Back in the day, I was among the approximately 200,000 FFL holders who engaged in what you might call “casual business.” I was not a stocking dealer, I held no city or state business licenses, I collected no sales tax. I was a hobbyist, a basement bandit, a kitchen table dealer.

Or in the words of the late Bill Bridgewater of the now-defunct National Association of Stocking Gun Dealers, I was “pond scum.”

At the time—we’re talking in the ‘80s and early ‘90s—an FFL cost $10 a year and merely required that the license holder be engaged in business. I was editor-in-chief of American Handgunner magazine and I needed an FFL to receive guns to test for the magazine.

The fact that I bought a few of them and allowed a few buddies to order on my FFL was all part of the casual nature of my business.

The day of the hobby dealer has long past. Bridgewater and his organization successfully lobbied to amend the licensing procedure to require compliance with local and state business laws, including zoning laws.

Basement bandits like me almost universally used their homes as their business address, and Bridgewater argued that a business cannot be conducted from property that is zoned as residential. When the new FFL requirements went into effect, the hobbyist license holder was decimated.

From a top number of somewhere between 200,000 and 250,000 dealers, there are about 60,000 today with about 47,000 of these being Type 1 holders. Bridgewater’s stated goal was to drive the “pond scum” out of the industry so that legitimate store-front dealers, like the members of his Stocking Dealer Association, could be more profitable.

Bridgewater held the understandable, but mistaken, view that if the hobbyist FFL holders were eliminated, all the remaining dealers would immediately raise prices because there would be no more $20-over-cost competition. As a result, Bridgewater reasoned, the industry as a whole would be healthier because legitimate businessmen would be more inclined to invest in the retail side of the industry without having to worry about low-ball prices from the hobbyist license holders.

His plan worked, to a point. The hobbyist FFL holders were whisked away by a section of the '94 crime bill passed by Congress. But what about his larger goal of increasing the profitability of the retail side of the gun business? It simply never made any difference.

Bridgewater failed to realize that even without the “pond scum” competing with store-front dealers, there are still plenty of aggressive retailers who compete on price. I encountered a good example recently at a small, family-owned gun shop in Nevada.

I saw a new Colt 6940 law enforcement carbine on the shelf for $1,150. I was surprised because the rifle was among the first ones shipped from Colt, a proverbial “hot ticket” item.

“That’s a pretty good price you’ve got on that Colt 6940,” I commented.

“Yeah, it’s priced to move. I got one in last week and sold it the same day,” replied the store owner. “It’s only $150 over dealer cost. Good bargain. You interested?”

I declined, but I couldn’t help but throw in my two cents.

“That’s only about a 10 percent margin on a hot new gun. I would think you could get fifteen-hundred for a brand-new one of these,” I opined.

“Maybe, but then it’d sit on my shelf for awhile. I’d rather make a fast hundred-and-fifty. Sold the one I had last week the same day I got it,” he countered.

It seems that Bridgewater’s goal of increasing profitability hasn't worked out too well.