(I NEED YOUR OPINION!) looking in to Starting a rocket kit business...

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I use a sander, a knife and some sand paper for the finish. It's a lot of work, it'll take me 45 minutes to an hour just to make one. But, that is what makes this rocket special!
Thanks,

I am going to give you some tough advice here. Please think about this before making your decision. You are selling this kit for $15-20. That is right in the range for similar 3FN rocket kits from Estes and others. As far as I can tell there is nothing special about it. So, parts and packaging probably cost you $10. That leaves $5-10 in profit for the kit. Let's assume $10 to be generous. Paypal eats $0.90 off the top in fees so $9.10 total profit if sold for $20. It takes you 45 minutes to do a nosecone. I am going to guess you have about 15-30 minutes into the packing the kit and another 15 minutes in overhead talking to the customer and arranging shipping. So, you are making $9.10 in 1.5 hours. And that's not even taking into account additional hidden overhead costs. By the time you factor in returns, paperwork concerns, misc expenses, etc. I would think you would be lucky to break even even if you had enough to keep you busy full time for 40 hours.

Also, as a buyer of kits, I expect quality parts. A hand whittled nosecone with a cardboard coupler is half-assed in a my book and makes me question the quality of the entire kit. Why would I want to buy from you want I can buy a similar kit from say Fliskits for slightly cheaper and get a perfect machined turned balsa nose with it? Do yourself a favor and ditch the notion of making the parts yourself (unless you happen to have a 3D printer). The parts needed are available for decent prices in manageable quantities. That will bring your kit quality up and your labor invested down, which should raise your hourly rate to an acceptable level.

I highly encourage you to look at the thread where Dan Patel put together a new kit for sale: https://www.rocketryforum.com/showthread.php?140413-Mach-Buster-Rocket-Kit-Go-fast-on-a-budget! Study what parts he's offering as part of the kit, his pricing structure, intended market, packaging, how the kit is marketed. Figure out what your time per kit is and make sure your pricing can support a decent profit margin.
 
I am going to give you some tough advice here. Please think about this before making your decision. You are selling this kit for $15-20. That is right in the range for similar 3FN rocket kits from Estes and others. As far as I can tell there is nothing special about it. So, parts and packaging probably cost you $10. That leaves $5-10 in profit for the kit. Let's assume $10 to be generous. Paypal eats $0.90 off the top in fees so $9.10 total profit if sold for $20. It takes you 45 minutes to do a nosecone. I am going to guess you have about 15-30 minutes into the packing the kit and another 15 minutes in overhead talking to the customer and arranging shipping. So, you are making $9.10 in 1.5 hours. And that's not even taking into account additional hidden overhead costs. By the time you factor in returns, paperwork concerns, misc expenses, etc. I would think you would be lucky to break even even if you had enough to keep you busy full time for 40 hours.

Also, as a buyer of kits, I expect quality parts. A hand whittled nosecone with a cardboard coupler is half-assed in a my book and makes me question the quality of the entire kit. Why would I want to buy from you want I can buy a similar kit from say Fliskits for slightly cheaper and get a perfect machined turned balsa nose with it? Do yourself a favor and ditch the notion of making the parts yourself (unless you happen to have a 3D printer). The parts needed are available for decent prices in manageable quantities. That will bring your kit quality up and your labor invested down, which should raise your hourly rate to an acceptable level.

I highly encourage you to look at the thread where Dan Patel put together a new kit for sale: https://www.rocketryforum.com/showthread.php?140413-Mach-Buster-Rocket-Kit-Go-fast-on-a-budget! Study what parts he's offering as part of the kit, his pricing structure, intended market, packaging, how the kit is marketed. Figure out what your time per kit is and make sure your pricing can support a decent profit margin.

I probably won't use PayPal. I'm looking to use cash or check only. Yeah, the NC isn't perfect. I'm trying to do what patelldp did, a small business making only 5-10 kits.
Thanks,
 
Another piece of advice: "don't reinvent the wheel" and "get others to make stuff"

All manufacturers have suppliers. Some supply the raw parts, other produce parts to their specifications. In the case of your nosecone, there are people out there who are set up to produce these in bulk, with automated (or semi automated) machines. They will produce consistent pieces; one will look no different than another. It's what they chose to specialize in. Take advantage! They've invested in the tools and the time to learn how to make the part at a reasonable price. Same with tubes, hardware, etc..

Find suppliers who can supply you with the final parts you need, to the quality / spec you want. Don't rely on the prices you see from Apogee, Madcow, Estes, etc.. for your costs. You have to approach them and ask for quantity discount. Also, do your research. There are companies who supply these people. There are tube makers who supply Estes, Madcow, Apogee, etc.. (But don't expect them to tell you who they use!) You need to find them, and contact them directly. And, you won't find them here (On TRF)..

Also, there is a difference between piece cost / bulk / wholesale cost. (I can even start talking about OEM costing, but that's for later..) If you plan your costs based off what I would buy 1 for, you won't make any money. You, as a company, who wants to sell kits, needs 1) a lot of the same part! 2) to pay less than what I would pay. When you buy in bulk, the cost per part is always cheaper. And you can always negotiate a cheaper price because of the large volumes (and repeat business) expected. 'In volume' purchasing of parts will also come with price breaks. For example: If I order 1-50 pieces, my cost will be $1.00. But the supplier is offering me price breaks at 50, 150 and 500 pieces. That means if I order 51-150 pieces, I will probably pay $0.85 per part, not $1.00. And if I commit to 501+ pieces, the price will probably drop to $0.75 per piece. Remember, he sells this part to the public for $1.75.. Call them, ask for quotes..

Find a tube manufacturer for your tubes. (Euclid)
Find a hardware supplier for your hardware (Fastenal or Auckland Granger, not Home Depot)
Find a packaging supplier for your bags & boxes (Uline is a good one, not Zip lock bags from Kroger)
Find a laser cutter for your fins & centering rings (LazerLizard comes to mind, but there are others out there..)
Nosecones are tough, because they are unique to our hobby. But people out there will make you deals based on volume.
Create a costing sheet. analyse what you get!
 
Andrew, it pains me to be a naysayer here, but you need to take a step back and think about this.

Two things come to mind:
#1, At this age you need to focus on doing well in school. Even if your business is successful, it will take up your time and you wouldn't be able to juggle both.
#2, Focus on having fun with the hobby. Trying to profit from it right off the bat might burn you out and ruin the fun.
 
I probably won't use PayPal. I'm looking to use cash or check only. Yeah, the NC isn't perfect. I'm trying to do what patelldp did, a small business making only 5-10 kits.
Thanks,

I would strongly reconsider. The turn around time on a check/cash is at least a week (3-4 days to you then 2-3 to cash). It's a pain in the ass for the consumer and doesn't come with ANY risk mitigation. Not to mention it is about $1 to the total cost ($0.40 for a check, $0.60 to mail). By using PayPal or a card card processing service the customer 1) sends funds instantly without wait 2) has a piece of mind knowing that if you don't deliver they can get their money back and 3) knows that the funds got there. 95% of people are not going to want to pay cash/check and you are going to really drive down your sales.

Again, I applaud your effort. I was merely pointing out that making your own nosecone doesn't make any sense given the amount of time you spend making each nosecone and the perceived sub-standard quality of the cone. Quality matters and you need to be prepared to make the investment. Things like the peeling cardboard nosecone shoulder, the hand drawn image of the rocket on the cover, and the use of common to the household but very expensive for business Ziplock bags will hurt your sales. Dr. Wogz just gave you some very timely advise on sourcing parts that I suggest you take.
 
I probably won't use PayPal. I'm looking to use cash or check only. Yeah, the NC isn't perfect. I'm trying to do what patelldp did, a small business making only 5-10 kits.
Thanks,

again, I applaud your effort,andrew. one thing,though, that patelldp did was use a printer for his nose cones.i purchased 2 of his kits and theyre very nicely made and I don't think much labor(manhours) into them. its awesome that you want to make the nosecones yourself. im thinking that if you wanted to make your own balsa nose cones, a lathe would come in handy.you could get a benchtop lathe and probably kick out the nosecones a lot quicker and more accurately.
 
Andrew, I'll tell you want. You fix the nosecone to make it a well produced single piece part and I'll buy a kit from you. I'll pay you through PayPal and I'll even send you an extra $1 to cover the PayPal fees. I'll even do a build thread on here for you.
 
Andrew, most rocket people are extremely anal. I know I am. I go to great lengths to make my junk look great. I want other fliers to secretly be jealous and I suspect I am not the only one. I appreciate the gumption you have but trying to sell a buggered up nose cone to a bunch of detailed oriented people is just not going to work. People here flip out if they receive a kit where there is a small cosmetic defect. Selling them anything less is expecting charity and nothing more. Spend your time and effort making things for you and get darn good at it, I suspect you will have more fun.
 
To further my comments, I’ll add this. I did make a comment that you should l put together a costing sheet. I’ve included a sample based off one I did a few years ago when I thought of producing a few kits. It gives you a quick list of all that’s needed to see if a kit is profitable, and if you can expect to make anything! Also, if gives you an idea of what you can change to increase (or decrease) your end results. This is also the start of your ”business plan”. It shows you have put thought into the endeavour, that you are looking at what is involved, and it’ll show you what questions you need to ask!

Look at the costed BOM (Bill of Material). I’ve included all the parts I need, and that I have included a few suppliers for some parts. I’ve made an initial choice, based on the notes, and what I think is right. (I’ve chosen one of the three tube suppliers, same with some other items) At the bottom of the parts list ‘cost’ is my cost, what I need to spend to put a kit together. I’ve then chosen a 15% markup. (this is to I can make some money) My immediate first pass results show a negative profit. Not good. I can now look at a few options / scenarios. The parts really can’t changes, they are my fixed costs. The only real flexibility is my time ($15/hr) and if I include the sticker. I can see a few parts are cheaper if I buy in larger volumes, but do I have the cash (and storage space) for 100 nosecones? Also, I can lower my mark-up. And, finally, I can say that shipping & handling (packaging) is extra and/or include it in the shipping price. These can all alter the last line, my net profit in some way or another.

You might also find out that going with a 16” tube greatly reduces the cost of the BT (your supplier is charging you for a specialty tube, but has the 16” readily available). Or that the local flower shop receives their flowers in perfectly sized boxes with no markings (ask to have them!). Or even that buying a new printer and label paper reduces the label & instruction printing costs down to a few pennies.. Planning to visit launches, and sell them there instead of on line can also further help reduce costs. (maybe you have 4 clubs within an hour’s drive from you, or you & your dad like taking long drives to discover new places.) maybe, even the local hobby shop is willing to take a few kits, and sell them for you , either on commission or he becomes a reseller for you!

Don’t forget, that for your initial 20 kit offering, you’ll need to put out $177.80 (20 x $8.89) just to get the parts in house. And you’ll probably need to pay for shipping of some (most? All!) of the parts. That’ll further drive up your costs. (you may then need to include the shipping costs spread out over the quantity of parts you received. If the tubes you got were $0.75 per tube, and you got 25 tubes, and it cost you $15 to ship them, your total cost per tube is $1.35 landed cost ($15/25 = $0.60 shipping per tube. $0.75 + $0.60 = $1.35 per tube)

Learn Excel or another spreadsheet type program. It helps you organize your lists and costs. (It’ll even do the math for you!!) Learn Word or other word processor to get “professional” looking documents. You can even use it to print stickers, mailing labels, and invoices.

The bottom line is, know what you’re selling, know what goes into the kit, and know what your costs are.

And, if nothing else, go thru the motions and show it to a teacher (economics or math, or even science) to get some guidance, some help, and hopefully some extra credit!

View attachment Barry rocket kit - costing.pdf
 
To further my comments, I’ll add this. I did make a comment that you should l put together a costing sheet. I’ve included a sample based off one I did a few years ago when I thought of producing a few kits. It gives you a quick list of all that’s needed to see if a kit is profitable, and if you can expect to make anything! Also, if gives you an idea of what you can change to increase (or decrease) your end results. This is also the start of your ”business plan”. It shows you have put thought into the endeavour, that you are looking at what is involved, and it’ll show you what questions you need to ask!

Look at the costed BOM (Bill of Material). I’ve included all the parts I need, and that I have included a few suppliers for some parts. I’ve made an initial choice, based on the notes, and what I think is right. (I’ve chosen one of the three tube suppliers, same with some other items) At the bottom of the parts list ‘cost’ is my cost, what I need to spend to put a kit together. I’ve then chosen a 15% markup. (this is to I can make some money) My immediate first pass results show a negative profit. Not good. I can now look at a few options / scenarios. The parts really can’t changes, they are my fixed costs. The only real flexibility is my time ($15/hr) and if I include the sticker. I can see a few parts are cheaper if I buy in larger volumes, but do I have the cash (and storage space) for 100 nosecones? Also, I can lower my mark-up. And, finally, I can say that shipping & handling (packaging) is extra and/or include it in the shipping price. These can all alter the last line, my net profit in some way or another.

You might also find out that going with a 16” tube greatly reduces the cost of the BT (your supplier is charging you for a specialty tube, but has the 16” readily available). Or that the local flower shop receives their flowers in perfectly sized boxes with no markings (ask to have them!). Or even that buying a new printer and label paper reduces the label & instruction printing costs down to a few pennies.. Planning to visit launches, and sell them there instead of on line can also further help reduce costs. (maybe you have 4 clubs within an hour’s drive from you, or you & your dad like taking long drives to discover new places.) maybe, even the local hobby shop is willing to take a few kits, and sell them for you , either on commission or he becomes a reseller for you!

Don’t forget, that for your initial 20 kit offering, you’ll need to put out $177.80 (20 x $8.89) just to get the parts in house. And you’ll probably need to pay for shipping of some (most? All!) of the parts. That’ll further drive up your costs. (you may then need to include the shipping costs spread out over the quantity of parts you received. If the tubes you got were $0.75 per tube, and you got 25 tubes, and it cost you $15 to ship them, your total cost per tube is $1.35 landed cost ($15/25 = $0.60 shipping per tube. $0.75 + $0.60 = $1.35 per tube)

Learn Excel or another spreadsheet type program. It helps you organize your lists and costs. (It’ll even do the math for you!!) Learn Word or other word processor to get “professional” looking documents. You can even use it to print stickers, mailing labels, and invoices.

The bottom line is, know what you’re selling, know what goes into the kit, and know what your costs are.

And, if nothing else, go thru the motions and show it to a teacher (economics or math, or even science) to get some guidance, some help, and hopefully some extra credit!

Your markup should be a lot more than that. You indicated you would like to explore selling through a vendor eventually. If you do that you need to build in both wholesale and retail markup. A good markup to start with is 50% wholesale and 50% retail. You can get that by multiplying your costs by 2.25. Don't sell yourself short here. This markup will help you keep a profit with unexpected costs, the inevitable mistakes, returns, and fees. Also, if you ever want to sell with a Vendor they want a decent markup too. If you follow the markup structure you sell whole packs of 20 for a 33% discount (which would work out to your wholesale price). After shipping, the retailers markup is roughly 40% which is good and you still make your 50%. If you sell the kit yourself (which is more work for you) you enjoy both margins. The cost sheet Dr. Wogz posted is a great starting point.
 
Thank you Nate!

I'm in engineering, not sales!! I can make, quantify, and organize the BOM, and even source the parts. Sales is a dark art as far as I'm concerned!! :D

But regardless of the number, you can play with it, and see what happens, how it plays out, how the end results vary 9and by how much!)

There are other things at play here. For a start, for a kit you'll be making out of your dining room, There's not too much else you'll be needing to 'pay for'. There is no talk of overhead of any kind. So, the margin 'could' be lower.. There is no marketing plan / budget, nor other 'typical' company costs that need to accounted for in the profit margin here..
 
Andrew, feel free to message me. I'll help you out some and create some spreadsheets for you to analyze your costs. I just finished an Econ class with an A. I might as well put some of my knowledge to work. :p
 
Working on a Blog, and my first rocket, which will be announced soon! :) The hint: the rocket will be $10, and is 12 inches tall!
Thanks,
 
Can anyone guess what the first kit will be?
NOTE: I have 2 in stock! :)
I have my blog set up, the directions are made, and the rocket kits are mostly ready to go!
I'll post more on this soon!
Thanks,
 
Alright; :) No bubble mailers! I'll use small boxes! Remember, YOU pay shipping!
I'll probably use one of these. :cool:
PM.png
I think it'll fit! According to USPS it should cost $7.15 to ship. So what do you guys think of the kit???
Thanks,
 
Do not, do not, do not use bubble padded envelopes, you're just asking for a 100% refund rate. Go to
https://store.usps.com/store/browse...ing-supplies&categoryNavIds=shipping-supplies
and order some boxes. Our most used boxes are 01095 and 1098S. Those work great for one or two kit orders. You'll pay at least $7.00 per package to ship, probably more depending on weight.

I don't know how you plan to package the individual kits but we use poly tube rolls but it's a little pricey to set up for a small run. Looking at the photo of the kit in the bag, I would either completely rethink the package art or just eliminate it completely.

You can email me if you want and I can answer some questions based on 14 years of doing this.

Oh, and did I say do not use bubble padded envelopes?
 
Do not, do not, do not use bubble padded envelopes, you're just asking for a 100% refund rate. Go to
https://store.usps.com/store/browse...ing-supplies&categoryNavIds=shipping-supplies
and order some boxes. Our most used boxes are 01095 and 1098S. Those work great for one or two kit orders. You'll pay at least $7.00 per package to ship, probably more depending on weight.

I don't know how you plan to package the individual kits but we use poly tube rolls but it's a little pricey to set up for a small run. Looking at the photo of the kit in the bag, I would either completely rethink the package art or just eliminate it completely.

You can email me if you want and I can answer some questions based on 14 years of doing this.

Oh, and did I say do not use bubble padded envelopes?

:) OK, I won't use bubble mailers. Yeah, I'm have a VERY hard time trying to find packaging. I found this: https://www.ebay.com/itm/CLEAR-POLY...el-/321356287896?_trksid=p2385738.m2548.l4275
Thanks,
 
Alright; :) No bubble mailers! I'll use small boxes! Remember, YOU pay shipping!
I'll probably use one of these. :cool:
View attachment 319856
I think it'll fit! According to USPS it should cost $7.15 to ship. So what do you guys think of the kit???
Thanks,

Assuming the kit will fit in the box, it's a good way for you to ship because your costs are constant. Your cover art looks decent. However, you have not shown us a kit.

At a minimum, a customer needs to see the following:
  1. A picture of a completed kit, preferably painted
  2. A picture of the components in the kit laid on the table.
  3. A description of the parts.
  4. Specifications list of the kit (ex fields: motor mount, height, weight, recommended motors with altitudes).

What would be nice to have in addition to the above:
  1. Flight pictures
  2. A picture of the components in the packaging.
  3. A downloadable Rocksim or OpenRocket file
  4. Downloadable Assembly Instructions
 
Hey Paul,

How'd you fare with the floods?

For me, not an issue. rain's stopping me form painting though!

Seriously, though, if I drive to the "other side" (north side) or the western tip of eth island, I can see flood damage. (I'm on the south west side of eth island, on the St. Lawrence side) all the flooding is happening on the north side / the Ottawa river side.. A few of my wife's clients are flooded though. No one here at work seems to be affected either..
 
Assuming the kit will fit in the box, it's a good way for you to ship because your costs are constant. Your cover art looks decent. However, you have not shown us a kit.

At a minimum, a customer needs to see the following:
  1. A picture of a completed kit, preferably painted
  2. A picture of the components in the kit laid on the table.
  3. A description of the parts.
  4. Specifications list of the kit (ex fields: motor mount, height, weight, recommended motors with altitudes).

What would be nice to have in addition to the above:
  1. Flight pictures
  2. A picture of the components in the packaging.
  3. A downloadable Rocksim or OpenRocket file
  4. Downloadable Assembly Instructions
+100
 
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