Online Retailer - Waive HazMat Fee

[COrocket]

I'd eventually make it to a field to fly. But the idea of online shopping allows you to price compare and obtain the best deals
than from the 1-2 vendors monopolizing the market at the field.

I've never seen a rocketry vendor "monopolize" the launches they go to. I've bought motors from Giant Leap, Performance Hobbies, and a smaller vendor at separate launch sites. All of them charge MSRP for their reloads. I'd be really surprised if your local vendor doesn't. Even online it is a similar story. For example, a CTI 29 3 Grain Classic. $22 motor. Wildman, Giant Leap, AMW-PROX, Performance Hobbies all list them online for that price. Some vendors, most notably Wildman, do occasional online sales, but it really isn't the normal. As you can see, the profit margins are not there to play with pricing strategies. Rocketry is expensive, but trust me, you are not getting ripped off by a monopoly.

You probably think a vendor can be a "monopolize" the market at the field because they are the only ones there. In fact, this is because most launch sites can only financially support one vendor. Such is the way for a small hobby community. On the manufacturing side, there are also relatively few companies, because that's who the hobby can support. When the market is small and stable in size, it is easier for manufacturers to control and predict the supply side of the equation. They fill individual orders for vendors, and vendors sell, periodically restocking. It isn't a mass manufacturing operation, were overruns can occur. When that happens, you can get discounts. It's all a supply-demand game. It can happen in consumer goods, but rocket motors are not a mass consumer good.

From what I've seen on this forum, most people buy from the vendor with the best customer service. When multiple people offer product at nearly identical prices, this is what differentiates one vendor from another. If you have vendors on your field, you should be thankful. They do a valuable service. For example, I recently had a motor CATO, and it came from a on-site vendor. He inspected it, and I had my warranty replacement the same day. And it doesn't have to be a CATO. What if you get a motor in the mail and it has a cracked grain or defect? Can't send it back, and you have to contact the vendor by phone/web. It is a lot easier dealing with someone in person, considering the vendor is the point of contact for warranty issues.

On a side note relating to business. You can't evaluate a the profitability of a business venture based solely on markup. A few 100% in the example of event food vending you provided. How many food vendors to you see living the high life? I'm not trying to be harsh, just pointing out that you have too look much deeper. They simply have to sell at those prices to make a living. Lets say the product costs $1, you have $2 in overhead, and you sell it for $5. You may think that 40% profit is an awesome percentage and it is, but in the end its only $2. Now look at a car salesmen. Lets say after the deal is done, he makes 2% on a $25,000 car. I honestly don't know if that percentage is accurate, but for comparison sake lets say it is. So the salesman made $500. The food vendor has to sell 250 products to match the 1 car the salesman sold. Both walk away with the same amount of money, with wildly different profit margins and number of goods sold.

While it is very tempting to say "That is more expensive than it should be" for a lot of products, there are usually justifiable reasons why.

[troj]

Last summer I became WildmanVa, primarily to ensure that there would be a vendor at the launches I attend. Having seen the business from the other side of the counter, I now understand the limitations that vendors face. When I drive 3 hours each way to a launch, I consider it a good day if I am able to pay my gas and the stuff I fly myself. On a bad day, I spend nearly $100 on gas, 6 hours driving, and 5 hours sitting in front of my van watching people fly stuff they bought online. Please understand that I am not complaining. It's just that I can see both sides of the situation from where I now sit.

If you have a launch-site vendor and don't buy from him, you risk losing the convenience of having a resource to buy the little things you need when you need them most. Trust me, he doesn't make any money on igniters and swivels and wadding and C6-5s. If that's all you are buying from him, he is already subsidizing your hobby, and you risk the day when he decides your launch is no longer worth the trip.

Right there is why I encourage people to buy from their on-site vendors.

I have the option of two vendors who come to our launches, both of whom are great people, and both of whom treat the members of our club well. Their prices are fair, their service is great, and if you want something they don't normally stock, a phone call in advance and they'll do their best to have it in hand when they come down.

If you talk to them at the field and they don't have what you want, they're also more than happy to ship it to you later.

I very much have the feeling that the OP for this thread has little, or no, experience with retail, especially with the cost/profit side of things.

-Kevin

[Alby]

Last summer I became WildmanVa, primarily to ensure that there would be a vendor at the launches I attend. Having seen the business from the other side of the counter, I now understand the limitations that vendors face. When I drive 3 hours each way to a launch, I consider it a good day if I am able to pay my gas and the stuff I fly myself. On a bad day, I spend nearly $100 on gas, 6 hours driving, and 5 hours sitting in front of my van watching people fly stuff they bought online. Please understand that I am not complaining. It's just that I can see both sides of the situation from where I now sit.

What if you threw in Food and Drinks? The profit on reselling a bottle water for $1.50 that might be $0.20/cents wholesale,
or an Ice Cream Bar on a hot day with dozens of kids running around, is priceless.

But I hear what you a saying. There is no money making game plan for vendors. Both have there Pro's and Con's.


Online Vendors:
--
Pros: Market Rate Pricing / Global Customer Base.
Cons: Extreme Competition compressing margins / Buyer pays Hazmat Fee

Field Vendors:
--
Pros: Little (if any) Competition / No Hazmat Fee to buyer
Cons: Small customer base (Low Volume Sales) / Transportation Costs to Field


I suppose the only good choice for a vendor is to play both sides of the Online/Field fence.
As for the consumer, the same applies. Crunching the numbers and choosing Field or Online
will decide where one's money goes.

In the end, I suppose the current dynamic is good for both parties, and there is balance to
the whole mix. No one is able to get the upper leg and that keeps the market fair to all.

[troj]

What if you threw in Food and Drinks? The profit on reselling a bottle water for $1.50 that might be $0.20/cents wholesale,
or an Ice Cream Bar on a hot day with dozens of kids running around, is priceless.

That bottle of water might be available to big chains at $0.20 wholesale, but not to a small food vendor, it isn't.

Let's stick with that $0.20 on the bottle of water (though it's likely closer to $0.50 that they paid for it). The vendor had to buy the water, either pay for it to be delivered, or go pick it up -- neither of which is free. There's also the cost of ice (you don't want your water cold, I'm sure), as well as whatever powers the food truck. Add in the cost of the truck, itself. And finally, the food vendor would like to actually make some money for their time.

In the end, my guess is that on that $1.50 bottle of water, there's maybe $0.25 in profit. And that assumes that there is enough total sales for the vendor to even make any money on the entire trip.

-Kevin

[Adrian A]

Right there is why I encourage people to buy from their online vendors.

Did you mean on-site vendors?

[KevinDunn]

What if you threw in Food and Drinks? The profit on reselling a bottle water for $1.50 that might be $0.20/cents wholesale,
or an Ice Cream Bar on a hot day with dozens of kids running around, is priceless.

I actually pick up a 12-pack of water on my way to a launch and give them away to anyone who is thirsty. I also keep some single-use superglues for anyone in a bind. To make money on small items, you have to sell a lot of them, and my experience so far is that there just isn't enough demand for these items to even make a dent in my expenses. I carry these items as a service to the flyers because I want to build a reputation as the guy you has what you need when you need it at a fair price. But the vast majority of my gas money comes from selling HP reloads.

I am not a charity. I don't expect people to buy from me out of pity or a sense of duty. I am in competition with online vendors and other launch-site vendors, and I am happy to compete on both price and service. All I ask is that when you compare prices, you compare delivered price to delivered price.

Both have there Pro's and Con's.

I would only ask customers to consider the pros and cons from the customer's point of view.

Online Vendors:
--
Pros: Usually a large selection and inventory available. Delivery can be made any time, not just at launches. Easy to compare prices among various vendors.
Cons: Delivered price includes hazmat and shipping averaged over the entire order. Even if the vendor discounts off MSRP, you need to place a large enough order for the savings to offset the shipping. Some online vendors take orders for items they don't actually have--you may have to wait for a backordered item, or it may delay your entire order. The order might not be delivered in time for your launch.

Field Vendors:
--
Pros: Vendor has a car/van/truck/trailer full of stuff you want at a time and place where you want it. He can advise you on items that are new to you. You can look at items before buying them. He may replace failed items (e.g. ignitors) on the spot. He may provide other launch-site services (photography, post-mortem analysis, warranty service).
Cons: The selection and inventory may be smaller than that of an online vendor. Delivered price is often MSRP and may include sales tax. Vendor might not show up to a launch depending on weather or other issues.

We are lucky enough to have a variety of vendors serving the sport, and people will rightly gravitate to the ones that provide them the best overall value. I am not whining about how hard the vendor's life is or begging for charity. I am just pointing out that when you consider shipping, hazmat, and sales tax, a vendor charging MSRP may actually be giving you a better deal than you might have thought.

[jadebox]

As an online vendor, I encourage you to support your onsite vendors and local hobby shops. :-)

A hobby isn't an investment, so cost shouldn't be as great a factor in making your purchase decisions. Local vendors offer convenience, a place to meet others with the same interest, advice and knowledge, etc.

We are fortunate to have several local vendors at lauches - including one motor manufacturer. I don't always buy my motors from them. Sometimes I take advantage of on online deal or order a specific motor to ensure that I have it for a launch. But, most of the larger motors I fly, I buy on-site.

-- Roger

[Zeus-cat]

That bottle of water might be available to big chains at $0.20 wholesale, but not to a small food vendor, it isn't.

Let's stick with that $0.20 on the bottle of water (though it's likely closer to $0.50 that they paid for it). The vendor had to buy the water, either pay for it to be delivered, or go pick it up -- neither of which is free. There's also the cost of ice (you don't want your water cold, I'm sure), as well as whatever powers the food truck. Add in the cost of the truck, itself. And finally, the food vendor would like to actually make some money for their time.

In the end, my guess is that on that $1.50 bottle of water, there's maybe $0.25 in profit. And that assumes that there is enough total sales for the vendor to even make any money on the entire trip.

-Kevin

I know people who are food vendors; and I can assure you that they are not getting rich doing it. On a good day they make some decent money, but they have a fair number of bad days too. They can't control the weather and that has a major impact on how many people turn out for the events they go to. They usually have to pay a vendor fee for the large events and may even have to give up a percentage of their sales to the event. The government has rules on food safety so they have to buy the stuff they plan to sell and keep it fresh, refrigerated or whatever until they cook it. They can only keep stuff so long before they have to throw it away if they don't sell it. They have to buy and maintain their equipment. They have to haul it to the event and set it up and take it down and then go home. They have to buy the food and prepare it. All of this takes time or you have to pay someone else to do it. There is a tremendous amount of labor and overhead that many people don't factor in to that hot dog they buy from the food cart. They just think, wow they are getting rich selling hot dogs for $4 when I could just buy them for a fraction of that at the store.

[troj]

Did you mean on-site vendors?

Yep, I did.

[Zeus-cat]

On a side note relating to business. You can't evaluate a the profitability of a business venture based solely on markup. A few 100% in the example of event food vending you provided. How many food vendors to you see living the high life? I'm not trying to be harsh, just pointing out that you have too look much deeper. They simply have to sell at those prices to make a living. Lets say the product costs $1, you have $2 in overhead, and you sell it for $5. You may think that 40% profit is an awesome percentage and it is, but in the end its only $2. Now look at a car salesmen. Lets say after the deal is done, he makes 2% on a $25,000 car. I honestly don't know if that percentage is accurate, but for comparison sake lets say it is. So the salesman made $500. The food vendor has to sell 250 products to match the 1 car the salesman sold. Both walk away with the same amount of money, with wildly different profit margins and number of goods sold.

I know a guy who works at a place where the competition is so severe that to get the OEM business they literally have to give the product away. The shipset is typically twelve units or more, and the units cost $30,000 each. They make up for it in the aftermarket where they mark up the product 200 or 300% above fabrication costs.

In another part of the business I've seen spare parts sold in the aftermarket for $30,000 that cost $3,000 to make. However, the spare part sales are few and far between and the original parts are sold to the OEM at or below cost.

[MarkH]

It's been said, place a $150 motor order from Red Arrow Hobbies and Dave waives the hazmat fee. Dave might even throw a few explicatives at you for good measure ;-)

[luke strawwalker]

Right there is why I encourage people to buy from their online vendors.

.

-Kevin

ONLINE or ONSITE?? Think you had a typo there...

later! OL JR

[luke strawwalker]

Yep, I did.

There's this cool thing called an "edit" button... LOL (ducks and runs!)

hehehe... Later! OL JR

[troj]

There's this cool thing called an "edit" button... LOL (ducks and runs!)

hehehe... Later! OL JR

Not on the phone app, there isn't

[o1d_dude]

Not on the phone app, there isn't

On my version of ForumRunner all you need to do is tap the header of the post you want to edit and then tap the 'edit button'.

I know this because my iPhone keeps submitting posts before I'm done composing them.

[troj]

On my version of ForumRunner all you need to do is tap the header of the post you want to edit and then tap the 'edit button'.

I know this because my iPhone keeps submitting posts before I'm done composing them.

Well, lookie there! Guess what I learned today?

Thanks, Kit!

-Kevin