Are “Basement Vendors” Ruining The Reefing Industry?

[ReefLegends]

I’ve operated 2 stores in different counties, it’s hard to run and make a profit. Even when you have items the same price as Amazon, customers have the prime visa and get an extra 5% back. Then they will come in and ask all kinds of questions about said equipment.

The wholesalers selling to everyone and anyone doesn’t help the LFS. The entire industry needs a revamp. I built a shop with my new house, I don’t have any employee issues, I don’t let customers over and I stay in my lane.

I’ll read more and post later, time to enjoy some sleep and venture off to Yellowstone in a few hours. All while my systems are safe and ran by an APEX, shhh don’t jink me this trip.

 

[VintageReefer]

There wasn’t a coral store within 30 min of me, aside from petco. All my shopping was online for years. Then. A LFS opened. 2 min away from my house. I was extremely excited after years I was getting a saltwater fish and coral store literally 2 min away. I counted down the days to it opening. I was there opening day. And I bought…

Nothing

Everything was new and clean and modern. Healthy fish. But. Boring overpriced corals. It was such a let down.

I still visit every few months for frozen food. I look through the tanks. And I’m never impressed.

The prices are insane. I can’t bring myself to supporting them. 3-4 acan polyps. Plain ones. Can pick from green ones or red ones. $150

Dragon soul torch. Two small heads. One open. The other with bjd and not open $175

Hulk torch. One head. Which looks like a regular green torch. $200

3” gsp rock. $100

Maroon acanthophyllia. 5”. Good size. Boring color. No neon or anything. Very very plain and drab in person. $800

You get the point

They are charging Armani prices but selling Walmart products. It is cheaper and better for me to buy something high end, online, and have it shipped

 

[Peair]

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?

Allot of Basement vendors are selling online, but they don’t like to tell you that because they want to make money, I notice their prices are actually the same or a little higher than a brick store sometimes, but prices are all over the place for both, much better years ago before the Frag takeover, and it’s usually one person with an elaborate website, I think it is a tough business either way, and it’s more of a love of the hobby that drives them, and I don’t think they make allot of money.

 

[SanFernandoValleyAIOReef]

Thanks for the response.

$3 per square foot for retail space. Yes, I guess I should update my post with a range. I did opt for the high end (Mall, or other high traffic high profile retail). Strip mall or other areas may be as low as $3 or $4 per sqft/m, especially with extended multi-year leases.

We can also go back and forth with labor costs etc.

No argument there. The point that I was trying to make is that the numbers are not (at all trivial) and overall margins are nowhere near where people think they are. Retail (especially in a market where you are competing with big box, online and home based) is tough.

Right definitely not a business I would invest in even tho I like it very much.

 

[VintageReefer]

There wasn’t a coral store within 30 min of me, aside from petco. All my shopping was online for years. Then. A LFS opened. 2 min away from my house. I was extremely excited after years I was getting a saltwater fish and coral store literally 2 min away. I counted down the days to it opening. I was there opening day. And I bought…

Nothing

Everything was new and clean and modern. Healthy fish. But. Boring overpriced corals. It was such a let down.

I still visit every few months for frozen food. I look through the tanks. And I’m never impressed.

The prices are insane. I can’t bring myself to supporting them. 3-4 acan polyps. Plain ones. Can pick from green ones or red ones. $150

Dragon soul torch. Two small heads. One open. The other with bjd and not open $175

Hulk torch. One head. Which looks like a regular green torch. $200

3” gsp rock. $100

Maroon acanthophyllia. 5”. Good size. Boring color. No neon or anything. Very very plain and drab in person. $800

You get the point

They are charging Armani prices but selling Walmart products. It is cheaper and better for me to buy something high end, online, and have it shipped

I don’t even trust my lfs corals

I have traded in corals twice to them. Not easy to inspect frags. 3-4” rocks covered in gsp. they literally took my bag, took the rock of gsp out, and put it right in their coral tank. Then dumped my bag water into their system. They didn’t even visually inspect it, no dip, absolutely nothing.

My tank and coral were clean, but it makes me wonder, what in their tank is harboring pests or sickness. I could walk in and see a coral, that literally could have been dropped off an hour ago from another customer, and be loaded with pests.

If they don’t care about their tanks getting infected, they certainly don’t care about mine

 

[Doctorgori]

I made a profit as a basement seller in freshwater. In that space there were many ways to obtain stock, so if you had access to collectors and academic types, you could get exclusive stuff, breed it and then sell it.

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

I knew a few people that raised sticklebacks, cool water dace and others N.America fish from cold clean creeks..
It was weird to me what folks in Japan and Europe would pay for this stuff. Especially the sticklebacks and some of the pupfish et. Be blessed to be in Australia, we can’t touch the corals on this end of the world.

Anyway, saltwater is different in that “homegrown” coral propagation is well within the skill set of most and shipping logistics is a lot easier with a frag than a fish.
As for fish….
in contrast to freshwater, the availability and production of live feed is what’s holding the garage breeders in check. If your species larval stage can’t handle gut loaded BBS post 48hr Instar I & II then you gotta go rotifers which can be incomplete or pods, which are problematic to raise…

LFS offering $20 for a seahorse OR $5 for a small clown isn’t helping either

 

[stewy14]

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

Well, I can spend those profits on the hobby, it just matters how often u sell and stuff

 

[stewy14]

I don’t even trust my lfs corals

I have traded in corals twice to them. Not easy to inspect frags. 3-4” rocks covered in gsp. they literally took my bag, took the rock of gsp out, and put it right in their coral tank. Then dumped my bag water into their system. They didn’t even visually inspect it, no dip, absolutely nothing.

My tank and coral were clean, but it makes me wonder, what in their tank is harboring pests or sickness. I could walk in and see a coral, that literally could have been dropped off an hour ago from another customer, and be loaded with pests.

If they don’t care about their tanks getting infected, they certainly don’t care about mine

Dang, my lfs is renowned by wwc (been on it is all), and I trust the, fully, not with fish tho, just coral, they mis informed me on what fish to get for a 10…

 

[GARRIGA]

Free market dictates an LFS doesn't have more rights to selling than an at home owner. That's like complaining that online sales affect in-store sales yet free market dictates that those who can't compete will be eliminated. No one entity more entitled than another.

Sucks for the LFS and the customer can choose to only buy from them or seek the best price. Perhaps best if the LFS evolves to a new business model that draws more foot traffic and out competes the basement seller by perhaps offering more options therefore a one stop shop because many consumers don't have time to shop around and there's always the allure of price losers to get customers in the door.

Build a relationship. Don't sell them that not needed and with that trust built the customer might not bother looking elsewhere. Charge them $500 for yellow tang and they likely go find one for $less and never return because they felt they were being gauged without the store owner explaining why prices went up and why they must charge that price. Customer acquisition isn't only about lowest price. Many variables go into running a business but entitlement isn't one of them.

 

[Glowurm]

Strikes me that basement vendors are the future of the hobby, surely its not sustainable to rely on imports, not when its perfectly viable to aquaculture corals and breed fish in captivity. I would personally prefer to buy something that came out of someone elses tank than something which was flown thousands of miles, having been ripped from a reef (okay i know a lot if aquacultured in farms in the sea).

I still happily buy from the LFS because i want them to stay afloat. if nothing else they act as great meeting points for discussion with fellow enthusiasts and staff. Most of my frags end up in there store anways as exchange for stuff i need.

 

[Pntbll687]

So I have a unique perspective on this.

My day job I'm a distribution sales rep in the pet industry. We sell aquatics, but hit the new hobbiest clientel, we do not carry any lighting suitable for keeping corals. I visit lfs weekly to write orders and discuss the industry in general.
There are two very distinct LFS for the most part
1. We sell what we sell and that's it. These stores ***** and complain about the price of EVERY SINGLE ITEM. Remember in 2021 when prices went crazy because of shipping?? Yeah, they still talk about it. Even when I show them items they buy have come DOWN 75% from the high, they still have it retailing based off the high price. I call these stores Zombie stores. Yeah, they're still around, but they're dead they just don't know it yet. Less and less product on the shelves, prices of livestock go up because they're trying to counter the loss of dry good sales.

2. What's new and how can we compete with "X". These stores are constantly trying new items. Some work out some don't. They find manufacturers that sell the high end stuff (ecotech, AI, Whatever) but also find brands that are good enough to compete with jebao and amazon, these products may not be cheaper than amazon, but the manufacturer usually offers multiple year warranty and the price is good enough to where people will buy it now instead of ordering from amazon. These LFS still love to complain about prices, but they're more getting prepared for the future. "Are there any price increases coming, so I can change my prices now on the shelf?"

Now, I also have a coral business I run from my home. Legit business. Sales tax are paid, everything is tracked. I try to aquaculture as much as possible, but still bring in pieces from time to time of new items.

Of the two stores above, who do you think complains about hobbiest selling coral? And which one do you think asks to buy coral from me? I sell coral to stores at nearly the same price as other wholesalers, but they would much rather buy it from a hobbiest who has grown it out than wild stuff coming in.

As far as "stealing" business from the LFS. For me personally, it's non existent. I go to 10-12 frag swaps a year and sell. I've stopped posting online and selling directly out of my house. I had a guy come to buy some coral and took an hour to $50 worth of stuff. Now if someone knows who I am and contacts me and says, "I know you have X coral, I want $300 dollars worth", I'm not going to say no to that, but that is the exception and tnot the usual.

 

[Scottiemac]

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.

It's only the biggest ones that can survive. Here in Pennsylvania there's only one major place to go to and it's huge. There are a few pet stores that have a couple of SW tanks, but that's not their bread and butter.
I know of one smaller fish place that literally burned their shop down for the insurance money.
Between online buying and the huge LFSs, the smaller shops just can't compete.

 

[stewy14]

It's only the biggest ones that can survive. Here in Pennsylvania there's only one major place to go to and it's huge. There are a few pet stores that have a couple of SW tanks, but that's not their bread and butter.
I know of one smaller fish place that literally burned their shop down for the insurance money.
Between online buying and the huge LFSs, the smaller shops just can't compete.

can I ask what store? im in nj and wanna see that place

 

[PotatoPig]

Well, I can spend those profits on the hobby, it just matters how often u sell and stuff

For sure, and I don’t want to say it ruins it for everyone. A ton of businesses are run by people who got into them because of a hobby or interest that grew.

But it also definitely isn’t for everyone. You go from a hobby you do for you, to having to deal with customers (expectations and complaints, both reasonable and unreasonable), customer BS (people trying to scam), as well as marketing and reputation building and so on. And for reef related stuff there’s the added bonus of handling, packing and shipping very delicate and temperamental creatures that keel over if you look at them wrong.

I suspect the actual realities of this are perhaps more difficult than a lot of folks yelling from the sidelines think.

/I had a few folks on here suggest I sell some of my CUC, apparently I’m theoretically sitting on thousands of dollars of snails, but after looking into shipping and considering other BS related to the effort the likely net take home vs hassle just weren’t worth it.

 

[ClownSchool]

The only drawback to basement vendors - and LFSs do it sometimes too - is when they claim the coral they’re selling you is a named coral and it’s not.
I have a Walt Disney that looks nothing like my REAL Walt Disney. I have two Golden Table corals when one was sold to me as a Bill Murray.
It can be expensive and frustrating.

 

[KTTX]

Yea touchy depending on who reading it.

LFS stores don't really do much in way of corals. They have soft corals and only a couple acros. Tanks not very clean and I think that is the main reason LFS don't try and do alot of acros...it's alot of work to maintain acro tank parameters, etc. Also, online coral vendors have over the years raised a 1/2 inch frag price from $20 to now $50+ for a decent named coral. If you get a popular named acro you can pay anywhere from $150- $300 per frag. Torches range from $120 - $1000 depending on name. I could go on and on. At these prices LFS would have to hold on to acros for longer time and spend alot of time on those tanks.

So I feel LFS main focus is on fish sales, equipment and supplies.

So to answer the question I would say no, basement vendors are not running reefing. Prices are more affordable for corals. I see basement vendors like the mom and pop store of reefing.

 

[stewy14]

ok, are we talking about people just casually fragging and posting it here? or people like sbb, who have a business built off basement selling?

 

[Reefer Matt]

ok, are we talking about people just casually fragging and posting it here? or people like sbb, who have a business built off basement selling?

Really either/or. But the complaint from my lfs was about those that sell at swaps, etc and don’t have a store, and have a full time job elsewhere. Basically the “part time” vendors that don’t need the money from selling.

 

[stewy14]

Really either/or. But the complaint from my lfs was about those that sell at swaps, etc and don’t have a store, and have a full time job elsewhere.

well, they have competition, they should make a website(if they dont) sell on their, publicly get themselves out there, and more. Its not really the basement reefers,its just the lfs's not advertising enough

 

[00W]

A few notes - because you have it 100% backward.

Coral naming (mostly) started with Steve Tyree and Jason Fox. At that time LFS did not have named coral and people trading coral at home did not have "names" other than a few generics like "green slimer" or "pulsing sinularia". Both Steve and Jason were asking easily 10x more than the LFS for corals FRAGS while the LFS were still selling full colonies.

Your LFS was then talked into setting up a Tyree or Fox sales tank exclusive to their NAMED and VERY EXPENSIVE exotic corals.

From there the "basement coral" people started buying them and culturing them and naming corals for frag swaps which then turned the events from "swaps" into full blown traveling coral sales shows and the naming wars and prices exploded.

Your LFS was still selling full colonies and very few got into the "frag" business. Imports got more expensive, internet sales for hard goods exploded and your LFS found itself struggling to keep customers attention. So the LFS started selling frags too. They did not start the trend or set the prices, nor do they control it now. They are along for the ride trying to keep their heads above water and keep people coming with popular stuff.

Fish have become extremely expensive to import - so their prices have gone up and margins have disappeared. Dry goods prices have skyrocketed also and LFS are held to MAP pricing and competing with AMAZON and other places that get goods through backdoor distribution and undercut MAP. So dry goods and fish have smaller margins that ever, rent, utilities and labor have basically doubled in price so there is no margin. Coral frags are one of the few places they can make a little margin back. So no, some pressure from basement sellers is not going to drive coral prices down.

Had no idea on the history.
Thank you.