Are “Basement Vendors” Ruining The Reefing Industry?

[PotatoPig]

While "our" business helps, the vast majority of most LFS business is "daddy, I want a fish tank" and "hi, here to pick up fish for Dr. Bobs office, they killed them all again this week". Of course there are exceptions. However, none of them can compete dollar for dollar to online, let alone basement vendors. The point is that they don't really need to.

I have two LFS near me.

One has a fleet of at least 4 branded vehicles they use to go out and do their rounds of large builds and scheduled maintenance for all the “Dr Bobs”. The livestock seems more an elaborate marketing effort to sell the maintenance. Basement vendors aren’t going to kill this business.

The other has a huge range of high end livestock and a healthy online presence. They sell a wide selection of quarantined fish and first item in their current coral WYSIWYG is over $2000… they’re offering products and services your average basement vendor isn’t.

Well, and there’s also a Petco.

I’m skeptical basement vendors are a fundamental threat to either of these LFS. Folks buying discount frags out of a garage aren’t dropping 4 figures on a few Acan polyps, and randoms with basement operations aren’t out there setting up and maintaining large aquariums.

 

[Jmcdaniel0]

This is a touchy subject, but I’d like to know what you think. A LFS in my area claimed this to be true. Business owners can feel free to answer honestly as well. I just think that most reefing vendors and businesses started off selling from home, but now they are concerned about the ease of others to do it without a store and “dilute” the industry. Or is there room for everyone?

I am all for basement sellers.

They create competition and drive prices lower. Also, I only have 1 decent LFS near me, and even then they don’t have much. They are owned by SA, so the fish are usually great, but they are really expensive on most everything else.

Some friends of mine and myself recently got set up to order our own coral, dry goods, fish etc. we are able to stock coral on an entirely different level than the local lfs. We are in the process of starting a reef club and we are passing those savings onto everyone we can. We don’t make money, if anything we lose a bit, but it’s about having the things we want, when we want them. Not waiting on a lfs to order something and them mark it 4-500 %

 

[DeepDiver55]

Can you show your "greedy" math, please?

You may not be happy with their pricing, but that does not make them greedy or dishonest. Blanket statements like that indicate a lack of understanding of what it costs to run a business.

profit is not a dirty word. It means they stay in business and can offer realtime product, support and answers.

 

[Doctorgori]

I’m sorry to the local lfs thats charging $50 for bubblegum digi if im undercutting you,

But I offered you my frags exclusively as very cheap local grown wholesale and you didnt want them

Just to level the argument gotta ask yourself: are you paying taxes? …(I’m not asking you to answer per se’, it’s rhetorical) …if you got equivalent overhead is I’m getting at

I will say that basement growers and stores serve different purposes but do overlap. All of the stores near me aren't equipped to grow lineaged high end so frags. The stores are much better equipped to sell fish though and many other types of coral and livestock such as inverts. They will always both exist because there is need for both.

Yes, I think I’ve seen a Blue Gularis one time in a LFS, dang shame its almost never offered…I used to breed moema Quii ..a sight to behold and only available from the basement supply chain …

The basement mafia exist because there is a need in the market, simple as that. Personally I rather pay $20 than $60, everyone else can pay what they want IDC

It also exist because certain stock just isn’t available to many wholesale/retail supply chains… some stuff simply comes in via academic channels et

we as reefers and coral lovers need to under stand that. learn how to grow coral and pass them on to fellow reefers.
i know it can be tempting to get some $$ back and that is fine and all but lets get back to the hobby of it.

the way the Earth is going it is very possible only domestic stock will exist for some species..this has already happed in Livebearer/killifish circles… a location of F.walkeri is like that

I just question that when the bricks and mortar shops are gone due to online businesses and home grown frag sellers undercutting them, where are we going to get our fish from?

I’m not challenging this per se, but do we really have the numbers/percentage market data in to conclude that…I have no clue what percentage of each make up total sales, does anyone?

Online sales and overnight shipping is what kille the LFS, not the basement hobbiests. (In my opinion of course) bc most of us local basement traders were really only trading corals we got from our LFS..

No this I can believe without concrete data..I think we are all witnessing and living this now

 

[littlebeard]

Businesses change. Just like Home Depot and Lowes killed the ma and pa hardware store. I think e-commerce killed the LFS way more than a couple of coral nerds(said affectionately) selling sticks in their basement.

LFS had to pivot to survive e-commerce. Some do their own frag selling business, others pivoted to aquarium service companies.

Nowadays even having an e-commerce site isn't enough to be successful. Advertising in the social media sphere has dominated those e-commerce sites just to be successful. Just another way current businesses have to change.

 

[MONTANTK]

Basement reefers are not ruining it. Boutique shops are.

 

[BrokenReefer]

this is true. And it’s also true that just because someone has a business doesn’t mean that people will buy from them. Going out of business and getting another job is a fact of life that “business owners” refuse to accept.

I agree with your last statement and here’s my opinion on that. Warning, my opinion is quite callous and cold.

After owning a business for many years and hiring several former business owners, nearly all of them are unable to accept that they lost their company through some act of their undoing and they bring all of those bad habits with them. Hardly any of them are able to adapt and change their mindset from “I was an owner and this is how I did it!” Which is, ultimately, their continued downfall. I refuse to hire anyone who owned a failed business nowadays, I don’t need that cancer in my team.

I prey for all business owners. We are in the decade of change…

I hope this was a typo, otherwise …. Yikes man I hope we’re not in the same area!!

 

[drbark]

I used to live in SoCal and had plenty of LFS options. They each had their strengths and weaknesses but competition helped for a better product. Where I live now there is only one within 90 miles. His prices are ridiculous and he looks at me like I'm a giant dollar sign when I enter. I even saw his wife mouthing "ChaChing" when I entered the store once. It upset me so much that I haven't returned in two years. I have a unique situation in that I have a veterinary practice of my own and have a resale permit. I tell the wholesale suppliers that there is no one else here to sell corals (which is true) and most of them give me access to their online stores. I've never sold any but am shocked at the wholesale prices now. I realize why LFSs can't sell these items for profit anymore. This is the first time I'm telling anyone about this so don't tell anyone guys.

 

[Cool tangs]

I used to live in SoCal and had plenty of LFS options. They each had their strengths and weaknesses but competition helped for a better product. Where I live now there is only one within 90 miles. His prices are ridiculous and he looks at me like I'm a giant dollar sign when I enter. I even saw his wife mouthing "ChaChing" when I entered the store once. It upset me so much that I haven't returned in two years. I have a unique situation in that I have a veterinary practice of my own and have a resale permit. I tell the wholesale suppliers that there is no one else here to sell corals (which is true) and most of them give me access to their online stores. I've never sold any but am shocked at the wholesale prices now. I realize why LFSs can't sell these items for profit anymore. This is the first time I'm telling anyone about this so don't tell anyone guys.

Interesting, there is a wholesaler near me who also sells to the public from time to time in Aus. They would much rather sell to the US as they get waaayyyyy more money per coral then selling locally

 

[Scottiemac]

It's a double-edged sword. You can get some great deals from basement vendors, and you can get crap.
I ordered from a guy on FB one time and he gave me great packaging with good pricing. I went to him a second time and the water was filthy. The products were dead.

An LFS or major online vendor has a responsibility to give good service. I'll pay a few dollars more for the guarantees of service.

 

[tautog83]

I just think the business model of lfs needs to change a bit. I think having a large dry goods section nowadays is just a waste of space . At least 95% of us are going to order online and have it delivered to our doorstep for cheaper than most lfs . However id be all about supporting my lfs if they carried actual decent selection of livestock . I think in some areas there just isnt enough sales to warrant throwing a lot of money into it and i get that .So , in those cases sure id love to buy from a "basement" reefer if i went there and could see they knew what they were doing . In the end we all want a good product for the cheapest we can get .

 

[BryanM]

I honestly don't know how LFSs in the california bay area stay afloat, but it is clear that they are mostly if not all in commercial areas which I'm sure lower the cost per sq foot for rent/lease.

I walk in to one of the more popular stores here, its huge. A lot of tanks, lights, plumbing. But that's probably why I paid 79 or 99 for a RBTA.

 

[AtlantiCat]

Just keep in mind that "The Industry" does not exist to help the hobbyist.

The Industry exists to make MONEY from the hobbyist.

We're all a bunch of little psychos who thrive on the nifty things we want to own, keep, and grow.

If your LFS can sell you an overpriced thingamabob, it's because you feel it's worth that price.

The basement hobbyist selling a few frags at the local swap isn't ruining a damm thing other than his Saturday morning.

 

[drbark]

Interesting, there is a wholesaler near me who also sells to the public from time to time in Aus. They would much rather sell to the US as they get waaayyyyy more money per coral then selling locally

Exactly. Plus you guys get those corals sooner than we can. I bet the shipping part would be interesting

 

[stewy14]

Basement vendors are what drive u to grow coral out, lfs’s are what make that possible

 

[BryanM]

Basement vendors are what drive u to grow coral out, lfs’s are what make that possible

That, and actually having basement, or other space to do it.

 

[stewy14]

That, and actually having basement, or other space to do it.

Yeah!
Anybody can find space to put a tank, it just matters how big…
U can make money off of any hobby, it just matters how, and where u get the motivation to do it

 

[tigre44]

I have both traded coral to my local store for cuc and other coral and given corals to new people just getting into the hobby. The hobby is expensive enough helping new people and trading others I think is the right thing to do.

 

[PotatoPig]

U can make money off of any hobby, it just matters how, and where u get the motivation to do it

Also, something to consider: Turning a hobby into a profit center is frequently a first class way to suck the enjoyment out of it.

 

[Opus]

Personally I have no issues with basement vendors, it is the ones that do it without paying taxes or getting licenses that bothers me and really burns the LFS owners. As far as I can tell, all our local basement vendors are basically just chop shops. There is no way someone in their garage is able to grow enough coral to be shipping out a dozen plus boxes of corals each week. We also have them running raffles which the last time I checked were illegal in Texas except in certain non-profit situations. Not sure about ruining the LFS in my area though. We have probably over 30 if you include Petco and Petsmart in the numbers. I do wonder if they are hurting the frag swaps here. I go to every local frag swap and after the basement vendors starting popping up here after covid, the frag swaps are empty. The ones I went to this year I think there were almost as many vendors as there were customers. We used to get well over 100 people showing up but now it might be 30 to 40. Contrast that to the local freshwater shows and they are getting 100's of people showing up.

On a side note I have had a couple of LFS owners say if they didn't have a freshwater sections then they would have been out of business by now. One of our larger saltwater stores just had a big "grand reopening" with a big freshwater selection now.

Not sure on the AI part I've seen mentioned. AI has been around since the 60s.