Commercial Reloading Startup.

[johnny1290]

If you haven't read that thread by freakshow10mm, then it's well worth your time to see exactly how his business melted down and his advice for anyone trying to start a reloading business.

one of the tips I thought useful was he said to have a backup for each 1050 so you don't lose capacity when one goes down for repair.

[hermosabeach]

Places that have been successful with reloading started out in conjunction with a range or two.

They had a place to secure used brass and a place to sell ammo.

They partnered with a range that had an unused back room

They provided the equipment, insurance and staff. They partnered with facilities and FFL

They started with the most common rounds and then branched out.

If you were starting from scratch, you might consider a location where:
Insurance would be cheaper- workers comp
Rent/ home prices and wages are cheaper
Shipping zone from suppliers would be cheaper
Business licenses and zoning issues are handled by a pro business team of elected / government officials
Power per kilowatt hour is cheaper
Etc

California loses on almost every metric when it comes to manufacturing.

[bill_k_lopez]

I've owned and operated many businesses in my life.

I'm considering this same thing right now. I've been running numbers to see if its a good business to get into or not.

Some advice I would give you is

1) stay away from employees. Keep your business model as simple as possible
2) start with one caliber only
3) make sure your buddy can get supplies, and I mean real supplies - like 100K pieces of brass, projectiles and primers at a time - and that his suppliers can keep supplying you.
4) have enough money to float the boat for a month
5) have a strategy in place to sell and distribute before you start manufacturing

I would also suggest that you run this business somewhere other than Ca, because you're dealing with hazardous materials / explosives which in Ca means higher everything.

If you want to see some of my numbers that I put together PM me and I'll b glad to give you any thing I've come up with. I think there is money to be made doing it, even after the shortage goes away.

[chim-chim7]

I was intersted in opening a reloading store and ammo business for awhile. I was shot down by every single business park owner. As soon as I mentioned the word ammunition, they all did the same thing. Roll their eyes and lose interest in talking with me. It depends on your location. I was obviously looking in the wrong areas, but I didnt want the sharp taxes, and rent of the nice locations. I was looking at a 80-100K startup price, a big strain for me. 12-15 Dillon 1050's all set for one caliber. 3-5 months after signing a lease before opening the store, waiting on FFL and paying all fees + insurance. It still might happen one day, just not right now, I am keeping my day job.

[B!ngo]

This is the most thoughtful post I've read so far in this thread. For all of those citing that this is a terrible time to get in to the business, one could readily argue that it is also the best possible time to get in to the business.
Of course, the business model would have to indicate that the firm is sustainable when this local craziness returns to normal and likely but temporarily enters a depressed phase to accomodate the glut of purchases that have taken place.
It also sounds like the OP has a reasonable and successful business head on his shoulder and, unlike some who enter the firearms business, is considering it on a basis beyond simple enthusiasm for the industry.
Couple of things I would add or re-emphasize:
California seems like a questionable place to start such a business. Tax base, environmental and workers comp laws, potential growing squeeze on the firearms industry. It's a big country with friendlier state leaders out there. As much as I like living in CA, I wouldn't think of the place as firearms-friendly;
Obviously the components supply side is vital. Others have stated it but I'll add a new twist. If you are a successful and inventive merchant business leader, this tight availability will favor those who excel at finding the key components to fuel the business. There later will come a time when the sales side will require great skills, but if you think you can add value on the supply side, you have an opportunity;
Notwithstanding the current sellers market, when things return to the 'new normal' (whatever that will be) what will be your unique marketing and/or routes to market or product positioning that will allow you to compete effectively against the established brands? Is it cost? Reliability? Endorsements? Some x-factor that you have considered? In 6 months, you will need some differentiator and I suspect it will be challenging to compete on price alone when your volume is not among the largest;
Finally, the biggest x-factor is of course the change in laws that may impact your market. So, how rapidly can you spin your business if: there are major legal changes that affect the 5.56/.223 business - taxes on ammo; magazine size; limits on sales of certain gun configs, etc? Can you spin the business so fast that you can start with ammo that is most under scrutiny but can move to handgun ammo if there is a change?
All that said, one thing that I've learned in business is that the best time to enter a new market is when there is great changes happening. And that surely is true right now in the firearms industry.
So best of luck with this and I hope you think this through and make the right decisions. I am sure that all of us on the forum will line up to buy your products - assuming of course that they meet the stringent requirements that the market requires - so you'll have some early sales guaranteed.
All the best,
B

I've owned and operated many businesses in my life.

I'm considering this same thing right now. I've been running numbers to see if its a good business to get into or not.

Some advice I would give you is

1) stay away from employees. Keep your business model as simple as possible
2) start with one caliber only
3) make sure your buddy can get supplies, and I mean real supplies - like 100K pieces of brass, projectiles and primers at a time - and that his suppliers can keep supplying you.
4) have enough money to float the boat for a month
5) have a strategy in place to sell and distribute before you start manufacturing

I would also suggest that you run this business somewhere other than Ca, because you're dealing with hazardous materials / explosives which in Ca means higher everything.

If you want to see some of my numbers that I put together PM me and I'll b glad to give you any thing I've come up with. I think there is money to be made doing it, even after the shortage goes away.

[nothing4u]

If you really want to do this wait till components are readily available. Your business will more likely survive. Unless you have a ton of capital to invest and can sit idle with no components. The current commercial reloaders already got dibs on whatever components that's being trickled from the oem. Some of the oem need them to make their own commerical ammo too.

[bootcamp]

I've owned and operated many businesses in my life.

I'm considering this same thing right now. I've been running numbers to see if its a good business to get into or not.

Some advice I would give you is

4) have enough money to float the boat for a month

Of all your bullet points, this is one I have an issue with. Any good business model should be 6mo. to 1yr at least to have a chance, anything less if fly by night.

[stilly]

You wanna pick something better to go for?

I will be honest, I do not need someone asking me how they can provide me better ammo or if it is worth it for them to startup in selling ammo seeing as how I make all of my ammo except .22lr.

Yeah, get into making .22lr and after a few millions rounds you might come close to breaking even. Better yet, get into swaging and start making us some quality components like hard cast and plated and even swaged fmj/hp jacketed boolits and then maybe I would consider talking to you about what I am looking for, but until then, to a reloader you are just our potential competition looking to steal our supplies and then sell them to us or others at a higher price. Not gonna do it. I cranked out about 150 .45 last night in about an hour and I was a happy camper. I take pride in the ammo that I make and the ONLY reason why I care to buy ammo now is if it is REALLY cheap or if I need the brass and I expect to be able to reuse the brass I get.
If you dangle some extra 10mm brass cases along with your loads I would consider buying them. Kinda like putting the piece of meat around your neck to get the dog to play with ya...

[call-in]

Better yet, get into swaging and start making us some quality components like hard cast and plated and even swaged fmj/hp jacketed boolits and then maybe I would consider talking to you about what I am looking for, but until then, to a reloader you are just our potential competition looking to steal our supplies and then sell them to us or others at a higher price. Not gonna do it.

My understanding of what anon-e-mouse is asking is the costs involved with, and the viability of building a reloading company. Nowhere in the OP did I see the question of what we want.

[HighLander51]

90% of all small business start-ups fail within one year. Why you want to get into a business you know absolutely nothing about? If you and your buddy were smart, you might get a tour of the MiWall relaoding facility in Grass Valley, and see what it really takes.