Are “Basement Vendors” Ruining The Reefing Industry?

[keithw283]

Bad for LFS, but good for reefers.

As far as the reefing industry, if they are aquaculturing...I think basement reefers are awesome for the hobby. But I don't appreciate when they are chop shops or price gougers.

I agree, Brick and mortar stores will dwindle soon. Why go get something from a store that has to charge you more to pay for all their bills when you can get it from a hobbyist just selling a frag off a colony. Where the LFS has the advantage is with fish and dry goods but online sales are going to make those dry up eventually. I personally will never buy a fish online but there are tons of people that have no issue with that.

 

[landlubber]

This is like Walmart being ticked at people for having garage sales.
It's a silly argument for any LFS that isn't willing to buy 100% of all coral propagated at a fair price. Otherwise what are people supposed to do with their overgrowth? Flush them?
New reefers have a massive hill to climb in terms of setup costs and I know in my case the opportunity to buy a colony of zoanthids for the price the LFS sells 2 polyps was welcomed. Annual coral swaps wouldn't be possible without these arrangements and are something that reefers definitely appreciate as well.
The LFS that takes issue with this should understand that this is the game they chose to get involved in and should concentrate on figuring a way to make their store the first option rather than scoffing at the little guy working a side gig.

 

[stewy14]

This is like Walmart being ticked at people for having garage sales.
It's a silly argument for any LFS that isn't willing to buy 100% of all coral propagated at a fair price. Otherwise what are people supposed to do with their overgrowth? Flush them?
New reefers have a massive hill to climb in terms of setup costs and I know in my case the opportunity to buy a colony of zoanthids for the price the LFS sells 2 polyps was welcomed. Annual coral swaps wouldn't be possible without these arrangements and are something that reefers definitely appreciate as well.
The LFS that takes issue with this should understand that this is the game they chose to get involved in and should concentrate on figuring a way to make their store the first option rather than scoffing at the little guy working a side gig.

exactly this

 

[Reefer Matt]

It’s a delicate balance if you want to sell on the side, imo. On one hand you may want to offer great deals to others and provide more accessibility to “higher end” livestock, etc. Then on the other, you have the full time businesses that depend on sales to feed their families, etc. Since home businesses can now get wholesale accounts, owning a full time business can be less profitable in comparison. It’s hard to navigate that sometimes, but I try to be fair to both sides.

 

[ReefinDad]

The whole industry needs a reset in my opinion. My local guys I can buy frags from are just as much as the overpriced LFS. Keep in mind the selection is better and they actually care. But it feels like everyone is out to try and make a bunch of money out of this hobby.

 

[BeanAnimal]

Food for thought here.

This is like Walmart being ticked at people for having garage sales.

I am not seeing the similarity between a mega retailer and a privately owned fish store in terms of competition with garage sales or to each other or basement run business in terms of supply, margin, scale, etc.

It's a silly argument for any LFS that isn't willing to buy 100% of all coral propagated at a fair price. Otherwise what are people supposed to do with their overgrowth? Flush them?

I would ask what is a "fair" price and what is a "fair" markup? I think that is what is getting lost in these conversations, mostly because people do not have a good understanding of what it actually costs to stay in business, let alone make it worthwhile to be in business.

To that end I am not sure that the perspective of the LFS matters, and to your point (with or without) competition form both side (big box and home) they need to offer a value to their customers to stay in business, as reefing is not a necessity or staple that will sustain a business simply because it exists.

 

[stewy14]

have any of you sold or given away frags? cause you had to frag since you didn't have enough space?

and what are we saying, yes or no to the main question that OP posted?

 

[Reefer Matt]

have any of you sold or given away frags? cause you had to frag since you didn't have enough space?

All the time. But certain ones aren’t so desirable, and they tend to get discarded instead. When I used to get visitors, I’d always load them up on freebies.

 

[stewy14]

All the time. But certain ones aren’t so desirable, and they tend to get discarded instead. When I used to get visitors, I’d always load them up on freebies.

so we can consider you as a basement vendor! According to some people, you are ruining the industry, but others can also see that you are highly supported to your lfs's, just cause you are a basement vendor, doesn't mean you dont support lfs's
you see what im trying to get at?

what do u discard? ill take some

 

[BeanAnimal]

I have given away and donated many thousands of dollars of coral over 20+ years based on retail "frag" and "colony" rates.

Several of our club members with larger systems (one with a 500, 250 and 160) have given away and dontated many times more than I have. Heck when we moved his tanks 15+ years ago, there would have been literally hundreds of "frags" walking out in volunteers deli cups. They ranged in size from "frags" to monti caps the size of dinner plates...


Fish too... I have given away problematic fish and taken fish from other local reef keepers.

 

[Reefer Matt]

so we can consider you as a basement vendor! According to some people, you are ruining the industry, but others can also see that you are highly supported to your lfs's, just cause you are a basement vendor, doesn't mean you dont support lfs's
you see what im trying to get at?

what do u discard? ill take some

I’ve brought in seemingly pounds of birdsnest and pocillipora to my lfs among others. I just give it to them, but even they can only take so much. I don’t ship as I am never home in time to make the cutoff time for overnight shipping.

 

[TysTanks]

We can get into specifics if you wish and Whales is not the US but retail is relative.

A 1,500 retail fish store with (4) employees would cost $500,000 to $600,000 per year in overhead (rent, utilities, consumables, professional fees, etc.) Before any taxes, profits or losses (shrink) are accounted for and considering $20K or so loan repayment on a $100,000 loan used to open the business.

That is close to $1600 per day in gross sales just to break even.

The owner did this instead of having another 9to5 so let's assume he needs $100K a year (before taxes) out of the business. Add another $250 per day.

Account for shrink from theft, dead livestock, returns, expired or damaged good, etc. Livestock death is a huge factor, but let's lowball and go 5% total shrink.
That is another $80 per day.

So that business needs to do $1930 in business every day (assuming they are open 7 days a week) just to keep the doors open and we have certainly not covered all of the expenses.

So yes your $50 frag is more expensive at the LFS than it is from some guy living in his parents basement, or from an online vendor who pays lower overhead in non retail space using fewer resources.


Absolutely - most do custom work and maintenance. The maintenance is RMR that can be counted on with add on sales as things ore consumed and need to be replaced.

Your comment was really well thought out until the “guy living in his mother’s basement” part. Why does that have to be the example? There are multiple accounts of people in this thread selling livestock from their homes legitimately and fairly.

This whole conversation boils down to:

No, basement/garage selling is not inherently ruining the industry. However, it all depends on how the individual stores and home sellers are running their business. The barrier for entry to own a store is higher, so there is probably more due diligence needed from customers when they shop with home sellers.

 

[Zydan777]

I think that people forget that the LFS do more than just sale coral and fish. The LFS sale the equipment and even servicing for the tanks. I personally like to go to my LFS because it is easier to get water from them than make it myself. Some of the LFS even get some of their frags from basement vendors. I had one of my LFS get a ton of coral in one week and come to find out there was a hobbyist that decided to stop and gave the store all the coral/fish/equipment. The LFS than turned around and kept or sold the coral after fragging it. SO I do not think there is any harm in having basement vendors. In my experience part the the joy of this hobby is all the support from other hobbyist. I have had to get out of the hobby years ago and I ended up giving my live stock away for free. Thank goodness I was able to get back into the hobby again.

 

[BeanAnimal]

Your comment was really well thought out until the “guy living in his mother’s basement” part. Why does that have to be the example? There are multiple accounts of people in this thread selling livestock from their homes legitimately and fairly.

It is unfortunate that people such as yourself are willing to ignore context, simply to be offended or triggered.

The context was clearly a juxtaposition of two ends of the spectrum. A seller with ZERO cost of goods vs one who bears a TREMENDOUS cost of goods and everything in between. Moreover, If you bothered to read the thread and my other posts herein, I directly indicate that there is not only everything in between those two ends, but I don't consider ANY OF IT "illegitimate" in context to the question asked in this thread. Likewise I am not the State, so have no concern about the legality of home based coral businesses or what price or "profit" a kid in his parents basement can fetch for a coral, or for that matter what an LFS can fetch.

 

[00W]

I support my little petco LFS always.
Whether it be an occasional overpriced bucket of salt, food or something for my dog because I need them to stick around.
Just as I hope they eat at my restaurant when they are hungry.

 

[Pntbll687]

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

There's That Fish Place in Lancaster PA and Something Fishy in Northhampton

That Fish Place is HUGE, but they don't stock everything. They have by far the biggest selection of fish, coral selection is ok. You can find some good buys there most of the time

Something Fishy is a saltwater specialty store. Great selection of fish and coral. They have frags from $20 to colonies for several hundred dollars

 

[Pntbll687]

It’s a delicate balance if you want to sell on the side, imo. On one hand you may want to offer great deals to others and provide more accessibility to “higher end” livestock, etc. Then on the other, you have the full time businesses that depend on sales to feed their families, etc. Since home businesses can now get wholesale accounts, owning a full time business can be less profitable in comparison. It’s hard to navigate that sometimes, but I try to be fair to both sides.

I find that the LFS in my area aren't after the high end stuff. They want gsp / xenia / kenya trees / hammer / frogspawn.

I've paid for two full apex systems selling $5 and $10 frags to the lfs near me. It's to the point where the LFS tells me a month in advance when they will be wanting frags so I can cut them and let them heal, mainly because the stuff I have fragged up and ready to sell at shows are higher end than what they are looking for

 

[TysTanks]

It is unfortunate that people such as yourself are willing to ignore context, simply to be offended or triggered.

The context was clearly a juxtaposition of two ends of the spectrum. A seller with ZERO cost of goods vs one who bears a TREMENDOUS cost of goods and everything in between. Moreover, If you bothered to read the thread and my other posts herein, I directly indicate that there is not only everything in between those two ends, but I don't consider ANY OF IT "illegitimate" in context to the question asked in this thread. Likewise I am not the State, so have no concern about the legality of home based coral businesses or what price or "profit" a kid in his parents basement can fetch for a coral, or for that matter what an LFS can fetch.

lol @ triggered. You know it’s not a fair argument when you pick each end of the spectrum like that. It’s clearly biased. It’s also just plain incorrect to say “no cost of goods sold”. It really seems like you might understand one side and not the other. There’s no triggering happening here, bud.

I’ll just add - I see the juxtaposition that you’re trying to get at. I just don’t think it’s necessary and from the rest of your statement it’s not adding anything useful. I gave you full credit for explaining costs for running a legitimate business so the fact that you’re on a little tirade in this last comment is silly.

 

[Laughterman]

My whole softie and leather coral collection are from fellow hobbyists here in Durban, South Africa. It cost me a fraction of the cost that LFS are asking and I am building up a network here, knowing that I can get beautiful specimens for a 3rd of the price and who specialize in what corals.

 

[drbark]

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 .

Yep. My LFS started doing that right before Covid. He only had one or two items for emergencies for his patrons. I get it. As a Veterinarian, my clients ask me all the time if they can get that item or prescription on Chewy or something. It's annoying but it's 2024.