This hobby is getting even more ridiculous with pricing......

[Macdaddynick1]

Value isn't the issue there; Lack of education is. Raising the cost of corals doesn't elevate the hobby. It "flatlines" it. Eventually, it will hit the ceiling while losing many hobbyists in the process. It will deter potential hobbyists from starting. How great will this hobby be with a small group? LFS will close shop due to decreased sells. Eventually all coral sales will be online purchase which will also decrease.

Value is a huge part of the issue here. Even bigger part is a "perceived value". Raising cost of "IN" corals, is what is truly bothering most people, we only talk about the "IN" corals , because naturally even though most of us won't be able to admit this we are consumers and we want everything for nothing in the best case scenario.
As to deterring potential hobbyists - homewrecker being 799 or wd being 250 has nothing to do with the new hobbyists, just like a 100 million dollar painting of a red and white square has nothing to do with deterring a new art collector from starting his own little collection. As a matter of fact, an argument can be made this will most likely inspire him to get better and rarer pieces in the future.
Another thing is there are plenty of nice looking corals to start with , the ones that are hardier are usually cheaper, since they are more forgiving and grow faster under various tank conditions. This means that many new hobbyists are more likely to see their corals growing and get more inspired to stay in the hobby.
As to hitting the ceiling - This will never happen, because those expensive corals drop in price day by day. It happens in stages, first those who can afford pay the premium price (usually growers) get their hands on the newest and hottest things, then they sell stuff cheaper, and more time passes corals grow and the prices drop. Take the red dragon for example. it went from $150 1" to $10 an inch.
As to the hobby being a small group - this hobby is a small group of people who collect very expensive top of the line corals, then there is a bigger group of collectors who have somewhat expensive stuff, then there is a much bigger group of collectors that have normally priced stuff. This is just like any other collector hobby.
There is always supply and demand argument, once the demand falls the prices will fall.
Online sales - this is from my personal experience and I hate making factual assumptions from my personal experience but when it comes to corals I would think most people go to their lfs because it is cheaper, and those who want that newest thing that is not in the store have an option of paying extra to get it online.
I do agree with you that this hobby is not cheap, but the flip side of that is it drives various companies into the market, encourages innovations and progress. Do you think a company like apex would be encouraged to create that controller if no one in the hobby would be willing to spend more than 100 dollars on it? Now think about red sea , or echotech , or vertex. Those innovations came about because people looked at their tank said to themselves I have 2k invested into it I think I will go and spend 500 on a controller to help me prevent any disasters. Which goes back to my initial point, people care for the livestock more now that it is expensive, in part providing a better environment for the animals we keep. Just my personal opinion.

 

[Macdaddynick1]

So what do you say about all the people who have lost there intire tank do to not having the best equipment? Like there heater burns out. If everything was outrageous prices they may have been able to afford better equipment or safety measures. I can tell you from experience cost is not a deterrent it just makes people more likely to fail.

Ok I think the heater failure is kind of a bad example, because 1) equipment fails, 2) if you chose to go out and buy a ton of livestock at instead of investing in one of the most vital components of your tank, I think it is hard to justify your actions by the market prices for a heater. In general, however, I think cheap and expensive equipment fails, mechanical malfunction of the equipment is possible and we all know that, and that has little to do with the prices or whatnot. That's a risk anyone assumes when they get into this hobby, you can take some safeguards but things like that happen.

 

[Diesel]

I have been following this thread and I can drop a long comment here but I have a question for you guys.
Lets get this straight.... ** Beach Bum $790, *** Bounce Mushroom $600, Flamethrower Chalice $100, are just according this thread ridiculous in the pricing, right?

 

[mgoesma]

Ok I think the heater failure is kind of a bad example, because 1) equipment fails, 2) if you chose to go out and buy a ton of livestock at instead of investing in one of the most vital components of your tank, I think it is hard to justify your actions by the market prices for a heater. In general, however, I think cheap and expensive equipment fails, mechanical malfunction of the equipment is possible and we all know that, and that has little to do with the prices or whatnot. That's a risk anyone assumes when they get into this hobby, you can take some safeguards but things like that happen.

I agree both cheap and expensive equipmentment fails but I can would guess that the manufacturing cost of safeguards like a controller is probably $1 to $10 max. The equipment profit margins are what bother me not the livestock. I could guess a protein skimmer cost is about $2 to manufacture. So yes there is an r&d cost, frsit, marketing... But these companies are banking on your love for you livestock and getting rich in the process. This is why a Susun power heads are $10 and echotech are $500. Yes they are cooler and better quality but the manufacturing cost are probably within a few dollars of each other. People want to protect there investment so they buy the better product. We need more high quality discount providers.

 

[rock_lobster]

But you have to pay for shipping per each coral right?

No most eBay vendors actually combine shipping or else add a small fee like 1-3$ per coral.

 

[rock_lobster]

You think it costs 1$ to make an entire apex controller? 2$ to make a skimmer? That's seems a little crazy. I think you should give the manufacturers a little more credit. I can assure Neptune isn't netting 99.9% profit on every unit they sell. They would overtake apple on the Fortune 500 with those operating margins.

I agree both cheap and expensive equipmentment fails but I can would guess that the manufacturing cost of safeguards like a controller is probably $1 to $10 max. The equipment profit margins are what bother me not the livestock. I could guess a protein skimmer cost is about $2 to manufacture. So yes there is an r&d cost, frsit, marketing... But these companies are banking on your love for you livestock and getting rich in the process. This is why a Susun power heads are $10 and echotech are $500. Yes they are cooler and better quality but the manufacturing cost are probably within a few dollars of each other. People want to protect there investment so they buy the better product. We need more high quality discount providers.

 

[deaclauderdale]

Very interesting thread thus far, extremely subjective.

I'm not going to way in on exotic coral prices as this is a hobby and you can always not buy what you can't afford, but I will say that all equipment is not created equal as a Vortech and a Jeabo are simply not the same.

I've yet to hear mentioned joining a local reef club, and buying and trading corals with local hobbyist can be a bit more cost effective.

 

[mgoesma]

well first profit does not equal sales - manufacturing cost. if it did a lot of companies would be on fortune 500. I looked online for Neptune's 10K (annual financial report) so I could better estimate the cost but I could not find it. I'm guessing they are a privately owned company so they will never release that information. but lets compare this to a new smart phone production costs (iphone 5). They average $200, of that 10% camera,20% touch screen, 20% electronics that the controller does not have. Of the production cost, 3% is for sensors, 5% power, 5% memory, and 5 % assembly. that is less than 20%. So 20% of $200 is about $40. The issue manufactures have is not with low margins it's with low sales. If you sell 100 items at $1000 each you make less than selling 5000 items at $300. Not only do you make more but also your costs decrease. now lets think of a protein skimmer. what is it? an acrylic molded tube, a pump, so plastic fitting. Yes, I definitely believe most skimmers cost is under $10. I could make one in may garage for under $40. I hope they have a better economy of scale than I do at producing 1 unit.

 

[Brew12]

I know I should stay out of this but......

The price of a coral frag has little to do with the input costs. Coral is a cross between livestock breeding and collectibles. Ranchers will pay over $20k for a good breeding steer. Horse breeders will pay $100k+ for one time breeding rights with a Kentucky Derby winner. Why? In the case of the rancher, they see economic advantages to higher quality breeding stock whose calfs will give them profit. This is like reefers who collect coral with the intent to frag and resell. In the horse breeders example, they want to try and raise the most prestigious horses possible. It may not work out, but it does give them bragging rights for at least awhile.
So what should a frag cost? It should cost what someone is willing to pay for it. These aren't commodities, these are collectibles. What is a baseball card or comic worth? They aren't worth nearly as much to me as what others are willing to pay for them. I'm not going to complain if someone pays $100k for a Babe Ruth rookie card. I just won't spend that on one myself. If a coral supplier has a chalice someone is willing to pay $600 for, I don't expect them to sell it to me for $50 instead. I don't care what their costs are or profit margins are for a collectible like coral.

 

[rock_lobster]

well first profit does not equal sales - manufacturing cost. if it did a lot of companies would be on fortune 500. I looked online for Neptune's 10K (annual financial report) so I could better estimate the cost but I could not find it. I'm guessing they are a privately owned company so they will never release that information. but lets compare this to a new smart phone production costs (iphone 5). They average $200, of that 10% camera,20% touch screen, 20% electronics that the controller does not have. Of the production cost, 3% is for sensors, 5% power, 5% memory, and 5 % assembly. that is less than 20%. So 20% of $200 is about $40. The issue manufactures have is not with low margins it's with low sales. If you sell 100 items at $1000 each you make less than selling 5000 items at $300. Not only do you make more but also your costs decrease. now lets think of a protein skimmer. what is it? an acrylic molded tube, a pump, so plastic fitting. Yes, I definitely believe most skimmers cost is under $10. I could make one in may garage for under $40. I hope they have a better economy of scale than I do at producing 1 unit.

You cant extrapolate that to a niche market... Do you know the sales volume on an iphone its much higher than that of neptunes apex which allows for vastly superior manufacturing techniques, materials pricing, labor, engineering, literally every expense that goes into the production is much much cheaper with volume.

 

[mgoesma]

You cant extrapolate that to a niche market... Do you know the sales volume on an iphone its much higher than that of neptunes apex which allows for vastly superior manufacturing techniques, materials pricing, labor, engineering, literally every expense that goes into the production is much much cheaper with volume.

I understand that. that's why I added the "better economy of scale". we are saying the exact same thing. What I am also saying is that if the price was affordable more people would use them. the issue the consumer has is that the market is an oligopoly. meaning there are a few companies controlling the entire market.

 

[mgoesma]

I know I should stay out of this but......

The price of a coral frag has little to do with the input costs. Coral is a cross between livestock breeding and collectibles. Ranchers will pay over $20k for a good breeding steer. Horse breeders will pay $100k+ for one time breeding rights with a Kentucky Derby winner. Why? In the case of the rancher, they see economic advantages to higher quality breeding stock whose calfs will give them profit. This is like reefers who collect coral with the intent to frag and resell. In the horse breeders example, they want to try and raise the most prestigious horses possible. It may not work out, but it does give them bragging rights for at least awhile.
So what should a frag cost? It should cost what someone is willing to pay for it. These aren't commodities, these are collectibles. What is a baseball card or comic worth? They aren't worth nearly as much to me as what others are willing to pay for them. I'm not going to complain if someone pays $100k for a Babe Ruth rookie card. I just won't spend that on one myself. If a coral supplier has a chalice someone is willing to pay $600 for, I don't expect them to sell it to me for $50 instead. I don't care what their costs are or profit margins are for a collectible like coral.

so true. Everyone is looking for the "Greater fool".

 

[Brew12]

so true. Everyone is looking for the "Greater fool".

Is it foolish if you have the disposable income and find it enjoyable? As long as both parties are happy with the selling price, I wouldn't call either a fool or greedy.

 

[BigKid4788]

Someone doesn't need a controller, best lights, skimmer etc to maintain a great reef. Does it make it easier? Of course but it's not necessary. There are plenty of corals that are very nice for more than reasonable prices. If you like the super high end you ha e to make a choice. Pay or just admire pics. This is no different than any other hobby. The more you get into it, the more it cost. Just the facts!

 

[RoyalGrammaJohn]

That's why I usually buy just frags and let them grow out. Much cheaper that way.

 

[Stevenbulbus]

I have to say it is very expensive but done slowly isn't to bad just have to save a lot, but like i say if i can't afford a Ferrari i just cant buy one

 

[Opus]

There are certainly more expensive ways and less expensive ways to do this hobby . But I think you'll find that true in about everything in life. We can't expect a have a Mercedes and then complain it's more expensive than a Chevy.

Have you priced a Chevy lately. I looked at a SS and couldn't believe the price and there wasn't anything hinting at luxury.

 

[Opus]

As a long time serial hobbyist, I have noticed that a lot of hobbies are more expensive than what they once were BEFORE the mini economic depression in 2006 - 2010. When times were tough, I noticed everything from car parts to brewing supplies becoming more expensive as fewer products were in demand. Not sure if this would apply to reefkeeper or not but my 2 cents.

That is true. They saw they could sale at these higher prices and so they never lowered them. Have you bought from Domino's lately? They are still charging the extra $2 delivery fee that was supposed to help the drivers out when gas was getting close to $5/gal. Same with workers. They saw that the people that didn't get laid off were willing to work 60+ hour weeks to keep their jobs so they haven't hired new workers to get everyone down to a 40 hour week.

 

[Reeferdood]

I know I should stay out of this but......

The price of a coral frag has little to do with the input costs. Coral is a cross between livestock breeding and collectibles. Ranchers will pay over $20k for a good breeding steer. Horse breeders will pay $100k+ for one time breeding rights with a Kentucky Derby winner. Why? In the case of the rancher, they see economic advantages to higher quality breeding stock whose calfs will give them profit. This is like reefers who collect coral with the intent to frag and resell. In the horse breeders example, they want to try and raise the most prestigious horses possible. It may not work out, but it does give them bragging rights for at least awhile.
So what should a frag cost? It should cost what someone is willing to pay for it. These aren't commodities, these are collectibles. What is a baseball card or comic worth? They aren't worth nearly as much to me as what others are willing to pay for them. I'm not going to complain if someone pays $100k for a Babe Ruth rookie card. I just won't spend that on one myself. If a coral supplier has a chalice someone is willing to pay $600 for, I don't expect them to sell it to me for $50 instead. I don't care what their costs are or profit margins are for a collectible like coral.

Perfectly stated and I totally agree.

 

[juanrmattos]

I'd like to say this... Honestly, throughout 15 years of reefing, I've never "ever" purchased a single coral that made me feel like I was buying for a great price... BUT, let me add to this by saying, I've never been one for buying plugged frags either.

Back in 2003 / 2007 you could purchase decently sized colonies overseas (From sellers like Reefer Madness, to name one), for the same price we are paying today for a 2 1/2" coral from online growers in Wisconsin, or California; which is usually $ 100 to $ 120 per a single coral from the select list (And in most cases all the way up to $ 300 for the collectors pieces).

Like many of you have posted above, local fish stores and other resellers also need to pay their bills, and as much as we love Reefing, the demand for corals compared to wholesale requirements is way off balance... this not only drives the prices up, but in most cases forces the seller to desintegrate a beautiful colony into fragmented pieces to make the most out of the investment.

I guess, like any other hobby... We are bound to pay for our excesses.