Question about transfer fees

[Cruznegao]

Sorry if this is a stupid question, but I still would like to know the answer.

I'm thinking about building my first AR and even though I would like to support the local businesses they are asking twice what I can find a stripped lower for online. I know that if I order a single lower the price will be pretty much the same if not more due to the fees.

But what if I get a few people together and we buy more? Does the FFL charges one single transfer fee and then each person pays their own DROS?

This is what I have in mind:

The cheapest lower I can find locally is $99 from Riflegear (+-$135 after taxes and DROS)

I've found lowers for as low as $58 online and a single $10 shipping fee regardless of the number of items.

Lets say I get 4 other people and we all buy 2 lowers each.

If the FFL charges $50 for a single transfer fee I'm looking at $153 for 2 lowers OTD.

2 lowers @ $58 each:........ $116
$10 shipping divided by 5:......$2
$50 transfer divided by 5:.....$10
DROS:...............................$25

Total:..............................$153 (only $20 more than a single lower locally)

Can this be done or a FFL will laugh at me?

Thanks

[EBR Works]

The FFL will have to process paperwork for 5 separate individuals plus document & store 10 separate lowers during the DROS periods. I doubt that you will find an FFL that will do this for one single transfer fee. The FFL will also be required to collect California tax based upon the sale price of each lower.
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[dachan]

Can this be done or a FFL will laugh at me?

He'll probably first laugh at you then throw you out as you're asking him to break about 10 state and Federal laws.

[Cruznegao]

He'll probably first laugh at you then throw you out as you're asking him to break about 10 state and Federal laws.

Well, you could've told me what the problem is. Is it considered a straw sale because they came in the name of one person and are being transferred to others? Don't the other have to go through DROS anyway? The way I see this is not much different from a group buy...

What is considered the purchase, the first transaction (me buying form the vendor) or the local FFL "selling" it to me? If the first transaction is the one that counts and the second one is just a hurdle hom come I have to pay a Dealer Record Of SALE?

Are they mandated by law to charge a minimum fee?

As far as processing and storing 10 lowers... Wouldn't it be 5 transactions? Is it that much difficult? How much space does it take from their safes?

Can the FFL say that he won't do for only $50 but he'll do for $100?

What if one person buys 10 lowers because he is afraid that they will be banned but later decides that they have enough guns or limited funds and decides to sell some of them through PPOTs, is that illegal?

[BannedinBritain]

If you want to save money...here is what you should do:

Since 5 individuals are obtaining firearms, each is going to have to be DROSed at some point. A transfer fee is going to be charged on each firearm as well...so the only real way to save money is to get a bulk (group buy) discount on the cost of the receivers.

Do your group buy to possibly get the cost of the receivers down as much as possible. send them all to your respective FFL. When they arrive, all of you get together for a transfer party...go fill out the paperwork and then go to the nearest pub/eatery and enjoy a nice meal and a beer.

If you buy 10 receivers and decide to PPT them later, you're actually adding $10 to the total cost for each firearm, because no matter what a transfer fee is going to be charged on each firearm...adding a $10 additional transfer fee later makes no sense.

You are going to pay the transfer fees on the firearm no matter the cost of the firearm...so it doesn't really matter...and you're saving money on the tax by purchasing a stripped lower...then you can buy all the parts online and instead of paying 8% on $1500, you're only paying it on $100

[tenpercentfirearms]

Just go buy a local lower. The amount of time and money you spend trying to save $10-$20 could be better spent shooting or relaxing.

[kemasa]

He'll probably first laugh at you then throw you out as you're asking him to break about 10 state and Federal laws.

Please explain why laws would be broken? As stated, EACH person would submit a DROS. The example given only shows what it would cost ONE person, not that only ONE DROS was submitted. 5 people total, 2 lowers each means a total of 10 lowers, so the amounts given clearly can not be the total for everything.

A FFL is not going to split the FFL transfer fee. I am not sure if a given FFL would laugh or just tell you to get out as they would wonder about your mental status.

[kemasa]

Well, you could've told me what the problem is. Is it considered a straw sale because they came in the name of one person and are being transferred to others? Don't the other have to go through DROS anyway? The way I see this is not much different from a group buy...

I would like to know what the problem is as well :-)

No, it is not a straw purchase since everyone is doing a transfer. I have had one person place the order and then each person does their own paperwork. In a recent case, two people ordered separately and were each charged shipping, but both items came in the same box.

I suspect that the reason for the response was due to confusion. You listed only what one person would pay and I suspect it was thought that would be the total cost, even though it would not make sense since you would still have the rest of the transfer fees and shipping. Sometimes (including myself) people don't really read what is posted and are too quick to respond.

What is considered the purchase, the first transaction (me buying form the vendor) or the local FFL "selling" it to me? If the first transaction is the one that counts and the second one is just a hurdle hom come I have to pay a Dealer Record Of SALE?

Both are "transactions", but the transfer of the firearm is when the DROS and other paperwork is done.

Are they mandated by law to charge a minimum fee?

Nope, a FFL could do it for free, if they really wanted to.

As far as processing and storing 10 lowers... Wouldn't it be 5 transactions? Is it that much difficult? How much space does it take from their safes?

It depends on the FFL. Most do it based on the number of firearms as each firearm has to be recorded. Some will allow for some number of long guns to be included as what they consider one transfer. I give a discount for additional firearms, but I charge for each one as there is additional work for each one.

While it is not all that difficult and it does not take up much space, it is still a business. If you want to have it cheaper, then take all the time and effort to become a FFL and then you can charge whatever you want, but I suspect you will start charging more than you currently think is reasonable now.

Can the FFL say that he won't do for only $50 but he'll do for $100?

Yep. He could say that he would do it for $1000, but then he would not get many customers most likely, but the one would be really nice.

What if one person buys 10 lowers because he is afraid that they will be banned but later decides that they have enough guns or limited funds and decides to sell some of them through PPOTs, is that illegal?

No, it is not illegal, but there are limits in how many transactions can be done before the person is considered to be a dealer and would then need all the licenses. I suspect the law is a bit out of date since now all transfers have to go through a dealer and I think that the law was to prevent a person from buying numerous firearms and then selling them FTF, without going through a FFL.

[Cruznegao]

Just go buy a local lower. The amount of time and money you spend trying to save $10-$20 could be better spent shooting or relaxing.

As much as I like to buy local and would not mind spending $10-$20 more to help a local shop, in my example I would be saving almost $45 per lower. That is not much if I buy only one, but if I decided to get more it would be 3 lowers shipped for the price of 2 local. It does sound tempting.

I know this is the FFL forum and you guys all have overhead, payroll, CA taxes and all the other costs to run a business. But if you think from a consumer point of view, what would you go for? You could buy one lower locally or spend an extra $20 and go home with 2.

Recession has hit everyone across the board. The same way you guys are not swimming in extra cash I'm counting my coins in this side of the counter.

KEMASA, thank you for taking your time and answering my questions. As I posted in the beginning, all I had was a question and was looking for the answer.

On another note, what prevents a FFL from buying this stripped lowers in bigger quantities and re selling them with a $20 mark up? Do FFL have to pay transfer fees when getting products in their inventory or is it just a simple matter of bigger profits?

[tenpercentfirearms]

As much as I like to buy local and would not mind spending $10-$20 more to help a local shop, in my example I would be saving almost $45 per lower. That is not much if I buy only one, but if I decided to get more it would be 3 lowers shipped for the price of 2 local. It does sound tempting.

I know this is the FFL forum and you guys all have overhead, payroll, CA taxes and all the other costs to run a business. But if you think from a consumer point of view, what would you go for? You could buy one lower locally or spend an extra $20 and go home with 2.

Recession has hit everyone across the board. The same way you guys are not swimming in extra cash I'm counting my coins in this side of the counter.

KEMASA, thank you for taking your time and answering my questions. As I posted in the beginning, all I had was a question and was looking for the answer.

On another note, what prevents a FFL from buying this stripped lowers in bigger quantities and re selling them with a $20 mark up? Do FFL have to pay transfer fees when getting products in their inventory or is it just a simple matter of bigger profits?

Ask the dealer if he will work with you on a multiple buy discount. If you buy multiple lowers from me, I always knock some money off if you ask.

My current situation is I have a ton of left over lowers from the panic that I paid too much money on. So that keeps my prices high. I could liquidate them and take a loss then buy some cheaper lowers, but I don't. No big deal.

As far as marking lowers up $20; if it were a $60 lower maybe. But a $100 lower marked up $20 is only 20% profit. 20% doesn't pay the bills.

[Cruznegao]

Tenpercent,
It is totally understandable that you are a business and have to have a decent profit.
But I keep wondering why a FFL doesnt buy a lot of this $60 lowers, marks up 33% and sells them at $80. it seems to me that this would be a good deal and they would probably sell more.
By the way, I know that you were the first to put your neck out there and that to me would justify spending some extra $. But you are just to far. Sorry.
Anyway, thanks for takin your time to explain the FFL side. I do appreciate and will probably be buying local.

[tenpercentfirearms]

Tenpercent,
It is totally understandable that you are a business and have to have a decent profit.
But I keep wondering why a FFL doesnt buy a lot of this $60 lowers, marks up 33% and sells them at $80. it seems to me that this would be a good deal and they would probably sell more.
By the way, I know that you were the first to put your neck out there and that to me would justify spending some extra $. But you are just to far. Sorry.
Anyway, thanks for takin your time to explain the FFL side. I do appreciate and will probably be buying local.

I'd rather mark them up to $100 and sell them that way!

And then price my transfer fee to make it more expensive to cut me out!

Businessmen are evil!

Actually, who sells $60 lowers? Anyone decent?

[jeep7081]

Best deal I found was $59 lower, $10 ship, and $45 DROS.

[jeep7081]

I'd rather mark them up to $100 and sell them that way!

And then price my transfer fee to make it more expensive to cut me out!

Businessmen are evil!

Actually, who sells $60 lowers? Anyone decent?

I did my home work. There are 4 manufactures who make lowers in the USA. One is in San Diego, CA "JD". The rest are ALL re-marked!

Got mine here...

http://www.gunbroker.com/Auction/ViewItem.aspx?Item=238619776

Let me add, talked to the owner there. He pays $41 per unit. $19 profit + makes $5 off the shipping. So, $24 per unit profit.

[Cruznegao]

Actually, who sells $60 lowers? Anyone decent?

I've seen a few online vendors that sell them for around that price. Which, to me, makes it look possible. If they are selling at that price they probably paid cheaper. Even if a FFL buys it from this vendors it would still be getting at that price...