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

[Del’s Reef]

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.

RC.... a hobby I have a little in, but it’s on the back burner. But this is a great example. You can find a coaxial at Wally Word for $25 that will make you smile a couple times and then it’s broken. Or you can purchase a true CP that you have to tinker with to get perfect that will in turn last for years if you know what you’re doing, and will allow you to do so much more than the coaxial.
Something that no one has said yet; licensing. iOS, if I remember correctly, isn’t open ware, and to have a compatible device, you have to pay a fee. So that controller that you can hook up your iPad to, Apple gets a piece of that. Now I don’t think that there are as many fingers in the soup bowl as gasoline has (the oil company itself makes the least per gallon, and the station the second least...... the largest amount goes to the Gov’t here in the states, by a VERY large margin), but with more device compatibility to other devices, you’re handing money to more and more entities with just that one purchase.

 

[John3]

Fact is nothing is cheaper to make today than yesterday. All these companies who build their products in China are fighting margin erosion. The cost of making product in China has gone up every year for the past 10 years. Labor there while still cheap has gone up significantly.

The only lower price competition going on anymore are Chinese brand products and while not terrible they also don’t compare well to the big name brands.

 

[Dr.Xipoles]

I go by the saying, cheap is never good and good is never cheap. It has yet to be proven wrong to me.

Ive had jaebo, cheap chinese lights, black boxes made in the usa, ecotech mps, and ai lights and i must say, the price is worth it.

Ecotech powerheads and lights hold their value for years and my corals grow better now than the chinese stuff ever had.

 

[clsanchez77]

As others have stated, Supply and Demand is the only true principle that controls price. Sure some products, such as Apex, are continuously under R&D with continued development. To be fair, the cost of a basic Apex Classic is less now than it used to cost. But if you compare the cost of the current model now vs the current model 10 years ago, the prices are probably about the same.

When you look at fixed goods, without the integrated technology, for example, a Trigger Sump....it is solely supply and demand. Nothing in the Emerald34 has changed since I bought mine 3 years ago. But send them an email and ask what their backlog is for a custom build. It will be immediately clear demand is outstripping supply, thus they can raise prices. However, the high prices of sumps and long lead times has allowed other companies to come in and offer cheaper sumps. So do you just want a sump, or do you need to have that Trigger sump?

For my tank, I chose an Iwaki MD40RLXT pump. This pump cost me the same today as it did 10 years ago. I specifically wanted an Iwaki brand and I chose to pay for it. I could have chosen Pan-World, same pump, but cheaper...this option did not exist 13 years ago.

In fact, i actually did look at the cost of building out my old 90 gallon tank equipped exactly the way I did it 13 years ago, and it is much cheaper today than then. But when I built out my new tank (110, same footprint), I chose to upgrade a few things and ended up paying a little more.

And my response ignores time value of money, which has basically been flat for the last 10 years anyway.

 

[Forsaken77]

The R&D point doesn't work for me unless it's a software inclusive device or a company that evolves new products to market, which is really just the controller companies.

Skimmers rarely change, sumps never change, I wouldn't really consider going from suction cups to magnets much money spent on R&D. Most products are a static thing that does a specific purpose.

The degree that most products change is very small. Basically there's very little R&D involved and more so a new coat of paint to make it appear different.

Also, if prices DID drop after a year or two, that would give a company like Ecotech or Neptune (another example) much more exposure to all walks of the hobby. Would you rather sell a few products at a high price, or many, many more with less of a return?

It's like the eBay philosophy... Selling millions of products with a low return makes much more money than selling a few at a high return.

There are a lot more hobbyists than people think. If you make it easier to get your products into as many hands as possible, while being a reliable brand, you will do better over the long term. Especially for company's with low R&D costs on products that rarely change.

 

[playapixie]

Small market. There aren’t very many of us. Aside from other reefers I’ve met through reefing, I have only ever had one other person I knew who kept a salt water tank. Hardly anyone buys a skimmer/controller/reactor/whatever...and when we do, we don’t often have to upgrade...

 

[jez]

As someone in the industry for the last 15 years I think with a lot of far east manufacturer prices have come down, certainly, the entry to buying a skimmer and lights is way lower than when I started in this hobby.

But rightly said if companies are going to bother to do the R&D and actually build stuff that pushes the performance in the hobby they need to know that that R&D cost is going to come back and make a profit for them.

As for access to the hobby with budget end products like Bubble Magus, Jaebo, Black box lights the cost of entry in my mind has never been lower and if you want to buy better you can these days the hobby has products at both ends of the price range.

As for the R&D cost argument not holding water at the higher end of the hobby Neptune Ecotech etc both brands I know well you have to say as products in those markets evolve nobody is really interested in the technology in an Apex classic or a G3 Radion even if you took out the R&D cost there would not be enough price difference to make people rush out and buy the older product. Unlike large volume consumer stuff, there are very little downstream manufacturing economies to be had as the volumes are just to low.

 

[L Sean Hubbard]

Only been in the hobby a couple years, but I feel like new products are always coming out. Of course by that token old stuff gets cheaper, but the fact that much of the gear we buy is designed to mimic some aspect of nature (be it light spectrum, flow, etc.), companies are always investing in R&D to make their stuff better. For ecaexam an AI Prime is technically cheaper now that the HD version is out. Probably the same with Kessil A150's no longer being as expensive since A160's came out (granted I only ever see used ones on ebay).

 

[Denn]

Im sure this is a combo of what we are willing to pay and price fixing. Compare the prices of simular products in the greenhouse industrie(lights) for example, a lot cheaper mostly and they do exactly the same. However we are made to believe that the €850 Radion is an absolute must for a succesfull tank.

 

[Forsaken77]

As someone in the industry for the last 15 years I think with a lot of far east manufacturer prices have come down, certainly, the entry to buying a skimmer and lights is way lower than when I started in this hobby.

But rightly said if companies are going to bother to do the R&D and actually build stuff that pushes the performance in the hobby they need to know that that R&D cost is going to come back and make a profit for them.

As for access to the hobby with budget end products like Bubble Magus, Jaebo, Black box lights the cost of entry in my mind has never been lower and if you want to buy better you can these days the hobby has products at both ends of the price range.

As for the R&D cost argument not holding water at the higher end of the hobby Neptune Ecotech etc both brands I know well you have to say as products in those markets evolve nobody is really interested in the technology in an Apex classic or a G3 Radion even if you took out the R&D cost there would not be enough price difference to make people rush out and buy the older product. Unlike large volume consumer stuff, there are very little downstream manufacturing economies to be had as the volumes are just to low.

Do you own a retail store? I get that Neptune is R&D'ing, but they also sell a slew of products to work on the apex. But they get a pass because they actually contribute to advancing the hobby.

Im sure this is a combo of what we are willing to pay and price fixing. Compare the prices of simular products in the greenhouse industrie(lights) for example, a lot cheaper mostly and they do exactly the same. However we are made to believe that the €850 Radion is an absolute must for a succesfull tank.

Excellent point!!!

There are certain items, the exact same item, that are used across different industries. The aquarium specific item is always more, by a lot.

But it's even when a company comes out with a new product, the old one stays the same price. Not every company or item applies, but it's the majority.

 

[Nickp]

As already said, a manufacturer or whoever is only going to lower prices if they have to or indeed are able to, if people pay then prices will stay.

Also like above, volume counts, reef keeping gear is always going to be niche, with volumes produced tiny compared to any other type of consumer electronic, so prices will be higher for that reason.

Also, look at the brands you mention, in general they are the premium/top end of the hobby, there is no need to have vortechs, or computer control, and the people who want them are generally happy to pay premium pricing. It's the same with any luxury item, look at apple for example (and yes i find all of there phones overpriced, even at reduced prices)

 

[alton]

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

Sure glad we are friends and can disagree, but in 2012 my company paid $1.62 a foot for 4" PVC, today that same PVC is $1.98. EMT was $.20 a foot, today it is $.37. Labor has gone up a bunch also, but yet the cost of a MP 40 remains the same or less.
MAP pricing good or bad? Well BRS could go to Ecotech and buy 1,000 units much cheaper than your local LFS and if there was no MAP pricing the LFS would not sell a one so there goes another sale he loses to the internet. We have so many post about supporting your LFS, but if there is something that benefits us and hurts our LFS oh well sorry? Supply and demand lowers or raises product pricing, example I wanted to buy another Mars -Aqua light and darn they went up to almost $100!
FYI Sierra the urchins you gave me are doing great.

 

[Forsaken77]

Sure glad we are friends and can disagree, but in 2012 my company paid $1.62 a foot for 4" PVC, today that same PVC is $1.98. EMT was $.20 a foot, today it is $.37. Labor has gone up a bunch also, but yet the cost of a MP 40 remains the same or less.
MAP pricing good or bad? Well BRS could go to Ecotech and buy 1,000 units much cheaper than your local LFS and if there was no MAP pricing the LFS would not sell a one so there goes another sale he loses to the internet. We have so many post about supporting your LFS, but if there is something that benefits us and hurts our LFS oh well sorry? Supply and demand lowers or raises product pricing, example I wanted to buy another Mars -Aqua light and darn they went up to almost $100!
FYI Sierra the urchins you gave me are doing great.

Has nothing to do with the volume purchased at the distributor level. The MAP is equal across the board, online and local. I just think products that are out a few years, or have been surpassed by a newer model should have some devaluation. But they rarely do.

Again, this isn't a thread on WHY things are expensive, but rather why they rarely devalue like most other industries.

People keep saying it's a niche hobby. Niche hobbies can have millions of consumers around the world. Just because they aren't posting here doesn't mean they don't exist. Every time I go into one of my 5 LFS's in a 20 mile radius, no matter what time of day, it's hard to find a sales person to help you because they're running ragged helping all the customers.

This applies to all marine tanks, like FOWLR, not just reefs. There's a lot of people in this hobby. Unfortunately, Coralvue controls most of what the average consumer would purchase.

 

[alton]

Only if you get rid of the MAP pricing then the competition becomes unfair to the small guy? Also are we just hung up on the Apple IPhone and the way it is $1,000 the first year and then the next it is buy one get one free? Now that is a messed up market, once again supply and demand. People will pay stupid prices for the latest greatest. I do agree with you about Coralvue and how they control a lot of items coming into this country. I wonder what David thinks when he looks back at his old company and how it went from Ballast/ Lamps / Fixtures to the giant Wholesaler it has become today.

 

[rob safron]

Not enough competition. There really is no exact competitor to things like apex.

 

[Elegance Coral]

There is one area where prices have come down, and continues to drop. That's captive propagated livestock. I paid $300 for my first pair of picasso clowns. Now you can pick up a pair for $50 if you shop around. All new strains of clowns are very expensive when they first hit the market. Two years later they're a quarter of that price. ORA red planet was $75 a frag. Now that more people are producing them you can pick them up for half that or lower.
The market for captive propagated livestock is cut throat. It's flooded with garage breeders, with very little overhead, that can under cut the big guys with all their employees and building expenses.

 

[declanisadog]

There is one area where prices have come down, and continues to drop. That's captive propagated livestock. I paid $300 for my first pair of picasso clowns. Now you can pick up a pair for $50 if you shop around. All new strains of clowns are very expensive when they first hit the market. Two years later they're a quarter of that price. ORA red planet was $75 a frag. Now that more people are producing them you can pick them up for half that or lower.
The market for captive propagated livestock is cut throat. It's flooded with garage breeders, with very little overhead, that can under cut the big guys with all their employees and building expenses.

You are absolutely right about livestock, however I feel like that side of things operates a little differently than the dry goods. It's pretty easy to buy a coral, propagate it, then sell it unregulated. same with fish. The more people that have them translates to more people breeding them. This is why so many people do it, and that is what drives down the cost overall. You don't see many people making skimmers in their garage, and selling them en mass because it isn't practical to do on a small scale.

 

[Greybeard]

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.

R/C Aircraft is another hobby where demand is low, and customer base is fairly wealthy. Just like Reefing... same sort of result.

Hockey? You have any idea how many kids play hockey? Parents struggling to get buy, but manage to get a new stick under the tree at Christmas? Same with most mass appeal sports. Far different market... and why is the $279 stick better than the $100 stick? This year's hockey hero's name on it, most likely

Low demand hobby equipment, in just about any hobby you might consider, is going to be expensive. Don't want to pay it? Switch hobbies, or do everything used, DIY, whatever.

Or, better yet, take up a hobby involving cars... racing, collecting, showing... That'll give you some perspective Yes, reefing is a bit pricey, but it's _not_ the most expensive hobby around. Ask someone with a sport pilot license

 

[LbulletM]

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.

But also has performance data recorder (PDR), standard dual mode exhaust (NPP), standard magnetic ride control (FE4), Apple/Android radio support, and the Z51 appearance package (the motivator for the changed wheels).

My '14 had to add packages for NPP and FE4 to get those. It was impossible to get PDR and Android Auto.

Still don't regret it.

 

[jasonrusso]

You are absolutely right about livestock, however I feel like that side of things operates a little differently than the dry goods. It's pretty easy to buy a coral, propagate it, then sell it unregulated. same with fish. The more people that have them translates to more people breeding them. This is why so many people do it, and that is what drives down the cost overall. You don't see many people making skimmers in their garage, and selling them en mass because it isn't practical to do on a small scale.

The only difference between here may be that livestock has a "life." A pump can sit on a shelf for 8 months, a fish costs money to keep on the shelf. When demand goes down, the item needs to be moved.