Business is Business is Business. Whether small business or big business it is all the same. I think you all are fooling yourself if you don't think Walmart has between 300-700% markups.
Business is all about taking advantage of what you can get and make money on. Sell it for the maximum amount you can while still maintaining the volume you want.
We started selling online also about a year ago and I am going to bet by the end of this year we will sell more Rio Seio pumps than the good Dr. I did this by making good business decisions and balancing profit with being able to move the product. Now that I am moving the volume in one product I can approach other manufacturers about products and have a better chance of getting the kind of price that I will need to be competative in an online marketplace.
There is a major basic problem with the co-op of stores besides the fact that someone would always feel like they were getting the short end of the stick. This problem is that on most products you can negotiate better prices through a wholesaler than buying direct. For example I talked with a fish food manufacturer who shall remain nameless about buying direct and was told that the starting discount with a minimum $1500 first time buy in would be 32% but because the wholesalers that I use have a long term relationship with them and have proven that they can move a large volume of product they get about a 50% discount. I had already talked one of them into a 35% discount on the product so the only reason to buy direct from the manufacturer would be to start the relationship and try to prove that you can sell enough volume to move up in the discount market.
The online marketplace is a much more cost involved place to sell. Sure you can set up a website and sell things but how do you generate sales. You have to establish a lot of good word of mouth advertising by spending lots of advertising money to generate your first set of customers and then making sure that they are happy with their experience so they tell everyone they know and so on and so forth.
We take care of customers and go above and beyond for all of them but after awhile you figure out that some people don't care about the service and those people personally I quit making the extra effort. For our regulars that are loyal and appreciate us going the extra mile they continue to get the great service.
Fosters and Smith does not get people started in the aquarium hobby. PetsMart and PetCo are the big ones in getting people into aquarium by local level marketing and availability. I will guarantee that the good majority of people get started in this wonderful hobby one of two ways: the number one way is to see someone elses aquarium and fall in love with it, or the second would be to have a good experience with an aquarium as a kid.
It all comes down to one simple fact and that is that this is a business that many people are very passionate about. Most of the people that start shops are hobbyists who think that they can do it better than the existing stores. The problem is that most of them know nothing about business. The sad part is that most of them also know nothing about the real part of the business and that is getting the livestock in. Most of the livestock that they have ever owned has come from another store that took the time and losses involved with producing a good quality product to take home. These people have never added 100 corals to a tank that just shipped in and tried to keep it stable and have rarely had any experience with disease control in fish. This is why the majority of new fish stores fail. This is a very difficult industry because we deal in things that are and must remain alive. Anyone can run a business that deals in dry goods then it is all about what you pay and what you can sell it for.
My last point is that stores need to emphasize the benefits of buying the product from their store versus spending less to buy it online. I had one person that I sold something to online that summed up my main point pretty well when I told him that the defective item that he bought was going to have to be returned to me so that I could ship him a new one. He said that it(a ESU Coralife Powercenter) was running the lights on his tank on the good timer because one was broken and that he didn't want to have to be without it for a week and have to pay to ship it back because he could have bought it locally for what it would cost him and wouldn't have been without it for a week. The shipping on the item to him was only about $5 so in order to save 5 bucks he shipped the item in. So make sure your customer service is good. The quality of what you sell is high and emphasize that your prices after shipping may be a little higher but if you have a problem not only could you be without your item for awhile but you might have to pay more shipping also making the item more expensive. Internet sales are going to continue to increase so we have to protect ourselves. When those customers come in, you know the ones, and play twenty questions about an item you sell and then don't buy it from you kindly point out to them that one of the things you get when you buy things from me is the know how on how you use what you are buying and that if they are not going to buy it from you they didn't pay for the advise. They will more than likely stomp out and throw a hissy fit but they were just going to take time away from customers that pay for your advise.
Business is all about taking advantage of what you can get and make money on. Sell it for the maximum amount you can while still maintaining the volume you want.
We started selling online also about a year ago and I am going to bet by the end of this year we will sell more Rio Seio pumps than the good Dr. I did this by making good business decisions and balancing profit with being able to move the product. Now that I am moving the volume in one product I can approach other manufacturers about products and have a better chance of getting the kind of price that I will need to be competative in an online marketplace.
There is a major basic problem with the co-op of stores besides the fact that someone would always feel like they were getting the short end of the stick. This problem is that on most products you can negotiate better prices through a wholesaler than buying direct. For example I talked with a fish food manufacturer who shall remain nameless about buying direct and was told that the starting discount with a minimum $1500 first time buy in would be 32% but because the wholesalers that I use have a long term relationship with them and have proven that they can move a large volume of product they get about a 50% discount. I had already talked one of them into a 35% discount on the product so the only reason to buy direct from the manufacturer would be to start the relationship and try to prove that you can sell enough volume to move up in the discount market.
The online marketplace is a much more cost involved place to sell. Sure you can set up a website and sell things but how do you generate sales. You have to establish a lot of good word of mouth advertising by spending lots of advertising money to generate your first set of customers and then making sure that they are happy with their experience so they tell everyone they know and so on and so forth.
We take care of customers and go above and beyond for all of them but after awhile you figure out that some people don't care about the service and those people personally I quit making the extra effort. For our regulars that are loyal and appreciate us going the extra mile they continue to get the great service.
Fosters and Smith does not get people started in the aquarium hobby. PetsMart and PetCo are the big ones in getting people into aquarium by local level marketing and availability. I will guarantee that the good majority of people get started in this wonderful hobby one of two ways: the number one way is to see someone elses aquarium and fall in love with it, or the second would be to have a good experience with an aquarium as a kid.
It all comes down to one simple fact and that is that this is a business that many people are very passionate about. Most of the people that start shops are hobbyists who think that they can do it better than the existing stores. The problem is that most of them know nothing about business. The sad part is that most of them also know nothing about the real part of the business and that is getting the livestock in. Most of the livestock that they have ever owned has come from another store that took the time and losses involved with producing a good quality product to take home. These people have never added 100 corals to a tank that just shipped in and tried to keep it stable and have rarely had any experience with disease control in fish. This is why the majority of new fish stores fail. This is a very difficult industry because we deal in things that are and must remain alive. Anyone can run a business that deals in dry goods then it is all about what you pay and what you can sell it for.
My last point is that stores need to emphasize the benefits of buying the product from their store versus spending less to buy it online. I had one person that I sold something to online that summed up my main point pretty well when I told him that the defective item that he bought was going to have to be returned to me so that I could ship him a new one. He said that it(a ESU Coralife Powercenter) was running the lights on his tank on the good timer because one was broken and that he didn't want to have to be without it for a week and have to pay to ship it back because he could have bought it locally for what it would cost him and wouldn't have been without it for a week. The shipping on the item to him was only about $5 so in order to save 5 bucks he shipped the item in. So make sure your customer service is good. The quality of what you sell is high and emphasize that your prices after shipping may be a little higher but if you have a problem not only could you be without your item for awhile but you might have to pay more shipping also making the item more expensive. Internet sales are going to continue to increase so we have to protect ourselves. When those customers come in, you know the ones, and play twenty questions about an item you sell and then don't buy it from you kindly point out to them that one of the things you get when you buy things from me is the know how on how you use what you are buying and that if they are not going to buy it from you they didn't pay for the advise. They will more than likely stomp out and throw a hissy fit but they were just going to take time away from customers that pay for your advise.
