Loki Research
Motor Manufacturer
- Joined
- Aug 20, 2011
- Messages
- 1,409
- Reaction score
- 595
You must not fly high power. Loki is more like an old MOPAR, HEMI powered, NITRO fueled, top fuel funny car that was built for one purpose only...... to BLOW YOUR DOORS OFF! That's how I envision it in my mind anyway. ;-)
Loki has the 3 largest 38mm motors, the 2 largest 54mm motors, and the 2nd & 3rd largest 76mm certified motors available today.
KenECoyote said:
Ken, as for the health of the hobby, I could not disagree with that statement more. The rest here is NOT directed at you, but the readers in general.
While these types of people are saving their money months ahead of time for FIRE sales, the small manufacturers & vendors are starving for money they have to have in order to pay purchase orders, rent, bills and other required overhead. During that time, these same manfs & vendors are forced to have their own sales at lost profits just to cover overhead and keep some kind of cash flow going. Most vendors didn't jump on the FIRE sale bandwagon because they thought it was some great idea. No, they were forced to because they had no choice. They realized that if they didn't participate some how or compete against it with their own FIRE sales, they would be left high and dry without any money coming in for many months. If they don't get any or enough cash flow at any period of the year, their business starts going down, or like What's Up Hobbies, a former large west coast vendor, they start selling things off and then closed the doors. It wasn't worth his time and effort just to compete, survive and break even. You must make a profit to do this, and a healthy one to grow.
I myself brought this topic up here about 3 years ago. My concern was the same, the health of the vendors, the hobby and the health of Loki Research. Somehow I have managed to survive but it has been very difficult. If I didn't love what I do, and love being my own boss so much, I probably would have thrown in the towel by now. I have watched as retail prices for HP reloads have been slashed up to 45%, well below my own dealers cost line. I have watched as sales to dealers have plummeted.
Oct 2008-Oct 2009 (the year I worked for Jeff Taylor) dealer sales accounted for 40.73% of all hobby rocketry sales. If you counted the sales I had myself as a "dealer" at MDRA launches, that figure would likely be 45% or higher.
Oct 2013-Oct 2014 dealer sales accounted for 11.94% of all hobby rocketry sales.
Now here's the kicker, my gross sales for both 1 year periods were THE SAME, only I did 29-33% more of the work in sales to customers. The customers have bought the same dollar amount of Loki products, but more so directly from me rather than through dealers. Actually, customers have bought MORE Loki product, because the sales that I have seen in that time period have been at steeper pricing discounts. I have been forced to have sales direct to customers just to keep the cash flow going, keep my bills paid, and develop and pay for new products to keep up with the flurry on new motors flooding into the market. Can someone tell me how my own direct sales have not hurt the vendors who sell Loki Research products? I am sure they have, but when the choice is beg and plead that a dealer buy my product and likely go out of business, or go sell it to the customers myself, pay my bills and keep the doors open, the decision is very easy.
Can anyone tell me how products sold at 45-50% off does not hurt your local small field vendors ability to remain in business? These are vendors that are essential for both new and old clubs to grow, vendors who are essential for the hobby organizations to grow. I have had conversations with dealers on and off for the past two years, telling them if they can't pick it back up, the only option I will have left is to cut them out and sell direct to customers at lower retail prices in order to compete. Do I really want to do that? HELL NO, of course not! But if they aren't moving enough products fast enough, I would have no choice. Why have they not been moving the products? It's simple, because the dealers as a whole aren't making enough profits to afford the inventory, because the market keeps getting flooded with too much cheap products. Too many people save up ALL their AP motor and rocket kit money for these stinking FIRE sales. Do I like them? Of course I don't. It has hurt my business and my dealers businesses greatly. Customers spend almost their whole wad to stock up on goods for the entire year. When I or my dealers have a sale on our websites at 20-25% off, you would be amazed how very few people take advantage of them. That's pretty sad that a 20% off sale does not create much if any interest. I have been told by many, I can't afford it, I spent all my AP money at Black F/S, and there are many more I know who won't buy it because it's not discounted ENOUGH. They know full well if they wait till November, they can get something similar for 10-20% less, less than what my own dealers pay me for my equivalent reloads. How is this healthy for the hobby? Fewer but larger dealers and/or manufacturers are more detrimental to the growth of this hobby than having many more smaller dealers &/or manfs which are spread out over numerous fields and areas.
In my opinion, these sales are done mostly out of greed for customers money, fuel for their ego, and to drive all others out of business. There is no other reason that I can imagine which would justify selling a regular (not brand spanking new) rocket kit at 50% off a retail price or a HP rocket motor at 45% off retail, at a known time you can set your clock to, every year. Discounted prices for increased volume purchases do NOT, I repeat DO NOT account for that steep of a retail pricing discount. I know someone can probably come up with enough excuses to make your head spin and confuse you beyond believe, but simply put yourself in my shoes and their shoes, then ask yourself why you would continually do the same with your own business year after year. The business owners here know the answer to this already. I'm not making excuses here, I'm making factual statements. These are NOT FIRE sales for newly released TV's, electronics, BlueRay discs and other junk mass produced by the millions in China for the entire world to consume. This is a very fragile niche hobby market that is closely scrutinized by government alphabet agencies with many suppliers and land owners scared to death about liability risks. Just this week, the curative which Aerotech sells and uses to cure their propellant is currently unavailable to them because of a liability issue. They don't know when of if they will be able to get it again. That is a HUGE deal, to them, to me, and to many EX hobbyists. It's a MAIN ingredient for making propellant and they can't get it! When running a business on low profit margins just to stay alive and competitive, an issue like that is like having a cardiac arrest. Not that this is Aerotech's situation, but my point is, having a healthy running business is very important in order to weather and survive issues like this that can and always do come up.
When 9/11 happened, you guys remember how we couldn't fly rockets for many months??? (at least that's what I remember) Remember the arbitrary and capricious BATFE ruling on APCP, where for 10 years you had to have a LUEP in order to purchase and store APCP motors? Those two things happened during a time period which I think everyone here would agree was an extremely healthy time for the hobby. If either of those happened today, it would completely freak me out, along with a whole lot of others, and I am certain you would see some doors close up for good.
This issue is very important to me and yes, it bothers me dearly. Those motors I mentioned up top of this post..., that top motor list would be even larger right now if 50-60% of my sales had went to healthy dealers and those dealers were selling it all at retail. They haven't been buying it for one simple reason. They haven't been able to afford the inventory because their profits have been very slim at best. Their money has been mainly tied up in their current stock and the only thing they have been able to afford consistently are the items they know they need for certain, the items that always sell, and the items people have already placed orders to buy. If dealers sold all their stock at retail, there would be even more dealers because it would be well worth their time to carry those products, even the ones that weren't top sellers. (those are the items your dealer never seems to have in stock which the minority of people want) I am very fortunate that I recently picked up another dealer, very fortunate indeed, because for a while there it looked like things were going the other way, away from having any dealers at all. More sales to dealers equals more time for me (less time packing/shipping/billing/emailing/caring for individual customers orders), more time equals more money, more new developments and more newer/better products. Profit is not a dirty word, but greed is. Healthy profit is required to pay for overhead, new product development and new growth. It is also a must in order for new competition to enter the market place. Competition is good for the market and good for the customer. Competition is the opposite of allowing only a sole vendor at your field because they made you a "deal". Overall from what I have seen and the talk I have heard, HPR has not seen healthy profits in about 3 years I would say, and they have steadily gotten worse with these FIRE sales. I can not speak at all for MPR or model rocketry.
John Beans, your post was most excellent and I agree 110%. If I had the money to endure for the long run, and I didn't have products in direct competition with my own priced so ridiculously low, yours is the business model I would follow. Staying afloat has forced me to do otherwise.
Despite all this I have posted above, I have somehow survived. Loki Research's business has slowly been growing from a lot of my own hard work and the help of my customers and dealers, but much slower than it should be. Growing only means the work has gotten that much harder and the hours that much longer. As hard as the work has been though, as long as the hours, days and weeks have been, I am still here. Thank God! If I am lucky, I will have one part or full time employee by this time next year. So if you see me at Airfest, keep in mind, it is my vacation for the year. It's the only one I get. I am going to let my hair down and have as much fun as the KLOUDBusters will let me have.
If my dealers or I are out of stock on something, you'll have to buy it faster the next time it is in stock. If you buy from us at all, we will be grateful for your support. If you pay us retail, know that you are helping us to cover not only the cost of the product, but the long trip to the field as well. This year, I'll be camping to save a few bucks and enjoy the stars above.Lastly, this is an extremely important topic of discussion for the manufacturers, vendors and customers alike. It is equally important to all of us in different areas, in one way or another. What one of us thinks may not agree with what another thinks and that is to be expected, but disagreements and heated passions are by no means any justification for locking this thread. Locking this thread, or any like it will only add discontent for the forum and those trying to run the show. If you want healthy vendors and manufacturers, keep these lines of discussion open always, so that everyone can see all sides of the chess pieces at play and make informed conscious decisions about how they spend their money and why.
