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

[declanisadog]

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.

Very true

 

[Porpoise Hork]

Unlike other hobbies, the hardware we buy typically lasts us for years. Even the cheap brands like Jebao if given regular maintenance can hold up well to the saltwater environment. So generally speaking we are not upgrading equipment annually or anything like that. As such the vendors know that in order to remain profitable they need to price their products in such a way to compensate for the lower sales numbers compared to other brands. Also for higher end products they actually do a fair amount of R&D on a product so they can achieve a set goal. This also adds a fair bit to the overall cost of production. Add the ever increasing costs of materials, wages, marketing, distribution, etc. and you can see how the costs of products for our hobby or any for that matter never seem to get cheaper.

Now if a company would come out with high quality hardware that is in direct competition with the top brands then prices would come down to some degree as competition spurs better pricing for the consumer.

 

[SciGuy2]

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

A: Because they don't have to.

 

[ca1ore]

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

I'd suggest that your generalization is incorrect. Had you added 'mass market' before the word industry, then yes, I'd agree. Mass market is the key. Small, enthusiast based industries simply don't have the economies of scale of their more popular brethren; and they typically have consumers with high thresholds of 'willingness to pay'. If you look at the flat panel TV market, for example, constant dollar prices (adjusted for inflation) are less than 1/10th of what they were when panels first came out. I paid almost $2K for a 32 inch panel a decade ago (maybe even longer than that) that would cost me, what, $200 today. But, more flat panel TVs gets sold in a day than Neptune sells controllers in a year. Apples and aardvarks.

 

[jason.kennedy.98478]

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?

Inflation

 

[srad750c]

Credit cards, if you had to pay cash for everything you bought, you would be more conservative and as a result prices wouldn’t be so high. I try to buy high quality used equipment first. I always buy a new tank but other stuff I look for a deal. I only buy new as a last resort unless it’s on sale. It’s all about supply demand. If everyone held out for a while, prices would drop. Just my opinion.

 

[Forsaken77]

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

It's not about the cost of the hobby. The point was the fact that most every piece of equipment you buy does not devalue over time or even when its been replaced. This isn't another "everything is to expensive" thread. That's why I stated that in the first sentence, because I knew it would eventually get there. The "pick a cheaper hobby" doesn't apply to this thread because that's not what it's about.

In fact, I would say it's more part of the pet industry than a hobby. Most average people set up a saltwater fish tank for the fish and inverts, not because they love maintaining it. They do it for the animals they can keep, not the equipment they want to buy. I wouldn't call owning a dog or cat a hobby either, even though each requires specialized care (going to a vet) like a fish tank.

I wouldn't even call it niche. When there's millions of people around the world with marine pets, it's not so niche. Maybe owning an Apex is niche, but not the owning of marine animals. This also applies to freshwater, aquariums in general. And there are way more freshwater owners that would push it well out of the niche category.

Just wanted to clarify that it's not about the cost of the hobby, but rather why items don't go down in price when manufacturing costs decrease. Usually that's passed onto the consumer.

I apologize if any of that appeared rude, it wasn't intended that way and it's impossible to tell tone through a text or post. I just had surgery and haven't slept in a few days, so my choice of words could've probably been better.

 

[Forsaken77]

Inflation

So inflation is the reason that a 5 year old Reef Octopus skimmer, with all of the same parts, has remained at the same price over 5 consecutive years even though the skimmer has become cheaper to manufacture?

I can see why inflation would make prices rise on newer products, but why would it keep older products from devaluing? Everything devalues as newer items succeed it. But it doesn't happen here. It happens with other pet products, but I think this is something to take notice of.

 

[tastyfish]

Inflation will always drive pricing higher. As vendors innovate, their products will demand a higher price as the value to the customer is greater. New entrants will come in and the market commoditises. Look at the effect BubbleMagus, Jebao, CoralBox etc have had.

Actually, I'd say there is probably a bigger range of decent equipment at lower cost now, than there was when I got into the hobby.

BUT, you as a customer need to do your research, not take the accepted route of following the sheep and buying XYZ brand.

 

[Forsaken77]

I'd suggest that your generalization is incorrect. Had you added 'mass market' before the word industry, then yes, I'd agree. Mass market is the key. Small, enthusiast based industries simply don't have the economies of scale of their more popular brethren; and they typically have consumers with high thresholds of 'willingness to pay'. If you look at the flat panel TV market, for example, constant dollar prices (adjusted for inflation) are less than 1/10th of what they were when panels first came out. I paid almost $2K for a 32 inch panel a decade ago (maybe even longer than that) that would cost me, what, $200 today. But, more flat panel TVs gets sold in a day than Neptune sells controllers in a year. Apples and aardvarks.

I would argue that maybe owning an Apex is niche, but not owning a fish tank, either fresh or salt. Both sides make up a huge combined market that have manufacturers that make products for both.

The average consumer isn't looking to buy high level gear. They buy what's affordable and what gets the job done. Very few LFS's sell an Apex unit because that's to niche. But we're talking industry wide, not just high end equipment. As an example... Fluval used to sell the 404 canister filter. And fluval is a household name in the freshwater world. That 404 filter was the same price even when it was discontinued and succeeded by a new unit of a similar price point.

I think the argument that fish tanks in general are niche is simply not true. It's a global pet industry. Think about it... If it was so niche, we wouldn't have Marineland around forever making tanks. We wouldn't have the Microsoft of the aquarium world, Coralvue, being able to dominate in every part of the industry, which is still a pet industry.

Those two companies are making money hand over fist because they control what most average consumers purchase. Here may be more niche, because we talk about new, and high-end, products. Buy fish tanks are not a global niche imo.

Just my opinion.

 

[Forsaken77]

Inflation will always drive pricing higher. As vendors innovate, their products will demand a higher price as the value to the customer is greater. New entrants will come in and the market commoditises. Look at the effect BubbleMagus, Jebao, CoralBox etc have had.

Actually, I'd say there is probably a bigger range of decent equipment at lower cost now, than there was when I got into the hobby.

BUT, you as a customer need to do your research, not take the accepted route of following the sheep and buying XYZ brand.

Yes, but we're talking about older products, not newer ones.

 

[ca1ore]

I would argue that maybe owning an Apex is niche, but not owning a fish tank, either fresh or salt. Both sides make up a huge combined market that have manufacturers that make products for both. Just my opinion.

The examples you used in your original post, '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', led me to believe you were talking about the narrow slice of tank ownership that is reef-keeping. As a point of clarification, one comment is factually incorrect because ETM did take a substantial price decrease on their Vortech pumps around the time they introduced the QD models. Regardless, we may have to agree to disagree on whether the entire aquarium hobby is niche or not niche. Compared to my TV example before, the aquarium industry is most certainly niche; though I take your point that considered in it's global entirety, its hardly a small industry.

Your observation about Marineland is an interesting example. I've no idea what their prices have been over time, and whether in inflation adjusted dollars their tanks are less or more expensive today than in the past. What is perhaps more to the point is that many/most of the 'mass-market' tank builders have struggled financially and/or gone out of business; suggesting that their margins are not robust enough to withstand price declines. Although now owned by ML, the tank building business used to be Perfecto which, if memory serves, was about to go under before ML bought them.

Another point I would make is that, in reef-keeping at least, the brands you note are at the top end of the markets and price 'decreases' have generally appeared in the form of more budget gear from companies have been able to offer lower prices because they have little consideration for IP. Part of me is surprised that a budget controller has not appeared as a cheaper alternative to the Apex - though perhaps the complexity makes it less appealing to the IP thieves LOL.

Lastly, while the pinnacle implementations of the fish tank (reefs, planted tanks) are expensive; most other tanks are not - whether niche or not niche. Tanks can be had for $1/gallon, and filters for under $20.

Anyhow, interesting debate.

 

[tastyfish]

Yes, but we're talking about older products, not newer ones.

Ok, but consider that with positive inflation, costs are not going to go down. So therefore prices are unlikely to fall on new products to market. The only exception is competition.

When you look at older products, the Apex Classic has recently dropped significantly in price. Arguably because the newer, "better" 2016 model is now established and the classic is seen as less current.

Take computers. The price of the latest Macbook or ipad doesn't fall until a newer version replaces it, or a competitor launches or drops the price of a similar product.

 

[RichReef]

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.

Exactly.

Expanding the hobby is key. These companies need to fire their marketing teams, if they even have one.

There is no way in hell a fish tank should cost more than my race car. But it does and nothing you can say or explain will change that fact because if you think there is more R&D in this hobby than in that one you are seriously mistaken. There is no significant R&D in this hobby. Nothing that I have seen is a major breakthrough. Nothing.

 

[mcarroll]

once it gets cheaper to manufacture

Do the costs on things keep going down?

If not then prices going down only forces some dealers out of business when sales*margins become inadequate.

In fact it's probably more true that if you see prices going down somewhere it's because someone in the industry is trying to force someone else out — it's called a price war. It feels good to get a deal, but it's not a healthy trend.

 

[Greaps]

If it was in their interest to lower prices for any reason they would. They will when the time comes. Market forces generally dictate prices. Its not a conspiracy.

 

[Aardvark1134]

Well one of the reasons is advertising. Vendors are pushing those brands hard. Example what is the difference between a $50 power head and $300 power head? The $50 one works better and holds up better while the $300 one has some feature that a vendor convinced you that you must have and breaks 1 month after the warranty ends.

 

[Makomek]

Exactly.

Expanding the hobby is key. These companies need to fire their marketing teams, if they even have one.

There is no way in hell a fish tank should cost more than my race car. But it does and nothing you can say or explain will change that fact because if you think there is more R&D in this hobby than in that one you are seriously mistaken. There is no significant R&D in this hobby. Nothing that I have seen is a major breakthrough. Nothing.

You're right R&D in this hobby is a joke compare to others. It just most of these company in this hobby are greedy and want max profit out of every piece they sold especially those with MAP price where retailer will make a big chunk out of it, Example is the Red sea tank where retailer make 25%
if the customer pick up the tank at the lfs. MAP price is like going to the dealer and buy a car at MSRP. I'm sure all these company with MAP price are holding hands.

 

[mcarroll]

Tunze gear has gotten cheaper. 6045's and 6105's, for some popular examples, seem downright cheap. And these guys at least do SOME real R&D. I suspect if we all teamed up we could think of a few more good examples like these guys.

@RichReef what car and class do you race? There's a very good chance that the auto industry is paying for the lion's share of your R&D. Companies like Rahal who do R&D are on a whole other plane compared to a hobby like ours. And who pays THEIR bills?

@Makomek LFS's dont make much on those red sea kits...red sea takes the lions share. They do way way better if you buy a system sourced by them. (So should you.)

 

[RichReef]

what car and class do you race? There's a very good chance that the auto industry is paying for the lion's share of your R&D. Companies like Rahal who do R&D are on a whole other plane compared to a hobby like ours. And who pays THEIR bills?

Super Street NHRA. I pay for everything. I'm positive that the Big 3 aren't paying for Edlebrock, Holley, Demon, Dart, Morosoo, ect, ect, R&D.

I build transmissions for a living and see first hand the technology advances in the auto industry.

My point is there have not been any major breakthroughs since the LEDs and they weren't even invented by the industry. They just rode the backs of GE.

Skimmers, same.
Sumps, same.
Heaters, same.
Power strips, same.
Lids, same.
Lights, same.
Plumbing, same.
Overflow, same.
Pumps, same.
ECT ....

It's like Call of Duty. They keep selling you the same thing with different skins. Same old game.

I should just ask ....... Show me. Show me some technology I have not seen already. Something new.

If they made things more affordable more people would enter the hobby. More sales for everyone. I have quite a few friends who love my tank and want to do it, even just a fowlr, until I start telling them how much this was, that was.