Why Don't Prices Ever Come Down In This Hobby?

[Forsaken77]

This isn't a thread about the hobby being to expensive. Just want to make that clear.

But every other industry, or most of them, drop prices on their products after they've been out for a while.

Neptune, Ecotech, Reef Octopus... none of them ever drop their prices. Trigger sumps have been the same price forever. By normal standards, a 2016 Apex should be at least $100 cheaper by now (an example). The same Ecotech powerheads and pumps that have been around for years are still the same price.

I know they don't come out with new products on a yearly basis, but once it gets cheaper to manufacture, the prices should go down. But not here.

What's the reasoning?

 

[Maddlesrain]

If I had to guess, I’d say it’s because many people (myself included) would just hold out a couple years and buy all the fancy gadgets after the price dropped a couple hundred bucks. They keep the products the same price because they continue to sell and they’re making a profit off of the units is my thought. If you’re going to drop the price anyway, why not just come in with the lower marketing IMO.

 

[Guttersnipe]

It’s cause they know people will pay the high price they demand. People in this hobby are usually obsessed with their tanks and will spend a fortune to keeps things alive.

 

[reefwiser]

What I do Is keep an eye on the Used equipment postings and buy stuff when people leave the hobby. Most of my equipment I have purchased used thru the years. I only buy the best built equipment and stuff that is well supported .So I can buy used equipment knowing that I can always buy parts that are broken if need be. You have to be quick to buy as the good deals don't last long. Good equipment can be had used at a good price you just have to be ready to jump on the post when you see it.

 

[Waters]

If I had to guess, it is a combination of people being willing to pay that same amount over time, and also (for the most part) that the technology doesn't change that much from one product line to the next.

 

[five.five-six]

It’s because it is a relitively small market and the R&D costs have to be stretched over many years It’s not like a TV that sells 100,000 + units to Walmart on a Wednesday, neptune may only sell 10,000 apex over 4 years.

 

[alton]

Raw material cost are up, fuel is higher, electricity per KWH has not gone down? The fact that most have not raised there price, means they have cut into their profits to keep the same price over the last 5+ years. As a comparison the base model C7 Corvette with a stick is higher in 2018 than in 2014 and it has the same engine, same looks as 2014? The only thing that changed was the wheels and I am not impressed. It is all about supply and demand, look at the viper it came way down in price and yet it still is a loser in sales and resale. Look at Radion gen two on the for sale sites. Some people are getting over 50% of there money back on lights that are 4+ years old.

 

[Sierra_Bravo]

Not to disagree with my local friend Alton, but I don't know that I can buy into fuel and raw material costs increases have driving pricing; fuel and petroleum-based raw materials have been decreasing in both the US and China since a peak in 2012.

I lean more towards the combination of it being a smaller specialty market and that MAP (minimum advertised pricing) has a huge effect on allowing retailers to be independently competitive and lower their own margins in order to drive sales on many products. Large retailers like BRS would be able to drive wholesale prices down by offering competitive pricing and making volume deals with the manufacturer. A smaller retailer wanting to take a chunk of business could offer lower prices to lure customers away, forcing other retailers to do the same and pressure the manufacturer for concessions. In an environment in which the manufacturer sets the pricing and everyone sells the same light for the same amount, where does the incentive to lower prices come from?

Case in point: Reef Octopus Classic 200INT

BRS 314.99
Marine Depot 314.99
Aquacave 314.99
Amazon 314.99
DrsFosterandSmith 314.99

 

[Forsaken77]

If I had to guess, I’d say it’s because many people (myself included) would just hold out a couple years and buy all the fancy gadgets after the price dropped a couple hundred bucks. They keep the products the same price because they continue to sell and they’re making a profit off of the units is my thought. If you’re going to drop the price anyway, why not just come in with the lower marketing IMO.

I don't know. Our society is all about impulse buys and instant gratification. I started a thread about people interested in the new Klir Filter that comes out this summer, at a high price, and lots of folks are saying they're going to buy one or two right away and can't wait for it.

Some people may wait it out, but I think the vast majority in this hobby doesn't care for waiting years for a product. But I appreciate the input.

 

[Forsaken77]

Not to disagree with my local friend Alton, but I don't know that I can buy into fuel and raw material costs increases have driving pricing; fuel and petroleum-based raw materials have been decreasing in both the US and China since a peak in 2012.

I lean more towards the combination of it being a smaller specialty market and that MAP (minimum advertised pricing) has a huge efffect on allowing retailers to be indpendently competitive and lower their own margins in order to drive sales on many products. Large retailers like BRS would be able to drive wholesale prices down by offering competitive pricing and making voloume deals with the manufacturer. A smaller retailer wanting to take a chunk of business could offer lower prices to lure customers away, forcing other retailers to do the same and pressure the manufacturer for concessions. In an environment in which the manufacturer sets the pricing and everyone sells the same light for the same amount, where does the incentive to lower prices come from?

Case in point: Reef Octopus Classic 200INT

BRS 314.99
Marine Depot 314.99
Aquacave 314.99
Amazon 314.99
DrsFosterandSmith 314.99

I agree. There is no incentive because it has become an accepted practice for some reason.

I mean even people that buy a $400 powerhead are getting close to $350 shipped.

But as somebody that knows what the wholesale prices are, there are huge markups. Some way more than others, without calling anybody out, but some manufacturers mark the product up 200% and give the retailers a little flexibility. Other manufacturers keep a tight leash and want all the profit for themselves, leaving the retailers with a small cut.

I also think that some the competition has thinned out quite a bit and the few major company's don't have to be concerned because, frankly, you have no choice. Look at Coralvue... They are the parent company for numerous brands and exclusive distributor deals.

This is from their site and they only list the top brands:
"CoralVue is a manufacturer of OEM products and exclusive distributor representing a wide range of industry-leading brands for marine aquaria including Reef Octopus, Maxspect, Abyzz, Giesemann, Klir, AutoAqua, IceCap, Easy Reefs, Kamoer, Dr. Bridge and many more!"

That's one company owning the lions share right there. So you have only the high-end or low-end products that they don't already control. If nobody can challenge that, it's equivalent to having one company owning all the mid range cars except Ferrari or Hyundai. An exaggeration, but you get the idea.

It almost seems like when Microsoft had to split the company for anti competitive practices. Just nobody looks at this industry like that it seems.

 

[Maddlesrain]

I don't know. Our society is all about impulse buys and instant gratification. I started a thread about people interested in the new Klir Filter that comes out this summer, at a high price, and lots of folks are saying they're going to buy one or two right away and can't wait for it.

Some people may wait it out, but I think the vast majority in this hobby doesn't care for waiting years for a product. But I appreciate the input.

That is a valid point. I guess I personally would rather save my money since I don’t have quite as much as others to burn.

I think a lot of people in the hobby also like the ‘cool’ factor that comes along with having newly released gadgets. If you can spend the cash, good on ya. Haha

 

[McArcher]

Simple economics.
No matter the market, goods are always worth whatever consumers are willing to pay. Ecotech wouldn’t stay in business if they couldn’t get people to pay $400 for a pump or $700 for a light and until everybody buys their pumps from Jebao and their lights from Mars Aqua, it will always be that way. As @five.five-six said, reefing is a niche market where R&D costs can only be spread out over a relatively small customer base. Apple or Samsung can recoup most of their R&D costs by selling at a high price to the “must have the latest and greatest” early adopters because their early adopters market is still in the tens of millions. By the time the price comes down to something regular people are willing to pay, they’ve probably sold 20 million units. Whereas in the entire lifetime of a high end reef aquarium product manufacturer, they probably won’t sell one tenth that many units of any one product.

 

[shred5]

Not to disagree with my local friend Alton, but I don't know that I can buy into fuel and raw material costs increases have driving pricing; fuel and petroleum-based raw materials have been decreasing in both the US and China since a peak in 2012.

I lean more towards the combination of it being a smaller specialty market and that MAP (minimum advertised pricing) has a huge effect on allowing retailers to be independently competitive and lower their own margins in order to drive sales on many products. Large retailers like BRS would be able to drive wholesale prices down by offering competitive pricing and making volume deals with the manufacturer. A smaller retailer wanting to take a chunk of business could offer lower prices to lure customers away, forcing other retailers to do the same and pressure the manufacturer for concessions. In an environment in which the manufacturer sets the pricing and everyone sells the same light for the same amount, where does the incentive to lower prices come from?

Case in point: Reef Octopus Classic 200INT

BRS 314.99
Marine Depot 314.99
Aquacave 314.99
Amazon 314.99
DrsFosterandSmith 314.99

Bingo... Exactly right.

 

[jayala12]

We won’t let them. As long as we pay out the nose for livestock we will pay out the nose for equipment to keep that livestock happy. It’s a sellers market right now

 

[revhtree Verified Admin]

This industry is unique to other industries in many different ways. This is just one of them.

 

[jayala12]

Well like I tell my wife. “Atleast I’m blowing my money on this hobby and not on a girlfriend or at a bar” lol

 

[JoshH]

It’s because it is a relitively small market and the R&D costs have to be stretched over many years It’s not like a TV that sells 100,000 + units to Walmart on a Wednesday, neptune may only sell 10,000 apex over 4 years.

+1 on this.

This industry is unique to other industries in many different ways. This is just one of them.

And I don't believe that this is one of the unique things about this industry. I am involved in other hobbies of equal and greater expense than this one and the same rules seem to apply with them as well. Hobbies in general are "niche" markets and as such we pay a premium on items. Atleast we haven't seen what most of the model railroad industry has seen. Some manufacturers in that industry have taken the supply and demand method to heart and won't even start production of a locomotive or rail car series until a certain amount of preorders have been made which can take many, many months to fill (I have a locomotive that I preordered in 2016 that still hasn't been produced), then you have to wait till they are actually produced.

 

[Greybeard]

Low demand, high R&D costs, fairly short product lifespan, a wealthy and fad prone customer base... Why wouldn't vendors take advantage while they can?

 

[BradB]

Look at LEDs. Marsaqua 300w is $180 shipped, when LEDs first came out, this size/quality fixture would be $800. Of course high end LEDs are still expensive, but LEDs are competitive.

Manufacturers lower prices to increase sales, not just to be nice. When a new phone comes out, people selling now-inferior phones cut prices so they continue to sell until their own next gen product hits the market. Apex isn't worried about picking up market share from their nearest competitor.

 

[jasonrusso]

My other major hobby is R/C aircraft, mainly helicopters. Those prices don't come down either until something is on clearance. I buy most of my stuff used for that reason. For example, a servo may cost $100. 2 years later the new servo comes out, and it costs $125. The old one still costs $100, but now it looks like a bargain!!

The opposite is hockey equipment. I only buy last year's hockey sticks. I'll pay $100 for a sticks that costs $279 the year before.