Great Goblin at AC Supply

Onebadhawk
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tbonerocketeer said:
It is. We had to sign a new agreement and they will refuse to sell to use if we violate. I have to get my site prices fixed in the next few days. By the way, a coupon code violates the policy now too....
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Minimum Advertised Price - depending upon the products you sell, the rules can get "fun". Hopefully for your sanity, it stays as simple as "$X is the price", as opposed to different vendors having different wrinkles on it.

-Kevin
 
troj said:
Minimum Advertised Price - depending upon the products you sell, the rules can get "fun". Hopefully for your sanity, it stays as simple as "$X is the price", as opposed to different vendors having different wrinkles on it.

-Kevin
Click to expand...
Their policy is you cannot advertise below the MSRP list. Not allowed to do coupons, flyers, or any kind of printed material. Web-based sales must be at MSRP, with no exceptions. The only time we can deviate from that is if they are running a sale on a product, then we can match. Supposedly, we're going to be notified about those this year. On site is a different story, as that is considered my storefront and I can do whatever I would like. So my pricing in the trailer will stay as is, just website won't be able to have it.
 
tbonerocketeer said:
Their policy is you cannot advertise below the MSRP list. Not allowed to do coupons, flyers, or any kind of printed material. Web-based sales must be at MSRP, with no exceptions. The only time we can deviate from that is if they are running a sale on a product, then we can match. Supposedly, we're going to be notified about those this year. On site is a different story, as that is considered my storefront and I can do whatever I would like. So my pricing in the trailer will stay as is, just website won't be able to have it.
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That's a pretty standard variant of MAP.
 
tsmith1315 said:
Do you think that was driven by the Amazon deals over the last couple years?

It does tend to devalue the products.
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No, it's driven by the fact that anyone buying from a distributor cannot compete because the distributor is selling wholesale to the public. Estes has also realized that their product has no value since it is always discounted.
 
Well. I don’t like paying more for rocketry stuff then I have to but something like this was probably inevitable. Being a privately held, for profit concern Estes has to watch their bottom line closely - deep discounts can’t be good for that.
 
tbonerocketeer said:
No, it's driven by the fact that anyone buying from a distributor cannot compete because the distributor is selling wholesale to the public. Estes has also realized that their product has no value since it is always discounted.
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So this price change is primarily to stop distributors from selling direct to the public?
 
mh9162013 said:
So this price change is primarily to stop distributors from selling direct to the public?
Click to expand...
No, the price is a map policy to protect their brand value. Its very common in other industries as well. It also makes it such that dealers and store owners will continue to sell their products. If you owned a retail store and you can't compete because your wholesale cost is the same as what everybody buys for online, why would you stock the product. That in turn causes new customers to be non-existent as they can't find product locally.
 
tbonerocketeer said:
No, the price is a map policy to protect their brand value. Its very common in other industries as well. It also makes it such that dealers and store owners will continue to sell their products. If you owned a retail store and you can't compete because your wholesale cost is the same as what everybody buys for online, why would you stock the product. That in turn causes new customers to be non-existent as they can't find product locally.
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So maybe Estes' strategy is to sacrifice wholesale online sales to strengthen online and offline retail sales? Makes sense, I suppose.

I never thought of Estes brand as having a "premium" value attached to it, though. I'm familiar with MAP policies and I've usually only seen them attached to high-end products. We're talking designer goods, electronics, etc.

I guess Estes wants to be known as the premium brand when it comes to balsa, paper, cardboard and plastic? If it helps them stay in business, more power to them.
 
The discount is $19.50 but the shipping to Hawaii (non 48 continental state) is about $19.50 so same as Estes website.

I know our LHS won't order from Estes anymore because it's not worth it. Fortunately, they have a 3 year supply. They're looking at AT and other vendors.
 
If the AC Supply discount goes away, so does most of my flying of larger black powder motors, at least after I burn through the large supply I have on-hand. Discounted Quest motors (at AC Supply or elsewhere) are just too cost-effective compared to Estes at MSRP.
 
bad_idea said:
If the AC Supply discount goes away, so does most of my flying of larger black powder motors, at least after I burn through the large supply I have on-hand. Discounted Quest motors (at AC Supply or elsewhere) are just too cost-effective compared to Estes at MSRP.
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Just be sure the non-phenolic, clay nozzle motors are after 2021. In humid climates, the clay nozzles crack. Also, chuffing off the rod has been an issue lately. Never had any problems with E20 or E30.
 
mh9162013 said:
<snip>

I never thought of Estes brand as having a "premium" value attached to it, though. I'm familiar with MAP policies and I've usually only seen them attached to high-end products. We're talking designer goods, electronics, etc.

I guess Estes wants to be known as the premium brand when it comes to balsa, paper, cardboard and plastic? If it helps them stay in business, more power to them.
Click to expand...
In the hobby industry, certain company names and the products they create/release have a high awareness factor with the general public which equates to sales/profit.

Estes is one of those companies.

Other examples from the past include Monogram/Revell, Cox, Aurora. All of these are pretty much gone now. 😢
 
Initiator001 said:
In the hobby industry, certain company names and the products they create/release have a high awareness factor with the general public which equates to sales/profit.

Estes is one of those companies.

Other examples from the past include Monogram/Revell, Cox, Aurora. All of these are pretty much gone now. 😢
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Good point, brand/name awareness is valuable. Although I'm not sure what the correlation is between high-er prices and brand awareness. Maybe there is no connection, but online wholesalers selling at wholesale prices to the general public make it harder for retail sellers to sell to the general public, which then leads to fewer stores that sell Estes which lead to less brand awareness? That's possible, I guess...
 
mh9162013 said:
Good point, brand/name awareness is valuable. Although I'm not sure what the correlation is between high-er prices and brand awareness. Maybe there is no connection, but online wholesalers selling at wholesale prices to the general public make it harder for retail sellers to sell to the general public, which then leads to fewer stores that sell Estes which lead to less brand awareness? That's possible, I guess...
Click to expand...
This is exactly the issue. Prior to becoming a distributor myself, I could not stock or sell Estes products. When my dealer wholesale from a distributor-which is where I was required to buy because Estes did not sell direct to dealers- was 45% off retail and I had to pay shipping made it such that I could not justify selling it at the present time of 40% off that everyone else was paying. Once I was able to become a distributor for Estes, matching the presence sales price from everywhere means that I end up profiting about $0.05 per dollar. In the business world. Anything less than 15 to 20% does not keep lights on. The thing a lot of people don't realize is that if you have a 40% margin to start with and you give a 30% discount, you have lost 75% of your profit. I've been a distributor for Estes for almost 2 years now, and looking at those numbers alone, I'm not sure how anyone can stay in business when you have to pay employees and payroll tax, and keep the lights on. Estes was my fourth highest selling item for last year, and my lowest generation of profit. I made less money on Estes products than I did on products that have a lower yearly selling point
 
mh9162013 said:
Good point, brand/name awareness is valuable. Although I'm not sure what the correlation is between high-er prices and brand awareness. Maybe there is no connection, but online wholesalers selling at wholesale prices to the general public make it harder for retail sellers to sell to the general public, which then leads to fewer stores that sell Estes which lead to less brand awareness? That's possible, I guess...
Click to expand...

I bought two Der Big Red Max's at stupid low prices online. Each one I planned to build, but gave to other/new flyers to help generate their interest in the hobby.

Now at retail price, I'm not likely to buy another one for myself because their perceived worth is much lower in my mind.

Side note: I was at Hobby Lobby yesterday and noticed their plastic model car kits are now mostly in the $29-$39 range. :oops: I'll keep that in mind when looking at rocket kits moving forward.
 
mh9162013 said:
I never thought of Estes brand as having a "premium" value attached to it, though. I'm familiar with MAP policies and I've usually only seen them attached to high-end products. We're talking designer goods, electronics, etc.
Click to expand...

MAP is very common in consumer appliances and electronics. Not just the high-end stuff, but across the board. Whirlpool and LG were two of the first to implement it, across their lines. Whirlpool makes a significant percentage of the appliance brands that those of us in the US know.

I say this as someone who had to help implement MAP in those categories, as well as someone who's chased down the source of MAP violations.

-Kevin
 
troj said:
MAP is very common in consumer appliances and electronics. Not just the high-end stuff, but across the board. Whirlpool and LG were two of the first to implement it, across their lines. Whirlpool makes a significant percentage of the appliance brands that those of us in the US know.

I say this as someone who had to help implement MAP in those categories, as well as someone who's chased down the source of MAP violations.

-Kevin
Click to expand...
I hear ya, although when it comes to appliances, many consumers equate price to quality (whether they'er looking at a bargain brand or top-of-the-line brand). I doubt that phenomenon is equally strong with the model rocketry hobby.

Another difference is that most people view appliances as necessities, so the relationship between prices and perception will be different. Not sure if this makes it more or less likely that a MAP should be applied to them (or model rockets)...I'm not marketer.

I don't like this MAP stuff, but I understand why it's done (in general). Just trying to understand why Estes is doing it. Right now, that understanding seems to be what I mentioned in post #24
 
tbonerocketeer said:
No, the price is a map policy to protect their brand value. Its very common in other industries as well. It also makes it such that dealers and store owners will continue to sell their products. If you owned a retail store and you can't compete because your wholesale cost is the same as what everybody buys for online, why would you stock the product. That in turn causes new customers to be non-existent as they can't find product locally.
Click to expand...
I used to own a large shooting range and this is exactly what happened to firearm sales. Large distributors sold direct to the public at prices that were lower than my cost. When you have a brick and mortar store no way you can compete. It ruined the entire industry. So when you go into a gun store and ask to match an online price, realize you are essentially asking that dealer to take a loss on the sale. The absolute best was when the firearm purchased from an online dealer broke, and that person came to our brick and mortar store for help, they couldn’t believe we wouldn’t help them fix their problem. Our standard reply was you should get the place you purchased it from to help you with that. Because of that scenario we established a loyal following of folks that were willing to pay a reasonable margin for the ability to have great service. It’s very hard for brick and mortar stores to compete with online warehouses except when it comes to expertise and quality.
 
tbonerocketeer said:
This is exactly the issue. Prior to becoming a distributor myself, I could not stock or sell Estes products. When my dealer wholesale from a distributor-which is where I was required to buy because Estes did not sell direct to dealers- was 45% off retail and I had to pay shipping made it such that I could not justify selling it at the present time of 40% off that everyone else was paying. Once I was able to become a distributor for Estes, matching the presence sales price from everywhere means that I end up profiting about $0.05 per dollar. In the business world. Anything less than 15 to 20% does not keep lights on. The thing a lot of people don't realize is that if you have a 40% margin to start with and you give a 30% discount, you have lost 75% of your profit. I've been a distributor for Estes for almost 2 years now, and looking at those numbers alone, I'm not sure how anyone can stay in business when you have to pay employees and payroll tax, and keep the lights on. Estes was my fourth highest selling item for last year, and my lowest generation of profit. I made less money on Estes products than I did on products that have a lower yearly selling point
Click to expand...
TRUTH!
 

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