Although I missed the boat, I have been in this industry for over 10 years with a few different retailers, wholesalers, organizations, etc. and have established companies that operate in a few states (legally!). However, the directory comment was ridiculous!!! "must be listed with your local phone directory service. That pretty much means you're a legitimate business"
I incorporated my first aquarium service business in 1995 that fed off of several area retailers. At that time, there were at least 10 service companies listed in the phonebook, in a very large metropolitan area. There were also about 15 retail stores listed. Our business paid a hefty price for one of those "yellowbook" adds, and received retail based questions like "what fishbowls do you stock" on a weekly basis, which obviously ran our business phoneline rates through the roof.
Today if you pick up the yellow pages, you will not find any listings for service companies, and the retail aquarium trade has narrowed itself down to 5 advertising stores. Most have switched to other forms of revenue generating advertising (tv, radio, direct mail, etc.) Our company has a very organized direct contact marketing program, in which we invest about $250-500 per month on, in addition to qtrly advertising, shows, etc. We will not use yellow page advertising due to its proven low ROI that we tracked on several occasions. So does that make us a garage based business? Well, with about 1500 gallons at one location, and 3000 at another for propagation and holding, maybe it does, but then again most of our livestock is far healthier than most retailers, thus which helps us to continue ordering from our suppliers on a monthly basis.
On a weekly basis we visit our local retailers in 4 major cities, only to witness bleached corals, and ich-ridden fish, etc. Point I am trying to really make is... wholesale can save retailers money, help wholesalers meet order quotas...but what is it doing to the reefs when a new hobbyist helps keep the local retailer selling his weekly shipment, only to kill the organism within a weeks time? Our clients average about a 5% qtrly mortality rate versus the astonomical death rates the retailer and its customers provide. It's not about how many boxes you order, or how many bricks you build with mortar, but how many things live after the consumer places the fish or coral in their aquarium. If all goes well the customer returns to the store, but then again, those that kill everything off usually return as well. What a great business! However, I would like to be able to sell our clients something in the next few years, so it would help all of us to keep the dedicated service companies with several avenues to fullfill our orders. Anyone know of a good wholesaler who sells to dedicated service companies? :O) We have about 65 high-end clients in 6 states, who all purchase a fair amount of marine livestock from our home-based businesses. And the funny thing is, business licenses can be cheap, but most retailers pay on average $1,200 to have a lawyer get them one. Some of us are a bit smarter, we spend the money saved on education and marketing. hehe
I post only on occasion but have followed this thread with much interested over the last few months and wanted to give my two cents. As previously stated this has been a topic of debate for years and will always be. I have run a home based business for the past 4 years and here is my take on the subject. 
