Starting a reef shop!!!

BBQ BLUE

New member
Are there any people out there that can help me with questions about opening a LFS in my home town? I have investors who are willing to put up the $$, but I want to be sure it is a good idea and economically viable first. Any hints, tricks, or suggestions are welcome!
 

wsamsky

New member
give every one on RC a employee discount :D!

I've seen turn key fish stores on ebay... probably wouldnt work so well with reef though.
 

AaronKelly

In Memoriam
know your market... if you think there is enough business to turn a profit then go for it... dont expect to have a major financial gain within the first five years... it takes a lot of time and money... but good luck :) im excited for you
 

OnoIgotICH

In Memoriam
Keep money at a minimum. Take everything natural.


There will be times in your LFS where you just cant handle all the fish flow and QTing them and making money at the same time. Somewhere in between that, you need to find of way, to get rid of diseases, while serving the customer a nice fresh great looking fish, at a cheap cost.
Thats where it messes you up.
 

dendro982

New member
If you check the web, LFS owners post a lot, that:
- running LFS is more to support the hobby, than for profit - expenses are high, and customers are looking for a better deal all the time, so no money for a better personnel,
- we should buy dry goods and equipment from LFS, to support them, because livestock sales are not bringing enough profit,
- LFS in a small city near very big city is a good option: closeness to airport and cheaper, customers from big city will come and stay in line before opening, and almost all will be sold within hour (Mississauga posts at RC),
- club kind of store, with knowledgeable advising owner (geek, running store, in original wording, if memory serves), has less chances, than buy and go away kind (no insult intended, I also prefer to buy and go away).

I know two kinds of businesses, that worked for their owners, not exactly retail LFS:
- mail order only: dry goods, equipment, food; cheaper, better choice, rare finds, next day at your door, after $100 purchase shipping cost is comparable to public transit cost, after $200 - free. No retail expenses, no livestock life support, no customer service boys (they are boys here :p ).
- started as online frag seller, now has a shop (can't say, retail or online only) with imported corals. $8-12 frag, the corals you rarely will see readily available in LFS (like plain neon-green candycane, white pom-pom xenia and bright red mushrooms), minimum order $100, but the content of parcel is worth of $300. Shipping should be pain in the neck - he sends by Greyhound at 6 AM, and I received at 6 PM, all alive.

But I'm only a customer, just had experience with two last and had seen posts of LFS owners on the web.

Good luck to you!
 

seapug

Premium Member
This is something many people here would love to do, including myself. I spent years running a plant nursery which is a very similar sort of business (live products) so I'm very well aware of the challenges involved. Other people here have given good advice. One thing I would recommend is setting up a good system for doing mailorder via the web. This extends your potential customer base far beyond the borders of your town.

I'd also say you should focus more on livestock than dry goods. Dry goods are everywhere-- they are easy to find cheaper somewhere else. The reason why store owners wish people would buy more from them is because they don't sell! Some things like replacement lights and protien skimmers can be good to have on hand, but tanks and stands take up a LOT of space that could be used by a daily income generator like a frag tank.

It's also very important to tap into the local hobbyist market. They will be the primary source of your income. Offering discounts to reef club members is a good idea but that's not enough to make a business profitable. I've always thought setting up a set of frag tanks for local hobbyists to offer things for sale would be cool. It would save you a ton of money on stocking and bring lots of customers. Set up a system partitioned into 20 gallon tanks you let people "rent" to offer their frags for sale then split the earnings 50/50. If properly screened and managed, this could be a huge profit center for an LFS.

Also, please, keep the place tight n' shiny. There's nothing worse than walking into a store that looks dirty, tired, and rundown.

Just my suggestions...good luck!
 

stuccodude

New member
set up a few nice display tanks and get people to see these amazing tanks first hand. the LFS here is doing really well. stricly saltwater no freshwater. keep high end stuff and cheap stuff, some peeps are cheap(like me)good luck
 

dhoch

New member
I've seen this done two ways locally:

1) Take an existing business (Koi & Greenhouse) and add on Marine (this might be an option if you find someone to go into business with, or as a add-on to an existing business

2) Start as an online relatailor (web site is easier than the store).

In both cases build the business slowly and steadily continuing to expand.

Both businesses have been sucessful with these models, but without 1 or 2 they probably both would have failed (i.e. doing it LFS alone).

Dave
 

cpl40475

Just hanging out
Premium Member
One thing to look at also. I myself am looking into starting a LFS here in KY. Check with your local GOVMT. They will tell you if your area can handle another LFS or not. Location is a KEY thing to consider. Then check out your other LFS stores to get ideas on what and how they get there supplies in and try to do things that they do but add items that they normally dont carry.
 

kar93

New member
If you got to an LFS that is trustworthy and knowledgable then they maybe able to tell you about theyre systems and what they do, Just dont tell them your opening a shop:D
 

BBQ BLUE

New member
Thanks for all the ideas!! I have never started a business before, I know the market is there, people drive an hour from here to visit two great shops. I would like them to come to my store. I plan on using the KISS method (Keep It Simple Stupid). The store will be small, lots of livestock, only the essential dry goods, online mail order web site, I want to get the community involved with small seminars on marine life, tank set up and maintanence seminars.

I guess most of my questions are concentrated in how to start a small business, and system tips for a build out. Also I need some suggestions on great livestock purveyors, and I know a good supplier is a coveted entity!Please keep the ideas coming!!!
 

drparker

Premium Member
All of the "better" & "successful" LFS in my area have a lot to most of their income come from maintenance contracts and services to take care of commercial and residential customer's systems.

Services like weekly or monthly maintenance.
tank sitting while your on vacation.
Tank moving service.


You get the idea, servicing 4 tanks a day could be more profit than your store front.
 

TheMcs

New member
Here's my 2 cents+
I helped run a store for almost two years, starting with it's grand opening.
1) I think you're too late into the season to open. Typical season for this, industry-wide, is up in winter and down in summer. I'd say an October opening would be ideal.

2) Decide your market. There is a lot of money to be made on new hobbyists. I don't mean ripping them off. I mean they have an entire tank setup to buy, and if you treat them right, to stock. There is mild volume and low profit catering to a small club. You have to sell a ton of $10 frags to pay the bills. If you have a group that prefers colonies to frags (rare) you're better off. If you can cater to both, more power.

3) Choose your vendors wisely. Drygoods wholesalers are going to sell to you at about the same price you can buy them online. Most will work with getting you deals to open the store. After that, your volume determines your discount. Build a relationship with the livestock dealers. Have one primary for the bulk of your orders, you'll receive better service, discounts, and selection. A couple secondary vendors are necessary. Nothing wrong with telling them they're #2, they might try harder to earn the #1. Local farmers are okay for frags, just be sure you're not paying as much as some Joe off the street.

4) Location - high visibility/traffic locations are expensive. Your target customer base decides what size store you need. Your budget decides where it is. Take your time on this.

5) Are you going to run service? It can be a huge headache, but also keeps a lot of stores afloat in the summer. Be choosy if possible, some accounts just aren't worth the money.

6) You'll need help, unless you want to live at the store. Have fun finding someone who is intelligent, knows the hobby, has a good personality, willing to work for LFS pay, and has a customer-friendly appearance. Doesn't hurt to have a high school kid as a "grunt" either.

7) Keep it clean. We cleaned nonstop. We were always commended on it too. Use Ray Croc's motto (McDonald's founder), if you've got time to lean, you've got time to clean. No slacking.

8) Design & redesign your systems. We used a reef system and 2 fish systems, a reef-safe side and a predator side. Have holding facilities out of customer view for QT & hospital tanks. Have a frag/growout tank as well if you deem it worthy.

Way too many other things to keep going, plenty I'm sure I forgot. PM me if you want to ask questions. Just do a lot of research, have a business plan! Work the numbers and dollars. You won't become wealthy, so it had better be a job of passion.

Good luck!
 

Mattmcf

New member
I agree with having an online aspect to your store. A good idea would be to set up a website/forum for your store. An email sent out to inform your local crowd about shipments is always a nice touch. I.e. early viewing of choice pieces the day of delivery. Another thing that has seemed to work for the major LFS in my area (he now has 3 spread around central fl) is that your store must be in a good location and you must have everything looking perfect. How can you expect to draw in new customers to the hobby with these kinds of price tags if your store isn't top notch? "You cannot have porche prices on a used car lot", This was the analogy that the gentleman who owns these 3 stores in the area told me. Once all of this is inline i would also say begin contracting services with your local market (residential/commercial). One of the LFS in orlando used to care for a 3,000 gal cylindrical display at the international airport. Now imagine the price for monthly maintenance plus he provided all the fish which were naturally marked up a lot from what he paid at the wholesaler, this job alone could keep him "out of the red" for each month. Good luck and keep us posted!
 

seapug

Premium Member
Don't waste your money on a prime location. Take that money and put it into your system setup. This is the sort of business that people will go out of their way to get to. If they know you exist somewhere near to where they live they will get directions to where you are. It's not like a gas station where someone driving down the road is going to think, "Hey, look at that! Let's stop in and buy some corals!"
 

seapug

Premium Member
I don't know about you, but I didn't get into this hobby on impulse after seeing a sign for an aquarium shop while driving down the road one day.

Rent on a decent sized retail space will drain your coffers faster than anything. If the area you want to open up the store in is saturated to the point where hobbyists won't go to your shop if they have to make a left hand turn to get there, then there's no need for another aquarium shop. Paying extra for prime location is a waste of money for a specialty business. A paved city street with a name is the only thing you need.
 

Macimage

Active member
You may enjoy the thread in the S. Calif. forum about one of our local knowledgeable reefers that has opened a new store. A few points from the thread that I remember are 1. the store is a bit hard to find, but determined reefers are finding it. 2. Owner is an experienced reefer and it carrying extremely nice hand picked healthy fish. 3. Coral selection is extremely nice and hand picked. 4. Store is small but that is outweighed by the fact that the selection is very high quality. 5. Owner is very helpful and won't sell something not healthy to make a sale.

It's a long thread, but has good info. Here is the thread:

http://reefcentral.com/forums/showthread.php?s=&threadid=1227738&highlight=ali

Joyce
 
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