Am I wrong for thinking this?

[sjt7]

Recently on my local clubs website, people started a tread searching for someone with a business license so they could order wholesale. I feel this is wrong for someone with a construction company to order wholesale. I really believe this hurts the business of our local fish stores and ultimately raises retail prices for the rest of us that go that route.

 

[noobtothereef]

Why is it wrong? Supporting your lfs is good and all but times are changing as you can see, and when lfs's commonly charge 200%+ over internet prices its hard to buy anything from them anymore, i mean come on why blow your whole paycheck on a skimmer at the lfs and starve for a week when you could get it for 1/2 price and be able to afford to eat for a week, its either food on my table or food on the table of the owner of the lfs, i choose me. Lfs owners know times are changing and know the risks of theyre dwindling market, im not sure why people praise lfs's like they are gods, every lfs in my area gives false info trying to force sales with theyre unneducated staff, sure the owner might know his stuff but they are in it to make money, things arent what they were 15 years ago, times have changed, just my .02

 

[JHemdal]

sjt7:

I used to operate a wholesale firm - They are going to know this guy isn't a legit store when he orders 1 yellow tang, a 3" french angel and a clownfish. Basically, you can spot a hobbyist by the way they order - small orders, one or two of each species, very particular about size, no substitutions, asking about care information, etc.

There is no "business license" per-se that wholesalers ask for before doing business with you. If you have a registered business name, that is about all you need (in Michgian anyway). A sales tax license might be required by the wholesaler - not to "prove" you are a legit store, but to keep themswelves out of trouble because they aren't charging you tax. Anyone can register their business name - it means nothing to the wholesaler. What they care about is the size of the order and if there will be repeat business. A $200 order from a hobbyist one time just isn't enough for legit wholesalers to bother with - they want customers who spend $1000 per week. Don't forget - just like there are "fake" retail stores, there are "fake" wholesalers - and these are the people working out of their garages and basements who are the ones most likely to sell direct to a hobbyist.


Jay

 

[noobtothereef]

sjt7:

I used to operate a wholesale firm - They are going to know this guy isn't a legit store when he orders 1 yellow tang, a 3" french angel and a clownfish. Basically, you can spot a hobbyist by the way they order - small orders, one or two of each species, very particular about size, no substitutions, asking about care information, etc.

There is no "business license" per-se that wholesalers ask for before doing business with you. If you have a registered business name, that is about all you need (in Michgian anyway). A sales tax license might be required by the wholesaler - not to "prove" you are a legit store, but to keep themswelves out of trouble because they aren't charging you tax. Anyone can register their business name - it means nothing to the wholesaler. What they care about is the size of the order and if there will be repeat business. A $200 order from a hobbyist one time just isn't enough for legit wholesalers to bother with - they want customers who spend $1000 per week. Don't forget - just like there are "fake" retail stores, there are "fake" wholesalers - and these are the people working out of their garages and basements who are the ones most likely to sell direct to a hobbyist.


Jay

the thing is that its a group buy in club and a $1000 order would be easy to do, our last group buy for snails and crabs was $1200..... ordering corals from wholesalers you usually have a minimum order in the first place, like some sell a "box" of assorted sps with acros, milli's, montis etc of say 20 "large" frags or colonies etc, some times you have to pay the transhippers shipping expenses or percentage of it as well, and for taxes they are a thing of the past, you dont have to have a tax id number lol especially buying out of state.... theres many that will sell to a hobbyist as long as you reach the minimum order, they mamke theyre money by selling quantity as there markup is a low percentage

 

[FreakonaReef]

Why don't you ask your LFS to do a group buy for your club? Ask for a large discount if your ordering $1000+ at a time and I'm sure they would do it. This helps keep the LFS in business and why? because there are many people that like to see what there buying before they buy and sometimes we have an emergency and need a product NOW! So help support the LFS's

 

[JHemdal]

noobtothereef,

O.K., with a $1200 order, I would concede that wouldn't seem like a typical hobbyist posing as a store. Still, I saw a large group buy being put together on another web site with a collector in Hawaii - and the people were ordering things like a 4" bandit angel, a 3" potters, 2 small yellow tangs, a pair of blue boxfish, a black tang, etc, etc. This would end up being VERY different from a typical store's order of 24 yellow tangs, 6 flame angels, etc.
Regarding sales tax, yes, you are correct that most states (but not all) do not collect sales tax on purchases outside their state. In Michigan however, you either have to pay an estimated sales tax on all purchases from out of state, or pay a yearly "estimated fee" of $85 to the state.

You mentioned trans-shipping. I would urge people to be VERY careful in trying that. There are three common abuses you will run into:

1) The importer invoices you $5 for a coral that they paid $3 for FOB.
2) The importer charges you ALL of the USFWS and box fees (so that the fees for their portion of the shipment are paid by you.
3) Spreading. This almost ALWAYS happens. You are charged overseas shipping on a box of animals. Lets say they sell you 25 corals per box, and you pay $125 shipping for that. What you don't know is that the box actually contained 35 corals as shipped...so you paid all of the shipping on the 10 corals that they kept to sell themselves.

I recently brought in a trans-ship from Japan. The importer (Who I knew and trusted) had the shipper split the invoice and my animals were listed in their own boxes, and I got my copy of the invoice direct from the shipper, not the importer. I only paid shipping on those boxes, and then paid the percentage of fees that my boxes took of the total. The importer's "profit" was a simple handling fee (that I knew upfront) and that with my order, we both saved on costs of the fixed fees.

That is the ONLY way I would ever try a trans-ship now days.


Jay

 

[noobtothereef]

yes i know all about transhippers, but to me it doesnt matter what costs are added, if im happy with the total price for the given corals its fine with me, they have to make theyre money too, i understand they cant tranship for free

 

[sjt7]

Thanks for the replies. I see there are many ways to see this. I also know that ordering from wholesalers and transhippers can be a pain.

 

[gp2]

I have mixed feelings on this. As a small business owner, I just love being undercut by someone who does not have to deal with troublesome things like taxes, osha, workcomp, liability insurance, ADA compliance, etc ad infinitum. As a fierce libertarian, I must admit I have a soft spot in my heart for these sort of underground economy maneuvers that essentially defeat federal, state, and local intervention. As to the OP, whether it is "wrong" or not would be a really personal decision. Obviously, if they need to pose as a business and are not able to be honest and admit they are a club doing a group buy it is at least dishonest and possibly illegal. the chance of consequences would seem minute though. I try to support my LFS store whenever possible, but I did buy my 2 tanks off of reefers. More of a personal preference, and the same reason I have never driven a new car (let someone else take the depreciation.) It is much easier for me to order my dry goods off the internet, but I would rather keep the $$ in the community and have the LFS there to help me. I have not noticed much of a price difference between the internet and my LFS, maybe I am lucky. I doubt very much there are too many people getting rich in the LFS market, and without them it would be very difficult to obtain live fish.

 

[csharps42]

am I wrong

am I wrong

The way it is today, lfs always want way more than you get it on line for, so what is the difference on buying on line or having someone get a lic and buying through them.

 

[aleonn]

It's a tough economy for both consumers and retailers. As a consumer I'd usually go for the best deal I can get. But sometimes I have to consider the intangible services that a LFS can provide and factor that into the picture.

 

[alton]

problems you will occur
Order a small tang you may get a med, order a med, may get a large. So many times wholesalers just fill orders. To repeat customers they will treat them much better than someone who orders once a month or only once. Good luck on complaining about DOA. I guess we are very lucky here in SA where most of the time our fish stores are selling items cheaper than online. Some items like SPS frags $10 to $20, Bluspot jawfish $50 to $69. 200 gallon Reef Crystals $49 to $54

 

[scubasteve06]

So then what is the difference in a store owner buying fish for his store and then keeping some of them for himself. That would be considered personal and basically the same thing that your club is trying to do, except on a bigger scale. I see nothing wrong with it and if I could find a wholesaler or collector willing to sell to me I would do it. On top of that if I found the collector willing to do it, I would go to my LFS and offer to sell to them for cheaper then what they are paying now. Of course I would probably need a liscence then, but once you have the connection the easy part is selling it. Getting the connection is most of the work. I do admit though that in tough times things are harder to sell and move, but if there is still a market for the product you seek than it will sell sooner or later. If your getting it for a discounted price then you can more easily sell it for cheaper than the price is locally in your area. It just takes a minute for the word to get out that so and so has the same quality item for cheaper than you know who. It's the law of supply and demand.

 

[Ooulophilia]

Most reputable wholesalers will do some research on the company before setting up a wholesale account. I worked for a wholesaler for years, and google earth was my best friend - so, your fish store is in your garage?

Some of the smaller wholesalers I know used to do group buys for reef clubs but they always ended up being nightmares - hobbyists just do not understand how it works... if your yellow tang shows up DOA or the acro you wanted shows up melted in the bag you are just going to have to eat it - when ordering wholesale there is a certain amount of DOA you just have to absorb.

 

[crsaz]

So then what is the difference in a store owner buying fish for his store and then keeping some of them for himself

the difference is that he has spent the long hours and endured the hard times that come along with owning an lfs.

in the end you will not be saving much money, yes you will be saving 50%(or less when you factor in air freight and loss, you are usually asked to absorb 10% of the loss, ie. if you order $1000 of fish and lose $100 worth you eat it) any more and you get credit. atleast from the good wholesaler(which will likely check to make sure you have a license for the "pet trade" and aren't running out of a house, and unless you have a qt tank or several qt tanks you will be risking all your current live stock to save a few bucks.

is it really worth it to save $12 on that yellow tang:lmao:

if I found the collector willing to do it

have you ever dealt with CITES? No? then you are not ready or able to import.
do you have room to hold and maintain tens of thousands of dollars of stock?

but once you have the connection the easy part is selling it.

Not true. price is not the only factor, quality and history is also a factor

 

[potterjon]

I think this all boils down to intentions. If what is ordered is not intended for resale, then it is wrong. But if the livestock is intended for resale, I don't see how there is anything wrong with it at all. Every business starts somewhere, and if it starts in a basement or someones garage, so be it. This is capitalism.

 

[1st timer]

To the OP it boils down to how you feel about it. Kind of "if it feels good do it" thing. If it rubs you wrong don't be part of it.
I personally deal with LFS for some stuff but look online for higher priced items. I wish I lived near LFS that had excellent practices in place, or at least more than 1 to shop at.
Craigslist is my friend

 

[scubasteve06]

the difference is that he has spent the long hours and endured the hard times that come along with owning an lfs.

in the end you will not be saving much money, yes you will be saving 50%(or less when you factor in air freight and loss, you are usually asked to absorb 10% of the loss, ie. if you order $1000 of fish and lose $100 worth you eat it) any more and you get credit. atleast from the good wholesaler(which will likely check to make sure you have a license for the "pet trade" and aren't running out of a house, and unless you have a qt tank or several qt tanks you will be risking all your current live stock to save a few bucks.

is it really worth it to save $12 on that yellow tang:lmao:


have you ever dealt with CITES? No? then you are not ready or able to import.
do you have room to hold and maintain tens of thousands of dollars of stock?

Not true. price is not the only factor, quality and history is also a factor

We aren't talking about morals here, just what if. When you start to involve morals into big business since that's what you are talking about, you lose money. Because someone has endure hard ships that makes them eligible for monetary gain?

Wow, you took certain quotes out of my statement and made it look like I was for what the op was against.

I was just stating what I would do if ever given the chance by the collector. I was saying if I found a collector willing to get me what I wanted on a limited basis, and for my personal collection. That's it.

I haven't ever dealt with cites don't know who they are or care. I don't plan on doing what the op said his club was, or ever intend to do it. No I don't have room to hold or maintain that much stock or plan on it. Quality and history are a factor, but not the deciding factor. When the consumer is faced with a cheaper price, more than 1/2 the time they will go for the cheaper price. Why do you think black friday is such a huge day for business's around the world? There will be a 1/3rd out there that want the quality and the other 1/3rd that wants a good history. I said that it takes time for the word to get out, there is your history. The law of supply and demand which I stated clearly in my post will always rule supreme. You can argue that point all day, but it is what makes the world go round. Why do you think oil is so profitable? It's just facts I am stating, and IF I had the chance not I want to do this or how can I.

 

[jeff@zina.com]

The way it is today, lfs always want way more than you get it on line for, so what is the difference on buying on line or having someone get a lic and buying through them.

Most of the LFS here sell a little above online but not so much that it's worth paying shipping on an order. The big issue here is variety, the LFS order what always sells easily, though most will special order for regular customers.

I have one LFS that considers the local marine group competition because of the frag exchanges that happen. The rest cater to the group in different ways, but most are supportive. On the flip side, all the group's regular sponsors are non-local.

Jeff

 

[mchud]

It is not wrong but like someone posted above most good Lfs will always do real good group buys. Up until a year ago i was a part owner in a pretty large Koi and pond internet site. It is not as easy as setting up the accounts, If you want to really get any great deals you need to buy in large quantities. And any of the good wholesalers wanted more then just a tax id. References from other vendors, Pictures of your store or web site address. And then if you try it and it does not work the Lfs may not want to work with you in the future. Not to sound negative but keep it simple.