic formats and sell for like 100 dollar profits. I'm not necessarily thinking this will alow me to quit my day job but would be cool to do something I love on the side to make some spending money. Also I know what I'm doing when building these I have built a couple already and recently rebuilt my own .223 to 300 blkout. I have plenty of experience on the ar 15 platform as I spent time in the military and years playing around with mine. And let's face it to those that already have experience building them we know it's really not all that hard just not everyone has to tools or time to do so.


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## ryanh487 (Apr 1, 2015)

Something like that would most likely require you to have an FFL.  Or you could always just assemble and sell uppers.  

Not sure if charging a service fee for the build with the customer's parts would require an FFL or any inventory transfer forms or not.

I've thought a lot about doing the same, since I've had 2 or 3 folks offer to pay me for assembly if they ever get around to building one.


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## Vance1012 (Apr 1, 2015)

That's the one thing I have wondered about as well not sure if I need a ffl. I was thinking once I paid for and put the lower in my name and sold it it would be like any other gun sale which really requires no paperwork if I'm not mistaken maybe just a proof of sale


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## ryanh487 (Apr 1, 2015)

Vance1012 said:


> That's the one thing I have wondered about as well not sure if I need a ffl. I was thinking once I paid for and put the lower in my name and sold it it would be like any other gun sale which really requires no paperwork if I'm not mistaken maybe just a proof of sale



There is a limit to the number of sales you can make before the ATF will intervene.  Although, if you have a GWL, there would be no record of the transaction outside of a gunstore's inventory files (though an ATF auditor might raise a flag if they see your name on 50+ form 4473's).   You might be able to get away with it, but you would also be playing with fire.  If you're lucky, you get a cease and desist letter from the ATF.  If you're not, you go to jail and/or get heavily fined and become a felon.  Plus, you would owe income taxes on any amount of profit over a few grand, and sales taxes would probably start to be owed after so many transactions--if you were caught, chances are even if you got off with a cease and desist from the ATF you'd be raped by the IRS over income tax evasion and by the state of Georgia for the same + unpaid sales taxes.

There are many things I would take the risk of selling on a hobby level without going through all the business red tape, but firearms are not one of them.


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## Vance1012 (Apr 1, 2015)

Gotcha this is why I brought it up for public opinion


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## NE GA Pappy (Apr 1, 2015)

If you are assembling a lower for someone, you are a manufacturer of a firearm.  It requires a FFL manufacturers license, not just a resalers license.  Totally different animal.  

Uppers are not an issue, since they are not considered a firearm.  They are not serialized like the lowers.


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## hayseed_theology (Apr 1, 2015)

Several of the previous posters have offered some good info.

I have looked into it a little bit because I do some hobby gunsmith work on my guns, and I wondered about doing some cleaning, scope mounting, minor repairs and refinishing, etc. for a little extra cash.  Technically, you are supposed to have an FFL for even that kind of small stuff. 

For assembling AR's, NE GA Pappy is correct - you would probably need a Type 07 FFL because that would be considered manufacturing a firearm  (even though you are just assembling using an already serialized part).  With the Type 07, there is also a question of the $2500 ITAR registration. If you bring in over $600 a year in gross revenue, you have to report the income on your tax return.

Like Ryan said, it's hard to do legally as a hobby.  You probably wouldn't get your door kicked down for a few guns a year, but the government's excessive use of force never surprises me anymore.


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## Rich Kaminski (Apr 2, 2015)

*Vance1023*

I think it's a great idea and as far as being licensed - I believe that if you set up as teaching a course in how to assemble an AR15 that you would be OK. What would one cost if you and I were to collaborate on assembling one.


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## Vance1012 (Apr 2, 2015)

Rich Kaminski said:


> I think it's a great idea and as far as being licensed - I believe that if you set up as teaching a course in how to assemble an AR15 that you would be OK. What would one cost if you and I were to collaborate on assembling one.



Hard to give a cost on a custom ar build without knowing what one wants. It could run anywhere from $600 all the way up to $2000 depending on the parts used. 
As far as teaching a class not quite sure I'm set up for that. But if anyone here has questions on what parts to get or things like that I'd be more than happy to answer any questions.


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## WGSNewnan (Apr 2, 2015)

I doubt seriously you would be able to compete in that marketplace. There are just too many basic AR's for sale at cheap prices. Too many high end custom makers on the other end. 

Not to mention liability and warranty work. Licenses and insurance etc.

There is a reason why customs cost what they cost. Working in your garage likely wont net you any serious gains and once you establish a store front or retail establishment your business plan will be blown away with additional costs and expenses.


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## Vance1012 (Apr 2, 2015)

Thanks all for the input, pretty much what I thought and exactly why I didnt jump in without asking first.


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## TrailBlazinMan (Apr 2, 2015)

The AR market is shrinking. If you aren't in it now you have missed the boat. There are many many many AR component manufacturers that will not be around this time next year. There is little to no labor price involved in building ARs. 

When you look at building custom ARs you will always be competing with the average Joe at home AR builder (who doesnt have to pay FFL licensing fees, county business taxes, ITAR, liability insurance, etc). If you are doing this in your garage most guys will be a little skeptical of the quality they are getting.

In general ATF says you have to have a license if you are 'in the business of firearms.' I have heard this defined two ways: one said that this means the money you make from it you cannot do without, the other that if you are making money at all you are in the business. It depends on the investigator. There is no set limit of firearms sold or built that then ATF wants you licensed (at least none that ATF has admitted).

If you have an 07 (or one of the other manufacturing licenses) you must pay the ITAR tax. This is assessed from the State Deptartment - not ATF. In addition to ITAR if you build more than 50 guns a year you owe ATF excise tax on every firearm manufactured. With ARs this means if you take in a lower and selling it as a rifle- you have manufactured a firearm.

There is nothing wrong with getting an 01 dealer FFL and gunsmithing on the side. The beauty about this is that if the customer brings you the lower and wants a build, then the customer is the 'manufacturer' and you are simply a contract worker. ATF's laws are simple, but the open letters and case law decisions are complicated. Lucky for me the investigators our ATF office are really nice and want to help us rather than smash us with rules and regulations. Try talking to the people over at ATF.


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## tree cutter 08 (Apr 12, 2015)

To much headache to deal with. I considered it at one time but it's not worth the hassle in my opinion. I think it would be extremely hard to make any money after paying for all the legal junk.


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## bfriendly (Apr 13, 2015)

I kind of wondered the same thing......not anything high volume, but just as a hobby. I see many ARs "For Sale" for about $100-500 more than what I could put one together for(Armslist)......like craigslist

.....My question is, are they Selling or still for sale? 
You can "Build" them or simply put a top on a lower so cheap now, I kind of have to agree with the "Missed the boat" theory.....
A few others I have seen for sale were where a Customer "Backed Out" so now its for sale...........even Spikes, Anderson, Bushmaster and Colt lowers(BigNames) aren't that expensive anymore.

You can put one together easily for under $500 nowadays......even though mine did cost a tad bit more since I went a little higher on the Upper and BCG

Armslist would be a good place to see where your competition is at.........


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## BrownDog20886 (Apr 13, 2015)

I have a buddy who got the tools for his own use and then started putting together parts for his friends.  They bought the goodies and he assembled them.  However, he had to get a FFL as he got more serious because it opened some doors for him to get parts faster at wholesale prices.  He still just does it for a hobby and he has no expectation of making a profit, but he has made some epic connections.  He has street cred in the ex-operator world, so he frequently gets some very high dollar freebies and gets to shoot with some awesome trainers.  Based on his experience, if I loved tactical shooting, I'd jump in with both feet just because it looks like a blast, not because he is making money.

Nate


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## Rich Kaminski (Apr 14, 2015)

When I said suck as teaching a class, I meant that your buyer come to you and you instruct and supervise him/her as they put the gun together under your monitoring. This way, they purchase the parts, they perform the assembly, you make your money and everyone is happy. Just a suggestion.


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