Oregon Need help with ammunition business.

[The Courier]

Hey everyone,
So I am looking at starting a small ammunition business out of my home and so far everything is golden except for one thing the City of Newberg. The city code 10.40.404 states that in home business's of this nature may not use ''Highly'' flammable or combustible material in the process. So I must submit to them a case providing proof that there would be no explosive or fire hazard with the materials I would be using, so far upon inspection of some MSDS data I have found that Isopropyl alcohol presents the same fire rating as smokeless propellant with a rating of 3 (high) and nail polish remover has an even higher fire rating at 4 (extreme). The main issue I am having is smokeless propellant has a reactivity rating of 4 which means ''May detonate'' but this is only under highly controlled circumstances.
I have looked over State and Federal storage requirements and that is very easy to abide by but once you add manufacturing to the process is where the issue starts, Oregon fire code states that 50lbs of solid combustibles may be stored in the location that I am in (provided no containers are larger than 10lbs) so that would be easy to stay under and 10,000 primers may be stored in a private dwelling. So the overall allowable amount of components is sufficient to keep operations moving and I've called county, State, and ATF and they've said there's no problem except obtaining a permit through the city.
So with all that in mind if anyone can help with any data that supports that storage and use of smokeless propellant is safe to use for small manufacturing inside of a dwelling it would very much appreciated. On a side note if I could rent a section zoned for industrial there would be no issue but with fees, licensing, and insurance associated with this business adding rental fee on top is too much collateral for me to fund out of pocket.
Thanks for any helpful input/advice and hopefully I can get this up and running soon.

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[ma96782]

I think that you've researched this well.

That being said.....govt and business regulations to stifle an upstart business. Yuuuup, that's how it works. Or at least.....how I believe it works. But, I'm also sure that there are reasons for the regulations.

And Lord only knows what happens when the anti-gunners get their way with new laws covering home firearms storage, arsenal lic. requirements, warrantless inspections, additional fees, etc....

Sorry, that I'm of no help.

Aloha, Mark

 

[thorborg]

All the ammunition I have mail ordered came with hefty hazmet regs and fees possibly negating or at least exacerbating your "Safe" argument to the city. Possibly a land use variance may open a back door depending on the proximity to your neighbors and or geographic location.
Good luck with your venture.

 

[USMC-03]

I was looking into the same thing a few years ago. I'm in the county so no city ordinances to worry about. The thing that killed it was the taxes; federal excise tax on ammunition, along with everything else run the expenses up to a point where I couldn't produce enough by myself to cover cost and still make at least a little profit to put back into the business.

 

[thorborg]

Inventory taxes are a yearly burden as are business asset taxes. should turnover be lagging, multiple tax for successive years on the same item will quickly drain their profits and why many business I don't patronize with use on time deliveries between supplier and customer and so have little or no inventory. When a company's practice is "allow six to eight or eight to ten weeks for delivery" usually means they have no inventory and are holding orders until enough are stacked up to make a purchase in bulk.

 

[The Courier]

Trust me all the paper work looks very large compared to the amount of possible profit. However as dreadful the taxes and licensing may be I love to load ammo, the science and QC behind making quality rounds is alot of fun for me and having direct contact with customers to make specialty rounds with out having huge costs in machine changeovers would be awesome. In this life if I can set up an ammunition company and keep it successful I think that spells happiness for me. ... I might need a little luck on my side.

 

[41mag]

"I love to load ammo, the science and QC behind making quality rounds is alot of fun for me and having direct contact with customers to make specialty rounds with out having huge costs in machine changeovers"
Have you checked what your liability insurance would be? And the last I knew not more than a decade or 2 back, there's a BATF paperwork/license/records involved in 'manufacture' of ammunition.
Don't forget business taxes and ever-present other handful of often forgotten taxes including 'injured worker' etc. Even if that's only you there. Some of these business licenses require paying off the various bureaucrats via fees/regulation & stuff we forget until too late.

 

[The Courier]

My first quote was $7500 annually minimum coverage, second quote $2000 annually... I like the second quote better. DDTC registration $2250 annually... This is painful numbers considering my hourly wage.

 

[41mag]

Hoping all the best for your venture, here's a short tale meant to encourage and strengthen your resolve:

I've known 3 different people, successful in other related business, in the last 30 years, who have decided to branch into 'custom ammo'. At every turn they ran into obstructive regulations, outrageous fees, unexpected costs on top of the type of issues they had already learned to mange in other businesses.

The first was pretty loose & didn't really expect to turn a profit the first 6 months. Nor the second. Margins were too thin to keep the lights on. Other realities intervened and he dumped his stuff at a loss.

The second was actual gunsmith with extra energy & time on his hands, seeking to supply those esoteric rounds his clientele wanted. Ended moving to another area to work for wages.

Third guy was successful metal fabricator. Hired a talented & compulsive younger guy who wanted to make tons of 'custom loads' for pistols. Had a significant contract with several local LEO groups to supply range fodder, which he did by the pickup load.Then his wife came down with some terminal disease. Then local city informed some local license regulation was not met. Then he discovered something wrong with his liabiiity insurance. Then there was a series of fines. I still have a partial case of his product, nothing at all wrong with it. The 'deducts' got him.

Good luck. Really.

 

[U8395279]

Trust me all the paper work looks very large compared to the amount of possible profit. However as dreadful the taxes and licensing may be I love to load ammo, the science and QC behind making quality rounds is alot of fun for me and having direct contact with customers to make specialty rounds with out having huge costs in machine changeovers would be awesome. In this life if I can set up an ammunition company and keep it successful I think that spells happiness for me. ... I might need a little luck on my side.

Love of doing what you do only goes so far in running a business. You need market research to identify a demand for your product, and you have to crunch the numbers from a financial perspective to determine if you can actually make money or not. Not much point in starting a business that is doomed to never turn a profit, and fail.

I'm also doubtful that the city will ever allow you to operate this business in your home. You would have to move. My best advice would be for you to move to Nevada. Nevada, as well as Texas, has no corporate income tax, and no inventory tax on businesses either. It is a far more business friendly state than Oregon.

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[The Courier]

Love of doing what you do only goes so far in running a business. You need market research to identify a demand for your product, and you have to crunch the numbers from a financial perspective to determine if you can actually make money or not. Not much point in starting a business that is doomed to never turn a profit, and fail.

I'm also doubtful that the city will ever allow you to operate this business in your home. You would have to move. My best advice would be for you to move to Nevada. Nevada, as well as Texas, has no corporate income tax, and no inventory tax on businesses either. It is a far more business friendly state than Oregon.

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I was born in Portland and unless Oregon goes completely insane I aint giving up my home state without a fight, but I hear what your saying this is not the best area for a business especially guns and ammo but it'll take alot more than a city official giving me guff before reconsider jumping ship.

 

[Certaindeaf]

Is loaded ammo hazmat?
I think if you need a business license you just get one.. I don't think it necessary to draw them pictures just to give them money. I could be wrong though.

 

[U8395279]

I was born in Portland and unless Oregon goes completely insane I aint giving up my home state without a fight, but I hear what your saying this is not the best area for a business especially guns and ammo but it'll take alot more than a city official giving me guff before reconsider jumping ship.

Well, you would definitely need to create a LLC, in order to protect your personal assets. And to protect the business, you probably need liability insurance too. That might be difficult or expensive to get.

Actually, though, if you are the only employee making the ammo, a plaintiff might still be able to sue you personally for negligence, if an incident ever took place with your ammo. I would definitely recommend that you consult with a lawyer, and get his legal advice, before starting the business, so that you are sure that you have everything covered.
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[The Courier]

I considered just getting a business license, until I found that an LLC is far more beneficial than sole ownership with ammunition sales so I have the lawyer and LLC covered. The part that's stonewalling this is the fact that the city, county, state has no say in reloading/hand loading ammunition for private use as long as your not breaking State Fire Code kind of like having gas cans at your house but once you add sales/manufacture to it the regulations now become more stringent.

 

[The Courier]

Love of doing what you do only goes so far in running a business. You need market research to identify a demand for your product, and you have to crunch the numbers from a financial perspective to determine if you can actually make money or not. Not much point in starting a business that is doomed to never turn a profit, and fail.

I'm also doubtful that the city will ever allow you to operate this business in your home. You would have to move. My best advice would be for you to move to Nevada. Nevada, as well as Texas, has no corporate income tax, and no inventory tax on businesses either. It is a far more business friendly state than Oregon.

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The really hard part is finding ways to balance out all the taxes and cost of production while providing products people want, such as 223 and 9mm are main runners with daily sales but the margin to sell those calibers is slim. PMC, Blazer, Federal ammunition can be had cheap when bought in bulk or on sale so it definitely will be an uphill battle.

 

[Certaindeaf]

The really hard part is finding ways to balance out all the taxes and cost of production while providing products people want, such as 223 and 9mm are main runners with daily sales but the margin to sell those calibers is slim. PMC, Blazer, Federal ammunition can be had cheap when bought in bulk or on sale so it definitely will be an uphill battle.

I'd contact @AMProducts.. if understand correctly, he's fairly into that area and may have some valuable input for you.
Good luck.

 

[BlindedByScience]

I'd be very curious what the liability insurance costs will be. Make no mistake, I wish you well in your business endeavors, but I'd think liability insurance will be a very non-trivial expense.

 

[U8395279]

According to ATF, there were 13,318 licensed ammunition manufacturers in the USA in 1983. By 1994, that number had fallen to 6,068. By 2011, the number was down to only 1,895.

I think that ammunition manufacturing is a very tough business to be in these days. Obviously, a lot of these companies have failed, and gone out of business.

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[ma96782]

According to ATF, there were 13,318 licensed ammunition manufacturers in the USA in 1983. By 1994, that number had fallen to 6,068. By 2011, the number was down to only 1,895.

I think that ammunition manufacturing is a very tough business to be in these days. Obviously, a lot of these companies have failed, and gone out of business.

.

Right.

And, have you noticed the declining numbers of FFLs? Yup, the cost to get an FFL was raised awhile back. And not to mention, locals laws were changed to prohibit certain business in certain locations. A lot of the at home kitchen table FFLs are mostly a thing of the past.

Yet OBAMA and the states (WA and OR for example) wanted all firearms sales/transfers to go through an FFL for a background check.

But.....with less FFLs to service the public, compliance became harder and more expensive.

Humm......I think, that it's actually going according to their evil plans. That is: to reduce legal gun ownership in America.

Aloha, Mark

 

[Who The F R U]

City's cant pass any ordnance or law against selling firearm's Ammo or components.
You don't need any city license's in Oregon. All you need is to register with the state and the fed's.


The City of Rainier's Clerk tried to tell me this wasn't valid in Rainier.
I had the Portland ATF call and correct her.

ORS 166.170 - State preemption - 2015 Oregon Revised Statutes