The goal of the Curio and Relic (C&R) FFL (Federal Firearms License) is to enable collectors to receive firearms classified as C&R from sources outside of the collector's state of residence by mail, without having to have the firearm transferred through a licensed dealer.
Prior to the Gun Control Act (GCA) of 1968, individuals could ship and receive firearms directly to each other across state lines. With the GCA, individuals could no longer directly ship to or receive from other individuals. All transactions across state lines required one of the parties to be a licensed dealer, manufacturer, collector or importer.
In order to sell a firearm to a resident of another state, the seller has to ship the firearm to a dealer in the buyer's state, and the dealer would then have to transfer the firearm to the seller. The result is that the transaction now appears on the dealer's bound book, thus making the tracing of firearms possible. Some dealers also require the seller to have the firearms shipped by a licensed dealer in the seller's state, but that is not required.
An individual may also ship to a manufacturer for repairs, and is able to receive the firearm back directly.
The C&R license allows a seller, which need not be licensed, to sell and ship a firearms classified as C&R to a licensed collector. The license is for the benefit of the collector, who need not engage a local dealer to handle the transfer.