What happened to the hobby?

[ironman187]

OK thats good, just then I don't think I get where you were going with your reply to HotRocks. We have people in this thread claiming its all nothing more than a marketing scam so he broke down very well on costs as to why it isn't some scam. I mean, yea quality is important, but that wasn't what the point of the post was about.

Yeah, this thread has divolved into so many different thought directions it's hard to keep up. Personally, I largly agree with the OP. I got out and jumped back in around the same times they did, and I see the same thing. I don't think it's price fixing or some grand conspiracy, I just see it as the market reacting to the supply/demand ratio. Operating costs don't factor into that.

 

[Flippers4pups]

He need not. But if you want to complain about pricing as if you know the inner workings of the business and accuse people of “unethical pricing” or whatever position being taken, you probably should have an elementary understanding so you can formulate an educated viewpoint.

The best part of the free market is that if the perceived value of what you’re looking to buy is far less than the price, you can take your business elsewhere. If there are few better deals, then there may be micro and macroeconomic reasons behind the pricing that you’re seeing.

This hobby in its’ entirety is luxury goods. As price sensitive as anyone here that knows me personally knows that I am, I spend what I need to and want to for the luxury goods I find important. This hobby, cars, housing — everything else, namely commodity goods I buy generic everything. Not because I think name brands and luxury goods aside from what I value personally are evil but because my perceived value of said goods is less than others. I’m fine with a $20 shirt. If someone wants a $300 shirt that’s for them to decide. I don’t spend much time worrying about what others do, I vote with my own wallet and I move on.

Wether anyone here wants to admit it, we all shop at times based on price and value. Sometimes going out of our way to find the best deals. $300 for a pair of jeans, wow, I buy the $50 Levi's instead.

 

[HotRocks]

Yeah, this thread has divolved into so many different thought directions it's hard to keep up. Personally, I largly agree with the OP. I got out and jumped back in around the same times they did, and I see the same thing. I don't think it's price fixing or some grand conspiracy, I just see it as the market reacting to the supply/demand ratio. Operating costs don't factor into that.

I respectfully disagree that operating costs don’t factor in. How can they not?

They used to be able to collect corals and just frag them and sell them. So only holding tanks needed. Now you have retail tanks and grow out farms. Some of this is due to collection restrictions/bans. Aquaculture is far more expensive than just wholesale purchase for resale. You are also paying for a premium service because many of the top notch coral vendors in the industry have stringent QT protocols etc.

The beauty of it all is if you don’t like the prices you can always set up a tetra tank .

 

[4FordFamily]

Wether any here wants to admit it, we all shop at times based on price and value. Sometimes going out of our way to find the best deals. $300 for a pair of jeans, wow, I by the $50 Levi's instead.

Yup, I do! I just try not to accuse the $300 pair of being unfair. If there wasn’t a market for it, they wouldn’t exist. I am certainly not the target market. Sign me up for $30 jeans! To each his own, right?

 

[Flippers4pups]

Yup, I do! I just try not to accuse the $300 pair of being unfair. If there wasn’t a market for it, they wouldn’t exist. To each his own, right?

Yep.

 

[4FordFamily]

I respectfully disagree that operating costs don’t factor in. How can they not?

They used to be able to collect corals and just frag them and sell them. So only holding tanks needed. Now you have retail tanks and grow out farms. Some of this is due to collection restrictions/bans. Aquaculture is far more expensive than just wholesale purchase for resale. You are also paying for a premium service because many of the top notch coral vendors in the industry have stringent QT protocols etc.

The beauty of it all is if you don’t like the prices you can always set up a tetra tank .

Or buy star polyps, anthelia, Xenia, leathers, and cheap easy corals like I do.

 

[Flippers4pups]

Shop kid clothes and you can see what the market dictates. Supply and demand at work.

 

[ironman187]

I respectfully disagree that operating costs don’t factor in. How can they not?

They used to be able to collect corals and just frag them and sell them. So only holding tanks needed. Now you have retail tanks and grow out farms. Some of this is due to collection restrictions/bans. Aquaculture is far more expensive than just wholesale purchase for resale. You are also paying for a premium service because many of the top notch coral vendors in the industry have stringent QT protocols etc.

The beauty of it all is if you don’t like the prices you can always set up a tetra tank .

Operating costs are a symtom, not a cause.

 

[4FordFamily]

Operating costs are a symtom, not a cause.

What?

High costs are directly related to and lead to higher prices.

Assuming you take in to consideration cost accounting (which you should if being in business is something you wish to do):

If you sell widgets, you produced for $5 in materials, $5 in salaries and benefits were applied, $5 in overhead costs, $5 of marketing to move the product and make others aware of it so it can be sold, $5 in R&D is the proportionate amount based on the economies of scale and cost accounting methods you’re using, and you need a profit margin of 20% to justify remaining in business because your next best alternative brings in more cash flow after this point (opportunity cost)—

You have $5 in the product in materials, but $20 more in “other”. Of course we are ignoring other costs for the sake of simple illustration but your $5 good costs the business $25. If sold for $25, you are break even. No profit, no reason to be in business. You’d charge $5 more dollars to come up with the needed profit margin to remain in business. ($5 is 20% of 25).

So a $5 in materials widget is sold for $30 and only $5 of that is profit. Hardly seems worth it. Now if many units are sold (economies of scale) this could be a worthy business model. But even the largest operations in this industry don’t move many units. The fewer units moved, the higher the fixed costs assigned to each because the fixed costs are the same whether you sell 1 or $1,000,000 (within the restrictions of available space and time).

If 20 widgets are sold per month, congratulations your monthly net income is $100. Now you can take the wife out for a McChicken and buy a case of salt.

This also doesn’t factor in the opportunity cost of the business’ projects or product offerings. If another offering can command 50% margin, can you guess what you’ll sell if you’re smart?

 

[ironman187]

What?

High costs are directly related to and lead to higher prices.

Umm, no. Higher costs are dictated by the ratio of supply to demand. To keep up with demand businesses may be required to increase their operating costs, when demand becomes low, they may have to decrease operating costs. It's more complicated and nuanced than that, but for the sake of being more easily digested, this is the layman's explanation.

 

[Albert Bazaar]

When you put it that way, I am inclined to agree. I come from a parrot rescue background, and I have seen literally hundreds of times how much better people will treat, say, a macaw, over a parakeet; simply because one cost $2,000 and the other cost $20. I find that really sad.

I have found that many times that if it's cheap it becomes almost disposable.I had a dealer ask me yesterday what I was doing at the moment when he called.I told him I was feeding some Green Anolis cricketrs,I sell these for $1-$2ea.He said you actually feed them???I said yes they have to eat too.He responded doesn't that eat up all your profits??I said well maybe a little but they are living things also and they can't help what people say they are worth.

 

[Albert Bazaar]

How could one let these little guys starve.

 

[4FordFamily]

Umm, no. Higher costs are dictated by the ratio of supply to demand. To keep up with demand businesses may be required to increase their operating costs, when demand becomes low, they may have to decrease operating costs.

Have you run or owned a business?

I fail to see how the cost to produce a good or service is different depending on demand. Other than fixed costs which can be assigned to a higher number of goods to “lower” costs (economies of scale) this does not make sense.

If there is inefficiency (and there may be), perhaps these costs can be cut. But there is already incentive to do that to increase profits and reduce prices to move more product.

 

[Albert Bazaar]

Have you run or owned a business?

I fail to see how the cost to product a good or service is different depending on demand. Other than fixed costs which can be assigned to a higher number of goods to “lower” costs (economies of scale) this does not make sense.

If there is inefficiency (and there may be), perhaps these costs can be cut. But there is already incentive to do that to increase profits and reduce prices to move more product.

Best to ask have you run a Pet Trade business.It is like a Black Hole compared to other businesses.A place where all laws of business universe are torn apart and rarely apply.What sells for $1 now can be $300 5 years from now.I have watched animals go from $1000ea. to $50 in 1 year.Then rise up again to $300 of 3 years .This applies mostly to livestock.I have been a supplier to the Pet Trade and hobby for 35 years.

 

[ironman187]

Have you run or owned a business?

I fail to see how the cost to product a good or service is different depending on demand. Other than fixed costs which can be assigned to a higher number of goods to “lower” costs (economies of scale) this does not make sense.

If there is inefficiency (and there may be), perhaps these costs can be cut. But there is already incentive to do that to increase profits and reduce prices to move more product.

With all due respect, your thinking is completely backwards here. In a free market, the price is determined by the supply of goods and services to the people wanting it. People who value good service will be willing to pay more for it than those who don't. Businesses that provide better service can charge more for it. Understand this. Livestock is just one thing these businesses are selling. Customer service is the other.

As for owning a business, yes, I am currently growing a business, I had a small one as a teen, and have been a student of business for over 20 years. However, that doesn't matter. You don't need to be the President in order to have an informed opinion on how your country should be run do you? You also don't need to have a degree in marine biology to have an informed opinion on what it takes to keep a quality reef tank, I could go on, but the bottom line us that I strongly believe this line of thinking needs to stop. /rant

 

[ironman187]

Best to ask have you run a Pet Trade business.It is like a Black Hole compared to other businesses.A place where all laws of business universe are torn apart and rarely apply.What sells for $1 now can be $300 5 years from now.I have watched animals go from $1000ea. to $50 in 1 year.Then rise up again to $300 of 3 years .This applies mostly to livestock.I have been a supplier to the Pet Trade and hobby for 35 years.

No, that's the market forces at work, the laws of business don't change, the supply and demand do, and they can, as you alluded to, swing wildly in this hobby.

 

[4FordFamily]

With all due respect, your thinking is completely backwards here. In a free market, the price is determined by the supply of goods and services to the people wanting it. People who value good service will be willing to pay more for it than those who don't. Businesses that provide better service can charge more for it. Understand this. Livestock is just one thing these businesses are selling. Customer service is the other.

As for owning a business, yes, I am currently growing a business, I had a small one as a teen, and have been a student of business for over 20 years. However, that doesn't matter. You don't need to be the President in order to have an informed opinion on how your country should be run do you? You also don't need to have a degree in marine biology to have an informed opinion on what it takes to keep a quality reef tank, I could go on, but the bottom line us that I strongly believe this line of thinking needs to stop. /rant

What does how the country is being run have anything to do with the discussion at hand? I’m sorry to say, but your logic doesn’t make any sense to me. You’re looking at one or two elements of a much more complicated situation and basing your analysis on it.

Aside from the subject matter at hand, as a moderator I do want to remind you that political discussions are a violation of our Terms Of Service. They’re not directly relevant to the discussion at hand as well. Let’s keep this on topic.

Did you read my widget explanation before that post you’ve quoted?

Perhaps the more important takeaway here, is that if we don’t like the prices of any goods or services, especially those that are not necessities IE luxury goods, we can simply move on with our lives instead of casting stones and assigning malice to these companies/individuals.

 

[ironman187]

What does how the country is being run have anything to do with the discussion at hand? I’m sorry to say, but your logic doesn’t make any sense to me. You’re looking at one or two elements of a much more complicated situation and basing your analysis on it.

Aside from the subject matter at hand, as a moderator I do want to remind you that political discussions are a violation of our Terms Of Service. They’re not directly relevant to the discussion at hand as well.

Did you read my widget explanation before that post you’ve quoted?

Perhaps the more important takeaway here, is that if we don’t like the prices of any goods or services, especially those that are not necessities IE luxury goods, we can simply move on with our lives instead of casting stones and assigning malice to these companies/individuals.

Ugh, It was an example to your absurd assuption that one must be a business owner in order to have an opinion. Saying the word "president" in an example doesn't make it political by a longshot. Your reply absolutely highlights that you are reading to reply, not reading to understand, so there is no point in continuing this discussion. As such I'm simply going to agree to disagree.

 

[Albert Bazaar]

Animals are definitely a Luxury item.And your correct it's best to keep the forum half cup full and positive.Not to let it get like some other sites where it becomes a venting forum and total mob action.Sorry for the Anolis pics just making an example.Should have posted some damsels.Something people often look at the as disposable.I love them as much as a Blue Face Angel.In fact I think they have lots of personality for a little fish.They are underrated in my opinion.

 

[Albert Bazaar]

Thanks Ford!!!