While people who are gun owners (or dealers) know what an FFL dealer is, not everyone knows this. Thanks to various myths, misinformation and simple lack of understanding, a lot of people don’t know how guns are bought and sold in the United States, or any of the terminology.
So there are folks who are left asking what is an FFL dealer, or wondering about what it means to be a Federal firearms dealer. Well, the answers to both of those are the same and also fairly easy to answer, so let’s take a closer look.
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What is an FFL Dealer?
Simply put FFL stands for Federal Firearms License. Depending on the kind of FFL you get, you can do anything from non commercial collecting of certain vintage guns, to manufacturing or importing military grade weapons for government clients. In between, there are a number of other FFL’s for retail operations.
With that in mind, an FFL dealer is somebody with an FFL who also engages in the commercial sale of guns and/or NFA devices. Now there are a few different kinds of FFL’s as we noted in the earlier link. Some do not permit commercial sales as they are for things like building a personal collection or manufacturing ammunition. So these kinds of FFL’s are not FFL dealers.
FFL dealers have one of the several FFL’s that permit retail sales. The most common ones are an 01 FFL for general retail of non NFA firearms, and the 07 FFL which is a manufacturer of non NFA firearms.
FFL dealers can also choose to become an SOT which when paired with the proper FFL will permit the retail sale or manufacture of NFA devices.
So as you can see, an FFL dealer is somebody with an FFL that allows commercial sales of firearms. This can be anything from a massive storefront operation to a home based “kitchen table” FFL that sells or transfers a few guns out of a spare room in their house or garage.
What Does an FFL Dealer Do?
A Federal firearms dealer handles all commercial transactions of firearms. Because all new firearms must be sold through an FFL dealer, and some states require all transactions involving guns go through an FFL, FFL dealers are often the sole source of firearms, and the only way to get a brand new one.
Some FFL’s are massive wholesale operations buying direct from manufacturers and distributing them to smaller dealers with less purchasing power. However, these kinds of operations are rare. Most FFL dealers operate on a retail level, selling guns direct to consumers. A few may pursue law enforcement or government contracts to provide guns in bulk to a single end user.
On a given day, your typical FFL dealer will be engaged in selling guns to individual consumers who enter their store. Here are a few things FFL dealers usually do.
- Direct commercial gun sales to consumers. Basically, people walking in the door wanting to buy a gun.
- Private party transfers. Some states require that private sales be conducted with an FFL dealer handling background checks. The fee for this service can be a good source of income for smaller FFL’s looking to boost their walk in traffic.
- Online sales transfers. Purchases of guns online must go through an FFL dealer. Much like private party transfers, the fee for this service can be a good money maker. Some small home based FFL’s exclusively do online transfers.
- Sell ammo and accessories. This is a natural extension of retail gun sales, and offers customers a “full service” buying experience.
So as you see, an FFL dealer is there to handle all commercial gun sales activities as required by law.
What Does an FFL Dealer Not Do?
There are of course a few things an FFL dealer will not do. These include things like:
- Sell you a gun without a background check. FFL dealers are required by Federal law to conduct a background check on all applicable sales.
- Engage in gunsmithing unless licensed as a gunsmith.
- Manufacture ammunition.
There are a few gun related things a common FFL dealer can’t do. Some involve regulation, some simply require additional licenses. As a general rule, unless they advertise special services or NFA items, assume an FFL dealer simply sells guns.
Types of FFL Dealers
While we mentioned the several different FFL license types, there are still a few kinds of FFL dealers you might encounter.
- Wholesale distributors. These companies contract with manufacturers to purchase large lots of guns and then sell them to FFL dealers. They rarely sell direct to consumer, and if they do, it is at retail price through a network of dealers they ship directly to.
- Brick and mortar stores. So-called brick and mortar stores are simply traditional storefront locations. These FFL dealers are open multiple days a week and are the most common sort of gun shop you might think of. Some offer additional services like gunsmithing, refinishing, engraving, and even indoor ranges and training courses.
- Home based or kitchen table FFL’s. These are the part time small businesses of the FFL dealer world. Open perhaps as little as one day a week and otherwise by appointment, these small businesses often operate out of a home or garage. Home based FFL’s are an important part of the FFL ecosystem and typically handle transfers and special orders or carry a small inventory of specialized or unusual guns. They fill a niche role focused on flexibility and specialization that other FFL dealer’s don’t do.
- Gun Show dealers. Some FFL dealers, particularly home based FFL’s conduct much of their business at local or regional gun shows. They still conduct background checks and maintain the same paperwork they would as if selling at a fixed location, but find the flexibility of gun shows to be a profitable market.
Do You Want to be an FFL Dealer?
FFL dealers can turn a good profit, and having an FFL can be an excellent full or part time business. When paired with an SOT, FFL dealers can make even more money by serving the lucrative market for silencers and other NFA devices. With a manufacturing FFL, you can even make custom rifles or NFA devices with the right SOT!
No matter if you want to sell a few guns out of a spare room in your house, or operate a full scale retail and manufacturing facility, FFL123 can help you get the FFL you want and deserve!
For nearly twenty years, we’ve helped tens of thousands of Americans just like you get their FFL and SOT. Our team of industry insider experts are here to make sure you understand the entire process from filling out the initial application, to dealing with local zoning issues.
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