You knew it was only a matter of time before the subject of coral pricing would come up in my column. Welcome to a topic fraught with opinion, hype, insecurity, anger, etc. It’s a real raw nerve for some in the industry, and it’s not commonly talked about. Very few people in the industry will offer an opinion on it, especially if it paints the industry in a less than perfect light.
Okay, someone has to come out and just say this stuff, and it might as well be me!
This awesome hobby of ours has some really absurd conventions, doesn’t it?
For example, the term “Limited Edition.â€
What exactly does that mean? Does nature only “make†a certain number of this coral just to keep the price high? Does it mean that there are only so many of these corals in the world? Well, I would assume so! I mean, there are only so many people in the world, too, so one could make the stretch and argue that we are all “limited edition.†as well, right?
I guess, as a marketing person, I should be more understanding and forgiving of the term. However, as a reefer, and a guy who of late sees more coral than most people in the hobby on a daily basis, I just can’t give in to the term. I suppose that it fits in many instances- If there are only twenty of these frags in the country at any given time, I suppose that’s what we have to call them, right?
The sad part about the “Limited Editionâ€, in coral terms, is that no one is really doing much more than picking them out of a batch of random corals. Every week, we get solicited by dozens and dozens of exporters offering us their corals from all over the world. After a while (like two weeks, lol), pretty much every offering starts looking the same: (Week one)- “Look at that insane Echinophyllia with the red and blue stripes!†(Week two)- Wow! An Echinophyllia with red and blue stripes! (Week three)- Does that Echinophyllia have red and blue stripes?†(Week four) “Hey, isn’t that a Mycedium with yellow eyes…â€
You get the picture.
"Oh, that's one we haven't seen before..this week."
Truly unusual corals come around rarely, because, like all the best Dodgeball players on the playground at PE, or the latest One Direction posters at Wal-Mart, they are picked over by their appropriate target market (in our case, coral vendors instead of prepubescent boys or giggly teenage girls.) in short order. From there, the capitalistic convention of supply and demand takes over. If you only have 6 of something and it’s generally agreed by most reefers to be hot-looking, guess what? It’s gonna be more expensive than the 25 Green Birdsnest frags that you have in your raceway. And it’s not as though the Birdsnest is any less compelling. It’s just that-well, there is more of it. I don’t have any problem with this.
In my opinion, acquisition and handling costs, relative scarcity and (gulp) uniqueness of a coral will always dictate it’s price. Within reason. Now, I’m just rendering my opinion here…Every time I breach this subject, I get some hate mail from a fellow vendor or two who calls me out and says something like, “Oh, YOU are now the self-appointed spokesperson for the coral industry/“, or “Hmm, some of those Acan colonies offered on the Unique Corals website are kind of pricey, aren’t they, wise guy?â€
"That's not a $10-a-frag coral, is it, Fellman?"
To these people I say, â€It’s my opinion, and if you want to wake up every morning and blog about stuff before heading out to work on your coral empire, have at it. Your opinion is as valid as mine.â€
As a coral vendor and businessman, of course I’m in this to make money.
Wow, I said it.
However, my pedigree as a reef geek prevents me from making money by fleecing fellow reefers. I love coral and the hobby and all that good stuff. Quite honestly, the vast, vast majority of vendors on this forum and elsewhere will say the same thing, and back it all up with their work. Yes, there are a few that take advantage of hype, frenzy, and our innate desire as reefers to have the coolest stuff. That’s why you see the same Oxypora that is on every importer’s stock list weekly given some absurd name, and offered at “X†hundred dollars per “eyeâ€â€¦ As they say, a fool and his money…were lucky to get together in the first place.â€
Am I writing this piece to relieve some inner guilt that I have because I offer Acans at $128 for a two-polyp frag? No, not really. I AM writing this to let you know that most vendors are not pulling prices out of the ether and just figuring that they can charge whatever they want for anything. There is actually some thought that goes in it. A method to our madness.
A "Limited Edition?" Probably qualifies for the term..or does it?
Here is an overly-generalized example of the economics of coral pricing:
Let’s follow the journey of "Mikey", a hypothetical wild-collected coral- Acropora expensive, and his journey from reef to reef aquarium. He’s a really attractive Acro, too, with beautiful blue growth tips on a reddish yellow skeleton. He has bushy, thick polyp coverage and really stands out from a lot of other Acros on the reef.
As you probably surmise, most wild corals are collected somewhere in the South Pacific, by native fishers who make a subsistence wage (and that is debatable, too). They work for exporters who then receive, sort, hold, photograph, and offer these corals to coral vendors here in the U.S. and elsewhere. One of these fishers grabs “Mikey†off of the reef and brings him to his employer’s facility. Let’s say "Mikey" costs around $10 at that point. However, the exporter needs to make some money off of the coral, so "Mikey" is offered at say, $20 to customers in the U.S. Next, the coral is purchased by Outrageously Awesome corals.com at $20, along with a box (or a dozen boxes) of other corals from the same exporter.
"We'll take a few dozen boxes...how much is that gonna be?"
These boxes are packaged, sorted, and placed on an airplane. Sometimes, CITES paperwork is necessary, along with lots of import documentation to help clear customs in Los Angeles. Customs brokers often come into play, making arrangements to get these boxes on flights and coordinating other legalities and logistics. Guess what? They need to get paid, too. That is factored into the cost of “Mikeyâ€, and he’s now worth around $30.
But that’s not all. Airfreight is expensive, and these costs (landed costs†is a term you’ll hear often in the industry) push the expense to $40 before the box ever lands at LAX. Oh, and then, the vendor needs to send out one or more of its people (usually in a company vehicle that requires insurance, gas, and maintenance) to grab the boxes at USFW and get them back to the facility. This can take several hours. And guess what? Employees get paid wages, need Worker’s Compensation, and other benefits that are thrown in. That costs money, honey.
"How much was this guy when he left the reef?"
Finally, the coral arrives at OutrageouslyAwesomeCorals.com’s facility, gets unpacked, inspected, dipped and placed in a holding tank. Then, it’s photographed, priced, marketed, and placed on their website. This work doesn’t happen free of charge, of course. Employees again… Remember, “Mikey†is a living creature, and needs food, light, and stable water parameters to look his best. Salt mix, additives, and labor (as previously mentioned) are not free. Cha-ching. Factor in all of these costs, and the fact that "Mikey" is an unusually attractive A. expensiva, hyped up on the CoralDorks blog and in hobby forums under a goofy name, and he’s now going for $90.00. In some instances, it can be way, way more than that.
The point of this disjointed lesson in “coral-nomics†was to show you that, out of business necessity, coral prices do reflect the expenses that go into them. Any business works that way. However, in our business, there is a certain amount of subjectivity, creativity, and even hype that goes into the marketing and pricing of corals. Is there anything wrong with that? Not really. Where I have a problem is the adoration of a coral to the point where it goes for many times what would be considered a realistic price, entering a zone where hype and buzz exceed value.
On the other hand, we could argue “value†until the end of time. Look at the art world. A work that I’d consider utterly childish garbage could sell for many thousands of dollars to the right collector. Subjective. So my argument is once again going back into itself…
The beauty of it all is that if you think something is priced too outrageously, you simply don’t have to play ball. Pass. If the coral sits in the vendor’s raceway for weeks on end, if he or she is smart, they’ll lower the price eventually. Supply and demand is a beautiful thing for both vendor and consumer. A reality check.
If some sucker pays $900 for a coral that realistically should sell for $150, who’s the fool? Well, that’s subject to debate, right? To that consumer, it could be a bargain, really. As consumers, vote with your conscience- and your wallets.
I’d love to hear some of your thoughts on this. To reiterate, this is largely my opinion, and I’m not trash talking my industry, nor am I making excuses for it. I am trying to give you a bit of perspective to make your own good decisions about what to pay for your corals. In the end, what’s right and what’s wrong, along with what is appropriate, is in the mind of you, the consumer.
Until next time.
Stay Wet.
Scott Fellman
Unique Corals
Okay, someone has to come out and just say this stuff, and it might as well be me!
This awesome hobby of ours has some really absurd conventions, doesn’t it?
For example, the term “Limited Edition.â€
What exactly does that mean? Does nature only “make†a certain number of this coral just to keep the price high? Does it mean that there are only so many of these corals in the world? Well, I would assume so! I mean, there are only so many people in the world, too, so one could make the stretch and argue that we are all “limited edition.†as well, right?
I guess, as a marketing person, I should be more understanding and forgiving of the term. However, as a reefer, and a guy who of late sees more coral than most people in the hobby on a daily basis, I just can’t give in to the term. I suppose that it fits in many instances- If there are only twenty of these frags in the country at any given time, I suppose that’s what we have to call them, right?
The sad part about the “Limited Editionâ€, in coral terms, is that no one is really doing much more than picking them out of a batch of random corals. Every week, we get solicited by dozens and dozens of exporters offering us their corals from all over the world. After a while (like two weeks, lol), pretty much every offering starts looking the same: (Week one)- “Look at that insane Echinophyllia with the red and blue stripes!†(Week two)- Wow! An Echinophyllia with red and blue stripes! (Week three)- Does that Echinophyllia have red and blue stripes?†(Week four) “Hey, isn’t that a Mycedium with yellow eyes…â€
You get the picture.
"Oh, that's one we haven't seen before..this week."
Truly unusual corals come around rarely, because, like all the best Dodgeball players on the playground at PE, or the latest One Direction posters at Wal-Mart, they are picked over by their appropriate target market (in our case, coral vendors instead of prepubescent boys or giggly teenage girls.) in short order. From there, the capitalistic convention of supply and demand takes over. If you only have 6 of something and it’s generally agreed by most reefers to be hot-looking, guess what? It’s gonna be more expensive than the 25 Green Birdsnest frags that you have in your raceway. And it’s not as though the Birdsnest is any less compelling. It’s just that-well, there is more of it. I don’t have any problem with this.
In my opinion, acquisition and handling costs, relative scarcity and (gulp) uniqueness of a coral will always dictate it’s price. Within reason. Now, I’m just rendering my opinion here…Every time I breach this subject, I get some hate mail from a fellow vendor or two who calls me out and says something like, “Oh, YOU are now the self-appointed spokesperson for the coral industry/“, or “Hmm, some of those Acan colonies offered on the Unique Corals website are kind of pricey, aren’t they, wise guy?â€
"That's not a $10-a-frag coral, is it, Fellman?"
To these people I say, â€It’s my opinion, and if you want to wake up every morning and blog about stuff before heading out to work on your coral empire, have at it. Your opinion is as valid as mine.â€
As a coral vendor and businessman, of course I’m in this to make money.
Wow, I said it.
However, my pedigree as a reef geek prevents me from making money by fleecing fellow reefers. I love coral and the hobby and all that good stuff. Quite honestly, the vast, vast majority of vendors on this forum and elsewhere will say the same thing, and back it all up with their work. Yes, there are a few that take advantage of hype, frenzy, and our innate desire as reefers to have the coolest stuff. That’s why you see the same Oxypora that is on every importer’s stock list weekly given some absurd name, and offered at “X†hundred dollars per “eyeâ€â€¦ As they say, a fool and his money…were lucky to get together in the first place.â€
Am I writing this piece to relieve some inner guilt that I have because I offer Acans at $128 for a two-polyp frag? No, not really. I AM writing this to let you know that most vendors are not pulling prices out of the ether and just figuring that they can charge whatever they want for anything. There is actually some thought that goes in it. A method to our madness.
A "Limited Edition?" Probably qualifies for the term..or does it?
Here is an overly-generalized example of the economics of coral pricing:
Let’s follow the journey of "Mikey", a hypothetical wild-collected coral- Acropora expensive, and his journey from reef to reef aquarium. He’s a really attractive Acro, too, with beautiful blue growth tips on a reddish yellow skeleton. He has bushy, thick polyp coverage and really stands out from a lot of other Acros on the reef.
As you probably surmise, most wild corals are collected somewhere in the South Pacific, by native fishers who make a subsistence wage (and that is debatable, too). They work for exporters who then receive, sort, hold, photograph, and offer these corals to coral vendors here in the U.S. and elsewhere. One of these fishers grabs “Mikey†off of the reef and brings him to his employer’s facility. Let’s say "Mikey" costs around $10 at that point. However, the exporter needs to make some money off of the coral, so "Mikey" is offered at say, $20 to customers in the U.S. Next, the coral is purchased by Outrageously Awesome corals.com at $20, along with a box (or a dozen boxes) of other corals from the same exporter.
"We'll take a few dozen boxes...how much is that gonna be?"
These boxes are packaged, sorted, and placed on an airplane. Sometimes, CITES paperwork is necessary, along with lots of import documentation to help clear customs in Los Angeles. Customs brokers often come into play, making arrangements to get these boxes on flights and coordinating other legalities and logistics. Guess what? They need to get paid, too. That is factored into the cost of “Mikeyâ€, and he’s now worth around $30.
But that’s not all. Airfreight is expensive, and these costs (landed costs†is a term you’ll hear often in the industry) push the expense to $40 before the box ever lands at LAX. Oh, and then, the vendor needs to send out one or more of its people (usually in a company vehicle that requires insurance, gas, and maintenance) to grab the boxes at USFW and get them back to the facility. This can take several hours. And guess what? Employees get paid wages, need Worker’s Compensation, and other benefits that are thrown in. That costs money, honey.
"How much was this guy when he left the reef?"
Finally, the coral arrives at OutrageouslyAwesomeCorals.com’s facility, gets unpacked, inspected, dipped and placed in a holding tank. Then, it’s photographed, priced, marketed, and placed on their website. This work doesn’t happen free of charge, of course. Employees again… Remember, “Mikey†is a living creature, and needs food, light, and stable water parameters to look his best. Salt mix, additives, and labor (as previously mentioned) are not free. Cha-ching. Factor in all of these costs, and the fact that "Mikey" is an unusually attractive A. expensiva, hyped up on the CoralDorks blog and in hobby forums under a goofy name, and he’s now going for $90.00. In some instances, it can be way, way more than that.
The point of this disjointed lesson in “coral-nomics†was to show you that, out of business necessity, coral prices do reflect the expenses that go into them. Any business works that way. However, in our business, there is a certain amount of subjectivity, creativity, and even hype that goes into the marketing and pricing of corals. Is there anything wrong with that? Not really. Where I have a problem is the adoration of a coral to the point where it goes for many times what would be considered a realistic price, entering a zone where hype and buzz exceed value.
On the other hand, we could argue “value†until the end of time. Look at the art world. A work that I’d consider utterly childish garbage could sell for many thousands of dollars to the right collector. Subjective. So my argument is once again going back into itself…
The beauty of it all is that if you think something is priced too outrageously, you simply don’t have to play ball. Pass. If the coral sits in the vendor’s raceway for weeks on end, if he or she is smart, they’ll lower the price eventually. Supply and demand is a beautiful thing for both vendor and consumer. A reality check.
If some sucker pays $900 for a coral that realistically should sell for $150, who’s the fool? Well, that’s subject to debate, right? To that consumer, it could be a bargain, really. As consumers, vote with your conscience- and your wallets.
I’d love to hear some of your thoughts on this. To reiterate, this is largely my opinion, and I’m not trash talking my industry, nor am I making excuses for it. I am trying to give you a bit of perspective to make your own good decisions about what to pay for your corals. In the end, what’s right and what’s wrong, along with what is appropriate, is in the mind of you, the consumer.
Until next time.
Stay Wet.
Scott Fellman
Unique Corals
