A lot of the factors have been mentioned on the cost of the Gem Tang. I’ve been fortunate to source a couple fish out of there. The largest cost is the location – Mauritius.
1. Single Location - Gem Tangs are almost exclusive to Mauritius. There are a handful of accounts of Gems caught off the mainland of Africa – mainly S. Africa, but not enough for commercial trade.
2. Rare - Gems aren’t abundant, but not uber rare in the wild though. It is the other factors that add to the rarity - they are seasonal at reasonable collection depths and the Mauritius government limits exportation. Nobody can just go there and collect without a permit & they aren’t giving any out – let alone to foreigners.
3. Shipping Cost – to get to the U.S. you are talking about multiple flights with ~40 hours of travel time and most trans shipments from there are repackaged in the UK (if not staged for a period of time and later shipped).
4. Loss – none of the exporters guarantee live arrival, so those willing to source from there take a huge hit if even one fish passes in transport. Prices make up for those losses.
5. Importers are forced to source other fish – you can’t just order only 10 Gems. Importers have to take other fish that aren’t unique to Mauritius in an order. They are generally sold at a loss since they can’t command prices for the exact same fish coming from another locale with 5x lower shipping costs. They have to make up the loss on the profit of the handful of unique Mauritius fish – Gems, Flasher Wrasses, Gaster Clowns, etc.
So basically gem tangs that are specific to Mauritus are subsidizing the other fish (not exclusive to Mauritus) that need to be sold at some degree of loss in order to compete with these fish from other locations. That makes some sense.
It still begs the question though, why would a company have a myriad of loss leaders and one (or few) cash cow or star? Why not let the other fish get sourced from other sources where they have a competitive advantage (in the form of a cost advantage for the reasons you've all mentioned) and the collectors in Mauritus focus predominantly on those rare, unique fish that can fetch higher margins, and lose the loss leaders?
I understand that by not shipping other fish they may lose some degree of benefit from economies of scale and economies of scope but in this circumstance I can't imagine that it would impact a firm that does this because they have exclusive access to these fish and thus it is a "premium product", and those costs can be absorbed and then no losses occur over the other portfolio of fish, they focus on their competitive advantage and core competency, and make significantly more money.
People are willing to pay for exclusivity and rarity in this hobby, but if the losses on other fish did not need to be recooped, the total net loss of benefit would be far less by focusing on something people are actually willing to pay for.
To put it another way, even being shipped four times is a small expense relative to the full cost of the fish (product). It's a small fraction. And no matter the scenario, the loss leaders aren't really adding any value other than marginally (seemingly irrelevant) cost savings through selling more units (economies of scale) and several types of fish (economies of scope, which seems less relevant here than in many other industries/markets). The monitized value of those two factors surely cannot exceed the losses allocated to this fish by other species collected.
I am sure I don't have the full picture but that just seems like immensely inefficient cost accounting and business/distribution strategy.
