Vendor transparency question

[BornHandy]

That story doesn’t make sense. No airline is going to tell anybody anything without an airbill number.

People give out info they're not supposed to give all the time. Seems plausible to me.

 

[drstardust]

People give out info they're not supposed to give all the time. Seems plausible to me.

I suppose that's possible, yeah.

 

[Peace River]

So, I recently asked a vendor (won't name names) where they sourced their fish from (which wholesaler, etc), and they declined to tell me. This is the first time I had asked a vendor this, and was wondering if it was typical for them to be secretive about this, or if this is a red flag.

To me, I don't think such transparency is too much to ask, but perhaps this is typical behavior that I'm just not used to? What have been your experiences?

This is a valid question and has created a positive conversation - good job!. With the current emphasis on sustainably sourced fish and corals I think it is a very valid question to ask about where the livestock originated and about their journey to the store. However, none of us likely knows all of the challenges the LFS owner has had in life and in business, who has been dishonest or double crossed them, and what other experiences they have had that we know nothing about.

Do I think the LFS should have been prepared for the question and provided some more information about their supply chain? Yes. Do I think it is a red flag? No. I do think that by choosing not to share then they reduced the value that they are offering and I would likely choose another source, if possible, where I knew that they had a sustainably source supply chain.

 

[BornHandy]

1: I used to work in a pet store, and some of their vendors were a hush hush topic. As crazy as it seems, there were two shops in town, and each shop accused the other of "spying", so naturally, there was some paranoia among the owners. They owners I worked for would have seen such a question as competitor activity on their own turf.

2: Almost weekly, out saltwater supplier would ask us "Do you know this person, or that person"? We usually did, and our sales rep would tell us that they had applied for an account as a new "aquarium maintenance" business. They were almost always new customers that had just started their own saltwater tanks, and just wanted to stock up on the cheap. That question may have made you appear as a person that wants advice and connections, but doesn't want to support the local business.

3: We were always happy to share some vendor info. For instance, we advertised ORA stuff. We would say, "Indo", or "Red Sea" as a matter of good practice. We even went as far as to specify local trade in, or locally raised - but never who the actual distributor was.

 

[drstardust]

1: I used to work in a pet store, and some of their vendors were a hush hush topic. As crazy as it seems, there were two shops in town, and each shop accused the other of "spying", so naturally, there was some paranoia among the owners. They owners I worked for would have seen such a question as competitor activity on their own turf.

2: Almost weekly, out saltwater supplier would ask us "Do you know this person, or that person"? We usually did, and our sales rep would tell us that they had applied for an account as a new "aquarium maintenance" business. They were almost always new customers that had just started their own saltwater tanks, and just wanted to stock up on the cheap. That question may have made you appear as a person that wants advice and connections, but doesn't want to support the local business.

3: We were always happy to share some vendor info. For instance, we advertised ORA stuff. We would say, "Indo", or "Red Sea" as a matter of good practice. We even went as far as to specify local trade in, or locally raised - but never who the actual distributor was.

Thanks for sharing your perspective. This is helpful to know.

 

[Pntbll687]

I work in distribution of hard goods (lights, tanks, dry food, stands, ect) and some people are CRAZY with what they want to know.

I was helping a new account at their "open house" sale. Mainly just helping customers find what they need, and showing some sample filters I had and the differences between "good", "better", and "best" options I had.

Customers would almost demand to know what the store was paying for items. It was absolutely absurd to ask. People in business are there to make money, just like me, I'm in sales to make money. Do I sell stuff I like, sure, but I'm still working to sell it at the highest margin possible.

Most of my accounts mark up saltwater fish 2.0-2.5x what they paid for it. Some lower and some higher. Coral, I'm not sure of since prices are all over the place.

Live goods are where the margin is, most of the time. Dry goods are usually in the 20-50% margin range, with it really depending on brand and geographical location. Large bulky items are generally less margin than small items.

 

[drstardust]

I work in distribution of hard goods (lights, tanks, dry food, stands, ect) and some people are CRAZY with what they want to know.

I was helping a new account at their "open house" sale. Mainly just helping customers find what they need, and showing some sample filters I had and the differences between "good", "better", and "best" options I had.

Customers would almost demand to know what the store was paying for items. It was absolutely absurd to ask. People in business are there to make money, just like me, I'm in sales to make money. Do I sell stuff I like, sure, but I'm still working to sell it at the highest margin possible.

Most of my accounts mark up saltwater fish 2.0-2.5x what they paid for it. Some lower and some higher. Coral, I'm not sure of since prices are all over the place.

Live goods are where the margin is, most of the time. Dry goods are usually in the 20-50% margin range, with it really depending on brand and geographical location. Large bulky items are generally less margin than small items.

Yeah, that's a more extreme example, though. Asking for straight up numbers behind the store's back is totally not ok. I would never dream of asking for margins details or anything like that. To me, as someone not in the business, asking for a supplier's name seemed as innocent as asking what brand a particular dry good is. I have learned more intricacies of the situation through this thread, which has been helpful.

 

[Pntbll687]

Yeah, that's a more extreme example, though. Asking for straight up numbers behind the store's back is totally not ok. I would never dream of asking for margins details or anything like that. To me, as someone not in the business, asking for a supplier's name seemed as innocent as asking what brand a particular dry good is. I have learned more intricacies of the situation through this thread, which has been helpful.

As far as asking for vendors (wholesalers) I would say 90% of my stores would say where they got both live goods and dry goods

 

[Gregg @ ADP]

I work in distribution of hard goods (lights, tanks, dry food, stands, ect) and some people are CRAZY with what they want to know.

I was helping a new account at their "open house" sale. Mainly just helping customers find what they need, and showing some sample filters I had and the differences between "good", "better", and "best" options I had.

Customers would almost demand to know what the store was paying for items. It was absolutely absurd to ask. People in business are there to make money, just like me, I'm in sales to make money. Do I sell stuff I like, sure, but I'm still working to sell it at the highest margin possible.

Most of my accounts mark up saltwater fish 2.0-2.5x what they paid for it. Some lower and some higher. Coral, I'm not sure of since prices are all over the place.

Live goods are where the margin is, most of the time. Dry goods are usually in the 20-50% margin range, with it really depending on brand and geographical location. Large bulky items are generally less margin than small items.

What’s crazy to me is the dry goods prices I see in Petco.

Every once in a while when I’m out in the field, I need something right away, and Petco is usually a good bail-out. Once I went in because I forgot Emerald Entree that a client needed. I was shocked to see their price was $1.50/pack higher than mine.

I put a decent margin on mine, and I’m buying it wholesale. There is no way Petco is paying wholesale for their dry goods. An operation that size has to be buying direct, and getting huge volume discounts on top of that, right?

Hell, we’re not that big of an operation, and even we have a few direct lines. I can’t imagine what Petco is paying for that food.

 

[Opus]

Some things have changed over the years in re: to getting a wholesale account. In some ways, it has gotten easier, due to there essentially just being more suppliers and the line between supplier and e-comm vendor being blurred.

There are some e-comm vendors and small wholesalers that probably don’t require more than just a resale license.

In other ways, it has gotten harder. The really good, and reputable, suppliers just about require a DNA profile and passing a polygraph to get an account these days. For example, ORA requires all licensure, trade references, invoices from other suppliers, and pictures of your store to give an account.

As far as people asking how much I make on livestock, I just say ‘pretty much the same as everybody else’.

Seems to be true around here. In the last few years we seem to have several people pop up that are selling saltwater fish out of there homes and undercutting the lfs because they don't have the store overhead. The stores complain to the wholesalers but they don't seem to care. I guess if they really were serious about shutting them down, they could go to the city/county and complain. I'm certain they don't have the proper permits/licenses and are not collecting sales taxes.

 

[Bleigh]

I understand that markups tend to be extreme. They need to be in order to pay bills and taxes. Plus, if they want good employees, they have to provide them incentives to stay - such as health benefits and such (Which I know at least one of my LFS does). I have asked before just out of curiosity what the markup was. I have also told them that they have to make money too when they've given me discounts that I didn't think were appropriate. I think they realize I'm not going to take advantage of them and that I was asking sheerly out of curiosity.

 

[vetteguy53081]

I understand that markups tend to be extreme. They need to be in order to pay bills and taxes. Plus, if they want good employees, they have to provide them incentives to stay - such as health benefits and such (Which I know at least one of my LFS does). I have asked before just out of curiosity what the markup was. I have also told them that they have to make money too when they've given me discounts that I didn't think were appropriate. I think they realize I'm not going to take advantage of them and that I was asking sheerly out of curiosity.

Thank you for Good input ! As many know, I owned a full line pet store for 11 years until divorce. I had a belief in low mark-up, low prices and sell in volume rather than price. I put away two area stores due to this concept . . . . . HOWEVER . . … As Business grew, I had to find a larger location, which meant the rent of 4800 went to $1700/ month and I had to hire additional help. That added payroll for three new persons at $2400 per month Plus their workmans Comp and insurance expenseand larger utilities with lights at 300/mo, gas at $130/mo - expanded telephone and yellow pages ad and PCS Cash register system not to mention the dry goods and livestock cost. The first few months I had to borrow from my pay check (as i had a job while also running the store) to make ends meet as my total expenses were almost $5000/month.

WHAT MANY FAIL TO RECOGNIZE AND IT IS SIMPLE: I like many retailers have to sell $5000 of merchandise before there is ANY money left over after sending in quarterly sales tax also. So if you have A favorite retailer who is trusted and is your go-to store, rather than wondering about markups and profits, support them so that they can stay in business and survive to be your outlet. they have bills that you have no clue that they at times struggle to pay especially during summer months when pet sales are slower due to vacations, graduations, etc

 

[Lingwendil]

It depends on the retailer really, if I just walked into a store I wouldn't come out right away and ask what his markup is on a given product (and having worked in the industry I already have a good idea anyway) but if it's someone I have a good working/professional relationship with I may casually ask. Usually if this comes up it's out of curiosity and not from anyone that I may appear to be undercutting or in competition with. I was "talking shop" and getting into nostalgia with the owner of a local FW centered shop recently and casually asked a ballpark and he answered me without hesitation, but he has known me as a regular for years, and there were no customers present other than me at the time.

 

[drstardust]

It depends on the retailer really, if I just walked into a store I wouldn't come out right away and ask what his markup is on a given product (and having worked in the industry I already have a good idea anyway) but if it's someone I have a good working/professional relationship with I may casually ask. Usually if this comes up it's out of curiosity and not from anyone that I may appear to be undercutting or in competition with. I was "talking shop" and getting into nostalgia with the owner of a local FW centered shop recently and casually asked a ballpark and he answered me without hesitation, but he has known me as a regular for years, and there were no customers present other than me at the time.

Sure, the interpersonal relationship you have with them is a big factor.

 

[fish farmer]

1: I used to work in a pet store, and some of their vendors were a hush hush topic. As crazy as it seems, there were two shops in town, and each shop accused the other of "spying", so naturally, there was some paranoia among the owners. They owners I worked for would have seen such a question as competitor activity on their own turf.

2: Almost weekly, out saltwater supplier would ask us "Do you know this person, or that person"? We usually did, and our sales rep would tell us that they had applied for an account as a new "aquarium maintenance" business. They were almost always new customers that had just started their own saltwater tanks, and just wanted to stock up on the cheap. That question may have made you appear as a person that wants advice and connections, but doesn't want to support the local business.

3: We were always happy to share some vendor info. For instance, we advertised ORA stuff. We would say, "Indo", or "Red Sea" as a matter of good practice. We even went as far as to specify local trade in, or locally raised - but never who the actual distributor was.

We have a very small LFS/reef store presence in VT. It seems the market can handle two mom and pop LFS...maybe. We also now have Petcos and Petsmarts.

Years ago, a buddy of mine worked at the better LFS/pet store, they had a decent saltwater selection. One hobbyist was really into the hobby, to the point of snooping about the industry. Of course he and his wife did set up a reef only store about 30 minutes away, they didn't last more than a few years.

Fast forward to a couple of years ago, the better LFS/pet store is in a bigger location, under new ownership and was still the only place to get SW other than the chain stores. Another hobbyist got really into the hobby, to the point of doing tank maintenance and starting his own reef store only store about 45 minutes away. He even went to the owners and said he wasn't trying to take business away from them, but they no long allow him in the store. Something seemed fishy, the new guy is nice, but can be an intense individual to talk with. He buys direct from WWC, corals listed from $40 to $70, some fish and very little in dry goods. His store is actually the downstairs of his house.

 

[nezw0001]

I had a similar experience at a frag swap recently. A vendor was selling a Chicago Sunburst anemone for current market value. I was interested and asked for proof of lineage/or explanation of lineage as I feel this is important for 'branded' livestock. The vendor refused and I walked. Caught me by surprise as most people selling legit high end items typically brag about the validity of the items lineage.

 

[fish farmer]

I had a similar experience at a frag swap recently. A vendor was selling a Chicago Sunburst anemone for current market value. I was interested and asked for proof of lineage/or explanation of lineage as I feel this is important for 'branded' livestock. The vendor refused and I walked. Caught me by surprise as most people selling legit high end items typically brag about the validity of the items lineage.

I'm going to relate my experience with another industry that I'm involved in, recreational fishing. Here in Vermont the state regulates the importation of bait fish for fishing. This came about due to risks of disease from wild stocks and potential invasives coming into the state. Prior to this control, you could in essence haul bait fish from where ever and use it where ever. Now the local vendors in certain areas of the state must buy certified disease free bait from state approved sources(mostly Arkansas) which go through twice yearly disease testing and inspections. If the local bait store didn't have documentation of where that bait was from, they would be fined and the bait destroyed. Many of course don't like the current regulations because the bait fish became more expensive.

There was a violation a year ago where a local bait dealer had an invasive minnow in their shop. The state was able to track the bait to the wholesaler(only one in this state), where they were in violation of their importation permit, from there they were able to track it back to the individual fish farm in Arkansas who wasn't following the Best Management Practices of the bait fish industry. I know the wholesaler was fined and had to destroy product, not sure what happened down at the farm level.

I also oversee the trout egg sales for our small aquaculture industry. The same rules apply, you can only raise x,y,z and from approved sources which are usually Vermont sources. You know exactly where the fish originate when you buy for your pond.

 

[Elgringodiablo]

Honestly, unless you plan to open a competing business, there is no real reason they shouldn't be transparent about where the livestock comes from. Getting wholesale account is not exactly easy in most cases and requires quite a bit of hoops be jumped through. Many wholesalers have minimums or higher rates for non-brick & mortar service businesses or online sellers. Transshipping has an even higher barrier to entry, if nothing else due to the cost and size of orders and dealing with Fish & Wildlife...

 

[MnFish1]

So, I recently asked a vendor (won't name names) where they sourced their fish from (which wholesaler, etc), and they declined to tell me. This is the first time I had asked a vendor this, and was wondering if it was typical for them to be secretive about this, or if this is a red flag.

To me, I don't think such transparency is too much to ask, but perhaps this is typical behavior that I'm just not used to? What have been your experiences?

Why were you asking - curious?

 

[MnFish1]

I always slant an eyebrow about things like this. They likely get it from somewhere questionable, or somewhere that you could also order from if they react like this. All the successful shops I deal with have absolutely no problem stating sources, and often bring it up without asking- most places know the market is highly competitive and will be glad to let you know where things come from. Especially when it comes to aquacultured or locally bred stuff.

Disagree there is not a conspiracy behind every corner. There is no reason a vendor needs to announce where he bought the stuff he is selling - still waiting for the reason the OP asked. But - in general - the thing is - if you ask a question - and its important to you - and they dont answer - just move on and don't buy.