How to Become a Registered Arms Broker

bizfluent article image

Legal Law Justice image by Stacey Alexander from Fotolia.com

It's no secret that selling weapons is lucrative, but arms brokering is a highly regulated industry that is often looked down on as sordid, dangerous and flat-out illegal. This negates all the legal arms dealers — the people who help our military get crucial firearms and ammunition and allow hobbyists to perfect their collections.

To become a legal arms broker, you need to get the proper licensing. This varies from state to state, so you'll want to check local requirements before you get started.

What’s an Arms Dealer Salary?

An arms dealer salary depends on the contracts and the merchandise, especially because brokers can sell everything from handguns to grenades and missiles. As with all industries, niche is super important. For example, international arms brokers can make more money selling arms in war-torn countries (where people have a life-or-death need for arms) than a casual arms broker in, say, a suburb of Florida who is selling at a gun show. Nonetheless, it’s not unheard of for an arms dealer salary to surpass a million dollars.

Some arms brokers, particularly the kind selling military-grade weapons and ammunition, can make multimillions. For example, in 2007, a pair of 20-somethings with almost no experience as international arms brokers managed to score a massive contract with the Department of Defense to sell $300 million worth of ammunition to the Afghan army. This isn’t typical, but it’s possible.

Make Sure You Meet FFL Requirements

Before you can sell arms of any kind, you’ll need to get a federal firearms license, or FFL. First, you'll have to meet minimum requirements set by the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) and your state. Every state varies, but generally, you will not qualify for a license if:

  • You’re younger than 21 years old.
  • You’re a felon or fugitive.
  • You’ve been convicted or are under indictment for a crime that can warrant more than a year in prison.
  • You’ve been committed to a mental institution.
  • You’re an illegal alien or renounced your U.S. citizenship.
  • You’re the subject of a restraining order.
  • You’ve been dishonorably discharged from the military.
  • You’ve been convicted of misdemeanor domestic violence.
  • You cannot pass a background check.

Of course, there are nuances to federal law and very specific zoning regulations based on state law. For example, if you live in a New York City apartment building, it is very unlikely that you’ll be approved for a FFL. Research the specifics before applying.

Pick Your License Type

The type of FFL you need varies based on what you want to do. For example, a Type 1 license will let you deal Title I firearms (pistols, revolvers and shotguns), while a Type 8 license will let you import them too. A Type 7 FFL will let you manufacture and deal firearms, and a Type 2 license will let you deal pawned Title I firearms. Consult with the ATF and pick the one that applies to your business.

Take an Online FFL Course

In order to get an FFL, you need to know the legalities of arms brokering. For example, there are very specific methods used to prevent straw purchases (when a person buys arms on behalf of a person who can’t legally purchase them). International arms dealers must also learn the international traffic in arms regulations.

Take an online course to get acquainted with the law. Even though a field investigator for the ATF will go over the laws with you at your in-person interview, a mess up could still be devastating.

Apply for Your FFL

In order to apply for your FFL, you’ll need to fill out a copy of ATF Form 7. You can get this from the ATF’s website. Depending on the state, you might also need to notify your local police chief and fill out an official notification form. After you complete these forms, you’ll need to get your fingerprints taken at your local precinct and then mail them with your application and application fee to the address listed on the form.

Once your FFL application is received, you will need to complete an in-person interview and a background check. If you pass, you’ll be granted your license.

Become an SOT

If you want to broker Title II firearms (which includes silencers, suppressors and full-auto machine guns), you must become a special occupational taxpayer (SOT). An SOT is a taxpaying entity (think: a business) that is registered with the federal government and allows you to have more than one type of FFL. In other words, you need a formal business structure like an LLC or S corp before you can cross this bridge.

SOTs have three classes that allow you to either buy and sell, make or import Title II firearms. You’ll have to pick that which applies to your business and take an online course. After you complete the course, you can apply for your SOT license with the ATF.