Hobbico Sale of Estes

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I would like to see the scale rockets make a comeback. Bigger scale would be awesome! These

rockets-compared.jpg
 
I would like to see the scale rockets make a comeback. Bigger scale would be awesome! These

Yes, and add the SLS to that list.

Nice to hear the company will continue on.
 
When you or I buy an Estes product in a hobby shop, online or from an on-site dealer at a launch how much of the money you spend goes to Estes?

None.
Zip.
Zero.

The product was sold by Estes to a hobby distributor who in turned sold it to the hobby shop, etc.
Estes was paid by the hobby distributor for the product.
Hobby Lobby/Wal-Mart/Target buy enough to qualify for distributor (or better) pricing.

Under these conditions, hobby distributors/Hobby Lobby/Wal-Mart/etc. are THE customer.
We 'hobbyists' account for maybe 1% of Estes sales.

When Wal-Mart says they want 10 new RTF kits and a new Launch Set to sell (Along with P.O.P. materials and displays) for the Holiday season you can bet Estes is going to spend their capital to make sure Wal-Mart gets those products.

Oh, what would be an economical production run for more MDRM nose cones?
Oh, 2,000-3,000 pieces.
If Estes couldn't sell that number of MDRM kits in a year they will not be able to sell that many nose cones by themselves.
It would be a waste of capital.

Individual customers/hobbyists have not driven Estes sales since 1969 when Estes was bought by Damon and Damon connected Estes with hobby distributors to get increased market penetration.

It's been this way for almost fifty years.

Really? End users account for only 1% of Estes’ sales and end users have no influence on what Estes sells?
Not one of those retailers purchase Estes’ merchandise unless they feel that end users will purchase them and that they (retailers) will make a profit on them. End user preferences play a primary role in driving sales.
What makes a production run of any quantity economical is the price a consumer is willing to spend because that determines the profit potential for the retailers and Estes. Small runs (limited editions) at raised prices may be economically viable, even though 2,000 - 3,000 pieces might not be produced. Is this something Estes Industries is interested in doing? I have no idea. What rockets do John and Ellis like to build personally?
I’m delighted that Estes has returned to someone with a personal interest in rocketry and I wish them well. I’ll do what I can personally to support them, even though I’m more into HPR.


Steve Shannon
 
Small runs (limited editions) at raised prices may be economically viable...
Yet when we see such things happening at smaller vendors (I'm thinking Apogee as an example) there's no end of complaining about the high cost on TRF.

I'm grateful to Initiator001 for injecting a dose of realism into this discussion. I wish the Langfords all the best and maybe it will be great for the Estes line in general and our narrowly-focused part of the hobby in particular, but it's complicated. Just having someone with a personal interest in charge is not a guarantee (look at Quest's struggles for an example of that.)
 
I think the new owner(s) should look at Jolly Logic's sales model.
No matter who sells his products, he sets the price.
A fair and reasonable price we all can live with. (Thank You Mr. Beans!)
Way back when, Estes shipped everything from Penrose. Even the mail orders.
I believe the old owners didn't want to deal with in house orders or keep parts around as much as they should have.
Putting Estes back in the hands of people that have invested their lives to the hobby will perhaps will change this...I sure hope so.
By becoming part of TRF family, is a good sign! I hope they visit often, read our posts and respond positively to our want and desires the best they can.
And...Bring back the Yearly Catalog!!! And keep it online as well.
Changing times demand changes there is no doubt.
There is a really decent company we all know of that has a humongous parts assortment, and I use to use them often. (Thank You Mr. Boadway!)
Perhaps if my life swings back around some day I can get back with my builds.
Right now, everything that survived the fire and water damage Rocket wise has been moved back into storage until we get a larger apartment when one becomes available.
Unfortunately, that doesn't seem to be in the near future at all.
 
And...Bring back the Yearly Catalog!!! And keep it online as well.

I appreciate the nostalgia here, but producing a print catalog (or even a PDF facsimile of one) is a terrible waste of corporate resources in this day and age. That time and money would be better spent on other business goals. As long as Estes has a well-maintained website, that's enough.

James
 
Really? End users account for only 1% of Estes’ sales and end users have no influence on what Estes sells?
Not one of those retailers purchase Estes’ merchandise unless they feel that end users will purchase them and that they (retailers) will make a profit on them. End user preferences play a primary role in driving sales.
What makes a production run of any quantity economical is the price a consumer is willing to spend because that determines the profit potential for the retailers and Estes. Small runs (limited editions) at raised prices may be economically viable, even though 2,000 - 3,000 pieces might not be produced. Is this something Estes Industries is interested in doing? I have no idea. What rockets do John and Ellis like to build personally?
I’m delighted that Estes has returned to someone with a personal interest in rocketry and I wish them well. I’ll do what I can personally to support them, even though I’m more into HPR.


Steve Shannon

My wording was that we 'hobbyists' account for around 1% of Estes sales.
I consider myself a 'hobbyist' as would many people on this forum, probably including yourself.

The majority of end-users (Your phrase) get their rockets at Hobby Lobby, Wal-Mart, Target or other retail chains.
Some of the general public get their rocket products at hobby shops.

Retail stores carry a limited amount of the Estes line. Perhaps a dozen different kits, a Launch Set or two, around ten to twelve different motors (A8-3, B6-4, C6-3, C6-5) and some accessories.
Rocket purchases at these locations are 'impulse' buys. The general public first learns of model rocketry then and there.
These folks buy a launch set, some motors and maybe an extra kit or two.
They assemble the models and launch system, read how to prepare the rockets for flight and go launch that day or the next.
For most that's it. One-and-done.
Some will return to the same store and buy some other kits from the selection that particular retailer has on display.
After that, those folks are also done with rocketry.
A very few will go on the Internet, check out the Estes website, check web forums, learn of other rocket companies, maybe even find a local NAR section and go launch there.

For most, the selection of models they can buy is dictated by what products that particular retailer has in stock.

In the case of hobby shops very few carry the entire Estes product line.
They usually carry kits that they know have a good sales history or the very latest.
Also, price point is important. Most won't carry any kits over $25-$30.
The best/last general hobby shop here in San Diego has a four foot wide section devoted to Estes.
They usually stock ten to twenty different Estes kits and of those only one or two of each.
They do carry four to six different Launch Sets and four to five of each.

When Dad comes into the hobby shop looking to do something different with the kids for the upcoming weekend and sees rockets his choices are limited to what the hobby shop has on hand.
He is usually not aware of any products other than what he sees on the shelf/peghook.

When the hobby shop runs out of rocket 'A' do they immediately place a re-order for that model with their hobby distributor?

No.

The hobby shop will only place an order when they can order at least the minimum amount dollar-wise the distributor requires to accept an order.
So the hobby shop waits days/weeks to place an order until they can reach the dollar minimum required by the distributor.
To reach the minimum order amount the hobby shop will order drone parts, more R/C car tires, paint, glue and one rocket kit 'A'.

For hobby distributors they must place orders with hobby product manufacturers in the thousands of dollars in order to qualify for discount.
Hobby distributors don't have time to research every item each hobby company makes.
So they usually go with buying the newest products and re-ordering items that they know sell well (C6-5 motors for example).
Only when a distributor runs out of a product AND has orders from hobby shops for that product is when they place the order with the manufacturer.

Now, here's how it works.
Estes will release 20-30 new products a year.
They know each distributor will buy at least one case of these new items.
From this they can estimate what sales will be and income.

Estes has changed this model a lot in the past few years by bringing out new products 3-4 times a year.
This keeps the cash flow going all year.

Again, the hobby distributors decide what Estes products a hobby shop can order.
Distributors by and large always try to keep in stock EVERY item Estes makes.
But, if it's a slow time of year for rocket sales, a distributor may wait to place a re-stocking order for Estes items and use their capital for items that are more popular or have hobby shop orders waiting.

There's more to it but I'm tired of typing. :wink:

Steve, thanks for your support of the hobby.
 
Ahhhhh. sour grapes. good times.

All the molds were shipped to china.... Chinese production sucks. Is it possible to get the molds back? I dunno, but I'd guess not easily...


PSII died and sold like crap because they charged too much for them. The only sales I saw, were on sale. Priced right, they'd have sold better. And at that size, it's not a volume shipper. It's a different market than an Alpha III.
 
Yet when we see such things happening at smaller vendors (I'm thinking Apogee as an example) there's no end of complaining about the high cost on TRF.

I'm grateful to Initiator001 for injecting a dose of realism into this discussion. I wish the Langfords all the best and maybe it will be great for the Estes line in general and our narrowly-focused part of the hobby in particular, but it's complicated. Just having someone with a personal interest in charge is not a guarantee (look at Quest's struggles for an example of that.)

Thanks, mikec.

Yup, hobbyists are the most demanding 'customers' for a hobby company.
They want this or that but when the product is available the hobbyists suddenly don't/won't purchase the item for various reasons.

We are very fortunate in the rocket hobby to have many fine small rocket product manufacturers.
They are successful in part because they stay small.

For example, let me talk about Jolly Logic.
John Beans makes a wonderful line of products.
I own many of them. The Chute Release is a great device as I now don't have to walk as far to recover my rockets (Set for two hundred feet and a nice stroll out to my rocket).

John could not sell his products to hobby distributors.
Hobby distributors would insist on certain demands/requirement before they would buy the Chute Release.

Here's how a fictional hobby distributor would speak to Jolly Logic:

" Nice product. I will take a case of them to try.
You'll have to lower the SRP to $30-$40 at most.
You will give me the standard hobby rocketry discount of 55% off the SRP of the item along with an additional 5% discount if I pay the bill in ten days or less (NET 10).
You must fulfill my order within X number of days or the order will be cancelled.
Also, if I place and order and distributor H places an order on the same day you must ship my order first or I will cancel all orders and never carry your product line.
(This is in all order contracts from distributors. The way you get around it is by shipping ALL distributors their orders on the same day. That way nobody is first or last but you have to have the on-hand inventory to do it).
Lastly, you must carry and keep current a product liability policy of at least $1,000,000 and provide me with a copy of the policy. All incidents involving your product are your legal responsibility."

After that, John is thinking of taking up a less stressful occupation. :wink:

Welcome to the hobby industry.

Remember, to make a small fortune in the hobby industry you have to start out with a large fortune.
 
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This leads me to idly ponder whether there is any path for Estes to reduce its dependence on distributors. Now that it's not actually owned by one, it would seem to have options. But I don't know it would practical at this point, or even desirable for the hobby as a whole. There are indeed many fine small rocket manufacturers, but I would venture to say that those manufacturers mainly sell to hobbyists, whereas most folks get their introduction to the hobby through Estes rockets on retail shelves.

It will be interesting to see if Langford makes any attempt to significantly alter Estes' business model.
 
Really? End users account for only 1% of Estes’ sales and end users have no influence on what Estes sells?

He probably should have said, "End users like you and me, and the people that comprise NAR and the model rocket flyers of Tripoli."

The vast majority of model rocket end users are the kids who see a rocket kit in the hobby/craft/toy store, get it, fly it one Sunday afternoon and put it in the closet. Or school students who have to (or get to) fly a rocket for class. Or are extremely satisfied by the limited selection they find at the local Hobby Lobby and aren't really interested in going further, and Hobby Lobby is happy enough with the sales numbers and the fact that their staff doesn't have to know much about them.

i.e. lifetime purchase of one or two kits (or RTFs) and one to three packs of motors.

The hobby stores are more interested in the big ticket R/C items, and often stock rockets as an after-thought, unless there's a club nearby, so they'll stock what's easiest to sell, and they'll take whatever the distributor gives them.

These end users are not interested in the latest scale subject; that sci-fi rocket looks too hard to build; there's no place to fly that PSII rocket (more than once!). But *they* are the ones who influence what the distributors want and what Estes therefore has to produce because that's what keeps Estes in business, because that adds up to a lot more sales than to you and me and the people that comprise NAR, etc.
 
This leads me to idly ponder whether there is any path for Estes to reduce its dependence on distributors.

The only way to do that would be to go back to a direct-to-consumer model like they had for most of the 60's. This would effectively take it out of all retail where it is currently found, except for stores and chains willing to directly deal with Estes. Maybe Hobby Lobby, maybe HobbyTown USA. They *did* get out of WalMart (or WalMart left them -- either way I personally think it's for the best). The internet makes that somewhat more attractive.
 
My wording was that we 'hobbyists' account for around 1% of Estes sales.
I consider myself a 'hobbyist' as would many people on this forum, probably including yourself.

The majority of end-users (Your phrase) get their rockets at Hobby Lobby, Wal-Mart, Target or other retail chains.
Some of the general public get their rocket products at hobby shops.

Retail stores carry a limited amount of the Estes line. Perhaps a dozen different kits, a Launch Set or two, around ten to twelve different motors (A8-3, B6-4, C6-3, C6-5) and some accessories.
Rocket purchases at these locations are 'impulse' buys. The general public first learns of model rocketry then and there.
These folks buy a launch set, some motors and maybe an extra kit or two.
They assemble the models and launch system, read how to prepare the rockets for flight and go launch that day or the next.
For most that's it. One-and-done.
Some will return to the same store and buy some other kits from the selection that particular retailer has on display.
After that, those folks are also done with rocketry.
A very few will go on the Internet, check out the Estes website, check web forums, learn of other rocket companies, maybe even find a local NAR section and go launch there.

For most, the selection of models they can buy is dictated by what products that particular retailer has in stock.

In the case of hobby shops very few carry the entire Estes product line.
They usually carry kits that they know have a good sales history or the very latest.
Also, price point is important. Most won't carry any kits over $25-$30.
The best/last general hobby shop here in San Diego has a four foot wide section devoted to Estes.
They usually stock ten to twenty different Estes kits and of those only one or two of each.
They do carry four to six different Launch Sets and four to five of each.

When Dad comes into the hobby shop looking to do something different with the kids for the upcoming weekend and sees rockets his choices are limited to what the hobby shop has on hand.
He is usually not aware of any products other than what he sees on the shelf/peghook.

When the hobby shop runs out of rocket 'A' do they immediately place a re-order for that model with their hobby distributor?

No.

The hobby shop will only place an order when they can order at least the minimum amount dollar-wise the distributor requires to accept an order.
So the hobby shop waits days/weeks to place an order until they can reach the dollar minimum required by the distributor.
To reach the minimum order amount the hobby shop will order drone parts, more R/C car tires, paint, glue and one rocket kit 'A'.

For hobby distributors they must place orders with hobby product manufacturers in the thousands of dollars in order to qualify for discount.
Hobby distributors don't have time to research every item each hobby company makes.
So they usually go with buying the newest products and re-ordering items that they know sell well (C6-5 motors for example).
Only when a distributor runs out of a product AND has orders from hobby shops for that product is when they place the order with the manufacturer.

Now, here's how it works.
Estes will release 20-30 new products a year.
They know each distributor will buy at least one case of these new items.
From this they can estimate what sales will be and income.

Estes has changed this model a lot in the past few years by bringing out new products 3-4 times a year.
This keeps the cash flow going all year.

Again, the hobby distributors decide what Estes products a hobby shop can order.
Distributors by and large always try to keep in stock EVERY item Estes makes.
But, if it's a slow time of year for rocket sales, a distributor may wait to place a re-stocking order for Estes items and use their capital for items that are more popular or have hobby shop orders waiting.

There's more to it but I'm tired of typing. :wink:

Steve, thanks for your support of the hobby.

Thank you for the insight.


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The hobby stores are more interested in the big ticket R/C items, and often stock rockets as an after-thought, unless there's a club nearby, so they'll stock what's easiest to sell, and they'll take whatever the distributor gives them.

For what it's worth, I was in what may be the last locally-owned non-franchise hobby shop in the whole Puget Sound area a few days ago. I had not been to their shop in its current location and probably not to their prior one in many years (it's a little farther south than I usually range). They had a pretty good selection of Estes rockets and motors, including all the latest releases except the A Heli. I chatting with the owners he said that they sell lots of rockets and are looking forward to being able to continue to do so with the sale of Estes.

Of course they are MORE concerned right now with the Horizon/Hobbico tie up (they had both Ultracote and MonoKote in stock, to cite one overlap between the formerly two distributors) but I was pleasantly surprised at how favorably they viewed rocketry. I will have to visit them from time to time.....
 
For what it's worth, I was in what may be the last locally-owned non-franchise hobby shop in the whole Puget Sound area a few days ago. I had not been to their shop in its current location and probably not to their prior one in many years (it's a little farther south than I usually range). They had a pretty good selection of Estes rockets and motors, including all the latest releases except the A Heli. I chatting with the owners he said that they sell lots of rockets and are looking forward to being able to continue to do so with the sale of Estes.

Of course they are MORE concerned right now with the Horizon/Hobbico tie up (they had both Ultracote and MonoKote in stock, to cite one overlap between the formerly two distributors) but I was pleasantly surprised at how favorably they viewed rocketry. I will have to visit them from time to time.....

Bernard, does the LHS have an online presence/web address?
 
...All the molds were shipped to china.... Chinese production sucks. Is it possible to get the molds back? I dunno, but I'd guess not easily...


PSII died and sold like crap because they charged too much for them. The only sales I saw, were on sale. Priced right, they'd have sold better. And at that size, it's not a volume shipper. It's a different market than an Alpha III.

The reason Estes products began to be manufactured in The People's Republic of China started for one reason.

Lack of a local labor pool.

In the 1990s a Federal 'SuperMax' prison opened outside of Colorado Springs.
Working at the prison was a government job with better pay and benefits.
Or, you could pack nosecones in plastic bags eight hours a day for minimum wage at Estes.

So, the PRC was interested in getting it's people employed and learning about Western ways of manufacturing.
Estes management was looking to get it's products produced. So the current method of overseas production became the norm.
There are drawbacks to this system but it was this or nothing.

According to the auction paperwork for Estes, there are currently only twenty-seven employees at the Penrose plant.
In the late 1960s Estes employed over two-hundred people.

Quest did bring their molds back from China.
However, until they have a steady and stable source of rocket motors Quest hasn't been making many if any kits.

I don't know if the PSII kits were overpriced for their time.
AeroTech kits were running about the same or more in price.

Let's remember, for one dollar of cost to Estes equals seven dollars of the SRP.
That $70 PSII kit cost Estes $10 dollars to make (roughly).
The product went through a lot of hands before it showed up at the local hobby shop and each 'hand' had to get it's cut.

The comment about it being a different market than selling an Alpha III is dead-on.
The Hobbico/Estes management used the same metrics for selling the PSII kits as for selling Alphas.
Estes was not going to sell 5,000 of each PSII kit every year.
Maybe with a different marketing approach the PSII line could have been more successful but it was too different from the traditional Estes products.

Speaking of Estes Pro Series kits, I am building one right now.
It's one of the ORIGINAL Pro Series kits from the early 1990s. :wink:

Estes PS Impulse 001.jpg
 
Before anybody thinks I am anti-Estes they couldn't be more wrong.

There are great and wonderful people working at Estes, several of whom I consider friends.

They have suffered through the dictatorship of Barry Tunick and the fall of Hobbico.

I sincerely wish and hope that the company will now experience stability and growth under the new management.

I optimistically look forward to what the Langfords will do with/for the company.
 
Quest did bring their molds back from China.
However, until they have a steady and stable source of rocket motors Quest hasn't been making many if any kits.

QUOTE]

I just wanted to comment on Quest motors. With the acquisition of Quest by RCS/AeroTech they have a source of motors. About a month ago TMT certified the first two Quest 18 mm composite motors. The Q Jet A and B motors.


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Quest did bring their molds back from China.
However, until they have a steady and stable source of rocket motors Quest hasn't been making many if any kits.

QUOTE]

I just wanted to comment on Quest motors. With the acquisition of Quest by RCS/AeroTech they have a source of motors. About a month ago TMT certified the first two Quest 18 mm composite motors. The Q Jet A and B motors.


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yes, but it remains to be seen whether the Q-jets, which are traditional composite motors (different from, and slightly more complex to operate than black powder motors), will properly serve as the needed catalyst for Quest to get into retail channels as much as Estes. I think it depends as well on whether Aerotech has sufficiently automated the assembly of the Q-jets so that they can maintain volume at least to 1/10 the production of Estes.
 
yes, but it remains to be seen whether the Q-jets, which are traditional composite motors (different from, and slightly more complex to operate than black powder motors), will properly serve as the needed catalyst for Quest to get into retail channels as much as Estes. I think it depends as well on whether Aerotech has sufficiently automated the assembly of the Q-jets so that they can maintain volume at least to 1/10 the production of Estes.

First, they are no more complex to operate. They are a single use motor- put it in the rocket, rocket on pad, insert ignited, and apply electricity.

I agree about the production numbers. If AT can produce enough is a question.

Are the Estes motors still produced in the US, or are they also in China? Does anyone here actually know how many motors Estes produces in a year?


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Estes motors continue to be made in Penrose as always and I fully expect them to continue to be.

At the manufacturers' forum at NARCON Gary Rosenfield called the Q-Jets the toughest R&D project he's had at Aerotech, primarily because of what they had to do to hit the price point (the SRP of the two-packs is the same as that of Estes motors sold in two-packs in some stores). Here's hoping that they don't turn out like the Tesla Model 3 has so far.... :D
 
First, they are no more complex to operate. They are a single use motor- put it in the rocket, rocket on pad, insert ignited, and apply electricity.

I agree about the production numbers. If AT can produce enough is a question.

Are the Estes motors still produced in the US, or are they also in China? Does anyone here actually know how many motors Estes produces in a year?


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Estes has six machines (at one time, seven) that can make at least 10000 motors each per day, depending on downtime for maintenance and number of shifts per day. At one time, they were running three shifts and six days/week, probably during the Walmart times. I don’t know how headcount affects that. I saw only five or six names associated with motor production. Doesn’t seem like enough for three shifts.

As for igniting motors novices I see have a hard enough time igniting Estes motors , which should be dirt simple. A composite motor requires fairly precise placement of the igniter else performance and chute deployment will be affected, resulting in increased customer service requests.


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In the 1990s a Federal 'SuperMax' prison opened outside of Colorado Springs.
Working at the prison was a government job with better pay and benefits.
Or, you could pack nosecones in plastic bags eight hours a day for minimum wage at Estes.

I don't know if the PSII kits were overpriced for their time.
AeroTech kits were running about the same or more in price.

Speaking of Estes Pro Series kits, I am building one right now.
It's one of the ORIGINAL Pro Series kits from the early 1990s. :wink:

Interesting problem. I do disagree on the "china or nothing" comment. They could also have raised prices and increased wages and or benefits.

PSII prices may have been comparable for our market, but they weren't going to get bites at retail. Needing a $60 launch pad didn't help anything. If that was lower priced, I think it would have opened a couple doors.

VERY cool on the impluse kit!
 
Interesting problem. I do disagree on the "china or nothing" comment. They could also have raised prices and increased wages and or benefits.

PSII prices may have been comparable for our market, but they weren't going to get bites at retail. Needing a $60 launch pad didn't help anything. If that was lower priced, I think it would have opened a couple doors.

VERY cool on the impluse kit!

China or Nothing was driven by WalMart and the previous owner's (Tunick) toy business experience (and his desire to cut costs).
 
The reason Estes products began to be manufactured in The People's Republic of China started for one reason.

Lack of a local labor pool.

In the 1990s a Federal 'SuperMax' prison opened outside of Colorado Springs.
Working at the prison was a government job with better pay and benefits.
Or, you could pack nosecones in plastic bags eight hours a day for minimum wage at Estes.

So, the PRC was interested in getting it's people employed and learning about Western ways of manufacturing.
Estes management was looking to get it's products produced. So the current method of overseas production became the norm.
There are drawbacks to this system but it was this or nothing.

According to the auction paperwork for Estes, there are currently only twenty-seven employees at the Penrose plant.
In the late 1960s Estes employed over two-hundred people.

Quest did bring their molds back from China.
However, until they have a steady and stable source of rocket motors Quest hasn't been making many if any kits.

I don't know if the PSII kits were overpriced for their time.
AeroTech kits were running about the same or more in price.

Let's remember, for one dollar of cost to Estes equals seven dollars of the SRP.
That $70 PSII kit cost Estes $10 dollars to make (roughly).
The product went through a lot of hands before it showed up at the local hobby shop and each 'hand' had to get it's cut.

The comment about it being a different market than selling an Alpha III is dead-on.
The Hobbico/Estes management used the same metrics for selling the PSII kits as for selling Alphas.
Estes was not going to sell 5,000 of each PSII kit every year.
Maybe with a different marketing approach the PSII line could have been more successful but it was too different from the traditional Estes products.

Speaking of Estes Pro Series kits, I am building one right now.
It's one of the ORIGINAL Pro Series kits from the early 1990s. :wink:
I have that Impulse. Retired it after flying it once almost 20 years after building it

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Estes was not happy to find out AT was selling the Estes branded motors direct and told them to take a hike. Those kits were always good sellers.
 
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