ripped off

[gooch Verified Sponsor]

I just recently ordered my supplies for my products. Every single product but one had risen in price and not by just a little, some more than 50%. Shipping prices are getting very pricey as well which means they are paying more for shipping things in too. Everyone I talk to had a heat and electric bill increase of close to $100 for their homes. Imagine how much the utility bills are going up for the stores. I see stock lists from wholesalers all the time. Those have risen dramatically over the last three years.

I know with my business I decided that it was not a good time to raise prices. Even though everything I buy has increased in price. My margins were very small to begin with and are now smaller. I am looking at other ways to cut costs. Some businesses just can't. They are forced to increase prices. I am sure a lot of stores are struggling in this economy. Lets face it. If you had to choose between a tank of fish or a tank of gas so you could get to work the fish are gonna go bye bye. With less hobbyists comes fewer sales. A store need xxxx dollars to stay afloat. They need to recoupe it. So unfortunately that is driving the prices up on every level. It cost more for the importer to bring in coral......his prices increase. Your store pays the price increase on fish and coral and shipping. Has to increase his price as well.

Most stores try to operate on a 30-35% profit margin on drygoods. When I had my livestock business all the shops around me operated on a 5 time mark up. I ran on a three time mark up. Over the course of three years we lost over $80,000 and three other shops failed in my area. The average saltwater hobbyist use to last one year in this hobby. How many new hobbyists do you think are gonna set up a reef tank when they see corals selling for hundreds of dollars. I know if I wasn't already in this hobby there is no way I could do it now.

But in all reality if you think you are getting gouged by LFS what do you think the guys selling furniture or clothing are charging you? I guarantee you they are operating on higher markups than anyone in this business. Food is amazingly marked up.

I have watched so many people lose jobs over the last year. It sucks. One of my friends who is in his late 40's is working at K-mart for $7 an hour. They cant afford to do anything other than survive right now. My brother in law went from $29 an hour to unemployment.

I am just glad I am still fortunate enough to purchase corals and fish.

Not saying you don't have a right to complain because you do. It is your money. But I highly doubt the owner of the lfs drives a beemer and lives in a million dollar house with a trophy wife that doesn't work and has three kids going to Northwestern. There are only a handfull of people in this hobby that have made enough money to clasify them as rich. I have been working in this industry for over eight years and have yet to turn a profit. Now either I really love the hobby and money isn't what motivates me or I really suck as a businessman. Or both.......lol.

 

[gooch Verified Sponsor]

And most stores don't operate on a three time mark up anymore. It is much less.

 

[GMaquarium]

I just recently ordered my supplies for my products. Every single product but one had risen in price and not by just a little, some more than 50%. Shipping prices are getting very pricey as well which means they are paying more for shipping things in too. Everyone I talk to had a heat and electric bill increase of close to $100 for their homes. Imagine how much the utility bills are going up for the stores. I see stock lists from wholesalers all the time. Those have risen dramatically over the last three years.

I know with my business I decided that it was not a good time to raise prices. Even though everything I buy has increased in price. My margins were very small to begin with and are now smaller. I am looking at other ways to cut costs. Some businesses just can't. They are forced to increase prices. I am sure a lot of stores are struggling in this economy. Lets face it. If you had to choose between a tank of fish or a tank of gas so you could get to work the fish are gonna go bye bye. With less hobbyists comes fewer sales. A store need xxxx dollars to stay afloat. They need to recoupe it. So unfortunately that is driving the prices up on every level. It cost more for the importer to bring in coral......his prices increase. Your store pays the price increase on fish and coral and shipping. Has to increase his price as well.

Most stores try to operate on a 30-35% profit margin on drygoods. When I had my livestock business all the shops around me operated on a 5 time mark up. I ran on a three time mark up. Over the course of three years we lost over $80,000 and three other shops failed in my area. The average saltwater hobbyist use to last one year in this hobby. How many new hobbyists do you think are gonna set up a reef tank when they see corals selling for hundreds of dollars. I know if I wasn't already in this hobby there is no way I could do it now.

But in all reality if you think you are getting gouged by LFS what do you think the guys selling furniture or clothing are charging you? I guarantee you they are operating on higher markups than anyone in this business. Food is amazingly marked up.

I have watched so many people lose jobs over the last year. It sucks. One of my friends who is in his late 40's is working at K-mart for $7 an hour. They cant afford to do anything other than survive right now. My brother in law went from $29 an hour to unemployment.

I am just glad I am still fortunate enough to purchase corals and fish.

Not saying you don't have a right to complain because you do. It is your money. But I highly doubt the owner of the lfs drives a beemer and lives in a million dollar house with a trophy wife that doesn't work and has three kids going to Northwestern. There are only a handfull of people in this hobby that have made enough money to clasify them as rich. I have been working in this industry for over eight years and have yet to turn a profit. Now either I really love the hobby and money isn't what motivates me or I really suck as a businessman. Or both.......lol.

Well said, I agree

 

[rick van vladricken]

I have my own business for 13yrs. I dont raise my price to bring people in my doors. I would lower my price to bring more people in my store. I would rather sell ten items at a $3.00 profit apeace a week instead of two items at $5.00 a peace that is smart business. more people in a store more money you make

 

[gooch Verified Sponsor]

If you can run your business that way and still turn a profit kudos to you. You must have a product people will want that is ressesion proof. This hobby is not. Only real thing I can suggest to you is to start up a brick and morter lfs and see if you can make a go of it. I am being serious and not cocky at all. I tried and failed. The business itself wasn't a failure. I just couldn't juggle a full time job, a full time business, a wife and two special needs kids. My health went in the crapper and the burning the candle at both ends almost cost me the job that feeds my family. I was getting less than two hours of sleep a day and to the point where my quality of life wasn't worth doing what I was doing.

I don't think a lfs can turn a $3 profit on a $30 fish and still stay in business. They would have to do so much volume it is unreal. Now a $3 profit on a $6 item is awesome. Every business is different and has to operate on different margins. There is huge markups in freshwater but you don't notice it. A $.30 neon sells for $3. If it dies few customers complain. They just drop another $3. You spend $30 on a saltwater fish and it dies you seriously cosider not buying that fish again. My wrasse kill every goby I put in my tank. The third one was a yasha hashi with a pistol shrimp. Lasted two days before the wrasse killed them both. No more gobies for me.

So when your costs go up 50% and your $3 profit drops to $1.50 how long are you gonna keep your prices? How much more volume do you need to keep the status quo? A lfs especially a marine store is different. When say for example McDonalds has a customer base of say 200,000 people in a city of 201,000 they can raise the price and have a higher margin and still do ok. Some people eat McDonalds three or four times a week. In that same city of 201,000 you may have 50,000 with an aquarium and 5,000 of them have saltwater. 50-75% of them have fully stocked tanks and come in for some food or the occasional invert or consumable goods. Not to mention most experienced hobbyists are the hardest to sell to. They want something specific. I probably walk in and out of pet stores 50-75% of the time without buying livestock. I pick up some food and often just go in to look. When I see something I like either local or online I buy it if I can afford it.

I do betcha the guy that owns the McDonald is making more money than the guy with the lfs. At what point in time does the lfs guy just say the heck with it and closes shop and opens up his McDonalds franchise. Does that store owner not deserve to have a quality of life?

Last point and then I gotta run. If a store has an overhead of $20,000 a month and is bringing in $15,000 in sales how long do you think they are gonna be in business? They have to either increase prices or shut down. What a store needs to find is a balance. You have your ten dollar frag customers. But you also have your guys looking for that one special coral(me). I can look at $10 frags all day long and have no interest. Yeah a store can take a huge rock of brown button polyps and chop it into ten pieces. If he sells them he probably made more that way than on the $75.00 coral that cost more. But you have to have the customer base. The majority of the ten dollar frag guys graduate to better more expensive corals. If new customers are not setting up tanks those $10 frags sit. We have a store in town that has probably 200 frags priced at about $10-$20. But the first corals to go are always the cherry ones. Often times that handfull of cherry corals at the extreme markup you are talking about pays for the corals and fish that die and the stuff that sits and doesn't sell. It is the rule of supply and demand. When I had my shop I had this montipora I was selling for $15 a frag. Steve Tyree came to my shop and purchased a frag. He called me a month later and told me the same $15 frag I sold him was going on his site for $80. I sent him a 2"x2" frag. He sold 1/2" frags or smaller. He had a waiting list for that coral that was over five years long in a matter of months. Yet I couldn't sell the frags for $15. When I raised the price to $80 my waiting list went to about a year long. One of my customers sold a frag of it on e-bay. About 1"x1" for $350. She put the buy it now option on it as a joke. She sold it in a day. Just goes to show that for every guy that complains about a price there is someone willing to pay it.

 

[AquaWorldPSC]

Gooch, Agreed entirely.

We spend over 1 million dollars a year on livestock and dry goods and we sell in $2500 to $3000 a day. If we sell $3000 each day that's $1,095,000 a year. That's only $95,000 a year profit not including paying emplyees. We have been in bussiness for over 4 years and have not made a dime! Luckly we own a restaurant, and a custom acrylic shop to keep us afloat. In the end we are in it to help out hobbiests. And we are among one of the top 3 LFS in the area. In the past 4 years 5 LFS out of 12 have closed.

 

[nino78]

Well said gooch, Most consumers just don't understand the cost of running a fish store. If we don't make any money then they will won't have any where to shop. I don't think they want that to happen. Support your local shops. They need it now more than ever.

 

[Reef Monkey]

I work at the store and the owner is my friend so keep your attitude to your self smart***

Is it your friends store that is seeing the price increase? If so have you asked him why he is increasing his merchandise by this much?

 

[rick van vladricken]

Because he is moving to the island so he doesn`t have to work. st. johns

 

[mak060]

When this thread started, I though a Mod was going to step in and end it. Kudos to R2R for tolerance. I've ended up learning a great deal of what goes on behind the scenes from gooch, AquaWorldPSC, and nino78, not to mention you rick. BTW, welcome to R2R! As you can see, there are a lot of people here who love the hobby and want to help others. Hope you stick around and support R2R. It's a special place.

 

[Poseidon]

Thanks for keeping it civil folks. We like to have discussion, and talking/typing is the best way to accomplish that. As long as we learn from our mistakes, and keep the discussion civil, professional, and on topic then everyone can benefit.

-Mike

 

[WinstONE]

Well stated. As with the price increase it's based on market conditions. It's a way to keep the market stable. Should an item be in demand the price margin increases. Its the basic principal of supply & demand. Keep in mind the pricing is keep the market stable so there is no flooding in the market and an excess of goods to bleed the demand out. Although you may seem frustrated in the price differences it's the law of economics that takes play as well.

 

[rick van vladricken]

Is that why the market is so stable right now, price went up the market crash you wrong

 

[WinstONE]

wha? Supply and demand. The ocean is only covered by 21% reef, and of that 21% how much of it is actually taken for the reef hobby? They are picky in taking out which coral for shipment.

 

[iani]

wha? Supply and demand. The ocean is only covered by 21% reef, and of that 21% how much of it is actually taken for the reef hobby? They are picky in taking out which coral for shipment.

Coral reefs cover less than .2% of the ocean. If it were 21 percent there would be reefs everywhere.

 

[alvieman]

Is that why the market is so stable right now, price went up the market crash you wrong

I say most everyone here has great points, well thought out, well argued and very valid.....except Rick here. He began this, I have yet to see anything but unvalidated, short, snippy remarks made. Nothing longer than one or two lines, if you are being so "ripped off" lets here some statistics, some data to back these accusations? Even some more definitive explanations as to why its just being "ripped off" and not just business in a stressed economy. Yes prices are rising, everything is. If you are expecting to be excluded just because you are raising a reef tank, you are sadly mistaken. This hobby is very volitile, it will be the first to have a prices raised. So many variables in just manufacturing products and receiving livestock that when a SMALL increase across the board hits everything, we will get hit harder as it takes greater resources to aquire what we need. If you add the small increments up in what is required to get our equipment, livestock, etc. There is the reason for the prices going up, simple as that. If your "buddy" is simply raising prices to move somewhere so he doesnt have to work, then we have a great example of a poor business plan and businessman. If you plan appropriately, you dont have to gouge, you can sustain the profits needed over a period of time to get the desired amount, no harm done to the local economy, you dont lose credibility, and you reach your goal. Gouging as such is simply unethical business practice.

I dont mind people wanting to discuss pricing, I dont mind people wanting to argue points, its what creates discussions and opens peoples minds. But if you are to argue a point, if you are to start a discussion, DISCUSS. Dont create a topic just for the sake of creating. Participate in your own thread, civil, without the attitude. You say he's wrong about the pricing going up to attempt to stabalize the economy? Why? Lets see some reasoning. Lets see something other than a single remark attempting to state someone is wrong, with zero validity and nothing to back it but a person who has been here for a short amount of time, no reputation or credibility on this site to back it. (Yes having a reputation, having the credibility created through years of participation and discussion on boards counts. If people know you and trust you, you dont have to prove AS much, but still some :tongue:)

The balls in YOUR court to validate what you think, its been proven time and time again that there are logical and valid reason for the pricing. Just saying "your wrong" doesnt quite help your cause here. Lets see some rational!!

 

[Poseidon]

^^^

Well put Andy. I too question the motive of the thread, the OP is new to R2R, and has very little "street cred" here. I have been keeping an eye on this thread, as have the other staff members, and for as much as we like to leave the doors open for dialogue and communication, this thread seems to be rather one sided.

Sometimes businesses need to reduce prices in tough economic times, especially if the "widget" they are selling is not a need item. For as much as we might think we *NEED* that Acan, or stoney, or skimmer, in actuality we all know it is a want.

Other times there are very valid reasons for RAISING prices in tough times, even if we don't want to admit it. As a Wedding photographer in arguably one of the hardest hit areas in the country, I have actually RAISED my prices in an effort to meet my economic needs. On my website, I have offered a "promotion" for unlimited coverage at a rate of $999 for the day, this makes my services more affordable for more people, BUT if you book Ala carte, then you end up paying more for the albums. So bottom line, you will pay more for the same. Does that mean I am "ripping" people off, I don't think so!

 

[alvieman]

Glad ya'll are able to keep an eye on things and I'm glad its stayed civil!

Making a living, and attempting to gouge to leave an area are two entirely different things. As much as we HATE prices going up, its a part of reality in a stressed economy. Arguement for both ways are abundant (raise to make a living or lower to ease financial stress on others) It's all in the morals, ethics, and intentions of the business. We know you wouldnt rip us off Mike, which is why I farm your tank for my frags, great corals, great prices! Too bad I've bought the same pieces multiple times....gotta stop killin stuff :-P

Economics is fickle at best, trying to rationalize it is not easy, every circumstance is different. I just would like someone who began the arguementative topic, to explain the reasoning behind it. We're all just simply stating the same things over and over (that pricing going up is logical given the current market and constraints), without any explanation as to why we are "wrong" beyond being told, we're wrong. lol

I feel like my father has said "BECAUSE I SAID SO" to me...But WHYYYYYYYYYYYYY :waaaht:

 

[msman825]

I agree, no need in being snappy are short. No one pushes you into this hobby. if you dont like it get out.. mind explaining ( Ripped Off)

 

[Burks]

Gooch and AquaWorld are spot on. My best friend owns a LFS and working there (not for pay either...) you get to see a LOT of things people don't concern themselves with. Add in the massive cost of water, electricity, heat, rent, insurance, upkeep, and so forth...they don't make that much. His markups are NOT that high either. He thrives on return customers that come in 3-5 times a week versus once every two weeks. This year has been really hard with the rise in the cost of salt and the huge increase in dry good minimum (one place doubled). Hoping he can withstand another year but....

So when a fish store raises their prices, I highly doubt they WANT to. Just this week I saw a wholesalers list (which I see every week), his favias and favites have doubled in cost, some closer to tripled, within the last month.

As Steven Pro said at a conference I attended. "In order to make a million dollars in this hobby, you have to start out with two million."