Ah, but selling and buying guns for collection purposes is lawful without a FFL. Those guys are selling "for money" but not "engaging in business."
It's not the selling that got him. it's the
manufacturing for sale. The guys I see at shows around here selling reloads are selling their own, so I assume they have a 06 FFL to manufacture, or else some fresh faced agent would have snagged them.
If you want to buy a bunch of Federal 5.56, and sell it for profit at a gunshow the feds don't care. Under a fuzzy, not determined by case law yet, number of Firearms you may do so without a license as well. I warn that context can be very important. The ATF has published letters that you can sell as little as one firearm, at a loss, and they will consider you "in the business".
You may not manufacture so much as one firearm, or one round of ammunition, (or a Destructive Device)
for sale without an FFL however.
It should be noted that DD's and AP ammo require a different, more expensive FFL then normal ammo.
Next ask me if an unlicensed individual can ever sell ammo or a firearm they have manufactured.
This guy is about to find out that it doesn't take very many sales at all for the ATF to want you to have a license.