Rich,
There may come a time when a major Wholesaler again elects to sell direct to the hobby. All in all, I do not think it is a good fit.
Marketing to the end user is very capital and labor intensive. These types of facilities which would employ perhaps hundreds of employees are not well suited to the high rent warehouse districts surrounding the livestock ports. Remember that was Flying Fish's failed business model. The same is true for Florida's original Etropicals. Both were originally started and owned by Wholesalers. I know because I purchased them and that was one criteria that spelled their demise.
A simpler feat would be for a company such as mine, LiveAquaria.com, to start or purchase an existing Importer/Wholesaler. We do not see that as a wise strategy either as importing and marketing are so vastly different. Additionally, to secure the readily saleable livestock an Importer must also take all the incoming poor quality and slow moving fish and corals and these need to be flushed out through the trade. We would not have the retail avenues to do that. If Walt or any other wholesaler goes direct then they would not keep those channels either. Believe me, Kevin and I have researched this well and we concur that it would be a poor business decision for us or anyone else. Not saying it cannot be done but I do not see it reaching a scalable level. Again, part of the demise of Flying Fish and the original Etropicals.
My take is that the industry will not go back to the predropshipping era. It is a fact that it takes both the Retailers and the Etailers volume to keep the Wholesalers healthy. Right now the Wholesalers are not in good financial positions and that hurts all of us. Most Wholesalers are flat in volume and at least some have reduced staffing in 2007. I see consolidation on the horizon at the Importation level. Is this good ? It should be O.K. as I think there will still be enough Wholesalers and Distributors to prevent a monoply. Niche Wholealers, those who specialize in certain types of livestock really do not exist at marketable levels. We need the big guys such as Walt Smith, Quality Marine, SDC and others. This is not a sales pitch for any, just common names that most in the industry can identify with.
When Retailers leave their Wholesaler for one that does not sell to Etailers they are really taking their business to an unstable Wholesaler who may not be there in the future. I would not expect the original Wholesaler to welcome them back on equal terms.-------- A better plan would be to put the etail vs. retail differences aside and support the Wholesaler(s) who can deliver quality live stock on time, most every time.-------------- That in itself should drive the business decision, any other criteria will become a downfall.
You never hear me complaining about who else my livestock suppliers may be selling to. It does not matter as long as I get treated fairly. I need healthy Wholesalers and so does everyone else in this hobby. To be healthy and have a variety of livestock, Wholesalers need volume. That volume comes from a combination of retail and etail accounts, not one or the other. I do not know of one single good Wholesaler that does not use both retail and etail accounts to achieve the needed volume . They may claim otherwise but I know better as I pay the bills. I will buy from whoever delivers quality livestock and the price paid will be secondary. I suggest that criteria for everyone.
My bottom line advise--retail and etail, put your differences aside and purchase your livestock from the Wholesalers that have the best product and track record for delivery, period. Forget who else they sell to as the Internet, Petco and Petsmart are here for your lifetime. Without healthy Importers/Wholesalers,---- we do not have a hobby or our businesses.
Sorry for the length---Race
