MAC Certification Costs and Benefits: Retailer Case Study

[dizzy]

Mike, John, Lee Morey, anyone,
I'd like to see those charts that were posted on www.masna.org that explained predicted saving to MAC retailers posted over here so we could discuss. I went to www.MASNAorg site and it said it was moving to a new server. I then went to www.aquariumcouncil.org and it was not running for some reason. The study was based on the first four MAC certified retailers. It first listed the cost of the stores to get certifed. I believe # 2 the smaller store stayed in the red the first year. I think the numbers were based on selling 10%MAC certified fish that first year. Then then went to 25% second year, 50% third, 75% fouth year, and 100% 5th year I believe. The study was done by a MBA student or something I think. The study said that the only store that used premium pricing for MAC fish was retailer #1 I believe. I don't have all the figures, but if Lee Morey or John Brandt could get the charts and post here it would be a great help.

I did jot down a few figures because I felt they were quite interesting. I just wrote down the figures for the 5th year of the predictions. To summarize the following sums are what I believe MAC claims will be additional profit gained by becoming MAC certified. Keep in mind retailer #1 was the only one charging a premium for the MAC fish.
#1 $29,152.00
#2$1,771.00
#3$12,528.00
#4$104,679.00

John can you tell us a little bit more about these figures? I think you may have a history with one of them. Do they mean the four stores were killing that many dollars worth of fish before they became MAC certified?My first impression is that store #4 is either killing an incredibly high % of the their livestock or they do around $5,000,000 a year in saltwater livestock sales. If some type of forumla was used to obtain these figures I sure feel it would be helpful to see it, so we can check the math.

 

[Anonymous]

Dizzy,

I presume this is what you are talking about:
http://www.masna.org/legislation/mac/ce ... 0Costs.pdf

Sorry about the problems with the MASNA website earlier this week. Let's hope things are fixed!

-Lee

 

[dizzy]

Dizzy,
I presume this is what you are talking about:
http://www.masna.org/legislation/mac/ce ... 0Costs.pdf
-Lee

First I want to thank Lee for the above link and also John who sent me one via e-mail. I must admit I don't always understand charts and graphs and this one is no exception. In the conclusions it says "It is worth noting that retailer 2 and 3 register a loss during the initial two years" Looking at the charts it looks like retailer # 3 only shows a loss for the first year. Am I wrong or is this just carelessness or a typo?

I guess what I would really like to know is what formula can I use to figure out what my savings would be. Can you help me out John?

 

[John_Brandt]

Dizzy,
I presume this is what you are talking about:
http://www.masna.org/legislation/mac/ce ... 0Costs.pdf
-Lee

First I want to thank Lee for the above link and also John who sent me one via e-mail. I must admit I don't always understand charts and graphs and this one is no exception. In the conclusions it says "It is worth noting that retailer 2 and 3 register a loss during the initial two years" Looking at the charts it looks like retailer # 3 only shows a loss for the first year. Am I wrong or is this just carelessness or a typo?

I guess what I would really like to know is what formula can I use to figure out what my savings would be. Can you help me out John?

Mitch,

Sorry I left this question for so long. I got totally distracted with other things. It appears to me that there is a typo relating to the statement that Retailer #3 realized a loss in Year 2.

Keep in mind that this study is a purely hypothetical projection 5 years into the future, incorporating multiple variables, and variables that affect other variables. It's also the same calculation used for the targeting systems of Iraqi SCUD missiles :wink:

Obviously the formula for these here projections is going to be complex. Presuming that the retailer has detailed records of purchases by species, as well as mortalities by species then a number of calculations can be applied there. Presumptions are made about low (1%) mortality for MAC Certified fish and one begins to plot out savings over time. Mortality is pure profit shrinkage. It's like a Tiffany vase that fell off of a display shelf with no insurance. Not only is potential profit gone, but so is all accumulated monetary investments in the animal as well. It's assumed to be replaced. Dead fish are the worst profit drain a store could have. It is the equivalent loss as shoplifting.

When retailers show even reasonable numbers of mortality at the $50-300 per animal range, a reduction in mortality to 1% can have remarkable affect on the bottom line.

Mitch, if you put your mind to it you could come up with your own formula. If you have your store's historical data on purchases by species as well as mortality by species you could start to plot out savings by reduced mortality. Other factors might be more complex like savings due to efficiencies, costs due to modified administration procedures, etc. The variables are listed in the study, but those sound too complex for one to just deduce....MBA candidates excel at that stuff, so let them do it 8O

If you want to continue the discussion on this I will certainly oblige you.

John

 

[dizzy]

Sorry I left this question for so long. I got totally distracted with other things. It appears to me that there is a typo relating to the statement that Retailer #3 realized a loss in Year 2. John

John,
I would have proof read the conclusions if I was the MBA student, but it really don't matter much now does it? I've looked over the data and read the assumptions several times. The student mentions the MAC fees which are 2% of wholesale costs. It is not mentioned if the purchase price of the MAC fish are assumed to be higher than the non-MAC fish. Please find out if the student was working on the assumption that the fish would cost the same. If that was the assumption then please find out how MAC was going to get the divers more money for net-caught fish.
Thanks

 

[Caterham]

John,

I just read this entire thread and all of the links as well. I wanted to just ask one question.

It seems as though dizzy was asking some questions about the bottom line savings a retailer can expect from being a MAC certified retailer. I too would be interested in seeing some hard data as to how these numbers were established.

No offense, but it appears that they were just pulled from the sky. Please educate me. I would like to see hard data, including but not limited to every transaction through the test period and the species involved. This will, undoubtedly, help me run a better business.

Thanks so much for all of your efforts and I look forward to seeing the data.

 

[MaryHM]

Let me go out on a limb here...

Based on my past dealings with MAC and how they go about creating "data", I would guess that there were no "transactions", "test periods" or "species" involved in the creation of the savings. I'm counting the minutes until I'm proven wrong (hopefully???!!!).

 

[dizzy]

Read next post.

 

[dizzy]

Caterham,
I hope you heard this before I edited. I'll just let John Brandt respond and I withdraw my previous post.

 

[John_Brandt]

John,

I just read this entire thread and all of the links as well. I wanted to just ask one question.

It seems as though dizzy was asking some questions about the bottom line savings a retailer can expect from being a MAC certified retailer. I too would be interested in seeing some hard data as to how these numbers were established.

No offense, but it appears that they were just pulled from the sky. Please educate me. I would like to see hard data, including but not limited to every transaction through the test period and the species involved. This will, undoubtedly, help me run a better business.

Thanks so much for all of your efforts and I look forward to seeing the data.

Caterham, Mitch and everyone else,

I have been trying to track this information down for 3 weeks. I have spent 2 weeks barking up the wrong tree because of my own mistake. There have been 2 MBAs working on MAC financial projections. Without first consulting MAC Staff, I assumed it was MBA #2. I sent an email with Mitch's questions to MBA #2 and immediately got one of those out-of-town replies "Be back in a week." Ten days went by and I got a response from MBA #2 that I had contacted the wrong one. It was MBA #1 that prepared that report. Back to square one. So I am awaiting a response from MAC Staff to make inquiries to MBA #1. Now, there are very few MAC Staff and they are very busy right now. In fact, they are always very busy. So we wait some more. Sorry.

Is that enough transparency for you Mitch? :wink:

Caterham, I will tell you what I told Mitch....I will try to get you the info you want. There are no guarantees that I am going to get you the keys to the kingdom on this report. MAC is not a government agency that might immediately be able to send you a 50 page report on how their sub-contractor prepared a 2 page report.

I am a volunteer across the board. This means I am entirely uncompensated for my board position with MAC and MASNA. Your request for more information is reasonable, but please be patient. I hope you are interested in the details of this report because you are exploring the possibility of becoming MAC Certified.

Oh, before I forget, welcome to the forum. I see you are new here

John Brandt

MASNA
MAC
CMAS-Chicago

 

[dizzy]

Is that enough transparency for you Mitch? :wink:
CMAS-Chicago

John,
It's a good start but I like acrylic. :wink: I'm sure that you will be happy to learn I've been trying to help MAC out on this issue by doing a little investigating on my own. I wasn't an MBA student but I believe the figures are way off. So far off in fact that I would suggest pulling them off the MASNA site until the MBA can offer some explanation of how they were arrived at. I'm not going to speculate on why the figures are off. The student may have received faulty info from the retailers. If it is wrong though, please ask MAC to correct it or stop using it. Thanks

 

[Caterham]

John,

Thanks so much for your reply, I greatly appreciate it. I look forward to seeing the data when you get your hands on it.

Also, thanks again for your efforts here!

 

[John_Brandt]

Is that enough transparency for you Mitch? :wink:
CMAS-Chicago

John,
It's a good start but I like acrylic. :wink: I'm sure that you will be happy to learn I've been trying to help MAC out on this issue by doing a little investigating on my own. I wasn't an MBA student but I believe the figures are way off. So far off in fact that I would suggest pulling them off the MASNA site until the MBA can offer some explanation of how they were arrived at. I'm not going to speculate on why the figures are off. The student may have received faulty info from the retailers. If it is wrong though, please ask MAC to correct it or stop using it. Thanks

Mitch,

You are too young to be a grouchy old man yet. Let's wait to see what is behind these numbers.

I can tell you that you did find a genuine typo in the conclusion of that study. Eight people reviewed it...but I wasn't one of them :wink:

Keep in mind, when I do get explanations for these figures, I will not be able to post any proprietary information that directly relates to the retailers in the study.

Best regards,

John Brandt

MASNA
MAC
CMAS-Chicago

 

[dizzy]

You are too young to be a grouchy old man yet. Let's wait to see what is behind these numbers.

I can tell you that you did find a genuine typo in the conclusion of that study. Eight people reviewed it...but I wasn't one of them :wink:
John Brandt

MASNA
MAC
CMAS-Chicago

John,
I'm not grouchy, I'm having fun. I do believe it might be possible to show the MBA students that some of their assumptions may have been wrong. For example I learned yesterday that the MAC fish are currently costing more than the non-MAC fish. Also if the same model or percentage of decreased mortality were used on fish from non-cyanide countries, that was used on Philippine and Indo fish, it would yield inaccurate data.

John I may have assumed one of the wrong retailers when I was trying to sort things out. I have tried to call and also e-mail the stores I believe were in the study, with mixed success. I'll wait to see what you come up with and if I learn anything relevent I'll pass it on. I'm sure that both MAC and the readers are interested in seeing that the information we receive is as accurate as possible.

BTW if that store that is projected to save over $100,000 in the fifth year is currently killing $2,000 worth of marine fish a week they should be real ashamed of themselves.

 

[Caterham]

At this point it would appear to me that Mitch and Mary hit the nail right on the head. The only difference between those two people and the rest of us is that they actually have the courage to say what they feel, or what they KNOW.

Mitch and Mary have more combined experience in this hobby than I am likely to ever have, so I am just going to be quiet and listen for a while. I feel my opinion is shared by others that can express it quite well.

I hope that the results we were shown are not a bunch of

, but I fear that they could be.

 

[Anonymous]

John: Can you find out where this MBA got their degree? I need to cross it off my list of possible schools.

 

[John_Brandt]

Y'all,

I have the complete 35 page analysis with all figures and formulas in my hands. It is permeated with specific proprietary information provided by the retailers under the assumption of privacy. I'm not going to let them down.

Like any projection into the future it carries assumptions. Data was provided in faith by the retailers themselves.

Upon closer examination the "typo" we found is more innocent. It is not so much an error as it is an unintended ambiguous statement. The MBA knew what he meant, he just could have chosen a clearer way of saying it. "It is worth noting that retailer 2 and 3 register a loss during the initial two years" What he meant was that both register losses within in the first 2 years....Retailer #2 registers a loss in both Year 1 and 2. Retailer #3 registers a loss in Year 1. Admittedly this statement should have been more clear, but it doesn't represent any gross error.

It will take me some time to tease out the formulations used and provide them to you without proprietary data attached. But because a number of you have decided to ridicule the MBA, MAC and myself I have placed its priority down near my feet. I am nobody's Personal MAC Information Gopher. Mary can stare at her watch as long as she likes.

Treat me with dignity and respect and you might get what you desire!

John Brandt

MASNA
MAC
CMAS-Chicago

 

[dizzy]

Respectfully John,
There really wasn't very much ridicule in the above postings. MAC published a report for public consumption. Once that report becomes public record we have the right to ask questions as to how the conclusions were arrived at. I personally felt the assumptions should have been made clearer in the report. The slow response time tends to give one the impression of stalling or stonewalling. Your tart responses are starting to remind me of Donald Rumsfeld not Condy Rice.