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The slower burning and thicker the propellant is, the harder it has been to make corrections with good results. During this time, I have been testing like crazy, but we also have to keep products moving out the door so we can keep the bills paid and food on the table. This company provides 98% of our income. (My wife sells Avon and Mary Kay. If your wife/girlfriend needs anything, let us know.) The harder an issue is to solve, the longer it takes because we still have to keep the rest of the business going and providing income. So meanwhile, certain products are not available while we move the ones we still can.
If I had all of this extra time back, if I didn’t have to spend the time sifting crap out of AP and testing it till it’s allowable again, OR the cost of purchasing replacement AP earlier than expected at 4x the price, maybe then our shelfs would be stocked enough so that our dealers couldn’t clean out or inventory with their orders. With the way the rules & codes are written, I either pay through the nose to keep things in check, or I start selling lower quality propellant to our customers and hope for the best. I decided to take the first option. If you’d like me to try out the second option so that our reloads are always stocked everywhere, let us know. Most people only ever see the cost in the product itself. They will never see or experience the cost of keeping the products the same, year after year, after year. That time has to be paid for somehow.
On the price increases. Last fall our competitors had a price increase. We did not. We were late to increase our pricing until late in the 1st qtr of this year where we continued to see additional price increases into the new year. This caused another smaller increase. I expect that you will see a new price increase coming from AT and CTI in the coming months perhaps. AT has hinted as much when posting about Ti sponge. Zinc has tripled in cost, Titanium sponge has gone up 1/3rd in cost since our last purchase, AP 4x the old cost and those are just the top ones above the aluminum, phenolic and graphite increases. What I find really difficult to understand is why people like Jim seem to think that Loki Research should be able to operate on the same business structure/model as our much larger competitors when they know for a fact that we have a very small fraction of the resources and scale at which these much larger companies operate. Yet they still throw more stones at us when times get tough, as they are now.
Hey Brian, that $49 I-405 from 2009 still might have been made by me. I made all Loki propellant and reloads from around May 2009 to March 2010 and from April 2011 and on. This includes the Proteus 6 full P-motor. At $69 today, that’s only a 29% increase for the I-405. By today’s inflation standards, that’s not bad, is it?
Speaking of inflation. What most people will never grasp is the unseen burden of time this current inflation puts on a small business, let alone a 2 person business. I cannot tell you the amount of time I have spent in keeping up with the current day pricing on all the many different types of materials we source to produce our products over the past 12-18 months as they continually increase. I have only one vendor who I get an automatic email from every time DOA or R-45 increase in price. Since 7/22/2020 I have received 10 price increases from them. I have only one vendor who sends an email about 2-3 weeks before they hike their prices. Not much time to for us to react there. Everyone else I purchase from I have to request a new quote which is good for 30 days in order to know if the price has gone up at all. In some instances, like anodizing, I have had to find a new vendor all together. They don’t have the workers/staff any more to meet their work demand but they still have large government contracts they must fulfill, so the govt gets the work and small businesses get kicked to the curb. Some vendors won’t even take on any new business now for the same or similar reasons. Just about everything we purchase both for business and personal use (food/fuel) has gone up in cost one way or another. If we gave a 2-week notice before a price increase, it would only put us further and further behind. I don’t think CTI or AT announces their increases ahead of time. Do they? I don’t see this really anywhere in the retail world normally. Sure, it would be nice to know, but I don’t think it is a realistic expectation.
I have a customer who has his own small business. He makes custom turntable plinths, by hand out of exotic woods and parts for his small customer base who happily pay a premium for his gorgeous products. I seriously doubt that his business could easily scale up and grow simply by hiring and training new help on the art of custom working wood into stable turntable plinths in order to increase his production numbers while maintaining the same level of quality and service his current customers expect, all so that he could sell his new increase in volume to a few dealers at a discount the customer never sees. That would require a mighty BIG step up in production to cover the wholesale discount loss.
In a small rocket motor company, it isn’t a matter of just having a bigger grill and cranking out more hamburger patties. We’re not selling hamburgers here or anything close to that. You’ve got to have a LOT of money that you are able to invest, AND potentially loose in order to make “production line” volume level rocket motors. I don’t have that. I’m no big wig. I cut every 38/1200 reload and larger BY HAND. Everything is done by hand, manually except for mixing propellant. Even the lathes are manual. I can’t afford a quality employee in a college grad at the top end of pay, and on the bottom end, our states new minimum wage will be $12 by 2023. $12/hr to sweep the floor, clean/dip tooling and put the correct items into plastic bags, not to mention, teach them what every single rocket related item and/or term is and means. By the time I train a $12/hr employee that I can trust with the work we do, they’re gone to another less difficult job for $15/hr or more within 4-6 months. Or now they’ll just stay at home and make more money on incentivized unemployment. Don’t forget to add on about $8,000/yr for that employee’s taxes. This is not a job you can keep turning over part time help every 4-6 months and get ahead. It only gets us behind. I’m the only one who can train them every single time. I can’t do much else while I train someone, and they don’t make electronic kiosks for making rocket motors either.
We are not nearly large enough to support a dealer structure like AT and CTI have, or do so in the ways they do. We are not nearly large enough to absorb all of the recent price increases in the same way as AT & CTI have. We are not nearly large enough to operate on the same economy of scale that AT and CTI do, yet the detractors of Loki Research believe that if we are to operate at all in their rocketry community, we must have a $1,000,000/yr business that only sells through a dealer network. Well, we’ll take your investments directly, large or small at any time in order to get there. We only have two people here at Loki Research, my wife Carma and I. Without a HUGE outside investment that I cannot make myself, it's not going to happen. I seem to possess the knowledge and skills required to make motors of equal or greater quality than our competitors, but we lack the rest of their infrastructure and financial backing to easily compete for a larger share of their market, let along the required paperwork & personnel needed to enter the commercial/govt sector.
I hope that answers most of the questions in this thread. Thank you to all of you who continue to support us and have posted supportive, positive comments. Happy hunting to the rest.