I'm so tired of paying full retail!

[llowwelll]

amber, thanks for the coupon idea and website suggestion.

I agree with the whole notion of being sick of paying full retail for everything. This hobby is needlessly expensive. The markups are ridiculous. For example, I was searching for 50 gal worth of Instant Ocean salt recently and found it for as low as $9.99 on the internet. When I checked my lfs, it was $22.99 for the EXACT same product. That profit margin right there is downright greedy and I would say borders on being plain immoral. I don't know if that markup occurred at the retail level or what but whoever did it is simply wrong. That's the kind of stuff that makes this hobby very burdensome at times. I could keep going on and on. In the end, though, I think the folks in this hobby, be they producers, wholesalers, or retailers, who see fit to mark up prices so drastically are hurting themselves more than anyone else. I very well might spend $80-$100 for a good quality skimmer, but no way would I spend $300 for one. Therefore, no one in the industry gets my dollars that they would have gotten if they didn't so drastically overcharge. $9.99 for a 50 gal bag of salt...yeah, probably; but no way on the planet would I pay $22.99. That lfs got $0 from me when they may have gotten $10-$12 if they didn't overcharge so exorbitantly. Get my point? We hobbyists as a consumer group make thousands of similar decisions every day and most of them result in money not being spent on the hobby where money would have been spent if prices were halfway reasonable. A number of hobbyists out there are fairly well-to-do and don't mind spending three or four or five thousand dollars on a reef setup. Have at it...but I'd say folks like that are relatively few in number compared to comparatively average, everyday folks who likely make up the bulk of this hobby. Imagine if Wal-Mart charged two or three times as much for products as they do now...they would promptly go out of business. That's what companies in this industry do now! That has to make it more difficult for them to make a profit. Their prices limit their consumer group to a fairly small segment of either relatively wealthy hobbyists or die-hard reef addicts who would skip meals to fund their reef. Imagine if they appealed to a much wider group. Maybe each individual would not spend as much money but as a whole MUCH more money would flow into the hobby and profit margins could be cut way down and companies would still make more money than they did before. Oh, wait, holy cow, I did go on and on. A thousand apologies to everyone. I ranted.

 

[Mike02]

llowell, i dont think its greed. An LFS does a much smaller volume then a mail-order co. It can't compete with the discounts a mail-order firm would get from a producer. A Walmart, for ex., is getting its stuff (from producers), at a comparitively very low cost then its competitors. It does, because of the volume business it does. Walmart is popular, does alot of business, and a producer will cut a special deal with a Walmart, because it knows Walmart will buy/sell alot of it, and the producer will be able to get exposure of its products. Some "retailers" will even sell below cost, (of some items), if it means they can drive a competitor out of business. those losses are subsidized by its volume business. I've seen airlines do it all the time in the past. A big carrier will flood a market with cheaper seats then its small competitor (which only operates a few routes). The small carrier 'was' making money on the routes...the big carrier is losing money (becuz of big union contracts). but the big carrier doesnt care, it has a zillion other monoply routes it makes money on. Once the small carrier runs out of cash, it goes out of business. the big carrier then ups its price. I'm not saying Walmart does this sort of thing. i like Walmart, but an LFS is only trying to survive with its tiny volume business. I knew someone who owned a Western Auto store in Texas. He said Walmart could sell things cheaper than what he was buying from his producer. What was he to do? He went out of business.

 

[2poor2reef]

The truth is very simple. Nobody is getting rich owning an LFS. It's actually a pretty lousy business in terms of profit on capital invested. If you don't think so try opening one yourself. The ones that I believe are really paying off are the ones that supplement their local businesses with mail order. That is my opinion anyway.

[ September 03, 2001: Message edited by: 2poor2reef ]

 

[davelin315]

Since Cheese dug this one up from the grave (June), I'll throw in my 2 cents, which last time I imparted my knowledge of the industry, caused a major flame between myself and several shop owners over competing and ripping off customers. The mark up on the average fish is approximately 10000% or more (hopefully I did my math correctly). This means that a damsel that you might be paying $3.00 for initially costs approximately $.03. A nice angel that you pay $40.00 for might cost about $.40. I have seen livestock price lists from Indonesia and other places, and I know that the majority of fish that we purchase cost less than $.10. The most expensive fish I have ever seen on one of those price lists was a golden angel, and that was when it was brand new in the hobby, and it cost around $40.00. It was retailing in the one place that I saw one for around $500.00. Now this is not to say that there are not some cost increases that are legitimately passed on to the customer. For example, this does not include any customs fees or duties that have to be paid, licensing fees, shipping, overhead, etc. etc.. However, greed comes into the picture when you consider that most stores will pool their orders with other LFS in order to save on shipping costs. In my area, within a few miles of each other, there is one store that sells, for example, a purple tang for $29.00 and another that sells it for $99.00. Xenia cost $19.99 at the cheaper store, at the more expensive store, it costs $35.00. A simple long tentacle anemone costs $29.99 at one, $99.00 at the other. A mail order bat ray that I got, with shipping, cost me around $90.00. At the same store, they sell them for $2,000.00. Lemon sharks on the internet cost $125.00. At this store, they cost $2,000.00. You get the picture. There are some stores out there that really screw you over as far as their markup is concerned, while others only make their profit as a business, and don't totally rape the customer. I am not saying abandon your LFS, just be aware that the ultimate price you pay may or may not be a fair one after they take the risk of purchasing and importing the fish you buy, but if you shop around, you will know if it is fair or not. The best thing to keep in mind when determining if you are being given a fair price is to compare prices among LFSs, because many of them will pool their orders and pick up their own cargo at a central airport to save on money.

 

[chinese101]

I agree with mike. even with the markup, a lfs is not making a lot of money with the low volume. Our hobby is not as wide spread as one would think. these stores selling on line may not be make any money at all with all these overheads. Just look at webvan and amazon. Amazon is still claiming that it will turn a profit by years end. I think I've heard that 6 times now.

Your lfs has to take loss on a lot of life stock loss. If you think your utility bill is outragous, think about them.

A piece of nice coral at 25-30 bucks is cheap at lfs. I got my corals from a wholesaler at 15-18 bucks. A blue tang wholesale at 10 bucks, retail at 15 bucks. Now how many of those a lfs can sell in a day. They have to cover their cost too. I never complain about my lfs prices. If I can find cheaper prices I just buy elsewhere. Understand it is a business they are trying to run. If all lfs sells at wholesale prices, they'd soon go out of business and where would you get your fish from.

Just my opinion.

Lee

 

[monkeyboy]

That story about the 9.99 bag of IO is pretty ridiculous. It's pretty hard for an LFS to get a bag of salt that cheap and we usually have to initiate price wars with our suppliers. It's more than a 100% markup, if you don't want to pay for it, then don't. I would understand people freaking out if it was a really large place w/ big volume but we're talking about small stores with a few employees and owners that are far from "greedy and immoral". Heaven forbid that LFS's mark up their inventory so they can stay in business.

BTW, if that LFS got their 10-12 dollars they could very well have taken a loss on that item or only made 1 or 2 bucks. Do you really think that every store in the world gets the same price on a bag of salt and each gets to choose what their price is? Thats's very wrong because these places buy in tremendous volume and in some cases don't even take a markup on it just to get people to buy. Most LFS's don't have money or the space to buy massive quantities of products to get a better price.

So llowwelll i hope you realize that your LFS isn't being greedy, they just have to make enough money to keep the store running and because of the steady slowing of business from customers turning to the internet. Think about it.

 

[llowwelll]

I would think that making money period, whether it's one cent or one dollar, on the bag of salt in question would be better for the lfs than the customer going somewhere else and making no money on it at all. It's no wonder that there is a steady slowing of customers to lfs's when prices like this occur.

 

[SPC]

What were the shipping charges on that bag of salt?
Steve

 

[Carpentersreef]

Holy cow,
It amazes me how some people do not understand what it takes to run a business! Quoting prices that you see advertised on the net or from various suppliers/wholesalers is nowhere NEAR the final cost of the product /livestock! If you want to buy off the internet, fine, what about the shipping charges it takes to get it to your place? What if it shows up damaged? What if is doesn't show up at all? What if it isn't even what you ordered?
The LFS has WAY more things to pay for, above the cost of the item, just so you can get in your car and pick it up in 15 minutes or so from your house. Mortatilty rates on livestock,rent, power, salaries, insurance, their best guess on what you are going to come in and ask for, and the financial carrying costs on the stuff that they had to pay up front for. What if their best guess is on a product that has a limited shelf life? In the garbage it goes, and guess where that money comes from? The revenue from their sales! What are you going to do if you need immediate advice? Or a fast replacement part? Go to the internet? I don't think so. The internet is a great resource for info, but it will NEVER beat the service of a good LFS. I say give the LFS, if it is a good one, all the support you can. If you want cheap stuff, fine, do nothing but shop around. But who are you going to turn to when you are looking for service? And why then, should they even help you? Don't support a bad LFS, take the time to search out a good one, and stick to it.
If you think YOU are sick of paying full retail, how would you feel if you were paying the lease on a pet store to the tune of $2000/month, power of $400, plus everything else, with a business plan of customers hopefully buying from you?

Mitch

 

[JennM]

I love when this discussion crops up...One would think that ONLY LFS take a markup. Check your grocery bill lately?

davelin315, I say this with all due respect, but you have NO CLUE what you are talking about. Perhaps the collector charges 4 cents for a damsel, but by the time they get to a wholesaler in LA, they are worth $1.25 and when you add the cost of air freight in a "typical" order, price of freight per animal, that adds anywhere from $1.35 to $2.94 or more PER ANIMAL. Suddenly that damsel COST $4.00 to sell, and I've seen them selling for $3.99-9.99 here and there. Transhipping might be cheaper for the individual specimen, but greater distances and lower tech packaging mean more mortality.

How many arrive DOA? You still have to pay freight on deadstock, even if your supplier credits you for DOAs. Add an airline that's running late, or careless and they bust a box or two, and bags leak....you get the picture.

Salt: I love this one. SOMETIMES wholesalers put it on sale for $8/bag. The regular going rate is $13.60 for 50 gallon IO (where I live, and it's a national wholesale chain). If it's $8 bag for my LFS, he makes a little more profit, the price is $16.99. If the store doesn't get it on special, it's still $13.60 his cost and STILL sells for $16.99. That cost doesn't count the time/mileage to go pick it up at the wholesaler OR freight to have it delivered...

I've seen stuff in the petwarehouse.com catalogue selling for less than wholesale. I've bought stuff there for less than wholesale.

I won't rehash all the BENEFITS that a good LFS provides, many of them FREE (advice, water testing, water...sometimes for a nominal fee, but still a good convenience), I think others did a good job in justifying mom and pop stores' markups, but now I want to shed a bit different light on things.

Walmart versus Grocery store/other department store. On most items, the average retail profit margin is 60% (more on some things, less on others)...Walmart averages 40% and that's how they can undercut the little guy. Add to that the fact that they buy a zillion widgets directly from the manufacturer (versus 100 gross from a wholesaler), the prices goes down....VOLUME.

How much does that T-Bone steak get marked up? How many went beyond their expiration date and had to be thrown away, and how do you think they are paid for?

If you're going to be critical of RETAIL, then look at the whole picture, not just LFS. I guess LFS owners/workers are more lax about leaving invoices lying around, and Wal-mart doesn't so you can't see how much THEY paid for what you're buying.

For me, I'll buy dry goods online to save a dollar....but mechanical equipment and livestock I prefer to see and carry out myself from a good LFS. I want to see it swim, eat, open up (coral)...do whatever it's supposed to do. If I buy online, I don't even know if the person who processes my order even sees the livestock, or is it shipped directly from somewhere in the Indo Pacific? Buying livestock online there is
no guarantee of health, do you know if it was quarantined? All these questions can be answered by your LFS.

NO I don't believe in supporting bad LFS that don't care about the health of their specimens, but it was quite probably a LFS (or purchases from LFS in somebody's home) that interested you in the hobby to begin with.

OK..climbing off my soap box.

Jenn

 

[Carpentersreef]

One other point - markup is different than margin.

50%markup = 33%margin.

If you purchase something for $100, mark it up 50% to $150, then your profit margin is $50 on the $150, which is 33%. A business is considered to be doing well if their net profit is 5%(after expenses) If you multiply a business' total sales for the year by 5%, you'll get a good idea what the owner is taking home.
Of course, this is a generalization, but a good rule of thumb.

Mitch

 

[Chris Lucia]

At least some of you get the picture. Thank you for standing up for the GOOD Lfs out here.!! As an owner, I can tell you that I work longer hours and harder at keeping our place up than most would realize. There's just so many bad ones around here, that we need to be sure ours is the best. Late nights unbagging shipments after driving back and forth to the airport, waiting for late flights, etc. All in the name of attempting to have some nice stock for all of you to come in and "ooh" and "ahh" over.
Its all worth it to me when the customers tell us that we have the best store around, and that they drive from 2 hours away just to come to our store to select corals and marine fish & inverts.

As far as pricing, Internet pricing is just like magazine mail-order, which we have been dealing with for years. I have been in business and dealing with this for 11 years. When we opened in 1990, Instant Ocean salt, 50 gallon bag was selling for $16.99 retail.. Our price today in 2001 is $18.99/ bag or $54/case (3 bags). I think that's pretty good, and apparently our customers do to, since they buy tons of it. By the time you ship a 16 lb box (that's the weight of 1 bag of IO), the shipping charge will be at least $6-$9. So $9.99 plus shipping is really not that much of a savings, especially since you have to wait, it could puncture during transport, etc..
Did any of you ever consider asking your LFS for a quantity discount? We ALWAYS give good customers quantity discounts on items such as salt. Or sometimes we'll throw in some snails or hermits with a large purchase. We are always willing to cut a break for customers who will be dropping a good chunk of money at once. By ordering online, maybe you'll save $1-2. But you could save that by not stopping at the donut store for a coffee, or by buying a few less lottery tickets or cigarettes that week!!! If you still mail order to save $1-2 rather than giving the business to your small local store, then you don't belong stepping foot in his place at all. Or maybe LFS could lower all the prices to mail-order/internet prices, and charge $3.95/minute for advice, water tests, etc??. It cracks me up when someone comes in, complains about prices, doesn't buy a damn thing, but TAKES UP 30 MINUTES OR MORE OF OUR TIME DESCRIBING HIS SICK FISH AND ASKING US WHY THEY ARE SICK WHEN HE HASN'T TESTED HIS WATER IN 6 MONTHS, OR DONE A WATER CHANGE IN 3 YEARS!!! We are happy to give advise and perform other free services for those who shop in our store. I hope none of you go into your LFS and ask advice about products, ask for demos on lighting or other information and then proceed to mail order the item after some nice fish store owner spent time guiding you and showing you some of the equipment in use at his shop. That is downright rude. If you want to buy it online, that's your right. But one shouldn't steal the knowledge, advice and experience gained form an LFS which is FREE to customers who shop there.
Grocery stores can compete on price alone, but in our business, the service, advice, knowledge and experience of a good LFS are a value-added benefits that are worth paying a little extra for. After all, a good LFS can actually SAVE you money, by not selling you inappropriate products and livestock which may not be appopriate for your tank. Example, a customer called me the other day and asked me how to take care of a feather star (crinoid) which he had purchased elsewhere. I told him that I can't offer him any advice on the animal, and that we choose not to sell animals that are inappropriate for aquariums. That customer has never gone into another store for livestock since then.
Here's a tip: Most LFS's survive on what I call the 80/20 rule, which means that 80% of your business comes from 20% of your customers. These 20% are the customers that help us survive because of their repeat business. They are also the ones that get a phone call when a certain exquisite piece of coral or fish shows up. They are more likely to earn discounts, special pricing on lighting upgrades, free R/O water, free fish baby-sitting services if their tank leaks, etc. My advice to those who have a good LFS near them is work you way into that 20%, and you'll get personalized service, high quality specimens, and fair prices everytime. And one more thing that's great about retail LFS, face to face discussions and interaction with other hobbyists who have the same passion for the hobby as most owners. Thanks for your support of us!!!

 

[foo-cat]

Well said Mitch!

 

[JennM]

::::::Applauding RedCynarina:::::::

If I'm ever back in New England I'll definitely look your store up!

I can't tell you how many sick fish I've treated that were brought in by customers who purchased them elswhere, but they either couldn't ship them back in the mail or the retailer they bought them from doesn't take them back for rehab. Often (but surprisingly not always) this inspires some customer loyalty in the future but not always. I've learned that despite my best efforts to sometimes steer people away from organisms that are unlikely to survive and thrive, people WILL go and buy them wherever, and then they seek help to solve the problems after the fact.

And of course, if one is to provide excellent customer service, it's not kosher to stand there with hands on hips and shake my head and say, "I told you so"

but I've thought it a few times...

The LFS business is a tough one. Anybody who thinks that any GOOD LFS owner is laughing all the way to the bank is kidding themselves. A good LFS is created and maintained for the love of the hobby, not the almighty dollar. There are easier ways to make money, that don't involve handling hundreds, nay thousands of animal lives, and the potential to lose those lives (and the money they cost) if things aren't done right.

I'm the first one to say that I've seen some NASTY places in my day...places that just made my blood pressure rise, and I'm not suggesting for a moment that anybody should support bad stores. If you feel the need to "rescue" a fish on delivery day before it hits their "skanky water" then you shouldn't be shopping there at all, lest you keep them in business another day. You should be able to shop with confidence, and the looks of the sale tanks shouldn't cause cringing

Jenn

 

[davelin315]

I guess this is addressed to JennM for the most part, since she chose to address my post and tell me that I don't know what I'm talking about.

YOU'RE AN IDIOT.

Before you go jumping all over me for stating what I know, why don't you go back and reread my post (you too, carpentersreef, if your comments were directed at me, not the idiot part, just reread my post). I quoted initial costs, and said that it didn't take into account any of their overhead, shipping, licensing, etc. I also said that there are some stores that will truly rip you off and some that won't. I didn't say don't shop at your LFS because it's a rip off. I understand that it's a business, and I buy livestock almost exclusively from LFSs. In fact, on many threads, I extol the virtues of some of my LFSs that I visit. I even started a thread that only about 2 people posted to on sharing your experiences with LFSs in your area, good or bad, so that other hobbyists could know where to go and where to avoid. By not reading my post and just looking at some numbers, you completely misinterpret it. My message is the same as yours, although you failed to see that in your cursory read through of mine. I said locate your good LFS by comparison shopping. No doubt you do the same thing where you're from, and I think I'm pretty safe to say that you don't buy your livestock at the place that charges 10 times what the other place charges. Next time before you criticize, know what you're talking about before doing it. For example:

<BLOCKQUOTE><font size="1" face="Verdana, Helvetica, sans-serif">quote

Perhaps the collector charges 4 cents for a damsel, but by the time they get to a wholesaler in LA, they are worth $1.25 and when you add the cost of air freight in a "typical" order, price of freight per animal, that adds anywhere from $1.35 to $2.94 or more PER ANIMAL. Suddenly that damsel COST $4.00 to sell, and I've seen them selling for $3.99-9.99 here and there. Transhipping might be cheaper for the individual specimen, but greater distances and lower tech packaging mean more mortality.

pretty much is the same as what I said here:

<BLOCKQUOTE><font size="1" face="Verdana, Helvetica, sans-serif">quote

Now this is not to say that there are not some cost increases that are legitimately passed on to the customer. For example, this does not include any customs fees or duties that have to be paid, licensing fees, shipping, overhead, etc. etc..

It's a damn good thing you climbed down off your soap box, because I think your vision was being obscured by how high up you were on it since you so misread my post.

By the way, I, too (monkeyboy, this is directed at you) have seen 50 gallon bags of IO salt for around $10, although it's been a long long time since I saw this, and I'm sure my LFS bought a huge quantity to offer it at this price. Nowadays, if I saw 50 gallon bags for $10 each, I think I'd buy 50 bags, but for now, I'll settle for looking for that $50 200 gallon bucket that comes around every few months.

Here's the thread, by the way, that I posted in support of LFSs, although you must have been on your soapbox back then, because I didn't see you bragging about your favorite LFS to help them and your fellow hobbyists out, although I did see monkeyboy there.
Good LFSs

By the way, I don't mind a flame here and there, in fact it's kind of fun, but I don't know why ignorant people (JennM, that's directed at you again) go off on somebody before reading what they have to say. And by the way, you have Cheese Sandwich to thank for bringing up this flame again, since it was from June, way before I signed up for this bb, and Cheese thought it should be rehashed. By the way, Cheese, where are your additions to the flame?!

[ September 04, 2001: Message edited by: davelin315 ]

 

[Carpentersreef]

Davlin315,

No my post wasn't directed to just you, I was trying to point out that knowing the initial cost of a fish or product is pretty much irrelevant to the retail price. But since you mentioned it, I did go back and reread your post, and when you mention things like "10000% markup" and use words like "greed", it can leave people who don't know much about business with the wrong impression.

Mitch

BTW, I don't do "flame"

[ September 04, 2001: Message edited by: Carpentersreef ]

 

[davelin315]

Point well taken, but I was only addressing an earlier (way earlier, by several months) post when I mentioned greed. As I said, there are a bunch of stores that will not rip you off, but there are also a bunch of stores that take advantage of buyers, and caveat emptor is a good policy to have when in their stores. I appreciate your response to my post, and as a person who has examined going into business for myself and doubted I could turn a profit doing it, I understand and appreciate your point of view. If you truly want to show your appreciation for your LFS, why not revive the thread I put a link to on your LFSs?

 

[Anonymous]

<BLOCKQUOTE><font size="1" face="Verdana, Helvetica, sans-serif">quote

I hope none of you go into your LFS and ask advice about products, ask for demos on lighting or other information and then proceed to mail order the item after some nice fish store owner spent time guiding you and showing you some of the equipment in use at his shop. That is downright rude. If you want to buy it online, that's your right. But one shouldn't steal the knowledge, advice and experience gained form an LFS which is FREE to customers who shop there.

Amen!

 

[JeremyR]

I don't like it when people spend hours asking advice then mail order the goods either.. but I've learned to accept it and go on with life. It's been going on for years, and will not really change.. you learn who is just there to pick your brain and who is really going to be a loyal customer, and if it's busy you spend the time with the loyal customer.. it's that simple.

As far as overhead.. people have no concept. My electric bill alone is like $1200 in the summer. But I'll be driving that BMW soon! Heh.

 

[dbman]

<BLOCKQUOTE><font size="1" face="Verdana, Helvetica, sans-serif">quote:</font><HR>Originally posted by RedCynarina:
Here's a tip: Most LFS's survive on what I call the 80/20 rule, ...
My advice to those who have a good LFS near them is work you way into that 20%, and you'll get personalized service, high quality specimens, and fair prices everytime.

[/QB]<HR></BLOCKQUOTE>

Yes, this is exactly why when i go to the one LFS in my area that generally has quality livestock, I can't get the attention of a staff member for about 20 minutes while they're talking to their "regulars" who take all the best specimens from the shipments before they even hit the display tanks. Sorry but when I go to a small retail business I expect to be treated like a customer, not a tourist. This is why I started making all my significant purchases from online or large-scale vendors, because the premium I payed for "service" from the LFS was all going to the hours they spend on that "20%" you speak of so proudly. I guess if I want to be successful in this hobby I have to be close personal friends with a store owner. Good deal.