Drop in FFL numbers in the 1990's.

[Joseph E. Olson]

"The number of gun dealers in the United States has plummeted 78 percent in the past 10 years as tens of thousands of home-based dealers surrendered their federal licenses." http://www.startribune.com/484/story/322320.html   IMHO, the single major reason for the hugh drop in the 1990's was the clarified and more objective definition of "dealer" in the NRA-backed 1986 Volkmer-McClure Act.  Prior to that, ATF had great success in convicting (and/or threatening) people who sold any more than two (2) firearms in a year.  Any gun seller might fit under the "loose" definition in the 1968 Gun Control Act.    ATF's advice to anyone who inquired was "get an FFL, it's only $5" and a hugh number of persons who never were "real" dealers got a FFL (and had to keep records, etc.).  So pre-1993, the vast majority of FFL's were held by ordinary non-dealers.  When the fee increased by 40 times AND there was no further threat that a few sales from a personal collection would lead to a federal felony conviction, most FFL holders saw no need to continue their licenses.    They never really needed one and they certainly didn't now.  So they dropped out of the system.  That probably accounts for over 95% of the non-renewals.

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