Growouts, the Pyramid scheme of Reefing?

[CJO]

I kinda follow these grow outs a bit, seems to me very few ever turn out good. The one thing that I tend to see happen a lot, that I really don't understand. The grow out participants pick one person to grow the corals out, instead of splitting the corals up thru the grow out participants. The grow out tank starts having problems and the next thing you read about is they have lost several of the corals in the package.

That's great if everyone is local. The problem with this is when you aren't, then the shipping costs really add up. Instead of one $50 charge to ship them to the grower, you have $50 to each participant. Then, once they are grown out, instead of $50 to ship them to each participant, you have that times the number of participants (minus 1), squared.

For instance, say you have a growout with 5 people, one of them being the grower. If you send them all to one grower, you have $50 for the initial shipment and another $200 for the shipments when the growout is finished, for a total of $250. If you ship them to each person to grow out a portion, the initial shipment is $250 plus another $1,600 for everyone to ship out theirs to everyone else when it's done, for a total of $1,850 in shipping costs!

I think that growouts are a good idea in certain circumstances. You need to have a small number of participants so that it doesn't take too long, and you need a responsible grower. I disagree about necessarily getting a fast grower. The faster a coral grows, the quicker the prices drop and the less it is worth doing a growout.

CJ

 

[Tabasco1]

I'll chime in with my thoughts. I do think price is a valid discussion point with grow outs. I think that is the primary (if not only) reason people participate in them. Might be a little bit chicken/egg to say that growouts drive or keep prices up. I will say that I don't think they impact pricing very much. There are not a TON of grow outs going on. As far as where/how/why prices are actually set, I don't think that is a discussion for this thread. Would be an interesting discussion, but it would have to involve vendors and be very open. I will also say that it is a free market. A market that is completely discretionary, meaning that you don't need it to live. So if someone is charging a very high price for coral it is not like they are hamstringing me because it is something that I have to buy to live. That said, I personally think that $1000 for a frag is ridiculous and I would never pay that so I don't! Completely up to me. But if you have that much discretionary income, and you make the choice to spend it on coral, more power to you. That does not mean I won't be jealous or don't want the $$ corals. I do!

I think R2R does have a very strong "marketplace". More so than other sites. That might be why you seen group buys on here more. I'd be willing to bet it's also why you see more contests with prizes. I don't think it is a bad thing, I love looking at the eye candy.

I am involved in 2 group buys. My personal reason for joining is because of $. I also read pretty much every other grow out thread that is going on and it is pretty sad to see the rate of MIA growers. Seems like there were 2 people who were growers in 2 different grow outs so 2 people accounted for 4 MIAs of pretty high dollar GOs. It is disappointing when things happen and you lose pieces. But things do happen, as is the case with one of my grow outs. That grower has been very open with communication and very stand up about not going MIA when things went wrong. Things went wrong though and it is still disappointing. However, I went into it with that in my head as being a possibility and I needed to be ok with that. I don't think that unilaterally that grow outs are bad or don't make sense. Seems like the general buy in price point that people buy in at is between $250 & $500. Here are my thoughts regarding grow outs now that I have been in a couple:

1. Don't join one unless you are prepared to take the risk for something that you have no control over.
2. Have a very detailed plan and outline of responsibility. I believe this should be down to: is the grower going on vacation or travels frequently? if so, what/who do they have in place to watch the tank? are there things going on in life that could affect the time spent on the grow out/updates? what is the plan if there is an issue? do you have a back up system if your system has something going on?
3. Limit number or participants to 3-4. I think it is tempting to go w/more because it further reduces the $, but it also increase the time of the grow out thereby increasing what could go wrong.

I think the way the most grow outs are currently run there is not really much incentive for the grower and that is probably the reason for the high MIA/issues. R2R cannot police grow outs. That is not what they are here to do. These are things that I think would increase the success of grow outs.

1. While I know R2R cannot police grow outs, perhaps they can add an icon to your avatar block if you are the grower in a successful grow out. Perhaps one for each and the icon would look like they type of coral you grew out. I've seen this on MOFIB, you get an icon for each animal you have successfully propogated.
3. I personally think being the grower has a pretty huge responsibility and has to put in alot of effort. I don't know exactly how this would work, but depending on the grow out the grower would pay a significantly discounted share of the grow out. I think they would still have to put at least that amount of a full share, if not more into a holding account that they would then get back after the grow out if everything goes well. If not, they would lose the same share as everyone else.

 

[cdness]

Coral pricing is the drive for these. If the prices were lower, no one would need to do this. While I personally don't agree with the rare, LE, etc labeling to drive up the price, to each their own and if they sell then the market has determined the price level. There is only one way to control this and everyone I think is aware of it.

Personally I would not participate in something like this unless I knew where the grower lived and was within driving distance. A contract would be written up controlling what is expected of the grower and that the pieces would make it to the others in the growout, assuming the worst didn't happen and the coral was lost. If the grower went MIA, a participant loss amount would be in the contract which would help avoid the dissappearance of the grower as they could be legally bound to repay a portion of the initial investment. At the end of the successful grow out, the grower would get a bonus for facilitation of the successful grow out of say 10% of the participant initial investment when each frag is sent out...

The part I don't get though is you have five people who chip in $400 each to buy $2000 in corals. One of the five places the corals in his/her tank and grows them. The grower supplies the electricity, suppliments, water, salt, equipment, and time along with the $400 initial investment. What does the grower get for all their hard work and additional investment other than the stress of people depending on them and the temporary enjoyment of the corals he/she is growing out for the others?

Tobasco1 - While the image in the avatar block is a good idea, I think it would end up putting the R2R name associated with the growouts if one went bad. This is not a sanctioned activity of Reef2Reef so it should remain external to all that is the R2R community. I wouldn't want a growout to go bad and people start bashing saying that R2R said they were a good grower...

 

[dankreef]

Buying a coral to have someone else grow it is stupid. I got into the hobby to see my own stuff grow and be proud of the accomplishment.

 

[mfdrookie516]

Buying a coral to have someone else grow it is stupid. I got into the hobby to see my own stuff grow and be proud of the accomplishment.

I think you might be misunderstanding the concept.

Growouts are not where you essentially pay someone to make a frag in to a colony. It's where a group purchases a frag (or multiples), then it is grown and fragged once it's big enough. This could make a $1000 frag turn in to 5 $200 frags if 5 people are involved.

I do agree though, I don't like concept. I'll just stick with buying cheap corals... I may not be able to say 'I have over $5,000 in corals in my tank', but I can say 'Look at all that beauty... and it only cost me $300 and a year to grow'.

 

[UFreefer]

I'm glad someone finally posted a thread like this. Everytime I visit the group buy forum there are no group buys and countless growout threads where many seem to turn out to be stressful or unsuccessful. I find myself always shaking my head and can't believe people buy into them. The biggest winner seems to be the vendor who is able to sell huge dollar frag packs of trendy corals that will be worth a fraction by the time each reefer receives their frag. I have my share of named corals and can't blame the vendors for charging those prices if people buy them but it just seems crazy to assume that much risk for so long.

How about some vendors doing some actual drygood group buys!!

 

[larryl]

Growouts are a 50/50 with me. Close freinds always works. However on a another forum I was in a RDPE growout and another polyp growout. Things were fine and dandy intil he dropped off the face of this earth when it was time to frag.

 

[Tabasco1]

cdness-I do like the contract idea. Not sure how enforceable it would be if someone did not perform on the contract, but it would be a good way to really detail the expectations and nail all the details down. I was also going the same place you were with regard to the growers. There has to be more benefit to them to really make it work than just the same that everyone else puts in and have all the additional work, fragging, time and energy. I love the bonus idea. much cleaner than an escrow idea. It is a financial transaction, growers really have alot of responsibility and should have good incentive.

I don't agree about the icon. I think it is totally seperate from R2R. I don't think because someone with 5 starfish gave me bad advice that it was in anyway connected to R2R. Same thing with the icons or badges, just a way of saying they accomplished something. Not endorsing them. I think there is more responsibility or connection if a mod is involved and something goes bad. And there is no recourse there, so I don't think an icon would be an issue.

 

[cdness]

cdness-I do like the contract idea. Not sure how enforceable it would be if someone did not perform on the contract, but it would be a good way to really detail the expectations and nail all the details down. I was also going the same place you were with regard to the growers. There has to be more benefit to them to really make it work than just the same that everyone else puts in and have all the additional work, fragging, time and energy. I love the bonus idea. much cleaner than an escrow idea. It is a financial transaction, growers really have alot of responsibility and should have good incentive.

I don't agree about the icon. I think it is totally seperate from R2R. I don't think because someone with 5 starfish gave me bad advice that it was in anyway connected to R2R. Same thing with the icons or badges, just a way of saying they accomplished something. Not endorsing them. I think there is more responsibility or connection if a mod is involved and something goes bad. And there is no recourse there, so I don't think an icon would be an issue.

The contract would be enforceable in small claims court assuming state lines don't make things a bit muddy... It would at least outline the responsibilities and make it a more structured process. It could outline communication requirements, photos, loss clauses, as well as backup options if the grower decides they can no longer grow.

I think the icon would be a perception thing and I tend to analyze to worst case scenario... It would probably be ok, but it would have to be defined on how to earn it and what the icon represents.

Either way, in the end it is not my thing, but I wish the best success to those who try.

 

[thewackyreefer]

The contract would be enforceable in small claims court assuming state lines don't make things a bit muddy... It would at least outline the responsibilities and make it a more structured process. It could outline communication requirements, photos, loss clauses, as well as backup options if the grower decides they can no longer grow.

I think the icon would be a perception thing and I tend to analyze to worst case scenario... It would probably be ok, but it would have to be defined on how to earn it and what the icon represents.

Either way, in the end it is not my thing, but I wish the best success to those who try.

Contract? Small claims court? Come on now...this is a hobby, not a business.

If you don't trust those in the growout to the point you need a contract what fun is it?

 

[jerwin]

I just have to say WOW.

I am the grower in a growout and will say I paid a full share for my frags and I am the one taking all the responsiblity and energy like Tobasco1 said. It would be nice to get a bonus or even the first pick of the frags after I have fragged them. I am in the hobby to enjoy and like to have the nice pieces but like has been said the price have kept me from some of them. This is away to aquire them at a reasonable amount. I will also say that you have to realize this has to be fun money not money used to pay bills of life.

One thing I will say. I will not be in a growout that the grower is using his main display tank as the growout tank. I have read of fish knocking things over, fish buring the frag or other frags falling into one another. I am in no way saying it cant be done. I just like the idea of a growout tank with no fish in it. This is what I am providing to my growout.

My job allows me to work from home and keep an eye on the growout. it does take time every day to make sure all goes well. I do like the idea of an incentive for the grower to get something back when the growout is successful. But if you go as far as contracts to be the grower and get no reward back for it I dont see any one wanting to be a grower.

I have also seen a group pays for the frags and the grower does not but gets a frag for being a good grower and successfully. I would say if you travel a lot or dont put the time in with the tank you should not be a grower.

If you are buying the frags to grow them and then sell the frags a groupbuy is not the way to go. If you are buying the frags for what they are and know it will take some time to get them then a groupbuy might be ok for you. But the main thing I would say is patients and communications. I can see the both of the sides and would say it is hard to say what is the best way about it. I am being the grower because I want to say I have been the grower and have had completed a successfull growout. I like the idea of some kind of badge showing I have done this.

 

[Chameleon]

+1 totally agree

I think you might be misunderstanding the concept.

Growouts are not where you essentially pay someone to make a frag in to a colony. It's where a group purchases a frag (or multiples), then it is grown and fragged once it's big enough. This could make a $1000 frag turn in to 5 $200 frags if 5 people are involved.

I do agree though, I don't like concept. I'll just stick with buying cheap corals... I may not be able to say 'I have over $5,000 in corals in my tank', but I can say 'Look at all that beauty... and it only cost me $300 and a year to grow'.