Coral wholesalers who sell to non store front businesses?

[organism]

Currently I have an 8 foot 100g frag tank with a 55g sump.

That's enough to hold maybe 2 boxes if you have good flow in all parts of the tank, but with no quarantine you're going to have pests and lots of them.

I use the good equipment to upgrade my systems, sell the nice stuff cheap, and sell the corals at 40-50% LFS value.

I usually end up selling fish at 30-50% store value unless it is one of the select few wanted fish.

So you have a customer base that's used to getting healthy, captive system acclimated corals and fish for cheaper than you'll be able to afford selling newly arrived unhealthy corals and fish from wholesalers. Not sure that's a good thing.

What I was hoping from a wholesaler is to buy $500-$1500 worth every 2 weeks and get stuff 1/3 or 1/4 price of LFS to sell at my 40-50% rates.

1/3 or 1/4 the LFS price? lol, prepare to be surprised. Unless your LFS sells brown frogspawns for $110 and red mushrooms for $95, in that case you're good.

I refuse to sell parasites or dying stuff to people unless I know they are advanced enough to deal with it when I bring the issue to their attention.

You can't think like a hobbyist if you plan on running a business...

So with that said, do you all think that it is not worth my time to attempt to find a wholesaler?

Your decision to make, but you seem pretty dead set on it

If this is true, how do local fish stores stay in business? I know it isnt from selling equipment or doing maintenance (they outsource maintenance). I figured all of their profit is from selling corals and some profit from fish and equipment.

The ones that stay in business either get most of their money from maintenance and/or have a very solid customer base. You wouldn't believe how many LFS close up shop just to do maintenance since that's where the real money is.

 

[dahenley]

every location is different.
I think my LFS (the only one in town really) makes more money on lease tanks and maintance. He doesnt have a large turn over with corals........
Fish, he does sell a decent amount of Fresh and Salt water fish.


For you, it sounds like your doing ok. and have a decent side businiess.

I think if you ordered a few boxes ever few weeks, then you might get a decent contact at the shop, that picks you some decent stuff.
But just remember that QT is King.....
Its better to get a "reputation" of having clean stuff then the guy everyone says... OH, i got this from him... but the coral was cheap...)

even if people come look at your stock, and QT system, they might want something, but you have to be the bigger person and say... its in QT for X more weeks, but ill give you a call when its out and let you know... better to be that guy then to sell it and give something to your buddys/customers.. they will be appreciative. maybe upset because they avhe to wait another week or 2, but appreciative that you QT'd them.

 

[keh9qd]

Ok, thanks again for the comments and challenges guys (and gals if any of you are )

I never planned on QT for corals and cant think of any lfs who do although that would be fairly easy to accomplish in my mind. It does make sense to Qt both corals and fish though (definitely fish).

Im not necessarily dead set on doing this, but Im running out of options on where to take my side business next. I wish I knew a local guy to buy from.

Anyway, I think wholesale price is what Im most interested in. Obviously if there prices are 50% of LFS prices then that is not going to work very well. With the risk you guys mentioned and the surprise boxes it will be hard to put the corals out for a good price to my customers. I will have to get some price sheets (which in most cases are hidden until you set up an account).

 

[keh9qd]

1/3 or 1/4 the LFS price? lol, prepare to be surprised. Unless your LFS sells brown frogspawns for $110 and red mushrooms for $95, in that case you're good.

All I am saying is that if the local fish stores are only paying 50% retail and selling at 100% (doubling their money) then that is tough business. Id need to get corals at least at 1/3 retail in order to sell at roughly 1/2 retail. If the LFS are selling 8 headed green frogspawns for $80 and Im selling for $50 we both need to be getting them for $25-30 to stay alive (just an example). If they are paying their $2,000/month rent, there 5 employees, their utilities, and their shipments on a 50% markup then that would be impressive.

With that said, I am new to this side of the business, so Id be interested in getting more detailed examples. BTW- I realize in the wholesale/retail business that prices aren't spoken of individually.

 

[dahenley]

i will say that this might not be what your looking for.
on the other hand, i can see where ordering a box every now and then of specifics (an order of acans or polyp rocks,or SPS) not for specifics, but to have them on had. or maybe one person is looking for a coral, so you order a box and whats left over you can grow on till the next person. and eventually you will have growth, and can frag and sell some 20$ pieces to some guys, but still grow the mini colonies for a customer.
buy selling a few frags here and there, you can pay for shipping, and do what you want.

but its an opinion.
I will say that the fish that i see that come in when my friend orders, they are nice. i have never seen a bad/sick fish. and he has a great survival rate. but that has to do with hypo salinity and lots of wholesalers of fish medicate the water that they hold the fish's in...



so, it might not be a great expansion, but it could be a nice supplement your sales with. and you never know.. you might get a Jewl every now and then that can bump up the profit margin..

 

[RossW]

One thing to consider is DOA. I have seen many a thousand dollars lost on shipments that went wrong for many different reasons. You need to be able to absorb those when they happen... and I promise they will.

All I am saying is that if the local fish stores are only paying 50% retail and selling at 100% (doubling their money) then that is tough business. Id need to get corals at least at 1/3 retail in order to sell at roughly 1/2 retail. If the LFS are selling 8 headed green frogspawns for $80 and Im selling for $50 we both need to be getting them for $25-30 to stay alive (just an example). If they are paying their $2,000/month rent, there 5 employees, their utilities, and their shipments on a 50% markup then that would be impressive.

With that said, I am new to this side of the business, so Id be interested in getting more detailed examples. BTW- I realize in the wholesale/retail business that prices aren't spoken of individually.

 

[keh9qd]

One thing to consider is DOA. I have seen many a thousand dollars lost on shipments that went wrong for many different reasons. You need to be able to absorb those when they happen... and I promise they will.

I was just reading the policies of a few different wholesalers regarding Doa. Doa's that are immediately recorded are supposedly replaced in the next order while entire shipment deaths have different procedures. I'm assuming they want you to take that out on shipping companies due to delays. I can see that being a pain that might bite at times.

 

[Jeremy Blaze]

Better have plenty of money to fall back on. Basement operations are rarely successful.

 

[Jamesus]

keh9qd, where are you located?

 

[organism]

All I am saying is that if the local fish stores are only paying 50% retail and selling at 100% (doubling their money) then that is tough business. Id need to get corals at least at 1/3 retail in order to sell at roughly 1/2 retail.

It is a tough business, and you should look at it ethically: local shops work hard and need to mark up to pay the bills. You undercutting at 50% retail even if it were possible (which it isn't) just wrecks the local market for shops making sure their employees can put food on the table. How would you feel if you had a shop and someone came in saying "well I saw that in this dude's basement up the street for half the price"?

I was just reading the policies of a few different wholesalers regarding Doa. Doa's that are immediately recorded are supposedly replaced in the next order while entire shipment deaths have different procedures. I'm assuming they want you to take that out on shipping companies due to delays. I can see that being a pain that might bite at times.

Industry standard is that DOA credit is given after 5-10% (varies on the wholesaler) of your invoice amount. So if you buy $1500 of corals and fish then $75-150 is as a standard expected to die right off the bat in the first 24 hours. After 24 hours it's on you, so basically expect to eat every DOA cost, no free rides. If you lose a shipment due to the airline then kiss that money goodbye because it's gone.

 

[DeathWish302]

You can't think like a hobbyist if you plan on running a business...

The ones that stay in business either get most of their money from maintenance and/or have a very solid customer base. You wouldn't believe how many LFS close up shop just to do maintenance since that's where the real money is.

Unfortunately....organism is dead on!

For the past five years I have been flying out to Sacramento for biz. I've stopped at about every shop from Sac to LA. Moral of the story is EVERY major brick and mortar vendor cherry picks the LA wholesalers. I went with one of my fav Not-so-LFS's owner one day to pick out some stuff. I walked out with a few $50 colonies and handufls of brown frags for a couple bucks a pop. EVERY store I have been to on the West Coast has there 'special' wholesaler where they get cherry stuff every 'X' day of the week when the big shipments arrive.

I just don't see how any e-tailer can compete with those close to vendors that are moving 2+K a week of coral. Most all of the same LFS owners have stated to me that they truly dislike the types like me that just buy coral and buy the drygoods from online vendors. The equipment and drygoods are their true bread and butter along with house calls and maintenance.

And pests..... I know of at least 3 vendors in Sac alone that have redbugs and have had AEFW in the past and have done nothing. The cost of pitching some corals versus the time and cost to dose Interceptor is far less and easier in their minds. I would love to spread the word on those few stores, but that's for a different time and place.

Hate to burst your bubble, but I've pondered this idea of selling coral online and the risk versus reward is just not there for a primary form of income comparative to my current employment. It will be a tough road until your at the level of income you likely have in your plan.

Best of luck

 

[matt_wahoo]

this just doesnt sound like its worth it. lots of risks here

 

[jeff@zina.com]

Welcome to the world of business.

Jeff


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- Text mangled by iPhone spell check...

 

[Jeremy Blaze]

If it was easy money, everyone would be importing corals and growing in the basement, and there would be no retails.

Retail serves a purpose.

 

[DeathWish302]

Welcome to the world of business.

Jeff


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- Text mangled by iPhone spell check...

Hehe, I like the iPhone SC comment.

Anyways.... Not only the world of business, but the world of business in a 'luxury' sector!

keh9qd - The best advice I have is talk to your LFS owner frequently and get to know him/her. After you have their trust, talk business. I can guarantee that they will tell you in the last 5 years they have had more people coming in to sell livestock and equipment than they have had customers. At least that's what I have heard and seen. I might be biased, but I feel the need to pitch some money their way if I stop by the shop to BS. A frag here, a jar of pellets, or a odd-ball loc-line piece keeps their doors open. With an online gig, you don't have the 'usuals' that swing by to say hi and spend $20-50 bucks a week regardless if they really need to or not.

As for securing cherry pieces from wholesalers, I think that will definitely be your first hurdle. It seems that every piece of SPS, rics or BTA's that I take to the LFS are either hoarded by the owner for their grow-out system of gone within the week. Unless your moving all the 'already got it' or 'that's blah' on a consistent basis, your dead in the water for counting on what a wholesaler sends you to float your business. My advice is to get the pieces you like now and spend some serious money on a collection. Grow it out for 5 years and come back to this idea. I know of several RC'ers and a couple 'renowned' growers that make ~$2k at every swap they go to throwing $20-25 frags out the door. IMO, that's the way to go and only build on that. There's two in particular I can think of that have their named corals all over from doing it just that way.

 

[keh9qd]

Agreed, it is highly convincing that it isnt worth it. Selling coral is like gambing for pennies and sounds like more time and stress than its worth. Many have made good points that it isnt worth it unless you have a local vendor hookup.

 

[gon08]

In south Florida most LFS make their money on servicing tanks and set ups. There is greater margin in changing water than selling coral. Some shops here sub the work which is how I used to get most of my business. You would have a small overhead, and a greater profit margin without the need for keeping much inventory. On top of that some shops paid a commission for moving they're fish and coral.

 

[jeff@zina.com]

In south Florida most LFS make their money on servicing tanks and set ups.

That's just about everywhere, especially in this economy. The shop is there to warehouse supplies and livestock for the maintenance business. Locally, service has dropped by 50-80% as most home owners have cut back or gone out of aquariums and many businesses that had aquariums (bars, restaurants, offices, etc) have gone under. As a result, many LFS have cut their stock dramatically.

Jeff

 

[gon08]

That's just about everywhere, especially in this economy. The shop is there to warehouse supplies and livestock for the maintenance business. Locally, service has dropped by 50-80% as most home owners have cut back or gone out of aquariums and many businesses that had aquariums (bars, restaurants, offices, etc) have gone under. As a result, many LFS have cut their stock dramatically.

Jeff

I got out of the aquarium service business for those same reasons and got into landscaping and now I'm in the same boat, however I know landscaping will pick up again while aquariums will continue to be a luxury not a necessity.

 

[jformani]

why not drive to a local wholesaler and pick up the corals. this would save on shipping, doa, and allow you to pick out better corals. talk to a few i have.

there are so many ways to sell corals its crazy, you have your local clubs, craigslist, ebay, frag swaps, forums like this, etc, etc. get creative and go for it, you dont have rent, ee's to pay for, and probably wont make this your primary business. it takes very little start up money to do what your talking about,