Estes: betting the business and the hobby on... retail?

[jhill9693]

I recently turned my side hobby into a side hustle and officially started up New Century Rocketry (newcenturyrocketry.shop).

It was easy at first. Just go to b2b.estesrockets.com, sign up, and boom, within 2 business days I was an approved dealer with access to purchase at wholesale. No one said a word about MAP pricing, and I wasn't asked to sign anything other that what was in the web form. There was a check box that made some vague reference to "terms" and so I inquired by email what those terms were. The response: "minimum order is $150, and free shipping over $750." That was it. So for about 4 weeks I did my thing. Ordered a couple cases of catalogs. Sponsored TRF. Started a catalog promotion and getting the word out.

I already had some stock, mostly from people who were getting out of the hobby and/or getting out of the hobby business. I placed an order or two for additional items from Estes, and received the first order.

By the time the new Shuttles came out, Estes started giving me the run-around. First, I was asked to sign two new documents, one of which is their MAP pricing policy. Happy to do that. I was rewarded with the news that "you didn't follow our MAP pricing policy, so you're no longer a dealer." Well, I complied immediately (same business day) when I was told, so you can imagine how chafed I was.

I attempted many emails, eventually culminating in visiting Estes HQ in person in Penrose, CO. I didn't have an appointment. No one would see me. But... I scored some biz cards for Estes top brass. So I reached out to the president, and got referred to the vice president. After a couple days, I finally got to speak with her on the phone.

It was a good, amicable conversation. But the answer was clear: no. Because, Estes is pivoting. They have a new business plan. And that business plan is retail.

They specifically are cutting off many e-commerce only dealers, and I expect more in the future.

They almost cut off Hobby Lobby. It's no accident that you saw massive clearance, and now their stock items are less, and the clearanced items will never be coming back.

I would love for the days of my youth to return, when you could find a reasonable amount of Estes product stocked in every Wal-Mart, Toys 'R Us, K-Mart, oh and there were not one but THREE really awesome hobby shops (HobbyTown USA, and the like) within an hour's drive.

It does seem like Estes is trying to go back there. But so far, I can't name a single Estes retailer other than Hobby Lobby within a THREE hour drive of me. I can only name TWO really awesome well stocked retail hobby shop within FOUR hours of me—HobbyTown USA in Augusta, GA, and Atlanta Hobby in Cumming, GA. I happen to be about equidistant between both. Surprisingly, nothing much in any other major city in SC, GA, or NC that I have found.

This, and the fact that no vendors regularly and reliably patronize ROSCO/ICBM in SC, were reasons for starting up New Century Rocketry.

Only to have Estes cut me off.

Unless I open a retail store.

Which I can't afford to do unless someone has some languishing retail space somewhere that they are willing to essentially donate.

And even then, Estes Global Sales Director made it clear that they screen applicants for "good product-market fit"—meaning, they reserve the right to still say no, even to retail businesses.

I debated whether to say anything. I LOVE ESTES. I really do. But I hate that they are trying to be the only e-commerce game in town, at a time when the market has moved on from retail categorically, and shipping prices are very onerous and getting worse.

This ad in the latest issue of Sport Rocketry couldn't be any clearer: estesrockets.com is the only place they want you to order online.



Note the bottom right: "Available at your local hobby store (??) or EstesRockets.com"

It's not just me that have been cut. I can name two others you'd recognize that have either had their dealerships revoked or downgraded recently. And a third one that is doing massive clearancing which suspect is for the same reason.

As of right now, I have no available sources for new Estes products. Luckily, I have quite a bit in stock, and will no doubt continue to find more. But without being able to order from Estes, the time may come when I have no choice but to drop them.

And what of the retail? Is WalMart, Ace Hardware, or some other retailer in my town and nearby towns going to start carrying Estes? That would be nice, but it hasn't happened. And I don't think it will, after Hobby Lobby's partially unsuccessful re-negotiations, which the other big retailers probably know about.

Add to that Estes ongoing and very obvious internal communication and execution issues, from approving vendors only to reject them days later, to sales personnel being on three different sheets of music, to the near-impossibility to get anyone at Estes on the phone, to their very inconsistent and often unsatisfactory customer support request handling—these things have me legitimately worried about the future of this company that has been the cornerstone of the hobby for so many decades.

It's really hard for everyone in this business. Those who are doing it are doing it primarily because they want to. I want Estes to succeed. I want to see their products more widely available from a retail perspective. But I also think they are ignoring some clear signals in the industry and have some internal laundry to sort out.

I hope they can make this work.

I hope they don't take this wonderful hobby down with them on a bad bet poorly executed.

Please, do not use this thread to air all your random grievances with Estes. I don't want to start a bash-fest. I'll be asking the moderators to keep this thread on topic.

And especially, if you have any USEFUL advice for those of us in the business, I'd love to hear it!

 

[jhill9693]

Related to this business change:

• Nov. 4, 2023 - AC Supply discount https://www.rocketryforum.com/threads/ac-supply-no-more-discount.182977/
• Mar. 5, 2024 - Hobby Lobby clearance https://www.rocketryforum.com/threads/hobby-lobby-clearance.185160/

 

[mh9162013]

Hmmm, interesting information, thank you for sharing. Best of luck with your business.

For the reocrd, I haven't seen any Estes products sold in person, except for thrift stores and yard sales (I've never been inside a Hobby Lobby).

 

[SolarYellow]

There is one traditional hobby shop within the area where I do most of my shopping. It has one end cap worth of Estes stuff, about 1/4 populated. Almost everything is at full MSRP, and what isn't is close. It's kinda silly to see the same products there that I can buy any day of the week closer to my house at HL for a lot less.

Bottom line for me, if the price of this stuff was Estes' full MSRP, it wouldn't be worth it. I'd just fly the other brands and more expensive stuff, bought at the prevailing discounts. $15 for a frankly crappy 29mm BP motor or $9 for a CATO-prone E12 and I'm flying the other guys, all the way.

I expect Estes will end up with all of a much, much smaller pie in the end. I really hope that shrinking of the pie doesn't mean shrinking of the hobby in general. Potentially, I see this being great for AT/Quest, and hopefully, it opens up the space for small guys with fewer layers of overhead to enter and innovate.

I could write a lot more, but I'd rather spend the time building rockets.

 

[cerving]

Nobody outside Estes knows what percentage of their business is from die-hard hobbyists and how much is from mom and pop buying a launch set for their kid's birthday. Judging by their recent releases, it may be leaning a bit towards the hobbyists... who spend more, and come back.

There aren't many traditional hobby shops left... online discounters have pretty much killed them off.

 

[MarsLander]

online discounters have pretty much killed them off.

I don't believe that killing off the online discounter's access to Estes products will bring back traditional hobby shops...

 

[mh9162013]

I don't believe that killing off the online discounter's access to Estes products will bring back traditional hobby shops...

I tend to agree. I think a changing generation/society is what killed off traditional hobby shops, not cheaper prices that can be found online.

It also didn't help that so many local "mom and pop" hobby shops were filled with...let's just say employees who lacked customer service skills.

Honestly, now that I think of it, when I think about my interactions with employees at Big Box stores and other types of hobby-related shops (quilting, art, colletible trading cards, etc.) the R/C, model and rocket hobby shops (a la Hobbytown USA) had a high percentage of rude employees.

 

[SolarYellow]

There aren't many traditional hobby shops left... online discounters have pretty much killed them off.

I don't believe that killing off the online discounter's access to Estes products will bring back traditional hobby shops...

There's a heck of a lot more to it than pricing. For a niche activity like model rocketry, or what any hobby has become in the information age, it's simply not possible for a B&M store to stock enough SKUs to be competitive. Places like ACSupply and Hobbylinc can put up some stock of a large number of SKUs because their audience to sell those SKUs to is nationwide, thanks to the internet. Having that reach enables them to access enough customers to move the products. It takes an investment in inventory and selling tools (web site, pulling/packing/shipping facilities and personnel, etc.) to run that business. But even at that, there are slow-moving SKUs and faster moving SKUs. But they can operate out of a lower-overhead facility. Their inventory can be stored where and how it's most efficient for pulling and storage; the storage of the inventory doesn't have to double as advertising. It's not infeasible for them to bring in one or two things that they know will be slow sellers, just so they can have a more complete offering and therefore more impressive web site.

In contrast, even in a major metro area, a retail hobby shop must be located in customer-accessible retail space. The bigger the metro area and the better the location with the more traffic potential, the higher the cost per square foot. They must stock and display what they think will sell. There are real costs per square foot of shelf space per day associated with every one of those decisions. They must choose not only profitable, but the most profitable products per square foot/inch of available shelf/display space. They can only afford to stock a limited selection. Model rockets are bulky and low-value compared to many other hobby goods, even when priced at full MSRP.

Having a hobby shop able to get anything from a distributor just doesn't cut it. Having to drive to the shop, deal with an ignorant salesperson, manage to communicate to them what you want, shutting down their attempts to steer you to what they actually have on the shelf that isn't what you want, pay full price, and then drive home, wait for it to come in, drive back, etc. is just not going to happen in 2024 and beyond. Not when I can order it online and bypass the hobby shop completely. Most online sellers can ship me the product just as fast as the hobby shop would get it, and I don't have to leave the house. Even ordering from Estes and paying $10 for a pack of motors or one rocket kit to be delivered is better than the nearly two hours lost doing that dance with the hobby shop. And that ain't happening.

At the end of the day, the value proposition is based on putting the product I want in my hand. Whoever can get that done the cheapest with the least hassle gets the business. That's how "the market" works. Estes can't operate in a vacuum and take model rocketry back to 1986 when the rest of the world, including all the other hobbies a person might enjoy, are operating in 2024.

ETA:
I'd be a lot more enthusiastic about Estes' web site if it had everything on it. All the parts, etc. Having some things freely available at the .edu site but only there, and most things not available there, is lame. Knowing, as I now do, that they have plenty of inventory of various things I might want, but show it as sold out on the web site and won't make it available, is lame. When it goes up as available and then disappears, and then comes back and then is gone, when all the while it's been in stock in significant quantities, is super annoying and makes it impossible to plan builds around their products. For example, having unique airframe tubes and couplers like the PSII stuff or BT-65 flip flop back and forth between apparently gone forever and plenty available, come and get them, makes it impossible to plan future builds involving them.

Also, it would be great to have access to more of the parts a-la-carte. Having to buy two or three nose cones I don't want to get the one I do is lame, as is being unable to buy nose cones I'd like to mess with. I've done bulk buys of 3- and 4-in Red Max nose cones, as well as the PNC-80s. I'm sure I'd have collected a bunch of Big Daddy/Doorknob cones for the build inventory by now if I could get them without also buying a whole rocket kit that I don't want. A lot of the ARF nose cones are not only different/better shapes, they are actually much nicer parts that require less finishing to paint properly because they are injection molded rather than blow molded. It would be neat to be able to buy fin cans and fins separately, so I could choose the color, shape, and quantity of fins I want, and put it with the airframe and nose cone I want, etc. Because Estes won't do that, I just wait until someone is discontinuing their product and then buy in bulk at deeply discounted prices, viewing the kits as essentially random parts assortments, rather than as kits.

 

[smstachwick]

I recently turned my side hobby into a side hustle and officially started up New Century Rocketry (newcenturyrocketry.shop).

It was easy at first. Just go to b2b.estesrockets.com, sign up, and boom, within 2 business days I was an approved dealer with access to purchase at wholesale. No one said a word about MAP pricing, and I wasn't asked to sign anything other that what was in the web form. There was a check box that made some vague reference to "terms" and so I inquired by email what those terms were. The response: "minimum order is $150, and free shipping over $750." That was it. So for about 4 weeks I did my thing. Ordered a couple cases of catalogs. Sponsored TRF. Started a catalog promotion and getting the word out.

I already had some stock, mostly from people who were getting out of the hobby and/or getting out of the hobby business. I placed an order or two for additional items from Estes, and received the first order.

By the time the new Shuttles came out, Estes started giving me the run-around. First, I was asked to sign two new documents, one of which is their MAP pricing policy. Happy to do that. I was rewarded with the news that "you didn't follow our MAP pricing policy, so you're no longer a dealer." Well, I complied immediately (same business day) when I was told, so you can imagine how chafed I was.

I attempted many emails, eventually culminating in visiting Estes HQ in person in Penrose, CO. I didn't have an appointment. No one would see me. But... I scored some biz cards for Estes top brass. So I reached out to the president, and got referred to the vice president. After a couple days, I finally got to speak with her on the phone.

It was a good, amicable conversation. But the answer was clear: no. Because, Estes is pivoting. They have a new business plan. And that business plan is retail.

They specifically are cutting off many e-commerce only dealers, and I expect more in the future.

They almost cut off Hobby Lobby. It's no accident that you saw massive clearance, and now their stock items are less, and the clearanced items will never be coming back.

I would love for the days of my youth to return, when you could find a reasonable amount of Estes product stocked in every Wal-Mart, Toys 'R Us, K-Mart, oh and there were not one but THREE really awesome hobby shops (HobbyTown USA, and the like) within an hour's drive.

It does seem like Estes is trying to go back there. But so far, I can't name a single Estes retailer other than Hobby Lobby within a THREE hour drive of me. I can only name TWO really awesome well stocked retail hobby shop within FOUR hours of me—HobbyTown USA in Augusta, GA, and Atlanta Hobby in Cumming, GA. I happen to be about equidistant between both. Surprisingly, nothing much in any other major city in SC, GA, or NC that I have found.

This, and the fact that no vendors regularly and reliably patronize ROSCO/ICBM in SC, were reasons for starting up New Century Rocketry.

Only to have Estes cut me off.

Unless I open a retail store.

Which I can't afford to do unless someone has some languishing retail space somewhere that they are willing to essentially donate.

And even then, Estes Global Sales Director made it clear that they screen applicants for "good product-market fit"—meaning, they reserve the right to still say no, even to retail businesses.

I debated whether to say anything. I LOVE ESTES. I really do. But I hate that they are trying to be the only e-commerce game in town, at a time when the market has moved on from retail categorically, and shipping prices are very onerous and getting worse.

This ad in the latest issue of Sport Rocketry couldn't be any clearer: estesrockets.com is the only place they want you to order online.

View attachment 644532

Note the bottom right: "Available at your local hobby store (??) or EstesRockets.com"

It's not just me that have been cut. I can name two others you'd recognize that have either had their dealerships revoked or downgraded recently. And a third one that is doing massive clearancing which suspect is for the same reason.

As of right now, I have no available sources for new Estes products. Luckily, I have quite a bit in stock, and will no doubt continue to find more. But without being able to order from Estes, the time may come when I have no choice but to drop them.

And what of the retail? Is WalMart, Ace Hardware, or some other retailer in my town and nearby towns going to start carrying Estes? That would be nice, but it hasn't happened. And I don't think it will, after Hobby Lobby's partially unsuccessful re-negotiations, which the other big retailers probably know about.

Add to that Estes ongoing and very obvious internal communication and execution issues, from approving vendors only to reject them days later, to sales personnel being on three different sheets of music, to the near-impossibility to get anyone at Estes on the phone, to their very inconsistent and often unsatisfactory customer support request handling—these things have me legitimately worried about the future of this company that has been the cornerstone of the hobby for so many decades.

It's really hard for everyone in this business. Those who are doing it are doing it primarily because they want to. I want Estes to succeed. I want to see their products more widely available from a retail perspective. But I also think they are ignoring some clear signals in the industry and have some internal laundry to sort out.

I hope they can make this work.

I hope they don't take this wonderful hobby down with them on a bad bet poorly executed.

Please, do not use this thread to air all your random grievances with Estes. I don't want to start a bash-fest. I'll be asking the moderators to keep this thread on topic.

And especially, if you have any USEFUL advice for those of us in the business, I'd love to hear it!

Thank you for this information. Sorry about your business difficulties, it hurts to see that.

Personally, I’d love to see Estes stuff at Wal-Mart and the rest, but if the quest to open a retail channel is forcing out all these other fantastic people I’ve done business with and come to support through these last few years, I’d be pretty bummed.

I’m also rather shocked that the opinion of their customer service has turned so negative so quickly, it was somewhere around two or three years ago they were practically the best I’ve ever seen at any company. Hopefully at least that gets sorted out.

 

[jhill9693]

I don't believe that killing off the online discounter's access to Estes products will bring back traditional hobby shops...

Exactly my point.

 

[jhill9693]

Thank you for this information. Sorry about your business difficulties, it hurts to see that.

Personally, I’d love to see Estes stuff at Wal-Mart and the rest, but if the quest to open a retail channel is forcing out all these other fantastic people I’ve done business with and come to support through these last few years, I’d be pretty bummed.

I’m also rather shocked that the opinion of their customer service has turned so negative so quickly, it was somewhere around two or three years ago they were practically the best I’ve ever seen at any company. Hopefully at least that gets sorted out.

Bad customer service can kill a company if it gets bad enough. They really need to fix their internal and external communication issues stat.

 

[SolarYellow]

One interesting question is, "Who/what actually sells at MSRP these days?" Very high-end consumer goods with limited availability. Not cheap cardboard and plastic in plastic bags. Pretty much everything an ordinary consumer is going to buy has an "MSRP," and then the price it actually sells for. Home Depot and Lowes sell LG dishwashers with near-as-matters identical features but slightly different part numbers for exactly the same price. Costco comes in cheaper, but if you compare the specs closely enough, you'll see where Costco's buyers got LG to cut out content to get the price down. Everybody is claiming to discount it, but if they're all offering the same price, that's the price. Everybody knows the MSRP is just a funny-money number that the real price is calculated based off of.

I have been around for all the discussions (different industry, different business), so I'm pretty familiar with what Estes appears to be trying to do. But I don't think they have the power to change the universe in the way they seem to want to.

Another thought:
Estes rockets compared to other engineered hobby items generally don't hold up on a content-for-dollar basis. Look at the engineering, the tooling, the complexity and sophistication, the parts count, etc., that go into an entry-level Traxxas product, for example. The apparent value of the content delivered is orders of magnitude greater, while the price is only maybe an order of magnitude greater. And with that battery-operated stuff, you can play with it in your back yard until the batteries need charging, charge them for a few pennies of electricity, and go do it again. It doesn't cost several dollars every single time it's used for a few seconds. Even though something like an R/C car costs a lot more, it feels more worth it, as far as what you're getting. In short, no f'ing way is an Alpha III worth $24 when you look at what's in the bag/box, compared to what's in the box for anything from Traxxas. Especially when you know it's an essentially unchanged design for >50 years. The full launch set from HL for $21 kinda makes sense - not at $36 MSRP.

 

[jhill9693]

Estes rockets compared to other engineered hobby items generally don't hold up on a content-for-dollar basis. Look at the engineering, the tooling, the complexity and sophistication, the parts count, etc., that go into an entry-level Traxxas product, for example. The apparent value of the content delivered is orders of magnitude greater, while the price is only maybe an order of magnitude greater. And with that battery-operated stuff, you can play with it in your back yard until the batteries need charging, charge them for a few pennies of electricity, and go do it again. It doesn't cost several dollars every single time it's used for a few seconds. Even though something like an R/C car costs a lot more, it feels more worth it, as far as what you're getting. In short, no f'ing way is an Alpha III worth $24 when you look at what's in the bag/box, compared to what's in the box for anything from Traxxas. Especially when you know it's an essentially unchanged design for >50 years. The full launch set from HL for $21 kinda makes sense - not at $36 MSRP.

This may be why the few larger, better stocked hobby stores left stock so dang much R/C car products. I'd bet that if you broke down their revenue, rocketry is a small part of their current revenue. Would it always be that way, if they picked better stock? Maybe not. The market and profitability of HPR vs LPR is higher, and that may be why Aerotech seems to be doing great compared to Estes.

To your point, there is the real cost of a product, and there is the price that the market will bear. Many people confuse the two. Those who are more successful in business recognize that price should not be a mere function of cost, and also avoid those products where the cost approaches too closely to the price the market will pay.

It wouldn't surprise me at all if Estes is too close for comfort to that threshold. It would provide plenty of motivation to try to kill off all players in the internet price wars so that prices can rise. But again, the reason for those price wars is that the market as it currently exists won't bear the MSRP/MAP prices Estes is trying to demand. Add the pressures of inflation...

Think too long on this and the path forward for Estes is difficult to see on their current course. I wish I had the answer. But I don't see how killing every e-commerce store but their own is the answer. Nor is cutting back on the people who physically service organized launches.

 

[mikec]

One interesting question is, "Who/what actually sells at MSRP these days?"

Horizon Hobby (R/C planes, cars, etc) imposes MSRP for all of their dealers, online and B&M, and they seem to have done OK with that.

Hobbylinc still has all of their Estes stuff at 25% below list, will this be changing soon?

 

[Art Upton]

Horizon Hobby (R/C planes, cars, etc) imposes MSRP for all of their dealers, online and B&M, and they seem to have done OK with that.

Hobbylinc still has all of their Estes stuff at 25% below list, will this be changing soon?

Horizon Hobbies RC planes, I have a few, the MSRP is priced to be competitive to the street price of their quality competitors. Now Cheap junk sells for less, but Horizon E-flight is quality goods and what I have bought.

 

[cwbullet]

I will miss AC hobbies. They often had great deals. I think the higher prices will hurts hobby over time.

 

[SolarYellow]

To your point, there is the real cost of a product, and there is the price that the market will bear. Many people confuse the two. Those who are more successful in business recognize that price should not be a mere function of cost, and also avoid those products where the cost approaches too closely to the price the market will pay.

It wouldn't surprise me at all if Estes is too close for comfort to that threshold. It would provide plenty of motivation to try to kill off all players in the internet price wars so that prices can rise. But again, the reason for those price wars is that the market as it currently exists won't bear the MSRP/MAP prices Estes is trying to demand. Add the pressures of inflation...

Estes will still have to face the competition from Quest, AT MPR, little specialists like Semroc, etc. I assume that Randy's cost basis to put a kit in a bag is far, far greater than Estes', but by selling direct, he can put out more interesting products for competitive or better prices. And he isn't committed to the size of runs that justify having the work done in China, so he can do more variety, try more experiments, etc.

 

[mikec]

Horizon Hobbies RC planes, I have a few, the MSRP is priced to be competitive to the street price of their quality competitors. Now Cheap junk sells for less...

Very subjective. I think most people think HH is at least 25% overpriced, but are willing to pay because of real or perceived better customer service and QC. The few times I've tried their customer service I haven't been too impressed.

I tend to agree that Estes list price is too high, but I'm old and I think practically everything seems too expensive. To think that Quest/AT can compete with Estes is unrealistic, they have only a tiny fraction of the market share. I don't know what Estes is doing now, but people have been saying that Estes is doomed for one reason or another on this forum for decades, and they're still around...

 

[Art Upton]

I don't know what Estes is doing now, but people have been saying that Estes is doomed for one reason or another on this forum for decades, and they're still around...

Just like ham Radio folks saying Ham radio is dead for decades and decades so far

 

[Initiator001]

A thread like this appears on TRF at least once a year about the failings of Estes and its upcoming demise.

I have written and posted about the changes to the hobby industry over the past 30 years.
When you have the largest hobby distributor in the United States, Hobbico/Great Planes, with annual gross revenue over $200 million/year collapse and go out of business there is much more at play here.

Estes current Vice President and General Manager, Heidi Muckenthaler, came from the Sporting Goods industry. Estes management must have seen something in her background and abilities that could drive sales.

I would also like to remind folks that 'we' are not Estes primary customer. Neither are hobby shops. Estes primary customers are hobby distributors. These distributors are the ones that pay Estes for product. From there the distributors sell the product to hobby shops. Estes doesn't see a dime from hobby shop sales of their product.

The current and long time most popular hobby product line is RC cars/trucks. Rockets have become less of a revenue generator for hobby shops.
Everyone on this forum should make it a point to buy rocket products (kits, motors, parts) from their local hobby shop at least once or twice a year to let the owners know there is still a market for rocketry products. I do. Even so my closest hobby shop has had a 50% reduction in display space for rocketry and now only carries Estes and no longer stocks Quest.

There were approximately 4200 hobby shops in the United States in 1989. Today there is less than 1000 (Hobby Lobby, Michaels do not count). Estes gross sales were $49 million in either 1998 or 1999. That same time they were producing 14 million rocket motors/year. Now Estes sales are $5-$6 million/year (Or less) and they manufacture 3-4 million rocket motors/year.

Estes will survive just not as the company we remember from the 1960s/1970s/1980s.

 

[MarsLander]

Everyone on this forum should make it a point to buy rocket products (kits, motors, parts) from their local hobby shop at least once or twice a year to let the owners know there is still a market for rocketry products.

I live in a US top 60 metro. There is no "local hobby shop," Doesn't exist.

 

[Scott_650]

…I would also like to remind folks that 'we' are not Estes primary customer. Neither are hobby shops. Estes primary customers are hobby distributors. These distributors are the ones that pay Estes for product. From there the distributors sell the product to hobby shops. Estes doesn't see a dime from hobby shop sales of their product.

Once again, Bob hits the nail squarely on the head - we are a significant factor but we are not the driving one in whatever direction Estes is headed. Our enthusiasm may (probably does) provide impetus to the creative side of Estes but we’re just not much of a force for the business side.

I see the same type of conversations in the world of motorcycles - folks bemoaning that we don’t get the model or type of bikes in North America that we want. We used to be one of the big dogs in that world but no more - for example one month of 200CC and up bike sales in India are roughly equivalent to a year’s worth of US sales.

 

[Rschub]

Interesting to me that both ends of the hobby, Estes at nominally the top, and a pretty niche vendor like Loki are moving to the same model....

 

[n3tjm]

Just like ham Radio folks saying Ham radio is dead for decades and decades so far

No code exams is going kill ham radio.... Lol... It's been, what 30 years+ now?

But on topic, I think Estes is really shooting themselves in their foot here. They might survive, but I feel it will cost them greatly.

 

[mh9162013]

Once again, Bob hits the nail squarely on the head - we are a significant factor but we are not the driving one in whatever direction Estes is headed.

I used to agree with that, but now I'm not so sure. I imagine the 80/20 rule (aka: Pareto Rule) applies to model rockets, at least to some extent or in some shape or form? In other words, people like "us" (hardcore and consistent customers) make up a minority of the number of customers, but a disproportionate percentage of their revenue/income...maybe.

If it's not us, it might be "group" leaders, such as camp counselors, Scouting America leaders and teachers that fit the 80/20 rule. I'm going to try to estimate Estes' sales. I could be very wrong and I encourage others to provide their estimates.

For every 100 Estes kits or engines sold, I imagine:
- Customer 1: 40 are sold to parents, grandparents or anyone else who think a model rocket kit will make a great gift or pathway to an intereset in STEM for their kid, grandkid, neice, nephew, etc. The primary characteristic of this group is that they are one-time "organic" buyers Estes kits. What I mean is that they might continue buying more kits, but it's because "Little Timmy or Maggie" is asking them to, not because they want to themselves.
- Customer 2: 30 are sold to people like us.
- Customer 3: 30 are sold to teachers, Scout leaders, etc.

For every $100 in income (not revenue) generated by Estes, I imagine:
- $25 comes from Customer 1
- $45 comes from Customer 2 (it's because we buy more engines!)
- $30 comes from Customer 3

So Customer 2 is what Estes wants more of. But to do this, they need more of Customers 1 and 2 to introduce rockets to potential Customer 2s. And Estes believes having more retail sellers is better than having more online sellers in order to do this.

 

[Rschub]

My opinion is that sales aren't really driving this, it is the rising costs of shipping. Every time the product moves, it adds a large % to the price. Judging from this thread, we are quite a price conscious market, as I am sure Estes is aware.

The cheapest way to get the product in our hands is to ship directly.

Nowadays, kids are not introduced to things by their family members and acquaintances, they see them on online through influencers, or other links. They are perfectly capable of online ordering. I just signed up for Zelle through my bank, for instance. The app says it is suitable for age 4 and above.

 

[Scott_650]

I used to agree with that, but now I'm not so sure. I imagine the 80/20 rule (aka: Pareto Rule) applies to model rockets, at least to some extent or in some shape or form? In other words, people like "us" (hardcore and consistent customers) make up a minority of the number of customers, but a disproportionate percentage of their revenue/income...maybe.

If it's not us, it might be "group" leaders, such as camp counselors, Scouting America leaders and teachers that fit the 80/20 rule. I'm going to try to estimate Estes' sales. I could be very wrong and I encourage others to provide their estimates.

For every 100 Estes kits or engines sold, I imagine:
- Customer 1: 40 are sold to parents, grandparents or anyone else who think a model rocket kit will make a great gift or pathway to an intereset in STEM for their kid, grandkid, neice, nephew, etc. The primary characteristic of this group is that they are one-time "organic" buyers Estes kits. What I mean is that they might continue buying more kits, but it's because "Little Timmy or Maggie" is asking them to, not because they want to themselves.
- Customer 2: 30 are sold to people like us.
- Customer 3: 30 are sold to teachers, Scout leaders, etc.

For every $100 in income (not revenue) generated by Estes, I imagine:
- $25 comes from Customer 1
- $45 comes from Customer 2 (it's because we buy more engines!)
- $30 comes from Customer 3

So Customer 2 is what Estes wants more of. But to do this, they need more of Customers 1 and 2 to introduce rockets to potential Customer 2s. And Estes believes having more retail sellers is better than having more online sellers in order to do this.

Great analysis, however, the one point we all tend to gloss over is, outside of direct sales from the Estes company website, 100% of all other sales are to distributors. As Bob stated those are the folks who pay Estes up front - our money goes to those distributors, not to Estes. Even with the big retailers who act as their own distributors money-wise it's the same model.

I do find the original poster's experience troubling - regardless of the circumstances, the actions taken by Estes were at the least unfocused and seemingly arbitrary. Those are indicators that leadership is either conflicted or capricious - neither thing being a good thing.

 

[mh9162013]

I do find the original poster's experience troubling - regardless of the circumstances, the actions taken by Estes were at the least unfocused and seemingly arbitrary. Those are indicators that leadership is either conflicted or capricious - neither thing being a good thing.

Agree 100%. The impression I got from the OP was that Estes is incompetent at best and malicious at worst.

 

[mh9162013]

Nowadays, kids are not introduced to things by their family members and acquaintances, they see them on online through influencers, or other links.

Most (or a significant portion) of us here on TRF are BARs, right? What "conception event" allowed us to become born again to this hobby? I'm betting it wasn't online advertising and instead, it was seeing a product in stores or being reintroduced to the hobby b/c a kid, friend or family member was engaged in model rockets (or something close to model rockets).

For me personally, it was a combination of seeing a model rocket kit in person for sale (at a yard sale) and my child being fascinated with stomp rockets that he was initially exposed to from in person experiences.

 

[lakeroadster]

As a scratch builder of odd rocs, and an occasional 3/4 FNC upscale, I haven't placed an order for anything from Estes since the 1970's. I try to buy Made In America, so I do buy their BP motors, mostly 24mm, from our local Hobby Store, but it seems their new magical mix of their own BP has lead to a rash of CATO's.

Nostalgia aside, this topic leads me to the question: If Estes was gone tomorrow, would I really miss them?

Sad to say, I'm thinking the answer to that query is no. Aerotech has the motors I need, so there is no real need for Estes.