Problems finding new wholesaler

[Blowfishaq]

I have been in the tank setup and cleaning business for over 5 years now and have a problem when I want to explore a new wholesaler. Some have a policy of no home based businesses. They require you to have a storefront. Why is this. Yes I only order about once a month but my orders this year ranged from $300 to over $1,500. each. I figured this is a good place to ask the questions as Mary has the same policy.

Bryan

 

[MaryHM]

The reason is to protect our retailers who have store fronts and large overhead. If you allow anyone with a DBA to purchase from you, pretty soon every hobbyist in the world will be beating down your door to get wholesale pricing. My personal policy is you have to have a business license in the company name and that company name must be listed with your local phone directory service. That pretty much means you're a legitimate business. Most other wholesalers follow the same procedure- some go further and require a copy of your yellow page listing.

 

[martynhulyer]

It's a simalar situation in the UK as mary explained of the wholesaler and retailer.
The wholesale companys here will only deal with you if you have a pet lisence.
The Pet Animals Act 1951 states that: Person keeping a Pet Shop must be licensed.
Keeping of a pet shop means carrying on at premises of any nature (including Private dwelling) a business of selling pets.
"Animal" includes any description of vertebrate. Pets not to be sold in streets or public places.

Enforcement. It is important that licence refusals are followed up so that enforcement action is taken against those trading without a licence.
It is of limited value to just refuse a licence if people continue to break the law and trade illegally.

I know nothing to do with the US but thought some may find it interesting.

The CIEH takes the view that the purpose of the Pet Animals Act 1951, as amended, was to afford protection to animals using the objects specified in section 1. Discretion is available in the application of conditions. Pet shops should be fixed, defined premises within which standards of care may be monitored and maintained, with named individuals responsible for the care of those animals.
I feel that the issueing of these lisences should involve even more like there are trained staff through courses so that can there is correct care for the animals fish and to include corals.

Mary.
Quote
(My personal policy is you have to have a business license in the company name and that company name must be listed with your local phone directory service. That pretty much means you're a legitimate business.)
The idea of just anyone in business can get supplied fish and corals even if they do not know how to care correctly for them and provide the correct enviroment is a major worry.
I do hope that this is regulated and that the bussiness Provide correct enviroment housing and care before they are supplied with fish and corals ?

Martyn.

[ December 08, 2001: Message edited by: martynhulyer ]</p>

 

[MaryHM]

Martyn-

The business must be a pet shop, not a building contractor or something similar.

There is absolutely no way to determine who properly cares for their animals and who doesn't at this point. Unfortunately I can't go out and inspect every shop that requests to purchase from me.

 

[Blowfishaq]

<blockquote><font size="1" face="Verdana, Helvetica, sans-serif">quote:</font><hr>Originally posted by MaryHM:
<strong>The reason is to protect our retailers who have store fronts and large overhead.</strong><hr></blockquote>

I thought your job was to supply the livestock not to protect retailers with large overhead. Many places start in a garage and your policy keeps them from getting started. A perfect example is http://www.premiumaquatics.com Jason started it in his garage. Sorry you missed out on that one.

"My personal policy is you have to have a business license in the company name and that company name must be listed with your local phone directory service. That pretty much means you're a legitimate business.”

Sorry I must have read your site wrong. Lets see when I go to your site it says

"To purchase wholesale from Marine Specialties International, you must have a retail storefront!! No "home based" businesses allowed. Please fax a copy of your business license to 805-986-4302"

I must have missed the phone number part and have misread the storefront part.

My intent here is not to try to flame you or the others with the same policy, it is to help you see that your policy hurts honest people who want to start a business and buy from a wholesaler who supposedly cares about the animals. I believe that this is why the forum was created.

I currently buy from Sea Dwelling and ERI and was considering switching to your place because it seems as if you care about your livestock. Your policy, along with the others, shows that maybe you care about your livestock more than the reefkeeper that wants to try to start a business that cares about the hobby.

I do have a business license and I am incorporated. I do not have a number in the local phone directory because I have enough business right now through word of mouth and do not want to pay the high price of business phone service in Indianapolis if I do not need it.

Bryan

[ December 07, 2001: Message edited by: Blowfishaq ]</p>

 

[Anonymous]

So if ya spend $100 and incorporate and then spend $50 a month on phone bill and you will be able to order.

 

[Anonymous]

There is nothing backwards about it. It is simple business. Most wholesalers have such policies, including other industries.

Just like there is no guarentee that a brick and mortar business is going to treat the animals better, it also doesn't mean that someone setting up a garage based business will either. A wholesaler can't come and inspect your operation any easier than they can inspect a brick and mortar operation so that isn't the reason and it's a non-starter IMO. For example, say you opened a garage based business across town from me and all my wholesalers were selling to you. Do I have a right to be upset? I've got an established business with a full inventory of drygoods and livestock. You can't possibly treat the animals any better than I already am, but you have a direct advantage simply because you have almost no overhead. Not to mention that in many cases you are likely violating zoning laws as well if you have retail foot traffic.


The reason is that ALL established businesses get preferential treatment. The longer the relationship the better the treatment. When a company can tell it's distributor, "Hey I've been ordering X amount from you for the past 5 years" it means something. Yes it makes it harder on the new guy. Guess what, it was hard on the old guy when he was at that stage. It's simple business. Commerce isn't a democracy, not everyone's vote carries the same weight, that business model simply doesn't work.

[ December 07, 2001: Message edited by: MickAv8r ]</p>

 

[JeremyR]

I would just like to 2nd Everything Tom said. And 3rd it, and 4th it. Heh.

 

[danmhippo]

Think about it, if you are the old guy and a new guy try to get the same cost basis as you have and the new guy thinks "Hey, I want people to recognize me, Guess what, I will sell them at a hair above or at my cost." Then, you are screwed.

All distributors have a policy to discriminate (or to set preference) among its thousands of customers. It's pure business practice.

If you are the new guy and knows Mary (for illustration purpose only) personally, Maybe Mary will cut you a deal. But if you are Mr. John Doe wants to sell some critters off a garage........hehe, no way jose. Why should Mary sacrifice her long term relationship customer for the mister work-off-the-garage John Doe?

Moreover, there are too many people that wants to get cheaper fish and critters just for their home aquarium and their friends. They would also pose themselves as a reseller. Frankly, reseller's license is too easy to get, anyone can get it. Without a proof showing you have a legitimate business, not many reputable business are willing to negotiate with you.

 

[Blowfishaq]

Lets get away from Mary and just focus on the real root cause.

This goal of the policy is designed to keep the average Joe from getting a $25.00 business lic. and trying to buy from a wholesaler. Forget the brick and mortar. I think the policy of minimum purchases takes care of most of this.

Tom and Jemery so you are saying you deserve an advantage because you have a storefront? What about internet based business. Do you also deserve and advantage because they can be run from a warehouse or basement instead of a strip mall? It is not their fault you run a face to face retail store so why should the wholesaler treat you any better and refuse their service to them.

Bryan

 

[Anonymous]

<blockquote><font size="1" face="Verdana, Helvetica, sans-serif">quote:</font><hr>Originally posted by Blowfishaq:
<strong>Tom and Jemery so you are saying you deserve an advantage because you have a storefront? What about internet based business. Do you also deserve and advantage because they can be run from a warehouse or basement instead of a strip mall? </strong><hr></blockquote>

If they have a warehouse they have a qualifying storefront and the overheads involved and thus aren't a concern. If they are a business run from a home, they don't IMO qualify as a comparable business. Put it this way, the people with a conventional commercial place of business have gone through the aches and pains of establishing themselves, if you elect to forego such because it is too hard, or you don't want to make that big of an investment, why should you expect or demand the same competitive advantage? There are tradeoffs, you get an advantage of lower overhead by working out of your home, the business with commercial property gets an easier time establishing wholesale contracts.

Nothing is free.

 

[newreefman1]

Well this is a great thread cause as we speak I am working on a home based business. Obviously my long term goals are to get a warehouse but a 3500 gallon propogation with NON retail traffic is hardly your average "garage" business and also would not compete with LFS. In turn, not affecting the wholesalers relationships.
In talking with wholesalers, some are willing to sell(as I have a sellers permit and business license already) and some are not. This is a free country and they can operate their PRIVATE business any way they want. Its a shame if I can visit some stores and not others but eventually I will be able to find reputable dealers that will deal with me and realize that I am not out to stock my own "personal" tanks by getting a few permits.

I do agree the wholesalers need to protect themselves because this is their business and they have HUGE relationships but also, they do need to be simpathetic at times to smaller customers that are starting out without trying to jeopardize a relationship or take away any of their businses.
I think mary has quite clearly stated that if its a legitimate business, she most likely would end up selling to them(see requirements above

)

All in all, in talking to the right people and conveying the proper intent, a home business should be able to get wholesale goods. But I agree...they should be legitimate.

Jason.

 

[Downdeep]

I can understand if a wholesaler did not want to sell to a home based buisness because it had retail store fronts in the same area that the home based buisness was in, and was trying to protect them. that I could understand. But maybe selling to a home based buisness in a area that currently does not have a retail store would help them get established to the point where they could afford to open a retail shop. And wouldn't it be great if you were the wholesaler that did that and helped that person out and then maybe that shop would have some kind of allegiance and be more inclined to order from you on a regular basis.

But what I find to be incredibly hipocritical is the fact that while your goal is to protect the retail storefronts, you currently have plans to screw the same storefronts you sell to by selling directly to the public. So now a "home" based buisness can't buy from you, but someone right off the street can.

 

[MaryHM]

My new business, if I ever get it going, would be selling RETAIL to hobbyists, not wholesale. And retailers in the area that I currently deal with on a regular basis would be informed that someone in their area wanted to place an order, and that hobbyist would be encouraged to piggy back an order with that retailer's- with the retailer making the profit. There are two things I won't do- wholesale to hobbyists and continue to defend personal business policies that have nothing to do with sustainable trade.

 

[Downdeep]

lol

 

[newreefman1]

What im a bit confused about is why people are attacking wholesalers?
You dont go to wholesalers for food do you? No, you go to a grocery store.
Do you go to the Manufacturer to buy a car? No there are dealerships.
There are tons others, why are you attacking this, cause you think it costs a bit more since youre not the middleman? Someone has to have a store and thus make a profit. If you find the right store, the profit wont scare you away and you should feel comfortable in making a purchase from the store thus making a profit and keeping them bringing in corals for you to choose.

...

Jason.

 

[newreefman1]

BTW, im not advocating choosing the cheapest dealer either for purchasing of livestock but the best conditioned live stock with the best prices

J

 

[Anonymous]

<blockquote><font size="1" face="Verdana, Helvetica, sans-serif">quote:</font><hr>Originally posted by martynhulyer:
<strong>It's a simalar situation in the UK as mary explained of the wholesaler and retailer.
The wholesale companys here will only deal with you if you have a pet lisence.
The Pet Animals Act 1951 states that: Person keeping a Pet Shop must be licensed.</strong><hr></blockquote>

Is this the same Act that requires Cat, Fish and Bee Licenses?

"I'd like to get a license for my pet fish, Eric."

 

[jamesw]

Before this goes any further, I'd like to let everyone know that whe we set this forum up I asked Mary not to comment on any specific businesses or people in the trade. Also keep in mind that this forum is not here to discuss HER business either.

Frankly, we just HAVE to have this policy, or else we would get sued...and that would be the end of our site.

I hope y'all understand.

Cheers
James Wiseman

 

[npaden]

James,

I agree that this should not be specific to Mary's individual business, however this is an area that I also don't understand.

I think the original question was regarding wholesalers in general not Mary specifically.

My concern here is that the retail storefronts that the wholesaler is trying to protect often should NOT be protected at all!

Mary states:
<blockquote><font size="1" face="Verdana, Helvetica, sans-serif">quote

There is absolutely no way to determine who properly cares for their animals and who doesn't at this point. Unfortunately I can't go out and inspect every shop that requests to purchase from me.

This is where this hobby seems to be backwards. If a wholesaler wants to be ethical in collection, etc. and then does nothing to ensure the animals are treated properly when they leave their care this doesn't make sense.

I know there has been an attempt to get retail shops to be certified in some manner or another, however I'm not sure to the extent this has been done. If this was completed the retail outlet could be pressured by the customer and the wholesaler to be certified and this might go a long way in helping the hobby.

Oh well, random babbling.

Nathan

[ December 07, 2001: Message edited by: npaden ]</p>