Why are LFS prices so high? - Page 5

nemo g · #**101** 02/20/2006, 06:01 PM

hmmmm

MarkD40 · #**102** 02/20/2006, 06:09 PM

Hotredjag says "The funny thing is, the first poster, inflated the cost of those lights to make LFS sound even greedier. TSK TSK TSK. "

As the original poster, I am sad to say I did not inflate the price of the light. In an earlier post today I mentioned that I was feeling guilty about all the pro-LFS posts and so I went to my LFS and paid $47.95 for a maxi-Jet 1200 powerhead available online for $16.99! A POWERHEAD!!!! Now explain again to me how this is not absurd.

hotredjag · #**103** 02/20/2006, 07:55 PM

Well SD sells the bulbs for $69. $43 on the power head which the wholesale cost is $23.15. So not even double on either. As I keep saying.. a LFS can not ever hope to compete with some place that has no investment in inventory. Its ok, LFS will take whatever scraps there is leftover.

firefish2020 · #**104** 02/20/2006, 08:21 PM

All good arguments IMO and I can stand on both sides of the fence. Being inside I can say that LFS are getting it put to them by there suppliers who are making side deals with online shops. That said I also know of some LFS that mark stuff up 75% just because they can. Here is a case in point. In our area Xenia umbellata was so hard to find, some shops were selling single stalks at over $80. To combat this insanity we began to propagate our own and teach our customers to do the same thing. Now instead of paying greedy wholesalers we buy healthy xenia from our customers and have managed to drive down the price in our area by as much as 90%. What does that have to do with anything? Simple I think that LFS will need to go out of there way to provide an alternate service unmatched by online shops they are to survive.

Today I talked to four individuals about setting up a tank, they asked questions and left. I imagine they will be researching on line to find a better price nothing I can do about that or would do about that. In fact if we don't cary it I tell them to go online. Does that hurt our sales? Maybe a little but most come back just because they know that we know what we are talking about. As for finding Reef Central and relying only on message boards for information I personally think that leaves something out. There is a certain coldness in that equation for me. We make customers but more importantly we forge relationships, we have multi-generation customers coming back now, not because we are cheaper than whoever but because we are specialists in our area and we do care about there systems.

Just like in LFS I have seen both good information and bad information on RC, it's not a perfect system but it's a good one. I personally have recommended Reef Central to an unknown number of customers since I found it. I have also found that the majority of those reading these boards are new to the hobby and they require as much information as they can get. Just look at the newbie forum at any given time and you will see the same questions asked almost daily and at the same time I answer those same questions in person almost daily as well, not because it's my job or to prove anything but because it's my hobby and I like to see others involved in it.

In the end Barry is right, no amount of good will- by any LFS is going to create 100% loyalty and it really should not be expected IMO. There is more than enough bussiness out there for everyone if they learn to get along and stop trying to gouge the hobbyist.

Oh and as for the IGA thing, great idea but most LFS are so competitive with each other that they would never forge such a relation, I have been working on that for a long time now

toto · #**105** 02/20/2006, 11:00 PM

WOW! what a great thread. It has really been eye-opening. Its nice to know that there are alot of people out there that are willing to support the LFS (within reason of course). Ive gotten more information from you guys than from any "suggestion box" in our store. You have really been a valuable resource for me.
At our store we really pride ourselves on our knowledge of the hobby. Do we know everything? NO of course not, nobody does. Do we try to stay up with the changes in the hobby? YES, we work on that daily. We understand that there are alot of ways to "skin the cat" and work very hard to help our customers to achieve success in their hobby. We have turned down many fish sales to customers because of poor water quality, etc. Some people get really irritated, because they want fish NOW...but most appreciate it. We could probably make alot more $$$ if we didnt do that. BUT....we would also lose any chance of a long term realtionship with that customer.
We have been in business for 12 years now, and have seen many changes. Seen stores come and go, etc. The internet is the most drastic change weve seen in a long time. We are not only competing against local stores, but now have to compete with something that is waaaay larger than were used to. Hopefully, people will give their LFS a chance to adapt to the changes.
As for the IGA idea, well.....its a nice thought, unfortunately it wouldnt work. Ill leave it at that.

D to the P · #**106** 02/21/2006, 12:05 AM

You can blame whoever you want for the way the market works, but when it comes down to it, unless the store physically manufactures the product and then puts it on a shelf, there is no way any store (whether lfs or your local hardware store) can have their prices be as low as any online place. It is reality and there is nothing that the customers can do about it, and nothing that the lfs people can do about it. The only point I try to get across is that even though you can buy stuff online and talk to all the people on RC it still isn't the same as actually going into a lfs and talking to people one on one and actually building a relationship with the people in the store. But getting angry at online people is the same as getting angry at wal mart. All those stores started out small and local, and as they became more popular they expanded. The only difference is that the online stores with their unbeatable low prices make it harder for the new and present pet stores to thrive. That's why I try to support them as much as I can.

firefish2020 · #**107** 02/21/2006, 05:32 AM

Quote:

...The internet is the most drastic change we've seen in a long time. We are not only competing against local stores, but now have to compete with something that is waaaay larger than were used to...

Could not agree more that is why I think in time some local shops might unite in order to benefit from larger group discounts. It's an idea but like your last line about IGA states it prob will never work but we still try. I don't think most people realize how competitive some LFS in an area can be towards each other. We have one in particular that has gone so far as to actually sell merchandise at near wholsale prices just to compete with us LOL. On a brighter side we also have managed to network with a small handfull of shops and have great relations between us. If one of us doesnt have what a customer needs we send them there. Lucky for us we have had a strong following for well over 34 years, the only factor I can think of is that we try to treat everyone fairly and provide hands on services when needed thats service not found elsewhere in our area or online.

MarkD40 · #**108** 02/21/2006, 09:58 AM

O.K. Hotredjag, if you are paying $23.15 wholesale for a powerhead that I can buy online for $16.99, why don't you buy it from an online retail store? I mean how much business savvy does that take. Your attitude seems to be "I don't need to keep my prices fair, I'll just stick it to my customers who had better be loyal because I am here to give them advice if they need it."

To put things in a different perspective, if you were shopping for a television from a small "Mom and Pop" store that provides good service and their price was $2000.00, would you buy it there if you could get it elsewhere for $800.00 or $1000.00? I doubt you would.

I understand the high costs of running a small business. That is why I have said repeatedly that I would be willing to up 50% more for hard goods at my LFS, but NOT 100-200% As a consumer I would be foolish to do so. You can only push "loyalty" so far. At some point you are taking advantage of that loyalty and this creates anger in your repeat customers and makes them feel stupid.

When I pay $47.00 for a powerhead at my LFS that I can buy for $16.99 online, it does not make me feel all warm and fuzzy inside because I am doing a good thing by supporting a good retail store, it makes me feel unappreciated as a loyal customer and really dumb.

boodwah · #**109** 02/21/2006, 10:55 AM

You know, I am really amazed at how everyone has carried on a discussion that has steped on toes more than once and yet everyone has remained pretty civil. In other forums I have participated in it has taken much less disagreement to bring the discussion to a juvenile insult flame war. I think it speaks highly of the people in this hobby both on the retail end and the customers.
I have read several comments from LFS operators about forming an IGA type association not working due to the competitiveness of LFS's and other unnamed reasons. As far as LFS's being competitive, maybe you should look outside of West Virginia and talk to LFS's around the nation. That is where the big buying power would come from. Or maybe you guys could set up your own forum here on Reef Central or elsewhere and network amongst each other and come up with ideas. There has to be a way you guys can lower your costs AND increase your profit margins. It has to be possible. It will take some thinking outside of the box. But every one of you seems very intelligent and I am sure there are more intelligent LFS operators out there in Reno, Austin, Detroit, Valdosta, Charleston, Knoxville, Sioux City, etc... I want to see you guys around for a long time. Don't let the free market economy take you all down. It has no mercy, but it can be outsmarted (Is that a word?).

MiddletonMark · #**110** 02/21/2006, 11:15 AM

Quote:

Originally posted by RudeBoy
At least with mail order, you can get in with a group of people and order a massive amount of livestock and split the shipping amoung everyone that orders. You can't do that with your LFS.

Actually, I would strongly suggest talking to local reefers + your LFS.

IMO, a good LFS just might do this.

Since starting an informal reef club here, one LFS has offered a couple `group buys' ... we put in a group order, he's been able to match [or beat, depending on merchant] online prices.
For bulk supplier - IMO it hardly gets better.

Personally, it's hard to buy big $$ items at the LFS. But, when the LFS is competitive, I try to support them. When they're close, I'd rather give my $$ to someone in my community.

After a few years in the hobby, it's hard to forget they had a bulkhead to replace the once I cracked a Saturday morning - or a pump to replace the one that blew on Friday morning, $10 more than online yet I could install it that same day. Factor in overnight shipping w/ Saturday delivery - online would have been slower, more expensive.

In a pinch, there's nothing like a good LFS nearby. I won't buy things that they radically overprice - but have bought nearly all my livestock `in person' and strongly prefer that method.

toto · #**111** 02/21/2006, 11:48 AM

well said boodwah!!! hats off to everyone for keeping their cool!!
believe it or not, i have taken all of your comments and suggestions over the last couple of days to heart. all of this has been a very helpful tool to us. we (all lfs owners) would be very foolish to not respond to what all of you have been saying. we have known for some time now the implications that the internet would have on our business, and have been trying to respond to it to the best of our ability. its really difficult to know what to do though. however, after talking with all of you, its very clear now. once again, thanks!

firefish2020 · #**112** 02/21/2006, 12:10 PM

I would agree this thread gets high ratings as far as I am concerned

Thanks for all the input and advice, I wish all threads were as formal. I also would like to say that I hope that all LFS owners can take away a good bit of information from this thread. It is important to take the pulse of the industry at times and reassess your overall position. Perhaps many LFS are just doing what they have done for years before the internet threat came along, and it's time for some realignment and restructuring at the sales level as the present course for some shops is into disaster.

boodwah · #**113** 02/21/2006, 12:27 PM

I think many of us consumers have been enlightened as well. Very few constructive dialogs have been ones where everyone is in agreement. But the most constructive dialogs are the ones where disagreeing parties come away with a better understanding of the opposing viewpoints. I'd rate this one a 10.

And I think that I'd be comfortable doing business at your stores, wherever they may be. Good luck and hope to do business with you all some day.

Pandora · #**114** 02/21/2006, 12:39 PM

I didn't read all the pages of replies... but on price hiking & gouging, I agree with this to some point. I can say though, that having worked for an LFS, there is a large overhead to running a store such as this--because you keep livestock, there is more cost than just your typical brick and mortar store. Large energy bills for heating, circulating, and lighting the water. Most of your stock is not going to have much of a long shelf life. Some of this cost is passed on to the hardware and non-live goods, and in exchange you get a human being who is able to talk you through the process and answer your questions in person (how good this advice turns out to be varies considerably from place to place). The live animals are the "draw" that brings people into the store, but typically not what bring in the profits, so many times equipment prices are raised to compensate, in exchange for a personal touch when customers need human interaction.

Personally, now that I'm more experienced, I can do a lot of online shopping and get free answers from trusted friends or people here on RC. But not all newbies are familiar with the resources out there, or may be shy and want personal attention with someone in real life to guide them (again, the quality of that advice is not the same everywhere).

I can say that running an LFS is far from a get-rich-fast-scheme and that making good money at it is far from easy because of the other costs involved. I have seen several LFS go out of business in my area, sometimes in the course of a few months; the owner of the one I used to work for has had his store for more than a decade (maybe 2 now?) which is rare, but even he struggles quite a bit to make ends meet. This business certainly didn't make him a millionaire.

Pandora · #**115** 02/21/2006, 12:46 PM

firefish, where is your facility located in WV?

Pandora · #**116** 02/21/2006, 12:54 PM

Quote:

Originally posted by nemo g
dhnguyen 2 things.

1. agree with you about the web presence. if nothing else, they should have phone numbers, addresses, directions, and maybe a list of products they carry.

2. your idea that they should have online store fronts really isnt feasible. without the ability to by in bulk, not just 3 filters at a time, there is no way they can compete with online retailers.

in fact, it could actually kill their business. for example, many who see prices listed on their web site will realize they can get it elsewhere much cheaper. but if they just hit the site for the aforementioned reasons (location, operating times) they will head to the store and possibly make an impuse buy. spending 75% more for a toy i can have right away makes many happy.

so, web site definitely. online retailing for lfs just not a viable option.

ng

I'm with nemo on both points here (and agree on dnguyen on the first, that websites are necessary these days to get the word out, and that those who lag behind, however qualified, may get trampled on by competition that caters to the savvy modern consumer).

On the second point, wanted to add that it's also no easy feat to overnight start an online store. There are differences in taking inventory and shipping, all which require specialized knowledge. With so much web competition, it just isn't profitable to run from a small mom & pop type perspective in the same way that many B&M stores are run.

hotredjag · #**117** 02/21/2006, 02:08 PM

I also want to thank all the people who took time to give input on this thread. I have learned quite a bit. Mostly about evolution and the wonderful attitudes of our new generation of fish keepers. I would suppose I am a dinosaur and need to rethink some issues. Let me say, this is my 6th fish store in 38 years. Must be like the circus and it stays in your blood. Or I am a glutton for punishment. I can only say, ya'll should walk a mile in the LFS shoes.

BlackOnyx · #**118** 02/21/2006, 02:53 PM

yeah online has less overhead hten any LFS because they dont need prime real estate. The website takes care of that for them. Plus due to voulme they ink up good deals with fedex and UPS. Liveaquaria is making money even off the shipping they charge you.

marcom1234 · #**119** 02/21/2006, 07:16 PM

ok....
my 2 cents

first of all there are 3 choices here in battle creek michigan

one is a little family owned store that is wonderful.....but....... they don't have "stuff"..... lots of piddly stuff like bubble activated ornaments and a HUGE suppy of fake plants for freshwater.....
also about 50 tanks.... of freshwater fish...... and about 2 tanks of saltwater fish..... in which everything in it looks horrible...

but being a support your small buisness's in your community type of guy.....
i go there and ask questions about saltwater and let him know im new to the hobby...... lots of freshwater exp but no saltwater...
know what his suggestion was???

i have these nano tanks over here that are a peice of cake.... just add a little live rock and a few fish and it takes care of itself.....

now i know better just from reading post on RC and i kinda thought to myself..... " hey maybe he's right....... hmmmmm "

i considered it because i have gone to him along time for freshwater stuff... i won't be going there for saltwater....

option two....... a place whos name invokes the thought of saltwater/reef specialty store..... ..
they have lots of saltwater fish.... most look good and even have a live rock tank..... bingo......
i find about 3 dead coral in it and upon further investigation the livestock tanks i find numerous dead fish in advanced stages of decay..... ok damn... maybe i'll get my fish other places and buy some tank drygoods......... " hey fish guy could i get some help over here?"

" uhhh sure what do you need?"
" interested in getting some lights for a future reef tank and would like to grow corals in it"
" here is a 48" strip light that will fit on your tank"
"well i need something that will let coral grow.... anyone here know more about corals?"
" uhhh .... ummm.... no not really just me i do most of the fish stuff"

ok goodbye

i understand it's costly and all that stuff but they pack their stores with a bunch of stuff no one wants...... get rid of it and buy decent stuff..... i counted 25 florescent hoods.... no CF's no metal halide.... nothing and when asked about it they look at me like they don't understand...... at least give the customer the opportunity to special order stuff......

i understand this isn't every fish store but in my area it is lol

ok im done venting

XeniaMania · #**120** 02/21/2006, 08:13 PM

Being a former manager at a retail/e-comm company I can say this. You pay for service when going into a retail store. Service you will not get online since most online sites are self-serve, or wait till your email gets answered. There is also the cost of shipping, dry goods are ok, since ground is sufficient, but for livestock, you need to go next day air. There are 2 types of shoppers, ones who care about price, and ones who care about relationships. Personally, I'd buy dry goods online, but as for my livestock, it's always my preference to see them in person, and to be able to get them into my tank within an hour or 2 (including acclimation).

BurntOutReefer · #**121** 02/21/2006, 08:30 PM

great thread.....busness 101 again......
my 2cents......the one and only one thing that can (and will) save a B&M is service. Face to Face service. I was once told by someone that as soon as books and newspapers went on-line, that would be the end of that market.
Wrong....why......you cant read a on-line book/newspaper on the toilet, subway, airplane. (I know, you can but lets get real).....
Its about service, instant gratfication and impluse purchases.
my 2cents

toto · #**122** 02/21/2006, 11:46 PM

well marcom.... i have to say..i cant blame ya for not wanting to shop locally. dang!! Thats too bad. At least 1/2 dozen times a day we find ourselves answering the question "how hard is saltwater?" its a toughy. in the 12 years weve been in business weve seen alot of changes in the industry, and the truth is that it is getting easier, however you cant just add water and go. (its not that easy) unfortunatly, there are alot of stores out there that give really bad advice. at our store we dont have anyone working for us that hasnt been in the hobby for at least 6 or 7 yrs. there are 2 people at our store that have been in the hobby since the early 70's. talk about seeing alot of changes in the hobby! the really hard part about this hobby is that there are soooo many opinions on how to achieve success. THAT is why the question "how hard is s/w?" is a real tough question to answer. My best advice to you is to read as much as you can, ask a ton of questions, then take all of that information and find what method works best for you. and one more thing...if you ask a question to someone and you dont understand the answer.. ask again. sometimes those of us who have been doing this for awhile forget that the person we are talking to probaly doesnt understand the lingo. we remind ourselves of that on a daily basis.

sequential · #**123** 02/22/2006, 12:42 AM

Quote:

Service you will not get online since most online sites are self-serve, or wait till your email gets answered.

I'd like to point out two things. First, self-service is not only a type of service, it's a valuable service that some unknown number of customers seek out. For example, in a wholesale club, I prefer to not have to wait in line while a single cashier handles mountains of goods. Instead, I go through the self-service checkout. There's rarely a line, I am intimately familiar with the price I'm being charged, and no one handles my ID or credit card. It's a personal preference, but I changed clubs just to have one that has self-service checkout.

Second, saying that there's no 'traditional' service online is a misnomer. A well prepared ecommerce site will provide more objective information to the consumer, allowing consumers to make educated decisions and significantly reduce cognitive dissonance. The problem many people experience with online purchases is that the whole experience is somewhat impulsive to them, like buying a few candy bars at the check out line. Online vendors go the extra mile and, as a bonus, are verifiable through reviews and other online resources. Once the consumer is educated to use online commerce, they can shop online with far greater confidence than in virtually any brick and mortar store.

That said, having a website does not mean any of the above. Bill's Reef comes highly recommended for certain products, but I find it difficult to use and less than forthcoming with information. As such, I have avoided purchases there. Any entrepreneur with money to pay someone to build a web site certainly can have a web based business, but that in no way guarantees a pennies worth of sales. In fact, having worked for a top 50 web site that was unranked the day I began working there, it's a lot of work to build that kind of traffic. Having worked in advertising and marketing of web sites, I know how much money companies spend maintaining their traffic. Without traffic, a website doesn't generate business. An LFS must have a significant and valuable niche carved out within the world wide market in order to sustain any significant sales, else their store would simply be an online LFS.

I have wondered, since the very first day I got into the hobby, why there were not cooperative fish stores or collaboratives between LFS and local dedicated hobbyists. I'd volunteer in a fish store for RO/DI water and maybe a cost plus percentage deal on goods. Furthermore, I'd be willing to work with my LFS to find a way to help them not just survive, but grow their business. I wonder if a club owned fish store could work or some hybrid of club, coop, LFS, and collaborative could possibly improve things for LFS owners. Maybe even an group antique store type set up, where people rent shelf space from an owner, who allows the sellers to work their space, but provides sales and maintenance people if the sellers should choose not to actively participate.

I like the idea of an IGA style association, but as others have pointed out, many LFS see each other as competitors. I think that's unfortunate, since their biggest competitors, online and catalogue retailers, don't even know who they are putting out of business and failing LFS, which of course is not all of them, don't seem to recognize who's putting them out of business.

toto · #**124** 02/22/2006, 12:49 AM

ok.. i just went through and re-read this entire thread. i think we can all agree that the whole price thing is a serious issue. Like i said before, i get it, im listening, and i am also reacting. I really appreciate all of your input. There is one more issue that your LFS needs your input on. One thing i have noticed is posters stating that their LFS should scrap all of their "old stuff" and get with the program. Keep up with the times. I guess what im asking is... in your opinions..what would you like to see your LFS stock? I am talking about both dry goods and livestock. Many of you have stated that for smaller ticket items, i.e. meds, foods, etc you buy local and for larger items you shop online. Does that mean we are wasting our time stocking pumps, filters, etc? Should we only stock smaller items? Are we not stocking the right pumps and filters? Do you even check locally before buying filters and pumps or do you just assume were too pricey and go straight to the internet? What about livestock? To give you a brief example of what im talking about... i had a customer ask me the other day what kinda cool stuff we were getting in this week? i respond "well, what did ya have in mind? Are you looking for something inpeticular?" he says "nah, i dunno, just something cool." ok...i need more than that...whats your opinion of COOL? Some people think cool is a yellow tang while others are thinking of a conspiculatis angel.. Im not asking you to place my livestock and dry good orders. Just asking for suggestions. If were not stocking the right stuff who better to ask then the people are are making all of the purchases. Any input you have on this subject would be greatly appreciated. You've been awesome so far, so i figure you'll continue the trend. Thanks for your help.

BurntOutReefer · #**125** 02/22/2006, 01:16 AM

cool for a yellow tang...you're kidding....pricea yellow tang in 10 stores.........you'll get a SRP from $8.99 to $39.99.........
no...I think the LFS's need to realize that their customers are getting smart. how about a standalone computer kiosk in a store thats connected to a website where customers who can wait to have product(s) can order and the store will have it drop-shipped to them.....would that work?
NO. Why do most people go to a store? To make a purchase.
Toto....how much do you sell a Fluval 404 for....lets use that as a benchmark. ?