BRS acquires Marine Depot? WOW!

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Rob.bucek

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Maybe you don't get it...

No one is "hat[ing] on success" as you put it.

What people hate are monopolies.

Less options and less competition are never a good thing for consumers.
Maybe we disagree, is all good
 
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trmiv

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I get not wanting fewer choices, but I don’t get the hate BRS is getting but nothing about Ken Wong and the rest of MD ownership that agreed to this. It’s not like BRS did a hostile takeover. The Marine Depot owners had to agree with this and got something— probably rather significant—out of it. Personally I don’t blame any of them. They built these businesses from the ground up. Yes as consumers it’s probably not the best, but I can’t blame people for wanting to capitalize on their success before they are pushing up daisies. At some point Ryan will probably cash out too.
 

Brew12

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Less options and less competition are never a good thing for consumers.
Monopolies aren't always bad for consumers. I would agree it would be foolish to not be concerned and watch it closely though.
Amazon, with it's virtual monopoly, has been very good for consumers in my opinion. Walmart was too, when it first grew into a retail powerhouse. We don't need to like either company, but it is hard to argue that consumers have suffered as a result of either.
The monopolies of the past, like the old telephone, oil, gas, railroad, and steel companies were powerful because of the amount of infrastructure it took to compete with them. Modern online services, such as retailers, can very easily be replaced if they fall out of favor. If BRS screws this up it will throw the door wide open for any number of other companies to replace them. A monopoly in a business with a low cost of entry is much less of a threat to consumers than one which is protected by massive infrastructure costs.
 

salty150

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No one is "blaming" anyone...

Everyone here, if they were in Ryan's position, would have done the exact same thing in buying MD - it was a very smart move.

What everyone here is saying is that it will wind up being bad for the consumer.

We already see one example - MD customers who were promised 15% off their filters for life are now screwed.

That's just the beginning.
 

trmiv

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So according to the live stream MD approached BRS in 2014 asking if they wanted to buy MD. Then in 2018 they talked again. Then recently Ken Wong said he was selling, and they had the opportunity to buy, so they did.

Sounds like one way or another Marine Depot was going to sell to someone. Sounds like Ken was ready to cash out, and one way or another there was going to be fewer options. Glad it was BRS that jumped on it.
 

salty150

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Monopolies aren't always bad for consumers. I would agree it would be foolish to not be concerned and watch it closely though.
Amazon, with it's virtual monopoly, has been very good for consumers in my opinion. Walmart was too, when it first grew into a retail powerhouse. We don't need to like either company, but it is hard to argue that consumers have suffered as a result of either.
The monopolies of the past, like the old telephone, oil, gas, railroad, and steel companies were powerful because of the amount of infrastructure it took to compete with them. Modern online services, such as retailers, can very easily be replaced if they fall out of favor. If BRS screws this up it will throw the door wide open for any number of other companies to replace them. A monopoly in a business with a low cost of entry is much less of a threat to consumers than one which is protected by massive infrastructure costs.
No one is comparing BRS to Amazon or Walmart...
 
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trmiv

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It also sounds like they will be bringing back the BRS Special Edition ApexEL as well. They said they are big enough to eliminate the risk for Neptune and just pre-purchase enough units. Ryan also seems to be into this idea of a skimmer with a built-in CO2 scrubber that you just plugin and it manages your pH automatically. Wonder if that actually happens.
 

Brew12

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No one in their right mind is comparing BRS to Amazon or Walmart...
I won't resort to insulting the state of your mind. I'm trying to be polite.

We already see one example - MD customers who were promised 15% off their filters for life are now screwed.
I'm not so sure about this. People get so caught up in things like discounts and free shipping but it isn't always the most important thing. For instance, a study was done a few years ago on the mental aspect of free shipping. They found a slight majority of people would pick a product with free shipping even if the total cost was more than paying for shipping but with a lower item price.
In this specific case, the MD refill kit is $34.42 after a 15% discount. They would save $7.43 buying it from BRS. The downside is having to pack your own resin. So I'm not sure just how "screwed" consumers really are.
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GuppyHJD

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I cant imagine that profits are killer in the reefing industry. I would imagine margins are pretty tight.

BRS contributes pretty heavily to the community (and yes its also self serving - but the education they provide and tests they perform are great) - and dont appear to be into gouging.

More competition is usually a good thing - but they likely need to consolidate in the industry in order to make the business profitable. I dont see any major issues with this personally.

Its just like with any other business - if they start getting aggressive/greedy/poor customer service - other options will be generated/other chains/stores will start up to compete with them.

I dont see any reason to get excited over it. Im more concerned about the profit margins of BRS - and whether this is a sign that they must acquire in order to turn a profit/stay afloat.
Interesting post. I was in two LFS this morning. (Fish gotta eat) One of my favorite shops told me today - egh - it will not change their situation. He said most of his profits are not in dry goods - he makes his money on corals. He keeps the dry goods because folks come in to by coral and pick up food and chemicals OR they come in for food/chemicals and grab a few frags. He said his profit on tanks is pennies after he pays shipping and such - he handles tanks because customers will them by their livestock from him.
So I bought live food and a frag before I left.
 

GuppyHJD

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This could be bad for consumers, but it could also be very good for consumers. I'll be interested to see how things pan out.
The downside would be a lack of competition causes customer service at BRS to no longer be a priority. The potential upside is that, now that they have a truly dominant market share, they may now be able to force aquarium related manufacturers to lower their prices and/or allow bigger discounts during national sales events like Cyber Monday.

I'm not a fan of Walmart but they were very good for consumers when they became large enough because they could force price concessions from their suppliers. BRS may not be big enough to pull that off yet, or they may not even want to, but I think it is premature to say if this will be good or bad for hobbyists until we see what changes occur.
Walmart and Amazon killed many small towns and shopping malls. Stores like Sears, Montgomery Wards, JC Pennys, Macys, etc got gutted in the process. True shopping has evolved to online, overnight but consumer choice is now controlled by a few.
 

trmiv

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Interesting post. I was in two LFS this morning. (Fish gotta eat) One of my favorite shops told me today - egh - it will not change their situation. He said most of his profits are not in dry goods - he makes his money on corals. He keeps the dry goods because folks come in to by coral and pick up food and chemicals OR they come in for food/chemicals and grab a few frags. He said his profit on tanks is pennies after he pays shipping and such - he handles tanks because customers will them by their livestock from him.
So I bought live food and a frag before I left.
They touched on this on the reef therapy podcast the other day and how it flipped the past 5 years or so. Used to be that dry goods was where the LFS’s made their money, now it’s on corals and dry goods are just there to drive people in and make some extra.
 

Sleepydoc

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Didn't the suits pump funding into BRS six months ago?
Only those on the inside know for sure, but from what I’ve read and seen, MD has been looking to sell and BRS recently had some investors come in. My guess is they now had the cash to actually buy MD and the investors were likely pushing a bit, too.


People get so caught up in things like discounts and free shipping but it isn't always the most important thing. For instance, a study was done a few years ago on the mental aspect of free shipping. They found a slight majority of people would pick a product with free shipping even if the total cost was more than paying for shipping but with a lower item price.
Exactly - People want ‘free’ shipping but nothing’s really free and they get mad if companies raise prices to compensate for the free shipping. Like many companies, BRS is using a combination of shipping partners to minimize costs.

regarding sales tax, there was a court ruling a few years ago that allowed states to collect sales tax from internet sales. Most companies have started collecting sales tax already and I’m surprised MD wasn’t. Merger or not, I’m pretty sure they would have started collecting soon regardless.
 
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Brew12

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Walmart and Amazon killed many small towns and shopping malls. Stores like Sears, Montgomery Wards, JC Pennys, Macys, etc got gutted in the process. True shopping has evolved to online, overnight but consumer choice is now controlled by a few.
I completely agree. These two companies in particular have destroyed their competition and if you owned or work for one of them it wasn't good. However, they did that by becoming very consumer friendly. It's the main reason they have succeeded in avoiding any significant antitrust actions. They not only have to dominate the market but the consumer has to have been hurt.

I'm not overly thrilled that this acquisition happened. As I've stated before, I could see it being either positive or negative. Given the times we are living in, I worry their actual performance is going to be clear as mud. With international shipping an absolute disaster and with inflation skyrocketing, it may be difficult to determine if they are abusing market share to raise prices or if any price increases are justified.
 

GuppyHJD

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I completely agree. These two companies in particular have destroyed their competition and if you owned or work for one of them it wasn't good. However, they did that by becoming very consumer friendly. It's the main reason they have succeeded in avoiding any significant antitrust actions. They not only have to dominate the market but the consumer has to have been hurt.

I'm not overly thrilled that this acquisition happened. As I've stated before, I could see it being either positive or negative. Given the times we are living in, I worry their actual performance is going to be clear as mud. With international shipping an absolute disaster and with inflation skyrocketing, it may be difficult to determine if they are abusing market share to raise prices or if any price increases are justified.
With the major vendors in the marketplace adopting a MAP pricing model, the consumers have no avenue for pricing options and the BIG distributers buy in volume to get better pricing. The LFS who might by 6 Radion XR15s see their "wholesale" prices slowly creap up. The LFS closest to me has almost nothing of the big vendors in stock, he says he can't make money on it - no Kessil, no Radion, no AI, no Red Sea (except chemicals), lights by Current and Fluval. Can't say I buy alot from him - he just does not have much. Only one chemical line and not all of it.
 

rob taft

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I recently purchased a fair amount of equipment via my LFS, most of the equipment he turned around and purchased from BRS, Coral Vue or MD. It didn't save me any money nor did it cost me more but he received a small amount because of his dealer account. And when my two Varios return pumps were received with cracked housings, he handled the replacement. As others have said, this LFS makes most of his income off live stock and tank maintenance.

When possible I will support a local business. And while this is my local LFS it is still quite a ways from my house.

That said, I will miss MD and the fast shipping and I feel for the people who in CA and GA who will be losing their jobs. As from the Live stream, BRS doesn't intend to keep multiple shipping points.
 

trmiv

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I recently purchased a fair amount of equipment via my LFS, most of the equipment he turned around and purchased from BRS, Coral Vue or MD. It didn't save me any money nor did it cost me more but he received a small amount because of his dealer account. And when my two Varios return pumps were received with cracked housings, he handled the replacement. As others have said, this LFS makes most of his income off live stock and tank maintenance.

When possible I will support a local business. And while this is my local LFS it is still quite a ways from my house.

That said, I will miss MD and the fast shipping and I feel for the people who in CA and GA who will be losing their jobs. As from the Live stream, BRS doesn't intend to keep multiple shipping points.
Hopefully since MD management seemed intent on selling, they made provisions to take care of those people with a nice severance package.
 

rob taft

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Well, I'm not privy to the details of the sale to say who was or is responsible for the jobs in CA or GA but again from what I can tell jobs will be jettisoned by bringing everything to Minn and like I said, without any partiality to either MD or BRS, I feel sorry for the workers who will have to seek new employment.
 
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