For those of you who work at an LFS, what would you say you sell more of?

Aquarium supplies, or fish? What keeps the business afloat, considering the high overhead costs?

 

Thinking about going into business?

 

Thinking about it. Small fish stores have been closing left and right up here, but I think a 'fish store' that doesn't sell any animals could work. :mrgreen:

 

IDK,my awesome family owned LFS(not mine,the one i went to) just recently closed after 30+ years of buisness....
It had always been just fish and supplies,then a few years ago went to only saltwater fish and supplies.....now its all gone

 

i work at a LFS we sell everything freshwater salt reef supplys for animals live food rats mice crickets ect.... we also maintain salt water tanks reef tanks ponds freshwater turtle tanks ect... busness is down about 65% this week we had to choose either to place an order for supplys for the store that we need or to make payroll i wouldnt go into it and our wholesale supplyer is really slow to

 

A LFS owner told me he made all his money in fish. Fresh water to be exact. Said ha had a 50% min profit. Another one told me they make most of their money in pond fish. Said they'd make more money on pond fish in three months than they would on salt water in a year.

I think different areas will make their money different ways though. Depending on the cost and demand of the things they're getting. Close to the ocean might make more on saltwater, and in cold areas like your might do better in supplies. IDK for sure.

 

My LFS makes all their money in livestock as well. With all the equipment, dry goods and even food being available for cheaper online now, it's hard to make any money at all off of that stuff in a brick and mortar store.

 

I don't know how any of them stay in business...I've thought about the margins and cost of running the business, I don't understand how they do it. Bottom line is that the majority of what they sell is between $20-$50...if the profit on a $50 item is $40.(just for conversation) you've still gotta sell a ton of product just to make ends meet. I just can't wrap my head around how they cover their costs.

Let me add this, the only person I've seen be successful at it runs a shop out of his garage. He owns the garage (no rent)..it's laid out just like a LFS. He advertises on CL, and send an email every 2 days with new product and pricing.

 

wher i work it was booming before this economy downfall

 

I think that the only way a person could be very successful at this is to cater to reefers who are sick of seeing the same thing at every different store. I personally frequent 4 stores, the only thing that is different is the prices.

If a person catered to a client who wanted hard to find and different species I think the store could be successful. The margins would be higher, because they're hard to find items, people would frequent the store because it would be known for it's hard to find livestock. Once you're known as the store that carries different things, with an immaculately clean shop, you might be able to have some success.

I'll give you an example. D2 has a orangish sponge in his large tank (kinda' shaped like a cactus). It's not a rare piece in his neck of the woods. But I've NEVER seen one at my LFS...These stores get stuck in a rut of buying the same thing over and over.

I work with an interior decorator on projects. She has a verbal slogan: "If you can't afford $30,000 for drapes, don't call me". She literally tells her clients that. It gets the tire kickers out of the way quick. She stays busy all year long, even in this economy. Why? Because people want to see what you get if you spend 30k on drapes. She doesn't have the Walmart mentality of sell more for less and work 80 hrs a week. She only sells product that makes her money. If it doesn't make money it doesn't make sense

Translate that to fish and it would go something like this.

"If you want a clownfish, don't come here"....I know it sounds kooky. But you're never going to make money selling clownfish, you have to differentiate yourself from the competition. The only way to do that is to basically tell people, "I'm only here for the serious hobbyist"

 

The biggest problem up here is getting equipment, food, and additives. I was thinking of trying the craigslist thing for awhile, fish the market so to speak. The biggest problem really is shipping. It just costs so much. I imagine you'd only make a few dollars profit per item, and probably not enough to cover business/rent costs. Especially since items such as pumps and skimmers are usually a one time long term buy.

 

I would just add, as a very well established business owner I would not recommend starting up a NEW business at this time. It is even harder for a non-established store to make ends meet during a recession. Right now well established stores are having a rough time of it and many are closing. If you are starting up a new business it takes approximately 3-5 years to begin to make any profit at all and more new businesses fail than survive. If you have a lot of working capitol and savings then go for it!

 

In my business class textbook it said that 80% of new businesses fail within the first 4 years -- for restaurants, it's even higher. That's incredible!

 

If you were to try and make a lil set up in your basement or garage yoiu mite succeed. Look at Diversden or Reefhotspot.com. Both have free shipping on orders over 225 dollors which wouldnt be to bad if you have customers already set up and equipment to store it all. you could also advertise on Craigslist, I see alot of people doing it already in Denver and i get alot of thins cheaper that way.

 

This is a hobby. The only money people spend on a hobby is expendable money that is have left over after all the bills are paid. There's not enough expendable money out there right now to support a store IMO. Wages are down. Profits are down. Costs are up. It don't make sense.

Most of you know that I fly RC airplanes. I gave up reefing to keep my airplanes. Couldn't afford both. Here's the joke in the RC hobby,

Q: "Do you know how to make a million dollars in the RC hobby?"

A: "Start out with 2 million bucks."

And it's the sad truth.

Invest your money in a CD ladder or low risk money market account and go back to school. The interest rates on school loans are very very low right now. You can make enough money off the interest of a CD to pay for the school loan.

Don't start a business where you are relying on the expendable income of other people. There isn't any expendable income right now.

 

I'm not one to rain on somebody's dreams, I agree with everyone's points...Here's what I always keep in mind.

Bill Gates started Microsoft in the middle of one of the worst recessions ever.

The business I'm in is based 100% on completely expendable income. 2009 was our biggest year ever. You've gotta know your market and go get them. The days of opening a door and having people walk in are over. You have to actively pursue your client. People aren't going to beat down your door. You have to sell. If you're not a salesman don't go into business.

 

So, target rich people.

They're the only ones with any money right now. :Cheers:

If you can get enough rich people to set up a saltwater tank and buy exclusively from you - you got it made. :mrgreen:

 

location location location

i used to be a bread vendor / distributor

during my training i ran plenty of routes to learn the ropes

one of the routes was in a very wealthy are the wallmart there JUST the wallmart made up 1/3 of that routes income roughly 10k in a week the distributor for that route makes 12 percent of the earning so he made about 1200 JUST on that wallmart

then i later went to go work at one of the worse routes in the south houston area , it had roughly about 16 or so stops during the week
which sold about 8K worth of product (thats all stores accumulated)

take home money for that distribut was about 900 or so dollars a week

so basically
LOCATION LOCATION LOCATION lol:mrgreen:

and yes i actually did run those routes when training to be a independent distributor :Cheers:

the first distributor take home money a week was about 3600


same company same product different location ...go figure

 

A LFS is categorized as a luxury retailer. They sell non-essential items that cost a lot of money. Opening a retail business that sells luxury items during a rather severe recession is a bad idea. Even when the economy is good, small businesses die at a high rate.

We have a marine-only LFS in my area and they have done "okay" during the recession. A great deal of their setup is DIY. They built their own light fixtures, their own plumbing system. Put together filtraiton systems themselves. It was a huge amount of time but they saved a lot of money on their initial investment. I would guess that if you just bought all the equipment you need --off the shelf-- for a LFS with little DIY setups --you wouuld never make your money back. Many successfull small business were built on a great deal of labor and hours that you never really expect to be compensated for. How much time do you have?