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Starting an online rocketry business

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013Rocketry

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Greetings everyone! I have been pondering for awhile the notion of starting a small online rocketry business. I was wondering if anyone here has any advice on things to do for starting a new business of this nature.
 

BrendanH69

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My feedback, based on my first 2 years in HPR would be:

1) Communicate
2) Communicate quickly
3) Have live/accurate inventory status at all times
4) Communicate
5) Ship to Australia ;)
6) Care for your customer
7) Add that little bit of something "extra".

Provide these things and we the customer will bring $000's of repeat business.
 

MOF410

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Im all for more vendors, I think it's good for everyone. This is a small world so customer service is key to long term success.

There was a guy on here who started a store in my home state last year. I waited until others had ordered and received items before ordering. Reviews were all good. Placed my order (1 rocket kit, 4 motor packs), and only ever received 1 motor pack. Talked to him several times telling me it was coming but it never did. He complained about wildman rocketry playing dirty and then closed up shop. Im now out about 50 in motors and aerotech mirage kit. I wonder how many others he stiffed as well.
 

Bill S

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My feedback, based on my first 2 years in HPR would be:

1) Communicate
2) Communicate quickly
3) Have live/accurate inventory status at all times
4) Communicate
5) Ship to Australia ;)
6) Care for your customer
7) Add that little bit of something "extra".

Provide these things and we the customer will bring $000's of repeat business.
I would add #8 as well: Don't charge MSRP or close to it and expect people to beat a path to your door. There are LOTS of online companies out there, and charging near-MSRP for online purchases is just insulting. Now for some specialty items that you make exclusively, you can maybe set your own price and people will pay it or not, but otherwise... if its a choice between newbie vendor A at MSRP (or within 10% of it) vs vendor B who sells at a lower price, most people will go with vendor B. Unless there is something compelling you to pay higher prices, say like Apogee charges, but they offer other services which may be worth the higher prices to you.
 

ewomack

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Since I restarted my rocketry interest over a year ago, barely a week goes by when I don't hear about yet another online rocketry site. My rocketry link list extends beyond my screen resolution. Given that, were I to consider starting an online rocketry business, I would research what already exists, gauge the competition and try to find a unique need that stands out among the hordes of already existing and well-established sites. Can you offer something that other sites don't? Why would people visit your site and not others? Better yet, put yourself in a buyer's shoes and ask why you would visit a site that you built over a site you currently shop at. If you can't find a reason, then you likely need to dig deeper for a more compelling business model.
 

Zeus-cat

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Go in with the expectation that you won't make any money and you won't be disappointed. Unless you are designing and selling your own stuff you are just another dealer offering a commodity.
 

PXR5

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Getting the word out on the net is the hardest part.
I'm not that computer savvy, so make sure you are comfortable with that.

I owned a brick and mortar hobby store, when I closed it in 2008, I couldn't make that transition to online :(
 

rfjustin

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1. Timely, clear, and transparent communications are key.

2. Solid customer service/support, a close second. You would be amazed that having a working customer service number (that gets answered) is really well received.

3. If you are trying to build a business (and do not have any stock currently), DO NOT TAKE MONEY FROM CUSTOMERS until the time you are able to fulfill the order.
***Granted, you could ask customers if they are comfortable participating in a pre-order sale, but you are responsible to set clear expectations with said customer base. For example, you can offer a 25% discount on the front end, if and only if you make it clear it is a pre-order sale, in order to help you build you brand/business.***
 

Jeff Lassahn

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Make sure you're doing it because you have a burning desire to do sales and customer service, not because you think it will give you a better chance to do rocket stuff. Most of the time you'll spend on this is not about rockets, it will be about running a business that sells [it doesn't really matter what].
 

Cl(VII)

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3. If you are trying to build a business (and do not have any stock currently), DO NOT TAKE MONEY FROM CUSTOMERS until the time you are able to fulfill the order.
This above all else! Goes hand-in-hand with real time inventory. I don't even take money for custom parts until they are in hand, I would rather risk getting stuck with useless (to me) custom parts, then be holding someone's money without product.

Also, as others have said, communicate! I have not had a problem with any customer or retailer that wasn't settled reasonably for both parties with a few timely emails.

Being a vendor is a good way to meet many rocket folk (especially at launches), and be at least somewhat "involved" in more projects than you could ever hope to undertake personally.
 

les

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They say to make a small fortune in rocketry, start with a large fortune.... ;)

Agree it is VITAL to communicate.

If you plan to basically be a re-seller (selling other companies goods), you will need competitive pricing.
And communicate

If you have your own products, you should check the competition - who else has similar products and what is their pricing.
In terms of pricing, consider losses (warranty replacements, packages lost/damaged in shipping, etc), yet beware of pricing yourself out of the market. You may have come up with the greatest thing since sliced bread, but if you try selling it at $1,000,000 a copy, you'll never actually sell one....
And don't forget to communicate...........

Pre-orders? - its been done. Often successfully. But there have been several bitter times where people ordered and got nothing but a hole in their bank account. People are a bit more wary now.
Again - communicate - make it absolutely clear if you are doing a pre-order.

Finally - several people though of starting a rocket company, and were successful. But also found that it took so much time they couldn't actually fly anymore. The company became "A JOB" and was no longer fun.
 

ShoelessJoe

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Why, what is your goal? As someone who has started from zero, grown an online direct import business to seven figures and sold it, I'd suggest you start by:

1) Clearly define your near term and long term goals (this is not just revenue goals, think about how you want to structure your life, and whats important to you in your work and non-work time - you can always make more money, you can never make more time). You cannot predict the future, but you should have several reasonably well defined target state possibilities in mind across multiple timeframes.

2) Research, research, research - look at the competitors, size of market, purchasing habits, customer demographics etc etc...if you haven't spent night and day for 2+ months researching and developing an execution model, you're nowhere near ready. There are plenty of places to shoot-from-the-hip in life and business, in the early 2000s you could get away with that in e-commerce, but that is not the case any longer...especially in a tiny market with many low margin high quality service providers.

3) With perspective on #1 & 2 above, think through what skills you currently have and which you need to develop. Technology, marketing, advertising, business operations, accounting, execution, vendor/supply chain management, employee/team leadership, customer service, conflict resolution etc etc.

It may sound like a lot of work just to decide if its a good idea (and it is), but anything short of this is a setup for failure.

Lots more to say on the topic, but this is where to start IMHO.
 

MikeT

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9 times out of 10 trying to turn your hobby into a business kills your desire for the hobby. If you want to make a million in the hobby business invest two million.

Mike
 

Woody's Workshop

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Just a comparison; In model railroading these days almost all good to top end sells on a pre-order basis. If you are in the market for a particular locomotive or rolling stock, if you don't pre-order you are most likely to miss out. They do runs of a limited number, and it may never be run again. I've seen buildings recently offered this way as well. They have succeeded at this and prices are (I think) ridiculously high. Most railroad modelers average age is over 60, returning to the hobby after a childhood fascination. Kids grown & gone, retired or about to, and have money to spend.
As for this hobby, the market is flooded with what we want (with a few exceptions) and it's almost a cut throat price battle with everyone selling on Ebay these days. Since they are stuck at home anyways...
If you can't be contacted to resolve issues or questions 24/7, buyers will just move on.
(pause, Piano Man by Billy Joel on radio)
LPR is most available and the items and availability as you go higher on the ladder of HPR get more limited, and expensive.
Some people don't have time to shop around, they need something, they need it NOW, and they will are willing to a little more if they know it will be on their door step 2 days later.
Some people (like me) have nothing but time. I'll spend 2 hours searching for something I want to get the best price. But, I'll be waiting a week to get it, but I don't care. For what I do, I pretty much know where to go to get the best service, fastest delivery and the best price. Personally, I hate talking on the phone anymore, and hate texting even more. But when I send an Email, I don't want to wait days for a reply. If it's about a purchase, most likely I've moved on by in a couple hours.
I'm mostly interested in OOP Custom, Quest & Estes Kits, but also buy new ones. I also scratch build A LOT. Right now Balsa is a PITA to find, or good quality when you find it. So I'm looking at kits mostly right now.
I personally have a wide range hobby knowledge as I do leather crafting, been looking heavily into model railroading and I still try to do a little wood working occasionally. But lets stick to rockets as that is your interest for a business.

What can you offer ME that would bring me to your website? To check out what you have, and make a purchase?

If you are asking us what you can do for us...you had an idea and didn't do much, if any, research into the idea.

If you can answer my question and bring me to your website, then you have a chance at success.
Selling rocketry IS NOT a get rich quick business. It takes a fortune to get started, no mater what you plan to sell.
Most vendors are created out of passion for the hobby and the people who also enjoy it. There is profit, but it's not big and it doesn't come fast. And those that succeed take a unique pride in servicing their clientele, whom ever it may be.
 

HHaase

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I have a non-rocketry hobby business, in a niche hobby market, and work in the planning/engineering level of manufacturing full time. I've also looked/am looking into the rocketry world as an add-on to my home business too. So here's my top ten list of things to consider.

1: Do not expect to make money for quite some time. At least 2-5 year minimum. Particularly if you focus on direct sales in a saturated market.
2: If you're making your own stuff, it's more about logistics and BOM management than rocket design.
3: Your profit margin needs to be significantly more than you expect it to be. Add a zero. Maybe more.
4: Unless you're buying stuff 1,000+pieces at a time, your pricing from suppliers will suck.
5: Your favorite idea ever will sell 3 pieces a year. The one that pisses you off the most will be your best seller for a decade.
6: Three Words "Limited Liability Corporation". Running as a sole proprietorship makes all the risk your own personal risk.
7: Standardization. It's for YOU.
8: One successful build does not equal sufficient testing.
9: Customers will find very creative ways to do things extremely wrong when building your kits. Learn from each of these, and be open minded.
10: Your reputation is utterly everything. It takes forever to build good faith, and only ONE extended forum war to destroy everything. Never short-change or screw over a single customer because they will NEVER forget that and it WILL haunt you later. Seen it happen to many many many of my competitors, even the good ones. Everybody will have bad days. NEVER let that impact your customers. If mistakes are made, rectify them quickly and honestly.

-Hans
 

boatgeek

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Much good advice above. One that I haven't seen is to think about what you can charge (ie what the market bears), and what your costs are for that item That gives you your "profit" for the item. Then think how much time it will take to create that order. Divide one by the other to see what your hourly rate is, even before you get into customer service etc. You will probably find that number really depressing. It will get even worse if you think about paying for space to run the business and/or tools to do the work.

I remember seeing that most people on Etsy are working for well below minimum wage. I wouldn't expect that rocketry would be much different, at least until you have a significant business built up.
 

dr wogz

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2: If you're making your own stuff, it's more about logistics and BOM management than rocket design.

THIS!! this is probably the biggest "thing" many fail to comprehend or understand!

Standardize on one motor mount, and one body tube size & NC to start. have 2 or 3 fin shapes. This will yield about 3-6 different models, but your inventory (and cost per part) is low. Toss in a coupler and a shorter BT, and you've just doubled (tripled!) your potential kit selection..
 

les

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Standardize on one motor mount, and one body tube size & NC to start. have 2 or 3 fin shapes. This will yield about 3-6 different models, but your inventory (and cost per part) is low.
I once supported/invested in a well known kit developer. Trying to find low cost parts were an issue. I came up with the idea of buying Estes rocket bulk packs from AC Supply with their 40% off. Scavenged body tubes, motor mounts, lugs, etc and he designed the rockets around the parts available in the kits.

5: Your favorite idea ever will sell 3 pieces a year. The one that pisses you off the most will be your best seller for a decade.

-Hans
And even with reasonable pricing and great designs, it was a struggle to sell all the kits put together....
 

Cape Byron

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I once supported/invested in a well known kit developer. Trying to find low cost parts were an issue. I came up with the idea of buying Estes rocket bulk packs from AC Supply with their 40% off. Scavenged body tubes, motor mounts, lugs, etc and he designed the rockets around the parts available in the kits.
That makes a lot of sense. Buying in bulk to get reasonable pricing is next to impossible unless you're buying hundreds and hundreds of units. There are exceptions, of course. David Qualman has been an incredible help with me getting my kits together at a reasonable price. Nose cones and body tubes are always expensive. Added to that, anything we import from the US to put in the kits costs us a small fortune in postage.

At least I have a good, local source of quality balsa and a mate who does brilliant laser cutting for me!

I make this stuff because I want to support LPR in Australia. I don't ever expect to do much except cover my costs.
 

rklapp

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There's a couple things I look for in an online store.

Unique product, something more than fins and a nose cone.
Cheap prices, otherwise I'll just shop from estesrockets.com or the LHS (whose prices aren't that bad but is limited in supply).
Free shipping to Hawaii with a reasonable minimum order ($100). Estes is usually $50 or less lately.
PayPal mostly because it's easier than entering my CC number.

I just placed an order with Belleville Hobby. I didn't feel like I needed to add things I don't want just to get the free shipping.
 
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