Why Do We Continue To Buy Frags?

[jttran]

Aquacultured corals and SAVE the ocean...

 

[Biokabe]

It's simple economics, on both the part of the buyer and the seller.

As all of us know, keeping a reef tank is expensive. Why do we act like the coral suppliers don't have to pay the same expenses? There's the cost of salt, dosing chemicals, water, filtration media, electricity, testing equipment, controllers, lighting, and everything else. On top of that, they also need to cover the physical needs of the facility - leasing/mortgage payments, insurance, taxes, utilities, shipping supplies and more. And on top of that, they need to make enough profit to cover all those expenses and pay themselves and all of their employees enough to live on. Is it greed if a coral supplier sells a frag for $100, or is it economic necessity?

Our coral suppliers don't have a monopoly on the market. In fact, every single hobbyist is a potential competitor. So if they were truly being greedy and taking far more profit than was necessary, other players would quickly jump into the market, undercut them by a few dollars, and be happy with their reasonable profit. The fact that we don't see this happening - that prices go up instead of down - tells me that it's not greed at play, but necessity.

Back-of-the-envelope math bears this out. Say I operate a small shop with two employees, plus myself. My rent is $4,000/mo. For simplicity's sake, I pay each employee $10/hour and they work full-time, so $1,600/mo each, or $3,200 total, plus an extra 15% in payroll taxes ($480). Before any other expenses, I'm at $7,680 in expenses before considering anything else. Again, to make things easy, let's just peg all those other expenses - not counting the cost of purchasing livestock from suppliers (either wholesalers or local hobbyists) - at $1,000 for salt, dosing, make-up water, media, electricity and everything else that I need to keep the place running. So before I can even take home a dollar to pay for my life, I have to bring in almost $9,000. 30 days in the month, so just to break even, my livestock profits need to be at least $300/day.

If I buy a coral for $5 and sell it for $10, I would need to sell 60 frags to break even. On the other hand, if I bring in a premium coral for $50 and sell it for $100, I'd only need to sell 6 frags. Obviously, it's harder to find a buyer for $100 frag than it is for a $10 frag, but I only need a few to make my money for the day. And as far as my costs go - it costs me just as much to maintain a $10 coral as it does to maintain a $100 coral, and it costs my employees the same amount of time to sell a $10 coral as it does to sell a $100 coral. Finally, there's nothing stopping me from stocking both the cheapie corals and the more expensive ones. So I can carry both, and then look at how my customers react. If the $10 corals languish while I can't keep the $100 corals in stock, then I'm getting out of the bargain coral business and targeting the high-end customer who's showing me he's interested in the way I care about most - by buying my stuff. If all I sell are $10 corals... well, then it might be time for me to close up shop, unless I sell a metric ton of them every single day.

And on the subject of frags vs. colonies - again, it's economics. If I can sell a full colony for $250, or frag it into eight pieces and net $400 from it, why should I leave $150 on the table? Furthermore, it's a lot easier to sell a $50 frag than a $250 colony. Even if it takes me some time to sell all 8 frags, I can begin reaping an immediate return on my investment. If I'm a shop owner, the only time I'd leave a colony intact is when I already have a buyer for it; at that point, it's just free money.

And by the way, there's nothing wrong with shops wanting to make a profit. That's literally the reason to run a shop. If owners can't support themselves off the profits from their shops, then they have to close up shop and go find some other way to make money. We all claim to love LFS, and yet there seem to be an awful lot of people in this thread who seem to want shop owners to deliberately make less money than they could. It's not greed. It's necessity. If you don't make it a policy to maximize your profit from your shop, you're probably not going to be a store owner for long.

On the buying side, it's what the market seems to have decided upon. I can only speak for myself here, but I've only purchased anything resembling a colony once. There are many reasons I choose to go this route:

1) I don't want to "buy" a complete look. If I just wanted the end result of a beautiful tank, I'd pay to have someone come and maintain my tank. I don't want that - working on and nurturing my tank is the reason I keep it. Corals are an integral part of that. I don't want to bring in a mature colony - I want to grow a mature colony.

2) Frags let me get a greater variety of different corals. If all of my corals were colonies 8"-12" across, I could only have a few corals in my tank. Getting frags, I can fill the tank with a greater variety and trim them back when they become too large.

3) It's more economical. Buying a colony, I can get 10 heads of the same coral for $250. Or I could get 6 completely different corals for the same price. Unless the colony is of a type that I'm just crazy about, I'm going for variety over size.

4) I like to support aquaculture with my dollars. I know that colonies can be aquacultured as well, so that's not what I'm talking about. Rather, if fragging is a viable business model, then more companies will spring up to fill that demand. So in choosing to buy frags, I'm telling businesses that this is something that they can do and make money doing. More companies provide a greater variety of choices, gives more opportunities for interesting new color morphs to appear and, after other market forces are corrected, drive down prices.

 

[mkwarner77]

Two reasons, first inflation, a gallon of gas cost less than $2 twenty years ago. Second demand, there are a lot more people in the hobby now then there was 20 years ago. I personally like small frags. I can watch them grow and it leads to more coral diversity in smaller tanks. Each person has to decide for themselves whats to much to pay.

 

[siggy]

The problem I see is no standard or size of a frag. I call the dot on a plug a Face Book Frag and will no longer purchase from them dealers Period. I will also be truthful in my assessment of that dealers practices. I have always wanted colonies or at least a chunk, frags are a nice addition to fill the voids, and always a pack of 6 or ???
I will pay a premium but I had better get a to 1" frag or you will NEVER see another penny of mine. I am now seeing a trend of these fast growing vendors getting CHEAP with smaller frags and higher priced and wild sourced corals to fill the orders. Why pay a premium for Aquacultured strains, only to receive SCRUB.

 

[MJC]

IMOP buying frags and growing them out shows dedication, patience, accomplishment and pride.
Anyone can throw colonies in a tank and have a "INSTA REEF"
That being said the frag prices today are ridiculous, not to mention the names they come up with to entice the new and gullible.
A word to new hobbyist.
It has been my experience there are some really good dedicated hobbyist out there that are willing to help you out with frags that are not looking to get rich off of you. Join a local club if you can and acquire patience. ;)

 

[NS Mike D]

Hello,

Lets start with the first paragraph and I’m speaking professionally (on said issues not you per say), but these corals had no issues until, humans (society, pick a country ) started with pick an option, crashing into them, waste, over harvesting, now has put them on the red list. This was all do to humans, not to mention releasing non reef creatures in a reef. Sadly we won’t stop until they are extinct just like other species. Climate change has also diminished them and it’s again mostly do to humans. There are several scientific papers to prove this.

In terms of cost to go see aka barrier reef or the reef in Belize, and others, price is no different than what people do for typical honeymoons etc. if it was so expensive then why are they some of the top tourist attractions? Yes flying from Boise to Australia and visiting the reef is actually cheaper than even my 240 gallon set up (dollar wise). Yet some can get nano tanks or all in one tanks for 650 roughly, but that’s not including water, rock, sand supplies and then corals. Then when they want coral, or don’t have a lfs how many corals do you see for 30 dollars. (Probably a few but let’s add shipping now it’s 100). But the prices of lights and corals, equipment, supplies Are not cheap. This probably goes with dogs, horses, pick a pet. But still you said “we kill for selfish pleasure”. Hate to say, if you think we kill just corals for selfish pleasure, add fish, cats dogs, animals we have made extinct aka some rhinos, soon tigers. So maybe again society problem with money and greed is the root cause. If a rhinos horn wasn’t ivory and worth 20,000, people would probably not have killed them off. The same will happen with fish and corals we will keep raising the price, and eventually we will run out of them.

How is it misguided that I say poor and needy can’t have a tank? Let’s see a decent reef tank that grows all corals softies lps and sps, get going under a 1,000, including stocking the entire tank. Let’s make it even more fair let’s say they want a walt Disney, home wrecker some special zoas. Now to be fair I have lots of no name cheap corals and my tank to me is gorgeous. So could they do the same yes, but hey are still 35 each min at my lfs. So can you show me how one starts a tank on a min wage job and you may not live in Idaho but I do. Yes my profession pays more but min wage here is 7.25 and guess what a high wage here is 10 dollars an hour. Idaho ranked 48/50 for the worst in pay as of 2019. The main person at my lfs who has worked there for 7 years still doesn’t make over 10. I’d say this is more of a society probelm, because sadly anything under 32,000 in Idaho is considered poverty. Yet house prices, gas prices, are similar to Portland and Seattle markets, except they have much higher min wage.

How about this come work in the trauma center I do, and see for yourself. Let’s visit the cancer center here with kiddos and see what happens. 99% or the tanks we have in places are individually owned, and that person usually hires the lfs to maintain it. Yes they want them all, but as usual there is no money in the budget. Yet we all know hospitals make insane profits. I have asked Ecotech and hydra to donate lights, I was laughed at off the phone. I have found three so far that have actually followed through. Not to mention how long it takes, and the amount of paper work and department heads one has to go Through. You make it sound super easy and it’s very hard actually. People always say the community will rally around, those in need. Come see people who are in the er constantly and can’t get a place to stay or even a shelter. There is one shelter for males and three for females. Sadly males get very very little support, and 90% it’s well go find s job. Some that does apply to but others really do need assistance. The average for a person to get ss disability takes 4-5 tries with appeals, (including one who had no legs). Still think the rising prices are not s probelm, i am curious to see what you see daily.

But do to the fact corals and fish are mainly produced by Mother Nature why charge money? We saw what money did to Tigers and rhinos, and you don’t see the symbolism here?

a lot of moral relativism in that post along with moving goal post. Doesn't change that frags can be gotten for reasonable prices. That doesn't mean there is also a market for high end corals and it doesn't mean the hobby is expensive. Your OP pinned the costs on corals and coral sellers.

as for the off topic parts of your posts,
I spend a good deal of my time and money helping others less fortunate. I am always inspired by the army of volunteers who do the same. Volunteerism is a core value of this country. Don't be jaded by looking at half empty glasses.

As for Mother Nature, there was no equivalent of the aquaculture market with rhinos and tigers. Apples and Oranges. Many people are more aware of the impact of the hobby on the environment and that has shifted demand for more aqua-cultured corals and captibe bred fish. If not for the marketplace, who would these operations exist while enabling the operators to pay their mortgage/rent and feed their families?

 

[HMpops]

Large colonies are cool but they are straight from the ocean. Frags are usually from a mother colony or another tank and are therefore more sustainable. When buying large colonies you have to account for either the costs of wildly harvesting or the costs of growing a small colony into a large one.
Aquaculture>wild

Sorry, maybe in your market. I sell frags and colonies to my local FARMS. I ‘can’ also buy full colonies. All grown from frags. Been doing it for years. My local farm also has a retail store. They sell my colonies, and others, from other reefers. Always keeping them separate from their farmed frags. As they increase their farming capacity, based on online sales, they sell off former colonies that were once used to supply frags.

I suggest, anyone on this thread, who keeps telling suppliers what and how they should sell their corals, to start their own business. Competition is always a good thing. I’d also suggest you buy this book

 

[Saveafish]

Take the price out. Look at this. The whole box.
Reefer #1
Buys frags, woops he went on vacation and his wife nuked 6 frags, he goes back to the LFS. Replaces the rare hard to find beautie.
Reefer #2
Buys big mothers. a Trident fail and ALK kills his tank. Whoops, he bought a rare mother coral. No replacement. None. Its gone.

 

[Jon M.]

 

[reefwiser]

The problem down the road is that we will be dealing with SPS or Zoas. While you can frag those do to fast growth. LPS corals don't grow and the same rate and they are beginner corals. New hobbyist are not going to jump right into the SPS pool. If they do they will have a short life in the hobby. Land Farms like WWC have a higher over head than farms where the corals can be kept in the ocean till harvest. So that is an issue. Fragging originally was developed to save coral heads that we where loosing because we where learning how to keep corals. Then as a method to trade corals with friends. Now it has turned into a business practice.

 

[shred5]

I agree 100% with this. There is no way home grown corals can keep up with the current demand. Prices will get even higher and force a lot of people out of the hobby or at least limit them to just a few corals. Even with aquaculture, the diversity will be small if they are not allowed to collect stock from the wild.

I do get it when people say they like to get frags and grow them out but I'm always amazed when I see full tank shots and they have so many frags crammed into their tank there is no way they will be able to grow into colonies. Also, as the OP stated, the definition of a "colony" has sure changed since I started in the hobby. I laugh out loud sometimes when people post a "colony" shot for reference to a frag they are selling.

I agree 100 percent. When Australia stops exporting corals it is going to be bad. The hobby will loose most LPS and without wild new corals the hobby will get boring for some and expensive.
What people do not get is allot of those frags we buy now are really still wild colonies brought in and fragged. Most frags are still not aquacultured.

Equipment prices have been on a massive rise in prices too and the hobby will just get to expensive for most.

Fish are going to get worse though. It is far far more hard to aquaculture fish. The diversity of fish will drop down to the point where most will only be able to afford clowns.
There will be a ban on fish too...

I know we are breeding more and more fish but I do not think people realise the scale of fish imported. We used to import almost 500,000 yellow tangs from Hawaii. That is one fish. What size facility makes up for 1/2 million tangs? We are lucky now if more than a thousand tangs are bred a year.

Diversity will be gone for both coral and fish.

The hobby will survive and prices will come down as demand drops as people leave the hobby.

Stores are already closing due to Indo ban. I know some of the farmers are thinking their corals will be gold but it is not going to be the case. I do not know many who will want a reef without fish. I have talked to a few who can not wait for more bans so they can jack up the price more.

After corals are banned they will go after the fish. Next they will attack the hobby and aquaculture. I do not know if people remember but a few years ago there was a proposal to ban a big chunk of corals from being aquacultured or even owned. Thankfully at that time it did not pass. It will come up again.

I do not get why we are not organised at all there is so much to loose. Even if they could just get maricultured corals it would make a huge difference.

The real problem is the bans are coming faster and the hobby does not have time to ramp up. If it happened slow we could adjust. Most people in the know think Australia will be closed this year or next and Caribbean will severely limit fish because of the lionfish issue this year or next too.

The problem down the road is that we will be dealing with SPS or Zoas. While you can frag those do to fast growth. LPS corals don't grow and the same rate and they are beginner corals. New hobbyist are not going to jump right into the SPS pool. If they do they will have a short life in the hobby. Land Farms like WWC have a higher over head than farms where the corals can be kept in the ocean till harvest. So that is an issue. Fragging originally was developed to save coral heads that we where loosing because we where learning how to keep corals. Then as a method to trade corals with friends. Now it has turned into a business practice.

I agree with out new people in the hobby it is hard to really have a future.
With the hobby looking like it might get smaller who will invest in new aquaculture facilities? Breeding facilities? New equipment?

I am a skier and snowboarder. I used to teach and work in the industry for a while and it is getting bad. There are ski areas charging over 100 dollars a lift ticket. So a weekend of skiing for a family gets expensive plus logging is out of hand. Now you got two kids that grow fast and new equipment is expensive. It is a dyeing sport. It has become a rich person sport. Ski areas close every year.

After keeping reefs for over 30 years and saltwater longer I am afraid for the hobby. I know allot of people in the industry are now too. Finally waking up..

The hobby will survive and prices will go way up and then drop as people leave the hobby.

Two reasons, first inflation, a gallon of gas cost less than $2 twenty years ago. Second demand, there are a lot more people in the hobby now then there was 20 years ago. I personally like small frags. I can watch them grow and it leads to more coral diversity in smaller tanks. Each person has to decide for themselves whats to much to pay.

20 years? It has jumped the most in the last year and a half and it is because of closures.

 

[EMeyer]

We all claim to love LFS, and yet there seem to be an awful lot of people in this thread who seem to want shop owners to deliberately make less money than they could. It's not greed. It's necessity. If you don't make it a policy to maximize your profit from your shop, you're probably not going to be a store owner for long.

Good post, but you've gotta be fair here. It goes both ways.

Store owners want to maximize their profits, customers want to minimize profits (i.e. buy it at cost). Both of these are natural and defensible goals. But you only defend the shop owners' goals; why? This is an endless and inevitable dance between buyers and sellers. Neither side is right or wrong, but pretending one side is acting nobly and one side is acting selfishly is silly. Both sides are acting out of greed.

The appropriate price for anything is a compromise: more than the buyer wants to pay but less than the seller wants to make. Given a fair market with enough transparency, prices will over time reach this compromise point.

I have nothing against frags. Frags are great, for many reasons already discussed in this thread. My only problem is with frags that cost more than $20.

 

[GK3]

When I started in this hobby 15+ years ago I would go to my LFS and purchase nice sized colonies/corals at reasonable prices.

About 2 weeks ago I gave my Granddaughter about half the corals in my 180gl to stock the 50gl tank I had given her. So I went out looking for new pieces to stock my tank. 95% of everything is little bitty frags on plugs at inflated prices. I am of the opinion and experience that buying frags, for the most part, is a sucker's game. The attrition rate is horrible. Yet most hobbyists continue to purchase frags because that is what is available. But why is that the only game in town? If we, as buyers, stopped buying overpriced frags the retailers would be forced to reduce the price or increase the size. Here is an example: I went to my LFS and asked if he could get me a nice Blasto colony, (BTW 4 heads on a plug IS NOT a colony), and he took me over to his display tank and told me I could buy one of the 2 colonies he had. About 20 heads for $225. He then took me to his frag tank and showed me the same heads at $60 each and he has a constant turnover of them. I asked him why people would pay $60 a head and he told me that is what hobbyists have become conditioned to buying.

He has a handful of old-time customers like me who he tries to find bigger pieces for, but most people prefer to buy frags. There is another well known LFS near me who has basically stopped selling corals because he told me selling frags is just ripping his customers off and he doesn't need the money that bad.

So someone explain to me? What is the fascination with buying frags?

I want to know how your LFS stays in business. The margin on dry goods in this business is so low, there is no way he can afford to just sell those. Most store owners who are successful do it through coral and fish.

Also - with blastos I will pay 225 for a 20 head colony. These guys are hardy and i know i can keep them. But what about acros? If I buy a $50 head and kill it, I’m out $50. If I buy a colony at $400 and kill it, I’m out 8 times as much.

I do agree that the attrition rate on frags is bad. But I also told my girlfriend that if you can’t take a $100, watch it burn, and be ok, then this is a rough hobby to be in. I don’t mean that in the sense that it’s only for the ultra rich, but that you have to understand you are going to have loses.

 

[fishybizzness]

I agree with alot of the posts that say it doesn't have to be expensive! All of these were $5 & $10 frags! Most were only a few polyps. I did go overboard with the Duncan though, I believe that one was around $25-30 for 3 heads! I stopped counting at 20+! For me it's not about the fancy names, it's about the thrill of just being able to keep my own personal reef in my living room that I can explore any time I want to and I don't even have to get wet! Lol it's not for anyone else's pleasure, only mine, so as long as I am happy with it, I'm good!

 

[Dkeller_nc]

A few on this thread have implied this explanation, but to be more explicit about it, there's a very good reason why people buy frags instead of colonies. And while that reason isn't logical, it is very much human nature.

Specifically, it's about total expenditure for an item rather than a price-for-value equation. I would guess that the majority of individuals would choose a $60 1" frag over a $250 colony of that same coral even though the colony is 10X as large as the frag.

I see this all the time at the grocery store with meat purchases. I will be mulling over the $8/lb special for a whole tenderloin - total expenditure about $80, and someone will walk up next to me, glance at the whole tenderloin total price, then choose the filet mignon right next to it for $20 per pound. I'd guess that most of these folks know that filet mignon steak is cut from tenderloin, and all they have to do to get 7 or 8 filet mignons is buy the whole tenderloin, slice it to their desired thickness, and freeze what they don't want to eat right away. The reason they do it is quite simple - the package of filet mignon steaks costs a total of $20, and they'd have to spend $80 to get the whole tenderloin.

Same thing with frags instead of colonies - it's just simple psychology. ;)

 

[ca1ore]

Railing against the price/size of coral frags is ultimately pointless. As long as there are adequate numbers of people willing to pay exorbitant prices nothing will change. Or wait a year until the bloom is off the rose and a frag can be had for a faction of it's hype price.

 

[Sharkbait HooHaHa]

I buy my frags from a local LFS that I know to be a good, conscientious source. He frags a lot of his stock from the large system he maintains as the store's show display, which is a good, healthy system. He also prices the frags reasonably at $25 - $40. Of course, he has larger developed colonies that cost more, but, like a lot of others, I like the challenge and reward of growing them from the small frag. I also like the fact that buying frags this way decreases the impact on our reefs that already face too many threats.

I appreciate that he doesn't charge as much as most other stores do, but the other stores are just pricing what the market will bear. The prices aren't likely to come down, given the rising cost of collecting from the wild. It is possible to offset the cost (and maybe influence LFS prices?) by looking into local reef clubs that sponsor frag swaps or that have members who sell frags from their tanks . You can find deals on local cheap frags all over social media--just be sure to quarantine.

 

[Silver14SS]

It’s like saying all cars are way too expensive and using the price of a new Ferrari as the evidence.

 

[NeutronMan]

I don’t like paying the prices, but don’t mind them. It’s capitalism. Capitalism is natural. If you price your coral too high, you go out of business because competition can do it cheaper than you. Who’s to say what something should be sold for anyways?

Supply isn’t increasing as fast as demand is. Many more people are getting into the hobby than have ever been. Few have it together enough to frag and sell for less than LFS so prices are only slowly coming down on known corals.

My old LFS guy sold frags are very reasonable prices when compared to online Coral Houses. He said he makes his money off services like maintenance rather than corals. He has a lot of high end named corals for a max of $50.

 

[Tamberav]

I buy frags but not at those prices! My LFS has frags from 8-15 dollars and then colonies for more.

I buy off local reefers a lot too. I bought a blasto with about 9 heads for 20 dollars and the 20 bucks went into a grow out contest for a prize and the a part of it went to support the local reef club so they can buy bus tickets and hold events for the club members.

Local reefers always toss in freebees too...it's awesome and I love when venders do that. I like surprises in general though.

Even online I shop around and buy frags I feel that are not crazy priced. There is definitely a lot of hype around some of it... especially on live sales and it's easy to get ripped off if not for careful shopping.

I also have nano tanks so colonies just fill it up too fast and it's fun to see things grow.

If you want a good deal on a frag....buying from other hobbiests is generally the best deal around and colonies are just harder to come by due to bans which isn't a bad thing....we got plenty of corals being aquacultured.