building AR's for profit

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Precision
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building AR's for profit

Postby Precision » Sat Nov 05, 2016 2:36 am

I may have the opportunity as part of working for an FFL to offer build classes. The classes will be from sourced high end parts (no 80% builds). The customer will buy the lower with proper 4473, then as a separate transaction buy the rest of the parts and the class (assembly lesson) together.

This will occur in TN at a brick and mortar location. Price will be whole sale parts cost, plus mark up, plus $100-150 for instruction time, tool usage. All billed as a turn key amount of $xxx.xx.

Each occasion will have a different theme. some themes:

super light carbine
3 gun set up
Precision Rifle 20-24" barrel
pink furniture carbine build
classic carbine
300 BLO carbine
and on down the list

Each build day would be limited to 6-8 customers all getting the exact same build (allowing for cosmetic substitutions like grips, flash hider)
Some allowable upgrades like trigger groups.

I would prebuild and shoot one of the guns to confirm build functionality.

Each student would get a T-shirt (ad piece) to say they built their own gun. I would build a database for future prospecting of clients ...

Where would I run foul of the law, what should I not do... all critiquing of the idea welcome, if the FFL doesn't make it happen, I may do it on my own somewhere.
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First Shirt
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Re: building AR's for profit

Postby First Shirt » Sat Nov 05, 2016 3:02 am

Have no idea about the legal aspects, but if you can get it going, myself and at least two of the three Minions would be very interested. Keep us posted!
But there ain't many troubles that a man caint fix, with seven hundred dollars and a thirty ought six."
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Re: building AR's for profit

Postby HTRN » Sat Nov 05, 2016 6:20 am

You're getting into a serious grey area in regards to construction, due to excise taxes on complete firearms vs just actions. Its one of the major reasons they went after build parties. when money changes hands involving firearms, the laws get alot more complicated. I suggest talking with a lawyer with an ffl specialty before proceeding.
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Re: building AR's for profit

Postby Precision » Sat Nov 05, 2016 1:00 pm

HTRN wrote:You're getting into a serious grey area in regards to construction, due to excise taxes on complete firearms vs just actions. Its one of the major reasons they went after build parties. when money changes hands involving firearms, the laws get alot more complicated. I suggest talking with a lawyer with an ffl specialty before proceeding.


my understanding (and yes a consultation with a lawyer would be in order), if you sell them the lower and the upper on the same day, same transaction you must charge the excise tax. If you use the lower as the deposit on 8/16 and the rest on class day 8/30 (or the other way around) no need for the excise tax.

That is what PSA and several other companies do.
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Re: building AR's for profit

Postby HTRN » Sun Nov 06, 2016 4:22 am

Yeah, that sounds like an invitation to trouble to me, especially if you're the one selling the serialized parts. BATFE has the nasty habit of changing technical rules on things they dont like, and they really, REALLY hate build parties. This strikes me as inviting the man into your life, and while you can probably beat them in court, do you really want to go through that?
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Re: building AR's for profit

Postby Precision » Wed Jan 25, 2017 3:52 pm

I am actively working towards this idea.

I have a manufacturer to provide custom engraved lowers and someone who will do cerakoting (custom or just mono color). I am working on getting my FFL.

The plan:
meet student for the build class and go over options offered.
Get them signed up for the appropriate class based on the type of AR they want to build. Sell them the lower (plus any custom engraving / coloring) Do background check and send them home with the serialized part immediately or as soon as custom aspect is completed (within 2 weeks)

Have them show up to appropriate build class where I provide all appropriate parts for their build. I provide the fixtures for assembly as well as instruction for building. A looped video will be running overhead on a 50"+ TV. The video will be broken up into components and only a 3-5 minute loop covering the currently being worked on part will run. If I have more than 5 students, I will have a second instructor helping to speed up the process and give everyone adequate attention. Each new phase will have a different student get first hands on attention. The idea is that some students will get some steps just from the video, where others it will at least give them a basis to not be so lost until the instructor can translate it into completion.

Each student in a given class will be building the same rifle as all the other students. By this I mean at the Precision Varmint Build Class, everyone will be building a 5.56 on a precision build. There will be upgrades available. 20" vs 24" barrel, mil-spec trigger vs Giesselle variants, custom engraving vs standard, cerakote vs standard black anodized, optics installed vs no optic. The point is at the Precision Varmint class, no one will be building a 300BLO, or an ultimate light weight gun. Those will be other classes.

My understanding is that by selling the student a stripped lower early in the process, they own the gun. They are later coming back for gunsmithing work for the build class so I need a seller's license not a manufacturer's license.

To that end, I need to figure out if I need an 01 or an 07 and why.

It is my understanding that an 01 would suffice, but an 07 would be good vs ATF playing loose with the law.
On the other side, 01 never has to have ITAR, where 07 does, especially if they build more than 50 guns. I am technically assembling not building, but ATF and whims. That is a $2000 bogus fee yearly. Once I get this figured out, it looks like I might have my FFL and go live in Late April / Early May.

Suggestions, compliments, criticisms welcome.
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Denis
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Re: building AR's for profit

Postby Denis » Wed Jan 25, 2017 5:01 pm

Forgive me for being the devil's advocate...

Have you done your research to make sure there is actually a demand for this, in the sense of a sufficient number of people willing and able to pay for build classes after buying a registered, recorded receiver?

As I see it, the attraction would be for people to learn how to complete an 80% receiver in order to have a no-official-records piece. (Insert here all the reasons why providing services to facilitate such activity will land you in trouble...) If they are simply buying a complete over-the counter receiver (albeit with custom engraving), how many really need and will actually pay for tuition on how to finish the build? There is so much information, good and bad, available online, what are you offering for a fee that they can't already get for free?

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Re: building AR's for profit

Postby Netpackrat » Wed Jan 25, 2017 7:15 pm

I think the 50 gun thing is strictly for ATF's rules. It has no bearing on whether or not you have to pay ITAR.
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Re: building AR's for profit

Postby slowpoke » Wed Jan 25, 2017 8:56 pm

The nitch that I havent found scratched:
20 to 22" heavy barrel, maybe fluted chrome lined upper, preferably piston, with bipod and a slidefire stock and trigger, or a binary trigger. Think poor mans M27/saw. Aluminum heat sink under the hand guard like an M27 would also be Winning.
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Re: building AR's for profit

Postby Precision » Fri Jan 27, 2017 5:13 am

slowpoke wrote:The nitch that I havent found scratched:
20 to 22" heavy barrel, maybe fluted chrome lined upper, preferably piston, with bipod and a slidefire stock and trigger, or a binary trigger. Think poor mans M27/saw. Aluminum heat sink under the hand guard like an M27 would also be Winning.


Noted, good idea.
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Re: building AR's for profit

Postby Precision » Fri Jan 27, 2017 5:14 am

Netpackrat wrote:I think the 50 gun thing is strictly for ATF's rules. It has no bearing on whether or not you have to pay ITAR.
My interaction with ATF says they could care less about ITAR. But not wanting run afoul of State either.
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Re: building AR's for profit

Postby Precision » Fri Jan 27, 2017 5:21 am

Denis wrote:Forgive me for being the devil's advocate...

Have you done your research to make sure there is actually a demand for this, in the sense of a sufficient number of people willing and able to pay for build classes after buying a registered, recorded receiver?

As I see it, the attraction would be for people to learn how to complete an 80% receiver in order to have a no-official-records piece. (Insert here all the reasons why providing services to facilitate such activity will land you in trouble...) If they are simply buying a complete over-the counter receiver (albeit with custom engraving), how many really need and will actually pay for tuition on how to finish the build? There is so much information, good and bad, available online, what are you offering for a fee that they can't already get for free?


Lowers are cheap. I will be selling them at current prices, the same with all the parts. Probably slightly lower than they can get them in most cases. I will make a modest profit on the parts and a good profit on my time for the class. Added together it makes a wonderful profit.

What they get. Quite simply competence, not having to do tons of research themselves, having parts that all go together and function, a one day build.
Many people have more money than time. Many people want to be able to say they built it themselves. I will also have custom engraving, custom colors and builds that you cannot buy off the shelf at all or certainly not at the price.

I fully admit it is not going to be 100 rifles a month. But somewhere between 8-20 a month is very doable. At 20 a month I would have more income than I have now. Not that my income is great now, but I am surviving. Between that and Amazon, I would be doing quite well and have 2 income streams.

Time will tell, but I think it is doable.
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Denis
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Re: building AR's for profit

Postby Denis » Fri Jan 27, 2017 12:13 pm

Precision wrote:Time will tell, but I think it is doable.


I hope you're right, and that you sell a boatload!

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Re: building AR's for profit

Postby Precision » Sat Jan 28, 2017 2:08 am

Denis wrote:
Precision wrote:Time will tell, but I think it is doable.


I hope you're right, and that you sell a boatload!


a small boat, but yes. Thanks
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Re: building AR's for profit

Postby randy » Sat Jan 28, 2017 2:13 am

If you were in my area, assuming I had the scratch, I'd love to have Darlin' Daughter participate in something like this.

I think it would be a much more valuable experience than just giving her a rifle or helping her pick one out at the Local MOD.
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Re: building AR's for profit

Postby Precision » Sun Jan 29, 2017 1:34 am

randy wrote:If you were in my area, assuming I had the scratch, I'd love to have Darlin' Daughter participate in something like this.

I think it would be a much more valuable experience than just giving her a rifle or helping her pick one out at the Local MOD.

And that make you fine Sir, my target market.

If you bring your own lower and decide to take a vacation in the area, we can make it happen. Assuming I get the FFL et al. With your won lower, no cross state gun sales...
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Re: building AR's for profit

Postby Candyman » Sun May 14, 2017 3:04 pm

I like coffee and conversation. Anyone in my area that would like to build their own AR is more then welcome to come over.
Just bring your stripped lower.
If doing classes for money, I would contact ATF in your area.
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