Prices going up again?

[Cpc83]

I use jaebo gyre pumps and holy hell they move water and honestly once unboxed and running can't tell a difference between it or redsea gyre

 

[Reefer Matt Verified Media Partner]

The markup is on the retail side, not so much the wholesale side. Companies are forcing retailers to advertise and sell at fixed prices with MAP policies to ensure their brand maintains a higher perception of quality, among other factors. Those policies are great for business, but bad for hobbyists.

 

[The_Paradox]

I was just popping in to see if any consumer good was cheaper than it was ten years ago?

 

[Cpc83]

The markup is on the retail side, not so much the wholesale side. Companies are forcing retailers to advertise and sell at fixed prices with MAP policies to ensure their brand maintains a higher perception of quality, among other factors. Those policies are great for business, but bad for hobbyists.

If people saw what it really costs they would crap after paying 895 for a light

 

[Reefer Matt Verified Media Partner]

If people saw what it really costs they would crap after paying 895 for a light

Shh!

 

[BZOFIQ]

I was just popping in to see if any consumer good was cheaper than it was ten years ago?

Are computers and/or TVs considered consumer goods where you live?

 

[The_Paradox]

Are computers and/or TVs considered consumer goods where you live?

Sure.

 

[BeanAnimal]

I love when people present it like everyone is in business of making no money. Perhaps even running at a loss.

This is probably why BRS bought them because they too wanted to lose money selling these light fixtures.



Side note, my bean animal overflow is running very well.

Reading comprehension and context are extremely important in a conversation.

The general premise being discussed here and responded to is that many of you think that these companies (Ecotech being one of them discussed) are screwing all of us by price gouging with insane markups. The people making those claims are rather ignorant of what it takes to operate a business at that scale, let alone how or why investment groups buy into companies. (BRS bought Ecotech and BRS was heavily invested into by Bertram Capital).

Capital investors often roll-up like businesses, profitable or not, to build a bigger brand footprint and monopolize a customer base as best they can. Lesser profitable entities are boosted by the more profitable entities and shared economic resources, marketing and buying power. Business valuation, tax essets and cashflow all come into play. Sometimes this is done for short term cashflow, and others for long term tax sheltering.

So directly to YOUR direct point about nobody buying a business that is losing money. It happens every day for many reasons, often tax sheltering. Run an owned entity that has value at a negative margin, that is a direct loss to offset a larger CURRENT tax liability. I suggest a crash course in capital investment strategies if you (honestly) wish to understand more.

I am not saying this is Ecotech or any of the companies that we are discussing, but am addressing your direct point.

The bottom line (again) is that most businesses are not the goldmines that many of you think they are and in fact operate at rather slim margin when all things are considered. This hobby is littered with the corpses of business that learned that lesson the hard way. Most were not bad business, they were just not profitable enough to remain in business long term with such a small relative demographic.

As I pointed out, I am not attempting to defend any particular price or margin and an NOT a fan of MAP pricing or market price fixing. At the same time, I understand real world margins and know that these folks are not raking in the cash that you think they are.

Over the last 4 years consumer goods prices have risen over 20% almost across the board. Some areas of the economy being closer to 50% and some 100% or more. The naive of you out there think that these companies that you interface with are the ones making all of the money, and nothing could be further from the truth. Profit margins for most of these retailers are at an all time low. The money is being sucked by inflation at every stop along the way.

 

[jimfish98]

Folks debating on costs, obviously we don't know exact costs, but some of the prices we can see the mark up in parts and implications can be made on the product as a whole. AI replacement power block and cord is listed for $112.73 on their parts site. You can find an equivalent one online for less than $25. Given mass parts ordering for new lights and replacement parts, AI is getting the lights at a price point where at $25 they would still be profitable on the sale. In this instance, you have a nearly $100 mark up on just the power supply as their profit margin. Now if that is on one part of one light, how much mark up is there on the rest of the light? If you do not think there is an overly large layer of profit per light, you are kidding yourself.

To be more direct with other items, lets look at Caribsea Life Rock. A 20lb box of shapes was $170 at my LFS if I carried it out the door. I asked if they would price match and pulled up Waterbox selling the same at $120 w/ free shipping. I had an honest answer of no as the LFS was getting the product for around $110. It begs to ask, if Waterbox can buy it and ship 20lbs of rocks and be profitable at that price, what are they getting it for from Caribsea vs. the LFS? When you come up with a number, then ask yourself what is Caribsea's actual cost and profit margin selling it to Waterbox? Every purchase from an LFS, BRS, or another vendor means Caribsea's profit margin is just huge compared to Waterbox's bulk discount.

Koi keeping....A food I use costs about $160 for a 40lb bag, some sites listing it up to $210. Club put together a bulk purchase from the maker for a pallet and we all took 2 bags, cost to us was $74.50 per bag and it was still pretty profitable to the maker. A lot of profit margins boosts from maker to seller to consumer as Chewy, Drs F&S, etc were ordering more than a pallet at a time.

The mark ups across the board are hefty and I repeat my thoughts that these vendors are padding their profits so much that they are driving people out of the hobby based on affordability. At a certain point they will price themselves out of customers or someone will find a way to undercut them.

 

[BeanAnimal]

Folks debating on costs, obviously we don't know exact costs, but some of the prices we can see the mark up in parts and implications can be made on the product as a whole. AI replacement power block and cord is listed for $112.73 on their parts site. You can find an equivalent one online for less than $25.

Accessories are a whole different aspect, but even then the same economies come into play. There is a world of difference between a drop shipped China power supply from an online vendor who has no obligation to support you, your device or damage it may do… and that of a similar spec unit shipped from a manufacturer who has to provide support for it and the product it powers. Two different types of overhead. Accessories and consumables are certainly profit centers for many vendors.

To be more direct with other items, lets look at Caribsea Life Rock. A 20lb box of shapes was $170 at my LFS if I carried it out the door. I asked if they would price match and pulled up Waterbox selling the same at $120 w/ free shipping. I had an honest answer of no as the LFS was getting the product for around $110. It begs to ask, if Waterbox can buy it and ship 20lbs of rocks and be profitable at that price, what are they getting it for from Caribsea vs. the LFS? When you come up with a number, then ask yourself what is Caribsea's actual cost and profit margin selling it to Waterbox? Every purchase from an LFS, BRS, or another vendor means Caribsea's profit margin is just huge compared to Waterbox's bulk discount.

Two different business models with different overheads and sales volumes. Your LFS is low volume high overhead and need 30% margin to stay in business. Waterbox can drop ship the item and make $10 on the deal.

If all of this is highway robbery and simple greed, why do all of you not own business and offer “fair” prices for a fair income?

You sound like one of those guys that see a wholesale price list and think that the owners are getting rich because they sell a $20 fish for $80… but never consider that after 3 of them die, they pay rent, utilities, insurance, staff, supplies, taxes and everything else, they made 30 cents on the fish and have to sell 5,000 fish a week to pay themselves

 

[jimfish98]

Accessories are a whole different aspect, but even then the same economies come into play. There is a world of difference between a drop shipped China power supply from an online vendor who has no obligation to support you, your device or damage it may do… and that of a similar spec unit shipped from a manufacturer who has to provide support for it and the product it powers. Two different types of overhead. Accessories and consumables are certainly profit centers for many vendors.


Two different business models with different overheads and sales volumes. Your LFS is low volume high overhead and need 30% margin to stay in business. Waterbox can drop ship the item and make $10 on the deal.

If all of this is highway robbery and simple greed, why do all of you not own business and offer “fair” prices for a fair income?

You sound like one of those guys that see a wholesale price list and think that the owners are getting rich because they sell a $20 fish for $80… but never consider that after 3 of them die, they pay rent, utilities, insurance, staff, supplies, taxes and everything else, they made 30 cents on the fish and have to sell 5,000 fish a week to pay themselves

You assume too much about others and spend too much time justifying high prices. If you want to pay sky high prices and think it's fair, good for you, but don't expect to debate us into falling in line with your thinking.

 

[Richard baker]

I’m all for companies making good money I mean you have to but 1000.00 a light with a 1 year warranty come on who are these guys kidding and to the ones who say well there other options and you don’t have to buy it your correct. But when you have a reef with over 40,000 invested and you use a companies lights that from the beginning gen 1 you could upgrade and buy new pucks to a path that you can’t buy new pucks my case with my gen 4 pros which are awesome lights to a now a way more expensive light that has a fraction of the horse power of the gen 4 and now don’t offer puck replacement for gen 4 and you up the price of a subpar newer version is absolutely unacceptable to me .

 

[BeanAnimal]

You assume too much about others and spend too much time justifying high prices. If you want to pay sky high prices and think it's fair, good for you, but don't expect to debate us into falling in line with your thinking.

I didn‘t assume anything, I responded to your comments that appear to illustrate a lack of understanding regarding the economics of manufacturing and retail. It has nothing to do with what I want to pay or think is fair. I am also not justifying anything, I am pointing out that most of you complaining about greed and markup are clueless about the actual cost profit.

To that end, please do tell me what exact profit margin you consider as fair?

 

[BeanAnimal]

I’m all for companies making good money I mean you have to but 1000.00 a light with a 1 year warranty come on who are these guys kidding and to the ones who say well there other options and you don’t have to buy it your correct. But when you have a reef with over 40,000 invested and you use a companies lights that from the beginning gen 1 you could upgrade and buy new pucks to a path that you can’t buy new pucks my case with my gen 4 pros which are awesome lights to a now a way more expensive light that has a fraction of the horse power of the gen 4 and now don’t offer puck replacement for gen 4 and you up the price of a subpar newer version is absolutely unacceptable to me .

So you are mad that technology has changed and they moved on from an older deign and you can‘t upgrade?

Is the light overpriced? I don’t think it is a good value, but that doesn’t necessarily mean that it is a product of pure overpricing or greed either. To that end, my comments are in general and not geared toward a single product from a single vendor.

 

[jimfish98]

You sound like one of those guys

I didn‘t assume anything,, I responded to your comments that appear to illustrate a lack of understanding regarding the economics of manufacturing and retail

You did assume something about me, just like your prior post made assumptions against everyone who didn't like the mark ups. I am not here to debate you, I am aware of the mark ups that exist in manufacturing and retail and you see them differently. As stated, don't expect a debate to get us into your line of thinking.

 

[BZOFIQ]

Reading comprehension and context are extremely important in a conversation.

The general premise being discussed here and responded to is that many of you think that these companies (Ecotech being one of them discussed) are screwing all of us by price gouging with insane markups. The people making those claims are rather ignorant of what it takes to operate a business at that scale, let alone how or why investment groups buy into companies. (BRS bought Ecotech and BRS was heavily invested into by Bertram Capital).

Capital investors often roll-up like businesses, profitable or not, to build a bigger brand footprint and monopolize a customer base as best they can. Lesser profitable entities are boosted by the more profitable entities and shared economic resources, marketing and buying power. Business valuation, tax essets and cashflow all come into play. Sometimes this is done for short term cashflow, and others for long term tax sheltering.

So directly to YOUR direct point about nobody buying a business that is losing money. It happens every day for many reasons, often tax sheltering. Run an owned entity that has value at a negative margin, that is a direct loss to offset a larger CURRENT tax liability. I suggest a crash course in capital investment strategies if you (honestly) wish to understand more.

I am not saying this is Ecotech or any of the companies that we are discussing, but am addressing your direct point.

The bottom line (again) is that most businesses are not the goldmines that many of you think they are and in fact operate at rather slim margin when all things are considered. This hobby is littered with the corpses of business that learned that lesson the hard way. Most were not bad business, they were just not profitable enough to remain in business long term with such a small relative demographic.

As I pointed out, I am not attempting to defend any particular price or margin and an NOT a fan of MAP pricing or market price fixing. At the same time, I understand real world margins and know that these folks are not raking in the cash that you think they are.

Over the last 4 years consumer goods prices have risen over 20% almost across the board. Some areas of the economy being closer to 50% and some 100% or more. The naive of you out there think that these companies that you interface with are the ones making all of the money, and nothing could be further from the truth. Profit margins for most of these retailers are at an all time low. The money is being sucked by inflation at every stop along the way.

You didn't say anything about my side note - disappointed.

 

[BeanAnimal]

You did assume something about me, just like your prior post made assumptions against everyone who didn't like the mark ups. I am not here to debate you, I am aware of the mark ups that exist in manufacturing and retail and you see them differently. As stated, don't expect a debate to get us into your line of thinking.

Let's try this a different way. Your post and the posts of others portray a simple lack of understanding about everything from manufacturing to economics to inflation.

I don't think ANY OF US are pleased with the current pricing of pretty much anything. Those who own businesses are in even harder places than those who just consume, because their costs have gone through the roof and can't simply be passed on to customers.

You say you see things differently but can't articulate what you feel is a fair margin, you just want to pound the table and say that the vendor is gouging you. So I ask again, what is a fair margin for the retailer? What is a fair margin for the wholesaler? What is a fair margin for the manufacturer?

Take a look around you, the cost of everything in the supply chain from rent, to energy, to parts, to labor to compliance is up. You are focussed on the guy selling you the light, not the entire big picture.

Assumption... I will ASSUME based on your comments that you don't own a manufacturing or retail business, have never written a valid business plan and have no formal education or experience in the finances, economics or operation of a retail or manufacturing business.

This is not personal and not about any individual company. Prices are high, yes but it is not some great conspiracy in the fish hobby where the cabal of vendors is printing money. If it is, I suggest you quickly open aquarium related business and print money too.

 

[BeanAnimal]

You didn't say anything about my side note - disappointed.

I am glad it is working for you.

 

[jimfish98]

Let's try this a different way. Your post and the posts of others portray a simple lack of understanding about everything from manufacturing to economics to inflation.

I don't think ANY OF US are pleased with the current pricing of pretty much anything. Those who own businesses are in even harder places than those who just consume, because their costs have gone through the roof and can't simply be passed on to customers.

You say you see things differently but can't articulate what you feel is a fair margin, you just want to pound the table and say that the vendor is gouging you. So I ask again, what is a fair margin for the retailer? What is a fair margin for the wholesaler? What is a fair margin for the manufacturer?

Take a look around you, the cost of everything in the supply chain from rent, to energy, to parts, to labor to compliance is up. You are focussed on the guy selling you the light, not the entire big picture.

Assumption... I will ASSUME based on your comments that you don't own a manufacturing or retail business, have never written a valid business plan and have no formal education or experience in the finances, economics or operation of a retail or manufacturing business.

This is not personal and not about any individual company. Prices are high, yes but it is not some great conspiracy in the fish hobby where the cabal of vendors is printing money. If it is, I suggest you quickly open aquarium related business and print money too.

Again, assuming a lot here, making insults, and trying to get debate going. Congrats on wasting your time and coming off worse.

 

[Uncle99]

I use jaebo gyre pumps and holy hell they move water and honestly once unboxed and running can't tell a difference between it or redsea gyre

Have them as well….5th year running.