The Down Range Forum
Member Section => Down Range Cafe => Topic started by: TAB on July 15, 2019, 06:01:29 PM
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would you buy once fired ammo from ffl06?
Not some guy at a gun show selling bags, but a legatmite, business, with all thier ducks in a row.
Iat what price point would that become attractive you? Example let's say a box of ammo is $25. At what point would it become interesting too you?
I would buy it, I just never see it for sale. Which means either it's all staying local too the places that do reload it, they have contracts for lea that eat up thier time or it's cost prohibitive. Maybe there is something else I am missing?
I have been pricing out Camdex systems and have a pretty good idea on a start up cost, just trying too see if there is a market.
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I think the biggest problem to overcome would be getting a reputation for reliability.
I remember when Black Hills started up and I was very leery of buying newly manufactured ammo from a No-Name company...one I'd never head of. After trying them for a few boxes I gained confidence...and their reputation spread in reviews and publications.
I think any startup would face the same problems and more so for reloaded ammo.
For sure you would need to offer a good cost savings over established manufactures to start with.
And perhaps selling to local shooting ranges and gun clubs might be a way to get noticed and a reputation.
The reloaders who might be potential customers attracted to a inexpensive source of twice fired brass for their own reloading.
Again, you will need to establish trust with potential buyers...
I have no doubt you would produce a quality product.
Good luck.
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I have some ideas about that, one of the cheapest ways to get results quickly would be to contact gun YouTube people and see if i could talk them into trying said product. Not a paid promotion, but here is 1000-3000 rounds, shoot it up. Another would be to get with the local Leo association, sponsor them in shooting events and provide ammo. There are lots of angles too work, I am just trying too figure out if it's even worth doing. Remember the feds take 17% of all guns/ ammo sales as an excise tax. So that has too be accounted for. Between everything I would be looking at, it's about 250k to get started with enough tooling and stock to meet a mild demand. The break even point is the question. Example you could pretty easily do 10k rounds a day. Is 250k rounds a month enough to make money is the question.
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Good question. I've shot a lot of Atlanta Arms remanufactured ammo back when I had time to train..or took the time to train. I had no problems with it functioning properly....so on this basis the reman is good.
I have some 308 reman I got from CMP (will get the name later) and most of it was super. However, I have a batch with separating cartridges...maybe loaded too hot...I dunno.
Don't forget insurance cost......
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Already priced that out, it's not near as bad as I thought it would be. The box's, and those plastic bullet trays however are shockingly expensive
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You also need to see who your customers will be and have loads that they will want to use. As an example,The ammo I use in Cowboy Action shooting, If I start with brand new Starline brass to load 1000 rounds, it costs me $12.35 per box of 50,Once I have empty brass to reload my cost per box of 50 is $5.55. Now if I were to buy factory ammo, Winchester 158 grain LRN-FP will cost me $38.00 a box of 50 plus tax and shipping. And it will be a heavier load than what I use, 158 grain bullet versus 105 grain.If you have a lot of CAS shoots in your area it might pay to carry the loads they like to use, same goes for IPSC and Practical pistol or 3 gun.
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So if costs you $12 At what price point would intrest you? That is the question I am really wondering about. That is assuming the reload was simlar too what you wanted.
Let's be honest, guys that role thier own are not the target group. It's more guys that want too shoot more for the same $/ shoot the same, but pay less.
What I am kind of thinking is that if a box goes for $25, paying around $20 for a reloads is fair. That is just my feelings about what it should cost. The only real cost difference is virgin brass vs once fired.
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If you were to offer a 105 grain LTC-FP bullet between 650 to 700 FPS, I'm pretty sure there would be a lot of CAS shooters buying them. One of the complaints I hear from new shooters is how expensive their ammo is. Most shooters are using .38's in their rifle and revolvers. The ones that shoot .45 Colt are paying close to $50.00 for a box of 50 that has a heavier bullet and recoil than is necessary for the game If you came out with a .45 Colt with a 160 to 200 grain bullet again, between 650 to 700 FPS at say $30.00 you would sell a lot of them. I would think that having ammo for the other shooting games that met power factor and such again would be a good seller. There are people that either don't want to or can't reload their own ammo and a budget priced source for the ammo they use would be a good seller.There is a woman that sells cast bullets as well as loaded ammo, she's getting $22.00 for 125 grain LTC-FP .38 special and is getting $32.00 for 200 LRN-FP .45Colt ammo.I see her selling a lot of the loaded ammo at the major matches she goes to.
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That might be worth while to do. The comm'l reloading machines are not cheap(38k) conversion kits are also pretty spendy at about 4k. So it would be something I would really have too crunch numbers on. I can see the 38/357, but 45 colt is basicly no. There is also significant set up times. So you pretty much want a decaded machine for each caliber. Another option is getting one of the motorised dillion 1050. Even those are about 7k by the time you buy everything. I am not sure the ~2k rounds an hour from one of those would be cost effective. As the comm'l machines are can produce 2-3x that and are significantly more "hands off"
For instance 45 acp with machine cost, taxes(remember feds take 17% form national parks), components, insurance, packaging comes out to about $.27 each. Which would mean the box 50 would me $13.50. So realisticly we are talking say $18/ box as a starting point. So 1 machine at 3k rounds an hour is only $210 in profit, add an a employee there is not much left. That is assuming I could even sell 500k 45 acp reloads a month. Winchester white box from midway USA is $21/ 50 unless they are on sale, then they are $19
It's not a money making business up front, but when the tooling is paid off it 3 years it would be.
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I have been thinking about this since you first posted it TAB. I keep going into all of the legalities and internal quality control. But, that is not the question:
I believe that the business is all about marketing. What are you doing, who are you doing it for, and what makes your product worth buying?
Examples:
1. You are making ammunition for practice and general plinking; 2. You are making down loaded ammunition for games like SASS; Etc.
Focus your marketing on what you are doing, why you are doing it, and your quality.
Price? What is your cost of production, your legal and business overhead, and what is a fair profit? Next, What will the market bear? Calculate your price point two ways: 1. What is your total cost of production, and what return on investment do you want or need; and 2. What is your competition's price point, and how far below it do you want to be (and can you do this given the expenses in method #1)?
Keep in mind that every business was at one time new and unknown. Midway USA started with Larry, Brenda, and the girls sitting at the kitchen table, taking military surplus ammunition apart, cutting the brass down, and putting it back together. Your concerns about being a newbie and how you feel about it - Sometimes we get too deep in our own heads, and we think the entire market is like "me" and my small circle. It isn't! If consumers were that deep and thinking, boat makers wouldn't worry about the amount of glitter in their gel coat on bass boats. Price and packaging will probably sell 75% of your product.
Good luck!
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You may want to consider acquiring some used commercial equipment. Gunbroker would be a place to peruse. I remember in the great ammo drought a couple of years back people in my area buying commercial equipment and making a go at commercial reloading but ultimately getting out of the reloading business after a while.
My thought is that there are quite a few units collecting dust nowadays and you can get into the business in a low cost way if you can wait a while during an equipment search. The guys I know who tried reloading did OK for 4-6 months but had personnel and marketing problems. They also missed profit projections because they bought into the business before components were at the top of the price cycle not to mention supply issues. You already know about costs, personnel and you are working on market identification so I have no doubt your business plan is better than theirs.
I just reached out on LinkedIn to see if they still had their equipment or if they knew someone who had commercial equipment for sale. Just in case you are interested.
I don't know, but I suspect you could buy some late model lightly used equipment for 30 cents on a dollar. That would greatly improve your payout and lessen your risk dollars.
I think cowboy action supply may be your bread and butter market. Competition like 3 gun or steel challenge could provide a nice secondary market along with tactical training in your region.
Just my 2 cents....
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Marketing and perception (maybe the same thing) are going to be among the most vital aspects of your potential new business. Here's a quick story to illustrate... In Western Florida, we had a guy doing "professional" reloads on a fairly grand level. He provided all the practice ammo for the local cop shops and cop ranges, so he did a huge amount of 9mm, .40 S&W and .223 ammo. He did .38 Spec., and .357, too as well as .44 Mag and various other calibers. His prices were reasonable and between the police and regular civilian shooters who bought his product, he sold about as much as he could produce. Until one of his .223 loads blew the bottom out of somebody's AR.
Now, maybe it wasn't the fault of the load. Maybe the AR was faulty. Either way, our local guy denied any responsibility and ignored requests for an impartial examination of the weapon a nd the remaining ammo.
When this word spread around, cop shops cancelled their contracts. Local gun shops refused to sell his re-mans. Most shooters (myself included) refused to buy/use his ammo because even if it wasn't his fault or the fault of his ammo, the fact that he didn't step up gave us cause for pause. And we just didn't trust him. He has now started a "gun smith" aspect to his business because re-manufacture was suddenly rather less profitable.
Almost immediately, another re-manufacturer stepped into the void. Company called Hyperion set up shop in our county after moving in from a neighboring county. I'm not terribly happy with them because it's almost impossible to get any sort of a response from them to questions I might have. And special orders are not high on their agenda. For example, if I want a heavier bullet for my FMJ 9mm practice rounds so they approximate the hollow point rounds I carry every day, I'm out of luck. So, I now purchase on line or at one of the gun shops I frequent.
Since the start of the current Administration in Washington D.C., ammo has been increasingly easier to get. More companies are making and shipping new stuff and the prices have been dropping. All those jerks who bought and hoarded .22 LR and were selling it at onerous prices are crying in their beer since I can buy it from WalMart for 3-cents a round and sometimes less. 9mm prices are dropping. .223 prices are dropping. Even hunting rounds are coming down in price due to over-supply and reduced demand since no one fears the Feds are going to shut down production.
So, Tab, I would sound a couple of cautionary notes: 1. When new ammo has yet to find its actual bottom price, re-manufactured might not provide enough margin to be viable; and 2. When it's unlikely that government regulation will be reduced from what we have under Trump, and the only real possibility is heavier regulation under a future Dummycrap Administration, is it wise to bet on the re-manufacturing business?
Tab, I don't know if you can afford the fairly hefty start-up costs and then write them off as a "hobby," but unless you have a great stash of dough to risk, I'd maybe give this some additional thought.
FWIW
Crusader Rabbit
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Wabbit is good, wabbit is wise.... That was in a movie, wasn't it?
Regardless, my buddy got back with me and he has no equipment. They were using a Dillon 1050 but to run really they needed primed demilled brass. The Dillon isn't a true auto loader ammo machine. He did recommend a Camdex over the Dillon.....
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Camdex is what I have been looking at. I looked at a few other manufactor stuff, but Camdex seemed too have best case prep set ups. Like in 45 acp they can auto detect small pistol primer cases and kick them out, with out a stoppage. Most others either didn't have, was a very expensive option or stopped the entire machine. I also like the fact that they pressurized case at one station too check for splits.
I constantly shop financing. Currently I can get 100k for 3 years at 5 7/8% which makes the payment just over 3k a month( 1st rule of business is use some one else's money) if I can make just $2/ box of 50 that's 75k rounds a month to pay for the machine. What is really killing it for me is the cost of the damn box and plastic tray. If I order 100k of them they are almost $1.40 each. Everything else I priced out in comm'l quantity was at or slightly bellow what I assumed cost would be. The box kind of blew me away. Used 30 cal ammo cans were actually cheaper then boxes by half. A 30 cal can will hold 770 45acps. It's just they are bulky so storing them is an issue.
Tmi have run pretty much all the numbers is can think of even if prices for components go + or - 35%. The only thing I can not figure out is what the market is willing too pay for reloads.
As too the issue of reloads "shady" rep. I delt with that in contracting all the time. Things I am already planing to help fight that is on the packaging, list my 06 ffl number, city, where produced( don't want too give a physical address for security concerns) a web link to my web site where regular independent testing reports are available for veiw/ down load. Load data from my personal fire arms.( with the 45 acp for example cronos for a gov model, commander )lots of places use test barrels. In other words I want too be as transparent as possible. I already promptly return phone calls and emails.
What concerns me the most is I have too much demand. I don't want too be the guy with 50+ employees again, I want no more then 3. A skilled loader, a helper and an office manger/ phone , plus me. I mean that's worse case ideally I would just want an assistant.
After the turn over of my construction company on August 31st. I would never have too work again. I know me I can not do that, but I don't have enough to where I can fund say a contracting business that does accessablity for disabled vets at little too no cost. I have already handed over the reigns of a non profit I co founded, where now I am just a voting board member. I am very proud to say that said none profit is 100% staffed by volunteers and always has been. I will resign from the board the second that changes. It did so well it bought it's own office complex and runs exclusively off the income that generates + donations.
I am all past that. I am really looking at getting into small scale manufacturing of niche products. Sadly out side of reloads all of the niche products I have ex with/ enjoy developing/ building reloads are the only ones that would be me not dealing with the very wealthy( read that as pita) which I would rather. It do. It's also the only one that would require less then 250k start up costs.
I don't want too be that 100 hour a week guy any more.
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TAB, you touched on reloads having a "shady rep." again. Here is where marketing comes in:
Are you reloading? Are you manufacturing ammunition? Are you manufacturing specialty ammunition?
What is reloading? Reloading is using recycled brass, and manufacturing new ammunition.
Look at American Eagle. Do you see them pushing that they are reloads? After you notice different brass in the same box you can research and find that they use recycled brass, but that is not their marketing focus.
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Mike definitely has a point. Marketing will be the key. I think all anyone has to do is to look at Black Hills....
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I think what you're talking about is referred to as re-manufactured ammo. If you roll your own at home they're reloads, but doing it pro-style to sell I think they're called re-manufactured. As for how low the cost would need to be or how great the savings would need to be, depending on how you look at things, that's hard to say. If you can't guarantee the brass has only been fired once I wouldn't be very interested at all. I'm assuming you have a source in mind already, maybe a military or LEO range that only uses new ammo. A commercial range that doesn't allow reloads could be a possible source of brass, but it would be a mixed bag instead of thousands of one caliber.
One market that ammo must be really selling good for is long range rifle, but .224 Valkyrie, 6mm and 6.5 Creedmoor, , etc. empty brass isn't exactly littering the ground waiting to be picked up. If you're going into business you have to find your niche. If you want to avoid the expense of buying new brass that wouldn't be it, but you may want to look into the price and demand numbers there. If you figure out what people want and give them a good product at a good price your reputation will grow. If you build it, they will come. Then your only worry will be hiring someone to run the second machine.
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don't know the price of a Camdex but you might take a look at the MarkVII... sensors up the wazoo
https://www.markvii-loading.com/loading-presses/101-1023.html
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The the Camdex are about 38k. I did look at the mark7, the base model is like $5500. Once optioned out it's 13.5k. Still have a few operations you have to do on another machine/ manually compared to the Camdex. (7 station vs 11) It's also about 50% slower.
I wish I could say I have moved forward on this endeavor, I got as far as to get financing ready to go should I pull the trigger on it.