Pufferpunk
New member
I'm glad you're finally getting honest with yourself. :bum:
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ocean's floor/cc's aquatics ???
- Thread starter klviper
- Start date
LadyEquinox
New member
well that was your opinion and thats why i said it......
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LatinoHeatCHI
Active member
Where Is This Place Located At?
sellout007
New member
Im not sure if there are enough people interested in this hobby for that to work. The volume they would have to sell if they are indeed doing wholesale prices would be very very large.
The location of that store will rely solely on word of mouth between those interested in this hobby (mainly the hardcore section of reefing) and there just isn't that many of us.
Have you noticed that the stores that stick around have great locations and don't focus on corals? They cater to the casual fish tank owner who loves fish, and their kids love fish.
I am not saying its doomed for failure, but I wouldn't be surprised if it didn't last a year.
If they are also selling to other stores, I would be surprised to see stores buying from them when they are also giving the same prices to anyone who walks in the door.
Helter Skilter
OT Community Organizer
1510 Industrial Dr Unit A
Lake In The Hills, IL 60156
LatinoHeatCHI
Active member
Thanks HS!
fijiblue
Active member
I love the speculation that goes on!
To set the record straight...I have been asked to manage the shop. It will be a whole new business no longer tied to OF or CC in any way. Again, it is not MY store, but the silent investors' store (not Dave). I am just running it to their specifications. We are hoping to open sooner than later, but our official opening will be on the Halloween Weekend (October 31st). We were primarily going to be wholesale and not open to the public, but the investors changed that. They are in the process of finalizing everything and we will let you know as soon as possible.
To set the record straight...I have been asked to manage the shop. It will be a whole new business no longer tied to OF or CC in any way. Again, it is not MY store, but the silent investors' store (not Dave). I am just running it to their specifications. We are hoping to open sooner than later, but our official opening will be on the Halloween Weekend (October 31st). We were primarily going to be wholesale and not open to the public, but the investors changed that. They are in the process of finalizing everything and we will let you know as soon as possible.
Roman Ogee
who goes where?
Now the cat's really out of the bag... :rolleye1:
bubbletip2
Premium Member
sorry...
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bubbletip2
Premium Member
Big congrats Justin!!! It is good to see you are doing it your way. Justin is one of the most knowledgeable reefkeepers I have known over the last 14 years. I am confident this is going to be a sweet establishment. Good luck Justin!!!
Roman Ogee
who goes where?
Same here Justin! I wish you the best of luck!
klviper
Member
Please open soon. Now with midwest reef store front closed I am going through coral window shopping withdrawl. Birds and beast and exotic aquatics just don't have the nice coral selections ocf or mwr had. And I hate ordering corals online. I need to see it in person! Best of luck!
The business model will not work because there is no way given lower margins that overhead can be covered. That is, rent, salaries, electricity, cooling, etc. A retail model almost is unable to work with out a very, very significant maintenance business to support it. In addition, if you want "primo" corals and fish, the business must have a very significant $ volume or the ones who sell to you won't give you the selection that you want. Sure you can get a ton of yellow tangs, brain corals, etc. But that is not what most people want.
I have spent a significant amount of time consulting with more than one business in this industry. I have looked at the books, and I can assure you, despite what might be desirable for us consumers, this model will not work. You can finance it on credit cards for a while but then, like many in the recent past, it is bye bye.
I know all of you think because Justin or whomever is a good guy and extremely knowledgeable about reef keeping that this should be sufficient. But, sadly, it is not. It is ALL about numbers, dollars, margins, break even points, and elasticity of demand.
I am not saying this to be mean. I WISH that it would work but it won't. Within a year, either out of business or new owners who will try for another year and burn capital. Bad for us who want to buy, worse for those who try and make their hobby into a business.
I am sure all of you can make a list of those that have passed by the wayside in only the last two years.
I have spent a significant amount of time consulting with more than one business in this industry. I have looked at the books, and I can assure you, despite what might be desirable for us consumers, this model will not work. You can finance it on credit cards for a while but then, like many in the recent past, it is bye bye.
I know all of you think because Justin or whomever is a good guy and extremely knowledgeable about reef keeping that this should be sufficient. But, sadly, it is not. It is ALL about numbers, dollars, margins, break even points, and elasticity of demand.
I am not saying this to be mean. I WISH that it would work but it won't. Within a year, either out of business or new owners who will try for another year and burn capital. Bad for us who want to buy, worse for those who try and make their hobby into a business.
I am sure all of you can make a list of those that have passed by the wayside in only the last two years.
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flapjack1439
New member
Well, aren't you a ray of sunshine.
sellout007
New member
If they are going to wholesale to other business then it has a shot to work out. Although the rent that is paid for that building seems to be quite a bit on the higher end then what a wholesaler would want to pay. No? But if they are making the majority of their money by selling their corals/fish to LFS that is where the bulk of their money should come from, and anything that is sold to the public is extra. Which is why it might work...
Regardless, GoFish had run for many years without a maintenance section, they have one now and it does bring in money and is extremely productive, but I think a fish store can survive without that end of the business.
What they can NOT survive without is the casual customer, and the casual customer in the right type of neighborhood. The customer who drives by the store and decides to stop in and buy a tank for their kids. The customers who want to get a Nemo, or a Dori.
Why are stores like Aquatica, GoFish, Old Town, Exotic Aquatics still around? Location and the customer base. They have customers that come into the store looking for the fish and corals that a store can buy cheap, transfer well and people want.
Justin - Good luck with the store! Knowing its you putting forth the effort I would make a drive up to see it when it opens.
Wholesale is a completely different business. It depends on having many, many businesses buy a whole lot of stuff. In any case, they would need a different location with much more space. More similar to what Dave was going to do on the wholesale side, than what Oceans floor looked like. There will be a need for MUCH more space than currently exists to make wholesale work.
Local stores are not going to buy from you given that you sell to the public. They would be crazy to do so. Why would a business buy from you at the same price that a retail customer (Sams Club member or whatever) can? It is called cannibalism.
Add up your total overhead per year. Perhaps $24k in rent, perhaps, 30k in salaries (assuming a small number of employees or a larger number of part timers), electricity, heat. So, you are talking in the area of 70k in overhead and that is BEFORE buying any merchandise for sale. You MUST make 70k in margin to break even. Now if you can borrow money for free, terrific, but most investors expect a return. Most LFS have 100% gross margin so they have to gross $140k per year. There are virtually none that do that without a maintenance business to subsidize the LFS side.
You should see that either you have to make up the 70k in margin or in margin plus yearly membership costs. Let's say you can charge $100 for membership (I doubt that people will pay that but lets assume they will) and you can find 100 customers willing to pay that (I doubt that too but again, lets assume). You now have to find 60k of margin. So, your margin has to be $5k per month. Not gross sales, but margin. If you really think you can do that, terrific, if not, it is going to be a problem. We are going into a period of time when disposable income is dropping.
I know this is an unpopular position but I hate to see stores come and go racking up debt that will be difficult if not impossible to pay.
Local stores are not going to buy from you given that you sell to the public. They would be crazy to do so. Why would a business buy from you at the same price that a retail customer (Sams Club member or whatever) can? It is called cannibalism.
Add up your total overhead per year. Perhaps $24k in rent, perhaps, 30k in salaries (assuming a small number of employees or a larger number of part timers), electricity, heat. So, you are talking in the area of 70k in overhead and that is BEFORE buying any merchandise for sale. You MUST make 70k in margin to break even. Now if you can borrow money for free, terrific, but most investors expect a return. Most LFS have 100% gross margin so they have to gross $140k per year. There are virtually none that do that without a maintenance business to subsidize the LFS side.
You should see that either you have to make up the 70k in margin or in margin plus yearly membership costs. Let's say you can charge $100 for membership (I doubt that people will pay that but lets assume they will) and you can find 100 customers willing to pay that (I doubt that too but again, lets assume). You now have to find 60k of margin. So, your margin has to be $5k per month. Not gross sales, but margin. If you really think you can do that, terrific, if not, it is going to be a problem. We are going into a period of time when disposable income is dropping.
I know this is an unpopular position but I hate to see stores come and go racking up debt that will be difficult if not impossible to pay.
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