Estes: betting the business and the hobby on... retail?

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New to the forum here. Speaking of Ace Hardware I was at mine in Northern California last weekend and on my way to the checkout there was an Estes display off to the side with a few kits, motors and wading. It definitely shocked me but now it makes sense
Just for fun, I looked at the Ace app on my phone. You can order engines - looks like MAP for pricing (12.99 for 13mm & 18mm, 14.99 for 24mm). But, it would only allow me to order a minimum of 12! Is that a full case? Other quantity option is 24.

No rockets were listed and to see what engine you were ordering, you needed to use the pictures (which I hope are correct).

Haven't been in-store recently. Our local hardware store had a fire last year and the owners decided to retire as reopening was a major PITA. Dealing with the insurance company was the biggest of the issues but apparently stocking all the stuff they had previously was a close second.
Our LHS said they have about 3 years of Estes stock available but won't be buying more because Estes requires minimum $1000 to order. At least that's what the manager told me. I'm trying to get him to order more AT stuff but hasn't so far. He's been donating A3 motors and we've been doing event to "infect" the youth. Sounds weird but that's what we have to do to keep the hobby alive. I believe this because I started when I was 11 and now that I have disposable income, I pour thousands into the hobby.

I’m hoping to attend the Manufacturer’s Forum at NARAM so I can be one of those old timers in the audience.

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@Initiator001, would you elaborate on what that means? Estes has other distributors, i.e., Emery, Heartland, HobbyTyme, and HRP (*), so I'm not understanding what an "exclusive sales program" means. I searched around a bit and didn't find any news blurbs.

(*) Potentially related, I did recently notice Stevens International had dropped off Estes' list sometime in the near past.
Yeah, It's a bit confusing. I used to think I understood it until I didn't. ;)

Let me put it this way. There are hobby distributors and then there are HOBBY DISTRIBUTORS.
I divide hobby distributors into three groups/categories.
(Note. This is NOT any sort of 'official' listing. It's the best way I can think of to present this information).

Category 1: Small distributors that serve a specific state (Usually a large one like California, Texas, etc.)

Category 2: Regional distributor that serves a specific geographic area (North East, South West, Midwest, etc)

Category 3: National distributors (The big boys)

As the number of hobby shops has contracted so too have hobby distributors.
The most distributors were category 2 back 30-40 years ago.
In 1990 there were four big players:

Hobbico/Great Planes
Horizon Hobbies
Hobby Dynamics
United Models

United Models had been around the longest and specialized in plastic models (Revel and Monogram were their two big accounts).
Hobbico/Great Planes was a juggernaut with a direct sale mail order division (Tower Hobbies). They were changing the way the hobby industry worked (Too long a story for this thread).
Horizon Hobbies was number two but was hungry.
Hobby Dynamics was started by some of the people who started Great Planes but left that company.

(Side note: When Gary Rosenfield and I were making a sales trip to the big four it was funny that I could look out the lobby windows at Hobby Dynamics and down the street was Horizon and a little farther was Hobbico).

As far as the hobby industry was concerned Estes was the only rocket company and everyone got along well with them.

In 1992 Hobby Dynamics was bought out by Horizon.

Then there were three.

In 1998 (Or was it 2002?) Hobbico bought United to get a bigger piece of the plastic model pie.

Then there was two.

However, by this time Estes management only recognized one of the two remaining big distributors.
It was a crazy time.

More about this in another post.
Let me back things up a bit and spend time on a different tangent.

In 1969 Vern and Gleda Estes sold their company to Damon Corporation, a medical company with a small science/education division.

Damon experienced a hostile take over attempt in 1988-1989. Needing cash Damon sold off Estes for $43.5M.
The new Estes owners (NOMAD Partners?) had overpaid for Estes as the company had many suiters.
When the loan could not be paid back fast enough the investors (TCW and Peter W. Smith) called it.
These companies installed their own General Manager to run Estes named Barry Tunick.

Now, even with all that was going on with Estes, the hobby distributors didn't experience anything that would alarmed them.
Estes was making new products, shipping product and continued to offer excellent terms/credit to distributors.

Things were about change.

Hobbico/Great Planes was Estes biggest distributor. Due to Hobbico being able to place larger orders than any other distributors Hobbico received additional discounts and terms.
Hobbico was not satisfied with just selling other manufacturers hobby products. They could not continue to grow unless they could control the manufacturing of hobby products. Hobbico was aggressive in either signing exclusive deals with product manufacturers, buying a manufacturer or, if they could not get an exclusive deal/buy a manufacturer then they would create a similar product to undercut the original manufacturer and take away their sales.

Hobbico was hardcore, no-holds barred, their way or you go out of business. (Does anyone remember when Great Planes brought out their own line of small R/C airplane/car hardware to compete with Du-Bro? That's just one example).

Hobbico had been one of the bidders for Estes but had wisely dropped out when the bidding went too high.
But, Hobbico wanted their own rocket company.

Enter Bill Stine and his new company called Quest Aerospace. Stine pitched Quest to Hobbico and they liked it.
Hobbico provided initial assistance to Stine while getting an exclusive on all Quest products.

In October 1990, the Radio Control Hobby Trade Association (RCHTA) had their annual trade show in Chicago. This was a huge hobby event when hundreds of hobby manufacturers would display new products and take orders from distributors
Just days before it opened word got out about Hobbico and Quest. This was big news.
This was a terrible shock to Estes and their management. Trying to dig themselves out of a financial hole they now had to compete with the largest distributor/buyer of their product.

Things did not go well.

Estes immediately cut off Hobbico. Hobbico was no longer an Estes distributor. This was a loss of several million dollars yearly to Estes but Estes felt very threatened and they also wanted to make an example of Hobbico.
Estes then turned to Horizon Hobby Distributors and offered to make them Estes number one hobby distributor and give them the best deals/terms.
For awhile Hobbico continued to sell Estes products. At first it was thought that Hobbico was just selling down old stock but Hobbico continued to sell Estes products long after any sort of warehouse stock should have been depleted.
While I do not know for certain, rumor was that somehow Hobbico was buying Estes through another distributor or had set up a dummy distributor to continue to buy Estes. Whatever it was, it was stopped by Estes.

Hobbico no longer had Estes. They did try to push Quest as an alternative but the sales numbers never matched what they made selling Estes products.

In 2002 Tunick and two partners bought Estes from TCW and Peter W. Smith. Hobbico still did not have Estes products but there would be another seismic shift with Estes in the future.

I hope folks don't mind this long background discussion about the hobby industry related to Estes as I try to inform about hobby distributors, exclusives and random events that have shaped things.

Stay tuned.
Correction to my last post.

In 1994 TCW and and Peter W Smith sold Estes to a company called Hobby Products.
Hobby Products sold Estes to Barry Tunick and two partners in 2002.
After 2002 Estes continued on under the control of Barry Tunick.
In 2010 Tunick sold Estes.
The two top bidders for Estes was a group headed by Bill Stine and Hobbico.
Stine's bid was more than Hobbico's but Tunick personally disliked Stine and wouldn't deal with him.
Tunick accepted the Hobbico offer but wanted some revenge on Hobbico for what had happened with Quest in 1990.

The sales agreement between Tunick and Hobbico contained a not unusual clause stating that the new buyer (Hobbico) could not cancel any orders placed before the sale of the company.
Okay, no big deal.
After the sale Hobbico found out that Tunick had allowed Horizon Hobby to secretly place a huge order for Estes products just before the sale was concluded.
Now Hobbico had to fulfill an order by their chief competitor before Hobbico would be the exclusive 'big' distributor of Estes products.
Horizon ordered a lot of product. Enough to keep them going for several years.

Eventually, Hobbico became the exclusive 'big' distributor of Estes products until their demise in 2018.
Estes Industries, LLC (aka the Langford family) purchased Estes from the Hobbico bankruptcy for $7M.

Estes now made a deal with the remaining large hobby distributor, Horizon Hobby.
In exchange for the best deals/terms for Horizon, Horizon would have to agree to make Estes the only model rocket company they would do business.
In other words, the last remaining large hobby distributor would only carry Estes rocketry products and no other.
This was a big deal as Horizon was pretty much the hobby distributor of choice for HobbyTown USA stores.
While HobbyTown USA stores were independently owned and were not prevented from ordering from smaller distributors or direct from hobby manufacturers most HobbyTowns didn't want to bother with the extra effort as Horizon carried 80%-90% of what hobbyists wanted.
Many other independent hobby shops also bought from Horizon.

Which brings us to today.
To stay alive in a declining hobby industry Estes needs to protect those outlets which sell their products. MSRP and MAP are just part of that process.
Hobby shops/retailers are Estes main providers of it's product to the general public. Estes could not survive as it is on 'nostalgia' rocketry products and long time buyers/supporters of the company.

Hobbyists wants have changed. Today's new hobbyists want RTF/ARF products whether it is RC airplanes, RC cars or rockets. To them it's about the experience not about getting there (Although, there are still a few 'renegades' out there who want to build things. ;)).

I hope Estes survives in some form for many years to come.
Again, Bob steps in and delivers some fascinating insights. Hopefully this helps the “why doesn’t Estes just do <fill in the blank>” folks and the “without us Estes is finished” folks understand a little bit better how production, wholesaling, distributing and retailing fits together. Contracts are made, money is borrowed, payments are remitted, product is made, shipped and warehoused and every step either takes money or makes money. Some steps do both at the same time - and it’s either thank heaven for the accountants or we’re being hosed by the bean counters 😆

And as it’s been said many, many times, the distributors are the biggest customers and they primarily want products their customers - the retailers (again, not us!) - can sell-through quickly and predictably. Shelf space costs money so the stuff on the shelf had better produce sales or it’s not there for long. The distributors pay up front (typically via various commercial financial methods that can be very complicated and involve layers of commercial banks and logistics specialists) we give our money to the retailers, not directly to Estes. With the exception of direct sales from the Estes website and I wouldn’t be surprised if they’ve set up some sort of layered arrangement to make their own website fit with the overall distribution model they’re using.

As I wrote earlier my misgivings are with how the OP was bounced around by Estes with each component of the company unclear as to what the others were doing or with what the overall direction that Estes seems to be taking with smaller retailers - especially online retailers and launch site support “trailer” retailers.
Great historical context, but what do hobby distributors have to do with, which seems to be a way to get wholesale pricing directly from Estes? For example, where does Hobbylinc get their stock from?
I'm wondering where all of these rocket-stocking hobby shops the distributors sell to are. The few shops I know in my area aside from Hobby Lobby that carry rockets carry very little product, which moves very slowly.

Maybe other parts of the country still have a lot of hobby shops. Aside from R/C that's not really the case here.
The B&M LHS I've actually been to in this area, as noted, has the end cap of rocket stuff in a store stocked full of R/C cars, etc. They're probably buying from Horizon. I haven't been to a HobbyTown USA, but my guess is they account for a lot of the Horizon rocket volume. I think there's one in Austin area and one in College Station. Some of them handle AT stuff.

It seems to me that it probably doesn't really make sense for Horizon and the dealers to stock a lot of parts and odds and ends from Estes. But it would be cool if the Estes web site was more complete and consistent on offering that stuff. When parts come and go from the site sporadically, while evidently being in good supply on hand all the while, it's pretty annoying.
Great historical context, but what do hobby distributors have to do with, which seems to be a way to get wholesale pricing directly from Estes? For example, where does Hobbylinc get their stock from?
HobbyLobby is such a big company that they can buy at distributor pricing direct from Estes. HL buys enough to fill their warehouses and then individual HL locations order Estes products from the local HL warehouse. In a way, they cut out the middle-man.
HobbyLobby is such a big client that HL can in some ways dictate terms to Estes.
Several years ago HL was going to drop Estes. Estes offered to make 'exclusive kits' just for sale in HL stores. That kept HL buying/stocking Estes.
So if the OP wants access to Estes products, it sounds like he needs to reach out to Horizon Hobby and see what their terms are like. It's possible that they could offer him a discount on par with what he was expecting from Estes.
That's a great idea.
However, hobby distributors usually require proof of storefront and a local business/resale license.
They're going to want to see a credit history.
If you pass all that you have to place minimum orders of at least $1000 each time.
Thanks Bob, let us look at Horizon Hobbies Vs Hobbico practices to B&M HS.

Hobbico put Tower Hobbies on the web to sell at prices that the Hobby Shop bought at. My Local large hobby store we used to have that was more traditionally and larger stock than Hobby Town told me his competition was his distributor.

I did computer work for him on the side and he showed me his costs vs Tower.

Horizon has strict rules on selling their branded items like "E-Flite" R/C planes. You don't see them highly discounted on the Web if discounted at all. What you see in Hobby Town for an E-Flight plane is what you see buying direct from Horizon.
So if the OP wants access to Estes products, it sounds like he needs to reach out to Horizon Hobby and see what their terms are like. It's possible that they could offer him a discount on par with what he was expecting from Estes.
According to Estes, they’ve forced all their distributors to sign agreements with Estes that they will not resell to online only dealers.
Ye Olde Rocketry Forum
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For those of you who are interested in the history of model rocketry and it's various aspects I would recommend you visit the Ye Olde Rocketry Forum:

There's a lot of knowledge and information about the hobby posted at that Forum
I have long wished for a definitive history of the hobby in book form. The information is currently scattered all over the place, some (I suspect) never written down at all. :(
According to Estes, they’ve forced all their distributors to sign agreements with Estes that they will not resell to online only dealers.

This is the biggest revelation from this thread IMO. Pretty monumental actually. Welcome to the new age.
For those of you who are interested in the history of model rocketry and it's various aspects I would recommend you visit the Ye Olde Rocketry Forum:

There's a lot of knowledge and information about the hobby posted at that Forum

I believe this is the preferred URL now:

I read both forums. They are different, with different focuses and different personalities active. A few of us cross over elegantly.