Who needs wholesalers/LFS/etailers, let's do a group buy

[Anonymous]

Hey Guys -

Lets stop any and all insults and derogatory digs.

RDO appreciates your understanding.

 

[JennM]

Thales Wrote:

Do you not order from companies that drop ship drygoods like you don't order from companies that drop ship livestock?
I was speaking to the point of LFS being more convenient, and I don't think one can say that they really are in terms of livestock or drygoods.

My dry goods distributor does not drop ship. They also don't knowingly deal with home based businesses. There was a home-based business around here for a while doing mostly stuff on eBay and a website, but having their deliveries sent to a LFS (this was a few years ago.) I found it weird that a LFS would enable a garage business to undermine his own business - the home based guy did a lot of local pickup stuff. Eventually the home-based guy got an out of the way storefront to maintain his status with his suppliers but eventually the negative feedback on eBay got him shut down. To my knowledge he hasn't resurfaced on eBay (at least none of the locals have mentioned him in about 18 months) but he still has a website that advertises "below wholesale prices"... so I don't know what he's doing now.

Unfortunately some manufacturers whose brands I carry DO drop ship. I'm not happy about that but it would be economic suicide not to carry some of those things, because they are things that are in demand.

So it's not a perfect world - but I do my best to support the wholesalers that support the brick and mortars.

Hope that answers your question.

Jenn

 

[sdcfish]

I think it's really strange that Jenn's opinion's are so far from ours.

She says it's "absurd" that I would threaten to stop selling a customer if they were undercutting retail prices on items they purchased from us, but do you really think she would feel the same way if a garage seller or another retailer was in her neighborhood undercutting her prices and diggin into her market? If she knew the product was coming from her supplier, do you not think she would mention it to her "valued" supplier?

I don't think my ideals of protecting the retailer would be so "absurd" as she says if she could put herself in the shoes of other retailers such as SW Saltwater who mentioned the problem before in this thread. It has been an issue in different cities before and we have always thought of the retailer first. I did say we would have a conversation with the customer before stopping to do business and give them an opportunity to correct the situation. No knee jerk reactions here! This is just our philosophy, but I really don't find our ideals "absurd".

Another scenario......Jenn wants to start an online site. Would she not want her wholesaler to drop-ship for her as an option? Live rock? Dry goods? Fish and inverts? So if we follow the thinking of Jen, all wholesalers stop drop-shipping altogether and now the option for all retailers is gone! Seems like selfish thinking to me.

Seems to me her opinions are pretty much opportunistic....and since she has repeatedly declared she's not an SDC customer, I would unfortunately say she has a biased opinion of us, although many geniune attempts to her have been made to offer our services. As the saying goes....you can't make everyone happy, but I personally try to...been that way pretty much my whole life, personally and in business. Sorry Jen.

I still think Jen's success as a retailer can shed some light on how others might be successful, and her views might help others in regards to how to run their business....pretty much everyone is here to add to the discussion, and each person can decide for themselves what they like and don't like about comments that are made.

Best regards....

 

[JennM]

She says it's "absurd" that I would threaten to stop selling a customer if they were undercutting retail prices on items they purchased from us, but do you really think she would feel the same way if a garage seller or me.

Well shipping livestock to hobbyists isn't something I'd consider, I don't think it's good for the hobby, or the industry. Dry goods, as I've said before, is another story - other than a transit mishap which insurance can cover, "stuff" is just stuff. So let's keep the topic to livestock please. And NO I don't have stuff drop-shipped. If I order from a supplier it comes to me and the customer either picks it up or we deliver it to them if necessary in our truck.

As for the drop shipping biz - they don't have to be in my neighbourhood - and they already do sell stuff online for less than I pay through a distributor - but the value added in service, after sales support etc., is what keeps people doing business with us. There's no magic formula - it's good old fashioned common sense.

Seems to me her opinions are pretty much opportunistic....and since she has repeatedly declared she's not an SDC customer, I would unfortunately say she has a biased opinion of us, although many geniune attempts to her have been made to offer our services. As the saying goes....you can't make everyone happy, but I personally try to...been that way pretty much my whole life, personally and in business. Sorry Jen.

You know Eric, I don't want to make this personal but you seem to want to make it so. I *was* your customer at one time, and you know the reasons why I am no longer - my choice, based on how I was treated as your customer. But at the time I was a nobody (and really, I still am a nobody in the grand scheme of things) This forum is not an appropriate venue to air that dirty laundry, but for the record, I chose to do business with you, your representatives chose not to give me good service, you didn't answer my concerns when I brought them forward to you, so I chose to take my business elsewhere. And yes, you get ample credit for having your latest salesperson call me every few weeks for a while, until I asked you to make that stop. I just found it kind of funny that suddenly when I became more vocal on this forum a few years ago, you suddenly made it your mission to get me back as a client - but it didn't happen. In fact, it almost seemed more like a challenge to you to "get me back" - but the thrill is only in the chase, eh? You've called, emailed, even sent me info on stuff you were wanting to sell me via PM on this forum. You get points for trying, though.

It's not personal - it's business. Take it as you will. I could make the same assumption that you are biased against me for the very same reasons. None of this is relevant to the discussion at hand, IMO but since you keep bringing it up, hopefully that will put the issue to rest.

I still think Jen's success as a retailer can shed some light on how others might be successful, and her views might help others in regards to how to run their business....pretty much everyone is here to add to the discussion, and each person can decide for themselves what they like and don't like about comments that are made.

And on that, we agree.

Jenn

 

[Anonymous]

dude-you're simply prejudiced against electronic commerce, for no really good valid reason-the venue does not determine the quality of the institution-the people behind running it and how it's run, does :idea:

Look dude this stuff works best when not everyone is trying to play at it. Too many stores in one area is usually bad for all of them. I've seen it happen in several places around here at different times. What it generally does is force margins down to the point profitabiltiy is lost and then some go out. What would the average fly over territory retail store really have to add to the etail game? More and better variety or cheaper prices? In most cases I say probably neither. The really successful stores around here in places like Nashville and Louisville aren't ecommersing. I think they realize it is better to take care of their walkin customers than trying to compete with the F&S and Marine Depots of the world.

PS
I think you've been in LA La Land so long you've lost touch with the Heartland. If indeed you ever were in touch in the first place.
Mitch

i think working where i do puts me very much in touch with a correct perception of how much livestock is being sold to stores, day to day, from a source point-i can say without any doubt in my mind whatsoever that the retail saltwater independent b&m industry not only hasn't suffered at all due to etail, dropshippers, big box stores, etc., but indeed remains as strong as ever, as a whole-in spite of all of your doom and gloom naysaying

again-one cannot make an industry wide statement based on examples of isolated retail stores closing for reasons you don't even know, or aren't sure of

 

[Kalkbreath]

We keep acting like the ships not taking on water, but lets look at the past few years.
Live animal supply side.)
I know of three LAX wholesalers whom almost went under past few Summers.
Several changed names .(and thats always a healthy sign.)
Companies dont layed off employees in droves unless there is something unraveling behind the scenes. And there seems to have been a moth eating the fabric of several human resources departments.

I Imagine several wont make it through this coming Summer to drop again in the Spring.

local.)
Locally in Atlanta the main stores are having their power interupted and changes in ownership every few years must mean something.
These same stores were doing 100,000 plusper month just a few years ago.
Now they cant even pay bills.
These same stores used to have 5,000 customers each in their data base.

Internet)

There also seems to be a shortage of online activity.
Daily examination of the livestock etailers sites can plainly see that what every one thinks is the answer is actually a mirage.
Watch carefully and you will notice that there really are not that many items moving into the sold catagory. Can web stores thrive selling one or two clams a day? Or a hand full of WYSIWYG corals?
Not if you consider what the average LFS retails in a average day.
I doubt that even the big boys online are selling as much live animals as metro Atlanta retailers each day. ( estimate ATL Daily 10-20K) and were just one city.

See, its not that customers are buying live stock online which is affecting LFSs health, its that they are price shopping online .
What this translates into is an LFS having to price match companies who are drop shipping and who have no or little over head.
This means that its getting just about impossible to make enough profit to afford highly visible retail store fronts. You know the kind, the kind of public exposure which in turn captures average Joe's attention and turns him into a Saltwater newbie.
Atlantas two highest profile stores have a combined rent of about Twenty thousand per month.
Last I heard, this is about the same in rent which the biggest wholesalers in 104th pay per month and several have had to down size into cheaper warehouses.
Now if a wholesaler who sells to a few hundred retail stores , Pets marts and such can barely afford a 25,000 per month rent....how the crap do you expect two LFS to do so?
What I hear on this board is that many of you no longer expect the old business model (the traditional brick and mortar) to continue into the next phase of the hobby.
Well who do you think is going to create the ten thousand or more hobbyists these two Atlanta stores mustered up using the old business model?(these stores own customer data number about five thousand each) and thats just signed up members.
I seriously doubt that most Web only based stores create any hobbyists in a given year.
The public does not stumble onto to a hobby website by chance and think "gee that would be a nice hobby". "Where is my credit card.?"

The wholesalers are the enablers.
They are the single reason the retailers can no longer afford to effectively lure in new hobbyists off the street like they used to.
The publics interest in the hobby is waining and we all know why.
Its just that we are all too self centered to sea what were doing.
What we need is a new breed of supplier.
A wholesaler who keeps us from harming ourselves
..... who resists temptation and immediate gratification for the long term health of themselves and the industry.
But alas , it may be already too late.

Well thats enough of that.........need to up load some more sound tracts onto the website for Gresham .

Jeff

 

[Anonymous]

No one has said that B&M won't continue into the future. Lets quash that mistaken sound bite right away!

 

[sdcfish]

Kalk,

Hey there....I would like to take a shot at some of your comments:

I agree that it's been harder for the wholesalers in LA. While we have seen very steady sales week to week, the growth has not been what it was just a few years ago. Even though we have a larger customer base each year, I don't see the sales increasing in the same growth rates as years past.

I also see the fed ex and ups trucks every day. Their loads with drop ships I have seen diminish. Just last Monday, a typical day would be 60 or more orders going out, but last week, there were only about 15 or 20.

I thought to myself a few days ago....maybe the fish and inverts are surviving better today than years past. I know we have greatly improved our mortalities, and maybe others have too. Could the demand be less needed due to more successful hobbyists? I think that's part of it...also I think the quality of the livestock has improved greatly over the years, from all sides...exporters, wholesalers (not sure), retailers and hobbyists.

You mention high rents for retailers....well that's part of what we are discussing is how do the retailers stay in business and one way is to expand their business's...maintenance, etail etc..

You mention who's creating the hobbyists? Well I think the internet has been a great credit and source of information for newbies, and with all the cool photos and information online, it's alot easier to learn how to keep a marine aquarium these days by researching online, than by hoping you will get good advice from a busy retailer's $10/hr employee. So I believe it's both the retailer and the internet that generates newbies....and more sources than that. A newbie may go online and do a search for Saltwater fish....do you think that a petstore is going to be the first hit on their search? No..it will most likely be an internet based etailer. So yes, etailers will help generate newbies for the hobby.

You say the wholesalers are the enablers. I have seen retailers deteriate because they could no longer sell their dry good products because of the huge shift in aquarium product manufactures selling out to the etailers. Mail order has seriously damaged the livlihoods of retailers....chillers, lighing, high end items, and even the basic fluval filter....how can the retailers compete with those etailers that crush historical retail pricing? They can't and most retailers have been forced to not carry inventory on high end items. I have always worried about this.

How do us wholesalers keep retailers from harming themselves? Heck...you don't even purchase from a wholesaler from what I know. You are mainly direct tranship true? How do you think that is supporting the wholesalers by buying around them? I am not putting you down for doing so, but you can't ask for wholesalers to support you, if you aren't supporting them right?

What do you consider to be your "new breed of supplier"? I truly am interested to know. Would you rather support the home based transhipper than the wholesaler that supports the retailers?

Don't get me wrong...I think your business plan has worked very well for you and I am very impressed with the website....looks like the makings of something very cool.

Mmmm....some good stuff to think about. I just read your post and thought you were off on some of your comments and dead on with others.

Best regards...

 

[dizzy]

:? Everyone seems to agree retail has taken a hit except for vitz who happens to work for one of the name changers kalk alluded too. If things are so rosy why was that keep the letters, change the meaning of said letters, and change paper owner thingy even necessary?

In the past year or two Fin Den and Fish Bowl went under in Nashville. Both were over 20-year stores and neither have been replaced by independents. I also think I heard Harp's in Evansville,In took the saltwater out of their store. Our Marineland/Tetra/Perfecto rep also closed his long time family independent retail store (St. Louie) to take the rep job. For whatever reason there is a bit of an exodus of 20-year plus stores out of the industry. I was at the Loveland Trade Show two weeks ago and got to communicate with some of the retailers that are holding on. The ones that are doing the best are full line stores with dogs and cats and reptiles and ferrets and lots of high maintenance stuff that is difficult to keep clean.

Another thing that is happening is that some manufacturers are going direct to the stores and bypassing distribution. First Penn Plax and now Hagen. The word I keep hearing is that manufacturers are beginning to see the error of their ways and realize that despite what vitz is trying to say, many brick and mortars are struggling. If there are any retailers out there that want to get a read on the pulse of the industry, talk to the company reps when they come around and ask them. Also our Royal delivery guy quit awhile ago. He worked there for 15 plus years and said it used to be a great place to work. He told me a lot of stores on his routes had closed and the company had to cut "benefits" to employees as a result.

So you can believe that the big box and ecommerse invasion have had a negative impact on most brick and mortar retailers across the country, or you can believe as vitz does that it's just a few bad stores cying wolf.
Mitch

 

[JennM]

Well as for the local ATL stores, in my observation, some that have changed hands while successful, that are allegedly struggling now, that just might have something to do with management, as well as a changing marketplace.

Eric said:

You mention who's creating the hobbyists? Well I think the internet has been a great credit and source of information for newbies, and with all the cool photos and information online, it's alot easier to learn how to keep a marine aquarium these days by researching online, than by hoping you will get good advice from a busy retailer's $10/hr employee. So I believe it's both the retailer and the internet that generates newbies....and more sources than that. A newbie may go online and do a search for Saltwater fish....do you think that a petstore is going to be the first hit on their search? No..it will most likely be an internet based etailer. So yes, etailers will help generate newbies for the hobby.

Well no matter what the first thing a Google site recommends, odds are they have to find a LFS to get their tank to begin with, then they're going to find that they can get everything they need there, and the support to go with it.

And in my chats with customers when I ask them what prompted them to get into the hobby, mostly it's somebody else's tank that they've seen, not an Internet site or something like that. They've seen it firsthand, or they did it when they were younger, or something similar to that. I can't recall anybody ever saying, well I had this idea, so I googled, and here I am.

A lot of customers do find us through the Internet though - yellow pages are a thing of the past, but online directories and search engines are where it's at and that's how many of my customers find me, and of course referrals from existing customers still lead the way.

And while the online community is growing, I'd still venture to guess that the majority still choose not to avail themselves of online resources. If they did I wouldn't field so many of the same questions each day.

The way I see it, there are 2 choices for the independent - either carry anything and everything, OR cater to a very specific market, but ONLY if there's sufficient customers in your area.

Jenn

 

[Anonymous]

I think that the Big Boxes have had more impact on LFS than ecommerce.

 

[pyrrhus]

Thales- That really depends on the market the LFS serves. Those who are running freshwater and mixed fish departments with lower end marine systems I am sure are being hurt by the presence of the big box more than the internet.

However, you also have marine specialty stores that the average Petco or Petsmart couldn't hurt even if they tried. There is a Petsmart being built 1/4 mile from my store, and a Petco a mile from that. I couldn't be less concerned about these retailers affecting my business. As a matter of fact, I am looking forward to the greater aquatic traffic in the area generated by these stores. Due to geographic concerns, virtually every customer of these stores heading to the east valley will have to drive past my storefront, I see this as a huge boon to the business. After all, when one has just spent an hour or two running around Petco or Petsmart looking at the poor quality livestock and equipment it is like entering the pearly gates when they walk in my store.

As far as the internet goes, I don't really pay any attention to it. If a customer asks me to match a price, I offer to meet them halfway between my price and the shipped price of the E-tailer, the store cannot survive on internet margins, and when this is explained to my customers very few choose to purchase online. Of course the very fact they are asking me to match in the first place shows they would rather support the store. (or want it today at internet price, NOT gonna happen.)

Then again, most of our customers would consistently rank us a 9 out of 10 as far as marine specialty stores go, so I would hardly consider ours to be the plight of the average retailer in this industry.

 

[Anonymous]

Sounds right to me. I think the bulk of aquarium stores, especially 10 year+ stores, cater to the entire hobby not just reef stuff. There are at lest 4 LFS in my area that have closed/shrank their freshwater sections because they haven't been profitable.

 

[swsaltwater]

I think that the Big Boxes have had more impact on LFS than ecommerce.

People do not come into my store and say Petco has it cheaper......They come in and say Dr F&S has it for 9.99 so my 19 is too high. Obviously I can not compete with Quality marines prices on Live aquaria unless I tranship. Most reefers would not buy from Petco but I can still price match them and make a few bucks, most know they will get crap and I hear people complain about the fish from Petco dying all the time. Sure fish die at my shop and some I sell end up dying over time, but it's no where near petco numbers from what I hear, and I offer a warranty. I do not even consider petco to be a competitor , and their fish are simply there as a loss leader to sell crappy setups that people eventually come in to pay me to fix up with proper filtration.

 

[Kalkbreath]

I tell my suppliers that selling to non storefronts is harming the trade.
Just like I am telling you.
they too have no coherent response either.

Sighting what a great source of information the Internet offers newbies , is far short from explaining how these newbies stumble onto an aquarium website in the first place.

Where do newbies come from? Heck were do LFS retailers come from?
If wholesalers had to create retailers they might understand that hobbyists dont grow on trees.
Imagine SDC having to set up a high profle public location (like along Hollywood BLVD & Vine street ) then wave down the public trying to get people to come inside and look at the fishes and become a retailer!
Thats what we fish stores have to do every day.
Nobody creates hobbyists for the LFS stores

Getting people interested in the hobby is one thing , finding customers who can actually afford it is another , then finding people willing to actually lay down a few grand to set up the aquarium is quite another.
Few people have the resources to purchase a TV with cash , let alone a reef aquarium.

Without the in store experience, seeing the new tank, experiencing the show tank examples and knowing that the new hobbyists has some one close at hand to guild them through whole adventure, help wade them into the boiling water .... I doubt much of the public would ever take the bait if all this had to be done over the web.

It takes a lot of reassuring to get the average Joe to lay down a thousand bucks on a new hobby.

And it takes a lot of bucks and effort to be in a fruitful retail location which
allows contact with these elusive potential newbies.

As mark ups dwindle the ability of brick and mortars to have the resources to capture the publics attention will as well.

Wholesalers this coming Summer , when its too hot to drop ship and your laying off workers and stalling over seas collectors. ( both kinds)

Turn off all the pumps and power heads in one of the live rock vats,

Wait until the water calms .........look at your reflection with tempid introspection and fool your selves again into thinking....


............ its not my fault.

 

[Anonymous]

:? Everyone seems to agree retail has taken a hit except for vitz who happens to work for one of the name changers kalk alluded too. If things are so rosy why was that keep the letters, change the meaning of said letters, and change paper owner thingy even necessary?

In the past year or two Fin Den and Fish Bowl went under in Nashville. Both were over 20-year stores and neither have been replaced by independents. I also think I heard Harp's in Evansville,In took the saltwater out of their store. Our Marineland/Tetra/Perfecto rep also closed his long time family independent retail store (St. Louie) to take the rep job. For whatever reason there is a bit of an exodus of 20-year plus stores out of the industry. I was at the Loveland Trade Show two weeks ago and got to communicate with some of the retailers that are holding on. The ones that are doing the best are full line stores with dogs and cats and reptiles and ferrets and lots of high maintenance stuff that is difficult to keep clean.

Another thing that is happening is that some manufacturers are going direct to the stores and bypassing distribution. First Penn Plax and now Hagen. The word I keep hearing is that manufacturers are beginning to see the error of their ways and realize that despite what vitz is trying to say, many brick and mortars are struggling. If there are any retailers out there that want to get a read on the pulse of the industry, talk to the company reps when they come around and ask them. Also our Royal delivery guy quit awhile ago. He worked there for 15 plus years and said it used to be a great place to work. He told me a lot of stores on his routes had closed and the company had to cut "benefits" to employees as a result.

So you can believe that the big box and ecommerse invasion have had a negative impact on most brick and mortar retailers across the country, or you can believe as vitz does that it's just a few bad stores cying wolf.
Mitch

i honestly don't think you read what others write

my arguments with you are that:

a: you do not know exactly why these stores are closing, and make conclusive statements based upon your BELIEF of what evolvement of commerce does to established b&m's
you have yet to post anything other than rumor or hearsay, like our buddy kalk-i for one, don't accept some delivery driver's observations about his particular route as an indication of the level of retail success or failure

how do you they don't have a diferent driver who's route has gotten busier?

ALL biz sectors go through ups and downs, sometimes by region, due to other external factors-until you post some hard corroborable numbers

i don't know about the name change, wasn't here when it happened, but i do know that there are plenty of reasons for businesses to change their names, and that a change of name might mean absolutely nothing, from the success of a biz's standpoint

you think every time a biz changes it's name something's wrong? :lol: :roll:

i also know the typical level of help available for lfs's in the sw realm, and it's garbage, for the most part-it never surprises me when an lfs has troubles with sw dept's, or closes-i've always found it miraculous that most lfs's stay alive as long as they do

maybe now reality and true knowledgeable competition is simply doing what should have been done 30 years ago ? :idea:

 

[dizzy]

vitz,
One reason a business changes its name is to stiff creditors when they go bankrupt. :wink: If the shoe fits. The main reason stores are closing is that others have found a way to buy and sell cheaper than they can. From a saltwater perspective this has been aided and abetted by the wholesalers who enable dropshipping and sell to the low overhead garage guys. The big box have been able to hurt brick and mortars with purchasing muscle. Plain and simple they can buy direct from manufacturers and the save the 35% markup the wholesalers want to make for delivering the stuff to your door.

BTW I don't really need arm chair quarterbacks telling me how I should run my business. I'll certainly listen and relate to fellow retailers, but if someone has never walked the walk then then don't need to be trying to talk the talk IMHO.

 

[GTR1]

and their fish are simply there as a loss leader to sell crappy setups that people eventually come in to pay me to fix up with proper filtration.

Those cheap inferior setups are what sets the hook in many cases. Telling them the truth that it's going to cost them 5k for the new system won't allow you to sleep better at night since you'll be awake thinking about how to pay the bills instead of thinking about how you abused the customers. :lol:

SteveU

 

[JennM]

and their fish are simply there as a loss leader to sell crappy setups that people eventually come in to pay me to fix up with proper filtration.

Those cheap inferior setups are what sets the hook in many cases. Telling them the truth that it's going to cost them 5k for the new system won't allow you to sleep better at night since you'll be awake thinking about how to pay the bills instead of thinking about how you abused the customers. :lol:

SteveU

Well I can't speak to the "abused customers" bit, but yeah nothing galls me more to give somebody a quote on a good reef-ready system, only to have them go down the road to Petsmart and get a regular tank and a Fluval or two... :roll:

Then they think I'm shafting them on price - but they're comparing apples and bowling balls.

Of course within a year when they've lost a ton of fish and have nitrates out the yin-yang they usually have an epiphany about why I suggested a sump and protein skimmer.....

I've begun to explain it to people right away - by all means compare pricing, but be sure you're comparing reef-appropriate equipment. I even invite them to bring in quotations they've received elsewhere (they can black out the store name or whatever - I just want to compare equipment etc. and I encourage them to read up before they buy anything anywhere so they make sure to get the right equipment the first time.

How many of us ended up with a salvage box in the garage or attic with a pile of CRAP equipment we bought cheap, only to have to replace with something decent? :::raises hand::::

Jenn

 

[Anonymous]

vitz,
One reason a business changes its name is to stiff creditors when they go bankrupt. :wink: If the shoe fits. The main reason stores are closing is that others have found a way to buy and sell cheaper than they can. From a saltwater perspective this has been aided and abetted by the wholesalers who enable dropshipping and sell to the low overhead garage guys. The big box have been able to hurt brick and mortars with purchasing muscle. Plain and simple they can buy direct from manufacturers and the save the 35% markup the wholesalers want to make for delivering the stuff to your door.

BTW I don't really need arm chair quarterbacks telling me how I should run my business. I'll certainly listen and relate to fellow retailers, but if someone has never walked the walk then then don't need to be trying to talk the talk IMHO.

:lol:

i haven't told you word one about how to run your business

do you have any objective data, statistical or otherwise, to show that retail stores are closing due to increased competition from big box stores, drop-shippers, et al, as opposed to the 'regular' reasons they've been opening and closing since the industry began ?