The LFS redoux

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reeffirstaid

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I have a different view of garage and basement wholesalers. I see two problems with it. First, it's well known that accountability and data acquisition on the hobbies' effect on the ocean are troublesome. There is a data black hole about how many people have marine/reef aquariums, what's in them, where it came from, any information needed to make a careful analysis that could be crunched into law. We saw the effect of this with NOAA and the NMFS report and proposed ban of species which will be listed as threatened under the ESA. We still don't know what legislation will arise, but I would assume it will be something. They didn't have enough data, they were presented with data and a list of 62 proposed species dropped to somewhere around 22. If we're going to monitor animals from the time they are collected forward, in an effort to get the data needed to make working regulations, it's going to be tough if at the wholesaler, livestock is sold to many different channels, online outlets, retail stores and a host of garage vendors. If garage vendors aren't carrying licenses, then we can't be assured they are abiding by any applicable regulations. A garage seller could be selling prohibited Caribbean elkhorn coral and it would be hard to tell, since their facility doesn't require inspection or certification of any kind.

I know everyone hates regulations, but they are there for a reason. Without them, when problems arise, such as we saw with NOAA, blanket bans are supported because data doesn't exist to show the real impact. There are so many basement vendors right now, you could never count them all. What rules do they play by? What laws of commerce and animal acquisition and care do they follow? It's anyone's guess. This has led to common corals being tagged with flashy names and sold for 20X+ their real market value. Without something in place to keep everyone on the same playing field, following the same rules and tracking information as it moves through, we don't have a sustainable industry.

I'll take Steve Robinson for example, a collector. Even under the circumstances of being a known collector, he attempted to smuggle in Clipperton angels which are protected. To do so, he told authorities they were a blue morph of passer angels. Now that the ESA is being used as a tool in protecting species effected by climate change, it's certain that it will have an effect on commerce regarding living animals for exotic regions. If garage sellers are too exist, they need to be playing by the same rules as everyone else. If wholesalers who aren't supposed to supply garage sellers with animals are doing so, there needs to be repercussions.
 

Bradd

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Josh..I know. Thats why as I stated before. Youd be crazy to invest in a LFS at the current state of the industry. Itll be interesting to see how that plays out long term. BTW I bradd is also reefcave. Auto log in.
 

heathd.hd

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Josh..I know. Thats why as I stated before. Youd be crazy to invest in a LFS at the current state of the industry. Itll be interesting to see how that plays out long term. BTW I bradd is also reefcave. Auto log in.


I think this is exactly what Scott was getting at. Trying to throw the ideas on how to merge the garage - lfs - and online vendor into one store front should be what your looking to do. All in one store front. How to do it is the question.
 

reeffirstaid

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IMHO, the first thing needed would be a tracking system, so that we know where and how much livestock is collected from various regions. Where that livestock is going first, then second and all the way to a hobbyists tank. Once we have that information, something could be written on protocol, licensing, etc for a hybrid storefront. I think any such store would start with the creation of a reef club centered around the physical facility the built upon by selling corals to other patrons, online, etc. The problem with garage vendors right now is that there is no oversight, which has led to one vendor offering something for $ 89 bucks and another offering it at $499. Both vendors are finding customers because the hobby is so dynamic and they're able to prey upon people's desire for something rare and beautiful. Most reefers "in the know" are buying the $89 coral, but those reefers not "in the know" think for $499 they are getting something super special. It really is abuse of the free market.
 

BaritoneJP

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My question is this.( This maybe would be a good poll maybe for the Admins to post.) Id be fascinated!

Q)What tank got you into the hobby?
Online introduction. (virtual interaction)
A) Was it you happened to stumble across reef2reef and decided to order a tank online?
B) Mass Media introduction
C) Was it you watched a TV show and said that's cool Ill order a tank online?
D) Browsing social media and Ill order a tank online?

RealLife Introduction
A)Were you in PetCo (a LFS in its own way)
B)At a freinds house? ( how and where did he acquire that tank? a LFS?)
C) at a doctors office (prob maintained and installed by a LFS)
D)At a fish store LFS?


My answer = real life introduction
  • I was NOT at a PetCo
  • I was not at a friends house nor a doctors office...
My very first introduction was at a LFS ... I'm talking 1980's ... the store opened near my Grandmother's neighborhood and I was in there everyday for a whole summer. I got to know, really know, the owner who loved animals in general but had a passion for fish. She, yes, a female business owner in the 80's, knew her stuff. Not only about fresh water but also salt.

About "Garage Vendors", I don't have an issue with them (with the exception of source of livestock and its affect on the Ocean, if any). But how do you get to KNOW them? And why does a frag with 5 polyps cost $650.00? The answer may very well be, "because someone will pay that." Ok, fair statement. ... but why? really truthfully why? What is at the root of that price point? For me, I want to know that. It will govern my decision to shell out money or not. Ok, I may not ever have that really color pop coral in my tank, but maybe I'll get to know a garage vendor (or a LFS owner) and just maybe mine will not cost but a fraction of a fraction of that. (that is to say, I'm not going to pay those price points)

I'm simply sharing my thoughts and truly asking and I'm not trying to sound haughty.
 
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ReefCave

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I hope everyone reading this knows..Im not complaining. I'm just stating the simple facts of the industry from a LFS point of view based on being in the business from before the internet was a place of commerce (or hardly). The subject of a LFS Redoux (ReVamp/Redue/Change) was brought up and why not know the facts from a LFS and the frustrations, hurdles and threats that are upon us prior to coming to conclusions on how to fix the LFS. Im on the LFS side I fully belive without them the industry will crumble. It will always be around but not much of a industry, and become EXTREMELY niche, more so than what it is now.
Its business...every industry has its challenges and politics. This is just the reality of the LFS Business. Id be floored if a LFS owner would differ about the realities that have been presented. Keeping in mind their are different sectors of the business. This audience being the enthusiasts the hard core reefers...myself included.
 

steve&mari

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If amazon ever sells fish and corals it will be game over....I doubt that will ever happen though. .I think majority of consumers sit at home or at work and buy things and have it come to them.Only in emergency situations I go to the lfs .One idea I have is I think it would be cool for lfs to have workshops. For example :Lets say" How to start a sps tank " learn a step by step guide and a weekly followup through your 6 week class with half hour meeting once a week.You draw people to your shop and who knows they would probably buy more of your inventory because they feel a connection to you.Maybe this exists but I have not seen in at any of my lfs .
We're lucky we have a great lfs tons on knowledge and won't sell livestock to you that you can't care for or don't have proper sized housing for it. He would rather lose a sale then send a animal to someone not properly able to care for it. He's growing and getting nicer corals now slowly. And another one little drive away that's like a zoo has lots of nicer corals and they do reef classes fw classes reptile classes bird classes from beginning to advance on different evenings. We also have cherry corals n tropicorium only 2 hours away. Have maybe 8-10 excellent lfs stores within a 1.5-3 hour drive of us. But totally agree with the need for staying current and many good ideas n points have been shared here so far. I'll be showing my buddy who owns closest lfs to us we use this thread.
 
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TJ's Reef

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Scott, this is probably my favorite of your many respected threads started here on R2R. Thanks for everyone who has contributed here, all great additions to this discussion. I truly hope that many LFS's will see and read this, then come up with a revised business plan to move forward or evolve there businesses towards a more secure future.

Cheers, Todd
 
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Great read Scott.... as usual. Thank you for the Friday food for thought.

My two cents worth, strictly as an online retail to consumer business of supplies, equipment and replenishables, not addressing the livestock component of the topic.

Buy online if.....
1) You know what product you are looking for AND
2) You are looking for the best price from a reputable online vendor AND
3) You are in a position to be able to wait a few days for an item to arrive.

If you do not know what you need..... go to your LFS and talk to an experienced sales rep that can help identify the proper product for your situation.
If you know what you need, but need it immediately.... go to your LFS and buy what you need on the spot. (ie; I always use "product-x" but ran out and need it pronto!)
In both cases, you are paying a premium for a reason and you should do so gladly. (The first being knowledge the second being convenience).

It is OK to support your LFS (providing they are knowledgeable and reputable), and I encourage it. They are not a threat to online sellers, there is enough love to share.

What is a threat to online sellers is flagrant MAP violators (not off by 5 or 10 cents, off by $50 or $100 or more!), and the Amazon "race to the bottom" pricing model that used to "win" the "buy box".

So what is the solution?

Perhaps a consortium of manufacturers, distributors and online vendors governed by PIJAC that enforces MAP pricing by refusing to supply egregious, chronic offenders.

It's impossible to target the 'garage or basement' sellers, so it's no use bemoaning their existence. They will do what they do, they can't help it. However, the distributor that is supplying the basement MAP violator needs to make a more concerted effort to 'know thy customer' and to enforce MAP by cutting them off when they are in violation. I know, not everyone has the budget for a full time employee that polices their customer's pricing. Perhaps implementing a monthly or quarterly review by having the sellers submit sales reports to their suppliers?

Likewise, the manufacturers need to take a united stand against the big boys like Amazon that employ "bully" purchasing tactics forcing them into selling their products below WHOLESALE, thus giving Amazon an unfair market advantage over EVERYONE.

If you don't stand for something, you'll fall for anything, and before they know it, the manufacturer's margins will be obliterated. This is an unsustainable business model and everyone suffers from the manufacturers to the resellers (online and brick & mortar, big or small), and ultimately to the consumers.... the hobbyists.... you.


Well said, Matt...I don't think we need to go on a "witch hunt" trying to knock out a specific category of vendor (for example, the "Garage Vendors" as mentioned here). The point is that there is enough market share for every category of business. I think the issue with MAP price violations is something that will simply go away...On the other hand, if Amazon is "bullying" suppliers into selling to them below MAP, it's a different world. Competition is one thing, innovation another, but giving one vendor a ridiculously serious advantage with a much lower price than the rest of the market is not really a healthy pace to be.

-Scott
 
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Scott, this is probably my favorite of your many respected threads started here on R2R. Thanks for everyone who has contributed here, all great additions to this discussion. I truly hope that many LFS's will see and read this, then come up with a revised business plan to move forward or evolve there businesses towards a more secure future.

Cheers, Todd

We've covered way more ground than was the original target, and I'm loving the participation and discussion...educating for many, I think! Thanks for participating!

Scott
 

heathd.hd

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I love the idea of a lfs app guys! I would love to have a app I could go on and order whatever I wanted have it shipped to the store down the street and pick it up when it's in. I know this is not available but a store that could do it would be nice.

I work alot and hate having to worry about being home for ups or fedex.

There's a way to make this work someone just needs to get it going. Apps are here 2 stay.
 

g6gang

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I love the idea of a lfs app guys! I would love to have a app I could go on and order whatever I wanted have it shipped to the store down the street and pick it up when it's in. I know this is not available but a store that could do it would be nice.

I work alot and hate having to worry about being home for ups or fedex.

There's a way to make this work someone just needs to get it going. Apps are here 2 stay.
If anyone lfs, garage, etc need an app..let me know and we can work out a no cost option being a hobbyist myself.
 
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The idea of an LFS app is super cool! I mean, you can use an app to order pizza, etc...why not have a way to order from your LFS and pick up..? Virtual inventory, and the transformation of the dryads into a "kiosk-type" delivery system...tons of ideas here.. I love this kind of thinking...I could even imagine several local stores getting together in a city and having a sort of "cooperative" app where customers could order from the inventory of several LFS...cooperative sales...We could do it online as well...Lots of ideas for stores willing to turn over the conventional models of retail and think way outside the box! Keep em coming!

-Scott
 

g6gang

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The idea of an LFS app is super cool! I mean, you can use an app to order pizza, etc...why not have a way to order from your LFS and pick up..? Virtual inventory, and the transformation of the dryads into a "kiosk-type" delivery system...tons of ideas here.. I love this kind of thinking...I could even imagine several local stores getting together in a city and having a sort of "cooperative" app where customers could order from the inventory of several LFS...cooperative sales...We could do it online as well...Lots of ideas for stores willing to turn over the conventional models of retail and think way outside the box! Keep em coming!

-Scott
I pitched the idea of a group buy app to a LFS and he was not interested because he was concerned that the buyers may not get exactly what they ordered.

The idea is that it would be a time based purchase. LFS posts select catalog. Buyers join group buy with guarantee to purchase min order. Order ships to store for local pick up. Win-win. Buyers get what they want at slight discount because or group buy. LFS gets guaranteed bulk income and possible extra purchase on pickup day because they are in store. I get a small slice of the pie.

If any LFS shop is interested PM me.
 
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Interesting concept that has a lot of very cool components that could probably be nuanced even further...I'm sure you'll get some PM's...I'm sure that you'll get some mixed reactions from some quarters, but a "fusion" concept like this has a lot of attractive things going for it. Like it or not, it's an evolution...we're seeing the evolution of the LFS concept in a microcosm right here..new ideas/old ideas/bold ideas...just..ideas, and courage to act on them...Value innovation, customer accessibility, buzz words for the future. Change, the one consistent concept is the key to the survival and evolution of the LFS in the mid 21st, IMHO.
 

heathd.hd

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That's the thinking businesses need to have for the future. Get all you stock on the app. Employees use the app technology. Your register even works along with that and a website. Everything works together. A person can sit at home and purchase a fish and 2 boxes of salt with a pick up time of 3 pm. Boom your done stop at the store grab your stuff and leave. It can work. This can also drive orders from the stores vendors. The programming would probably be complex but it's available and out there. Employees have a couple laptops they work on. Technology is awesome!
 

BaritoneJP

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If anyone lfs, garage, etc need an app..let me know and we can work out a no cost option being a hobbyist myself.

Being a Technical Writer for software, also QA, I would be willing to help beta/test any app, even write up documentation/help/instructions as well. Just throwing it out there ...
 

ReefCave

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Im starting to wonder if some understand the biggest problem with all of this.
Currently, to be competitive against the internet there are very few products that a profit margin can be made. While paying for overhead.
How is all this to be paid for when there is already little to no profit margin while still being competitive?
If a store sells $1M in a year, big deal if they spent $1.2M keeping the doors open, while staying competitive. Trust me this MAP is no new concept to the industry manufacturers..The manufacturers just don't care, because they do not need to. The stores just keep buying from them.

This is by no means a witch hunt on the garage shops, or the vendors, Its as Scott said if your a LFS vote with your wallet. If XYZ wants to continue to support a business practice that does not fall into your business principals. Thats fine. Let them do what they do.... But to support them? There are options!! Its just a bit more work because the rep does not walk your shelf filling them on a weekly basis of what THEY think is in your stores best interest. If anything I see opportunity on the manufacturer and livestock wholesale side of this. By, Being the elite, suppling the LFS only.
Still trying to wrap my head around this app thing and how from a business Point of view this would help anything as far as being profitable in the industries current state. Especially when these are independents and not chain stores. (big difference) That I feel is a very steep hill to climb.
 
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