Are pride and hard work dead?

[Newb73]

They would have gotten $600 or $700 from me at 10% just this fall. True they probably make way more than that in livestock but still.

I also wanted some professional eyes on my gear, set up, plumbing and stocking as i figured a single "opps" can lead to hundreds or thousands in loss. On numerous occassions i offered to pay for that service and always got a "text me next week" type of response and then texts i would send would be responded with "ok" or no response. The result of that was $375.00 (about the price of 3 large health LPS corals) went to Mark Callahan instead.

VERDICT : LFS (and their employees) hate profit.

Sounds like a reasonable guess, tho 2-3 a quarter is quite optimistic. Could just as likely be a whole year's sales.

Follow Up Question:

Either way you prefer, what does that amount to in yearly income, after taxes?

 

[mcarroll]

They would have gotten $600 or $700 from me at 10% just this fall. True they probably make way more than that in livestock but still.

I also wanted some professional eyes on my gear, set up, plumbing and stocking as i figured a single "opps" can lead to hundreds or thousands in loss. On numerous occassions i offered to pay for that service and always got a "text me next week" type of response and then texts i would send would be responded with "ok" or no response. The result of that was $375.00 (about the price of 3 large health LPS corals) went to Mark Callahan instead.

VERDICT : LFS (and their employees) hate profit.

[emoji6][emoji106]

$700 @ 10% implies you dropped $7K on lighting. Sales that large will be far less frequent....and require the same investment in inventory as three of our $2000 systems.

In our conversation with the $2000 system at 10% that would be $200. Times 12 per year on the most optimistic number, is $2400 per year in pretax dollars.

I don't know how much you think can be made on fish, but $2400 is a far cry from a living wage... Let alone enough to keep the lights on and pay employees.

Which my only point is, there is barely a business model in selling these lights in a local fish store. There is, but only under very optimal circumstances.


Historically a store could sell a big light such as yours at a thin margin such as we are talking about and still have a business model because it would require bulbs every so often.

It often makes more sense to stock more fish (or a number of other things) instead of lights. ROI

 

[cmcoker]

My understanding was that most LFS made there money through their maintenance accounts... At least that's what I've read in all the postings about wanting to start a lfs.

 

[TheEngineer]

10% margins are awful. I hope that isnt right.

 

[Newb73]

My full set up was closer to $15,000. Deducting for the work i had done to the floor, plumbing and wiring the stuff actually bought was closer to $10,000. If you subtract the tank (which i would have bought from them and which has a higher profit margin up... $,8,000. True enough i only spent about $1,600 on lights and $1,300 on wave makers $600 aon skimmer, and maybe $300 in reactors, probably $200 on salt...$600 in sump, about $900 in apex gear (so far). I cheaped out on return pumps $180, ReFugium light $250.00, RODI $200.00, TRansfer pumps $200, Heaters $200, Swabbie+locker $300ish, Dos pumps and resovoir $200ish, Ato $200, Co2 scrubber $100, back up batteries $400, Lighting mounts $200, ....thats not counting live rock, live stock, live sand, back up controllers, test kits, refractometers, a TON of misc plumbing and electrics components, back up water alarms, back up leak prevention and sunk pump, a dedicated control laptop and thats just 1 out of 3 of my tanks.

I was being conservative when i said $600 to $700....but who's counting.

Still need a couple hundred worth of rock and probably thousands in corals.

[emoji6][emoji106]

$700 @ 10% implies you dropped $7K on lighting. Sales that large will be far less frequent....and require the same investment in inventory as three of our $2000 systems.

In our conversation with the $2000 system at 10% that would be $200. Times 12 per year on the most optimistic number, is $2400 per year in pretax dollars.

I don't know how much you think can be made on fish, but $2400 is a far cry from a living wage... Let alone enough to keep the lights on and pay employees.

Which my only point is, there is barely a business model in selling these lights in a local fish store. There is, but only under very optimal circumstances.


Historically a store could sell a big light such as yours at a thin margin such as we are talking about and still have a business model because it would require bulbs every so often.

It often makes more sense to stock more fish (or a number of other things) instead of lights. ROI

 

[TheEngineer]

We're getting a little off topic. Let's come back to where we started. Are LFS better served by knockoff products? Are the margins better?

 

[DeadheadSC]

10% margins are awful. I hope that isnt right.

It isn't. Specialty retail still maintains the highest margins across the board. Somewhere between 18-25% is probably more accurate when looking at everything they sell. It is true that margins drop on high end items that have some competition, however, popular high end items with MAP and similar programs have a set margin for the retailer + or -. That margin is far above 10 percent. I ran a 3000 sq. foot store that competed with 15,000 sq foot stores and Wal-mart and Sam's and we held at 24% for the entire 9+ years I was there. Very similar type of market although a much larger customer base. At any rate, I agree with everyone that the seller should make fair profit; my issue is more with manufacturers turning out inferior stuff ALL over the place and charging high prices for unproven if not shaky equipment in some instances. I've been through 3 impellers and two pumps for a skimmer that has been down more than up since I've owned it and three heaters this calendar year.

 

[DeadheadSC]

We're getting a little off topic. Let's come back to where we started. Are LFS better served by knockoff products? Are the margins better?

Certainly, the margins are better on that stuff. That's why they sell it. The intangible costs to their business of selling less than quality gear are the real dangers. Sorry, I kinda got off topic. I was just trying to establish why those products are enticing to consumers.

 

[that Reef Guy]

Very interesting and telling comments from all sections of our country. Basically we are looking at a microcosm of our political system and its telling us how polarized this country really is. The only difference is at least on this forum must of us are civil.

The bottom line is that whether you call IP theft or just being competitive it will continue to happen. Just because an industry is small does not give the manufacturers the right to inflate prices to make up for lack of quantity. As said before, build different models to accommodate all sections. Diversify your product line. If your customers are paying a premium as opposed to cheap imports you better bring a quality product to market and not a beta model with faulty wiring or experimental parts.

Customers who pay premium dollars deserve premium service. Not hassles no matter how good your CS department is, it's a hassle to deal with. Take a lesson from the Amazon no matter what you think about them they make everything easy. What about free shipping both ways for repairs. What about a gift certificate or a discount on your next purchase. There are plenty of ways to give incentives to those customers.
As for the Jebaos of the world- there will always be room for them and they do a service by letting new hobbyist into our hobby who might have been put off before.
After gaining some experience every individual will then make their own decision on what they think is the appropriate amount to spend on equipment and such.
After all the equipment just moves water, provides light and does other necessary things to take care of what's really the important aspect. That is our livestock.

Does anyone know of a thread that traces the history of how the hobby went from trading frags to buying 1 inch frags for upwards of $1000?

I can't be the only one that thinks paying 20 or 30 dollars a polyp for a Zoa is nuts. I would appreciate some clue as how this happened. Thanks

1 Inch Frags for $1,000

I have seen 1/2 Inch Frags Sell for $2,000

$20 to $30 a Polyp for Zoanthids

How about the Polyp that Sold for $2,500

I would be interested to see a Thread that Traces the History too.

 

[gcrawford]

I have two systems, a 120 and a 75.... Each have two apex controlled jebao pumps that have been running trouble free for over two years... Have spares ready if needed. Probably less than the price of one MP-40 for all of it. Most reefers are on some sort of budget (or a little uncomfortably outside of it) like me..... I'm not paying $400 for a power head, sorry. Plus every time I look at the RC for sale forum, everyone and their brother are unloading these MP pumps touting "new or replaced" wet side or "upgraded" QD dry side..... You know microwave ovens used to be really expensive. Now they are disposable. I imagine a small water pump should also be disposable. When and if my jebaos wear out beyond an overnight vinegar bath re-birth I'll spend another $40 each to replace.

 

[mcarroll]

1 Inch Frags for $1,000

I have seen 1/2 Inch Frags Sell for $2,000[...]

Asking a thousand or two is one thing. Can't begrudge a seller for selling!

On the other hand, I question anyone paying a thousand!

 

[mcarroll]

I have two systems, a 120 and a 75.... Each have two apex controlled jebao pumps that have been running trouble free for over two years... Have spares ready if needed. Probably less than the price of one MP-40 for all of it. Most reefers are on some sort of budget (or a little uncomfortably outside of it) like me..... I'm not paying $400 for a power head, sorry. Plus every time I look at the RC for sale forum, everyone and their brother are unloading these MP pumps touting "new or replaced" wet side or "upgraded" QD dry side.....

Obviously spend your money however you feel is right, but IMO saving your money toward something is the way to go - even if it means buying used - not buying knock-offs.

I know you weren't recommending them or anything like that, but just for the record, there are tons of good deals on non-EcoTech gear in the used forum right now. LOL.

You know microwave ovens used to be really expensive. Now they are disposable. I imagine a small water pump should also be disposable.

I was with you up to this point...

It doesn't take any imagination to make a disposable water pump. It takes imagination to make one that lasts!

Be careful what you wish for - you just might get it.

P.S. As far as I know, these submersible pumps are completely non-recyclable? Windings are sealed in epoxy, etc.

 

[paraletho]

Built in obsolescense. A technique taught in industry. At what interval do we need the average customer to come back for another one. ( the interval is getting shorter by the minute)

 

[that Reef Guy]

Asking a thousand or two is one thing. Can't begrudge a seller for selling!

On the other hand, I question anyone paying a thousand!

It is what it is.

I don't partake in that but many people do.

 

[soeminpaing]

The latest respond from jebao due to hydor lawsuit on patent infrigment. They now innovate.

 

[TheEngineer]

^-- huh? So they changed the based to be ribbed. And?

 

[TheEngineer]

In recent news, a Chinese copycat demonstrating at product at CES was shutdown by Federal Marshals yesterday. They were blatantly copying a device that was patented, asked to cease by attorneys in writing and at the conference, but refused. They're not there now!

This quote I think sums up the point pretty well:

"If customers start to view the space as full of low-quality, low-cost products, that reflects poorly on everybody. We hate to see someone poison the well."

You can read the article here: http://www.bloomberg.com/news/articles/2016-01-07/u-s-marshals-raid-hoverboard-booth-at-ces

 

[Newb73]

Yea but if they dont explode and set the user on fire, or burst into flames and burn down your house, they just arent trying hard enough......

Russel Crow though....he will start a fight with you if you stop him from bringing one on a commercial flight...

Facepalm

In recent news, a Chinese copycat demonstrating at product at CES was shutdown by Federal Marshals yesterday. They were blatantly copying a device that was patented, asked to cease by attorneys in writing and at the conference, but refused. They're not there now!

This quote I think sums up the point pretty well:

"If customers start to view the space as full of low-quality, low-cost products, that reflects poorly on everybody. We hate to see someone poison the well."

You can read the article here: http://www.bloomberg.com/news/articles/2016-01-07/u-s-marshals-raid-hoverboard-booth-at-ces

 

[mcarroll]

Yea but if they dont explode and set the user on fire, or burst into flames and burn down your house, they just arent trying hard enough......

Russel Crow though....he will start a fight with you if you stop him from bringing one on a commercial flight...

Facepalm

Are you suggesting we hire Russell Crowe for our cause?

[emoji106][emoji106][emoji106][emoji106][emoji106][emoji106][emoji1]

 

[that Reef Guy]

In recent news, a Chinese copycat demonstrating at product at CES was shutdown by Federal Marshals yesterday. They were blatantly copying a device that was patented, asked to cease by attorneys in writing and at the conference, but refused. They're not there now!

This quote I think sums up the point pretty well:

"If customers start to view the space as full of low-quality, low-cost products, that reflects poorly on everybody. We hate to see someone poison the well."

You can read the article here: http://www.bloomberg.com/news/articles/2016-01-07/u-s-marshals-raid-hoverboard-booth-at-ces

Yeah but that is here not China.

The Chinese will read that and never come to the U.S. and stay in China.

We can't do anything about that.

So this Bust does nothing but let the Chinese Knockoff Companies know not to Visit the U.S.