LFS going extinct?

[seth the wine guy]

I'm really glad to see the response here supporting LFS. I was worried given the fact that only 10% of my build came from LFS. (I purchased two AI units from a store here. They were the only ones stocking them at the time and while I could have gotten them online cheaper, I appreciated the fact they had they on display for me to see.) Everything else came from online/out of state vendors or other ARC members.

I had gotten estimates from two different LFS before going the route I did. I ran into two extremes. One was trying to sell me marginal quality equipment at super inflated prices. The other was terrible about returning emails, phone calls, or showing up on time. I couldn't give them my money no matter how hard I tried. (I'll start a thread in the rants/complaints forum when I have more time to waste about all that)

So, I just ended up cherry picking the internet and ARC FS threads. Glad I did. I literally got five times the system I would have gotten otherwise.

I continue to run into the same extremes now. While sourcing livestock I'm either getting my head knocked off with the price or can't get any service. I sent an email to two different LFS looking for very specific creatures. I got a response from one and the price was exactly 2-3 times what I would pay at Live Aquaria and the other didn't respond at all. I actually went into the store that didn't respond today. I come to find out they had ordered some very high-end fish I was inquiring about and ran a sale/special on them. They had one pair left of what I was looking for. Although the price was right, I didn't like the fact that I had sent an email to them specifically asking for this product and got no response. There is no question I would have bought these fish had I been contacted. I would have gone in, seen the few different pairs available and picked the one I liked. Instead, I walk in today and see there is one pair left. (I don't know about you but I don't like the idea of getting last pick. Especially when its at super premium price points.)
So, I walk out with a $15 courtesy purchase instead.

I was really scared to purchase livestock online. Finally, a couple weeks ago, I mustered the courage because the deal was very good. (Same exact fish at the LFS was $75 with tax. I got it from Live Aquaria for $35 total. I paid zero shipping because it was a mini group buy that resulted in no shipping cost) The fish is a beautiful healthy specimen. Doing great in the QT eating and acting very normal.

I guess we all have our own reasons for being in this hobby or shopping at a LFS. Personally, I don't go to the LFS to shoot the breeze, yuck it up, or look for friends. I go for product and information. The entity that can most efficiently deliver those things to me at the best price will get my business. (I don' go to the bar to talk to the bartender. I go for what he's pouring.)

I guess I've learned something here that's broadened my perspective and makes me rethink my initial assessment as to LFS viability. There are a lot more people here voicing their affinity for the social interaction perspective than I would have expected.
I have met a ton of ARC members through buying and selling things on the forum. I have made so many coral purchases through this route. It's wham bam, thank you ma'am stuff. If I like the person, we chat for a bit. If not, money and product is exchanged and on my way.

To be continued....

 

[umbrellacorp]

i bough the majority of my stuff from my LFS. Even though i could have ordered the supplies online for a lot cheaper. I still buy minor things from them (when they have it in stock,) and i buy my livestock from them. The only thing i *never* buy online is livestock. I hate the idea of them being shipped in a box for 24+ hours to get to my house.. even though their prices are better on the livestock you still have to pay a ton for their next day shipping prices as well.

 

[seth the wine guy]

UmbrellaCorp;675174 wrote: I hate the idea of them being shipped in a box for 24+ hours to get to my house..

The LFS has to get them the same way we do. Only way to avoid that is get locally tank raised.

 

[jennm]

Interesting thread

I don't believe the LFS will ever disappear - or I'd be in the wrong business. I do believe that competition and the online market will prune out the stores that don't offer a certain level of service though. We've already seen that around here in the last 10 years or so. I've lost count of how many stores have come and gone, and/or ownership has changed. It's not an easy business, even in good economic times. Never thought I'd be one of the longest-timers in this area, but I can only think of a couple of owners locally who have been in the biz, in the same store, longer than me, and I've ONLY been around for just over 9 years.

Did *any* of you get into the hobby because of a website/etailer? Doubtful. Most people see a tank, either in a commercial setting (doctor's office etc.), through a friend (residential setting) or in ..... an LFS! I also doubt that most people get started online exclusively, or some other way, without *some* visits to the LFS.

LFS survived just fine before the Internet, but can etailers of aquatics supplies survive without LFS? Methinks not. If the LFS disappear off the map, then the etailers will too.

Some folks of my acquaintance in the industry have referred to etailers as "parasites". They feed off the LFS customer. I'm not sure I'd agree with that strong statement but I do believe that without LFS, the etailers wouldn't have any clientèle.

By and large, only a small percentage of consumers shop online - not just for aquatics stuff, but in general. That number increases each year, but the last stat I heard quoted (and I don't remember the source) was that about 4% of consumers shop online. That leaves 96% of the population still going into a brick and mortar store to buy whatever it is they want/need.

In a club such as this, there is a much higher concentration of people who will use online retailers/trading/selling among peers, than there is in the general population. And club membership/forum membership only accounts for a small percentage of the overall number of hobbyists in the area. So even a poll like this here, doesn't necessarily reflect real world numbers.

What I do find interesting is that patrons of LFS expect (and rightly so), a level of service, and knowledge from the store they frequent, yet when clicking to buy, there is seldom any interaction with a real person. When one clicks to buy a fish/living thing... is there ever a live person asking if this purchase is appropriate for your system? Nope - the onus is 100% on the consumer to be responsible for his/her choice.

Yet over the years I've seen tons of threads slamming LFS for "allowing" people to buy things that were totally inappropriate.

Another kicker is when somebody comes in, kicks the tires, picks our brains, collects all kinds of information - which we are happy to do since that is what we do - *serve*, and then they turn around and buy online. It comes with the territory, but it's kind of crappy when we did the work to earn the sale and don't get the benefit of the sale. Happens a lot, unfortunately. And sometimes, price isn't even discussed - the assumption is that we'll be more expensive. Sometimes people have learned after the fact that it wouldn't have been.

Another kicker is when somebody buys something online, and it malfunctions and they come to us to repair/replace/exchange it. I have had occasion to volunteer to clean up an etailer's mess (when they refused to make it right)... but it really isn't good manners to expect the LFS to take care of another's business - but it happens more often than you might think. After all it's a hassle to ship it back and wait for another (and possibly have to pay for return shipping...) IF we help out, we hope we've earned the customer's business - sometimes yes, sometimes no.

When one checks out a dry goods order, does anybody ask if you're testing for that parameter to make sure you need that product? Or ask what sort of system you have, to make sure that product is appropriate?

No, of course not - but a good LFS should, and usually does. And we're expected to.

As for costs - somebody else pointed out earlier that there's a large difference between warehousing or even drop-shipping merchandise, versus maintaining a retail outlet. Just the difference in rent is huge. Drop-shippers don't even have to keep merchandise warehoused - so they have no inventory overhead.

Two totally different business models with totally different overhead costs.

Another interesting comparison is how the LFS is expected to have a level of cleanliness, no dead fish floating etc., (again - rightly so), but when you buy online, you have no idea what the systems/facility looked like, where your purchase came from. LiveAquaria DD stuff of course, comes from their WI facility, and nobody is questioning that, but stuff out of LA comes from a wholesaler, and many other etailers drop-ship out of LA wholesalers. You don't know how long the fish had been landed, what kind of conditions it was in, how many in the shipment died, etc... So you're really taking a leap of faith in many instances. And particularly with corals - there's always the issue of things not appearing like they did in the photo... that's always a hot topic.

Of course I'm biased toward the LFS since I own and operate one. I had occasions to order online before I got into the business, livestock was a nightmare. With dry goods, the site I used at the time (which went dot-bomb), would entice me to order more: "You can add X more lbs for the same shipping fee." Result: I ended up spending more than I needed to to "save" on shipping. Did I really save? No, because I ended up with surplus stuff. The psychology worked!

The same psychology applies with "free shipping over $X ordered" How many of you have ordered extra stuff, just to make the free shipping?

Bottom line - this is the 21st century. It is what it is - the Internet and etailers aren't going to go away any time soon. As a brick and mortar, the best I, or anyone can do, is try to provide the best level of personal service to our valued customers as we can, and hope that this encourages them to keep coming in and putting bread on our tables.

Jenn

 

[grouper therapy]

To Jenn ,What percentage of your walk in clientele are ARC members before they come in for the first time?

 

[jennm]

I haven't tracked it that closely, but not as many as you might think. On the flip side of that there are a number who present a valid card or receipt, and when I ask their screen name, they'll say, "Well it's .... but I never post."

Given the number of members, to the number of clients in my database, it's really only a small fraction. Plenty of them do peruse online sources of information, but not that many are actually active in a forum, compared to the number of clients that are out there.

What I can tell you is that out of my top 10 customers this year to date, in terms of spending, 6 are maintenance customers. None are ARC members that I'm aware of. The others are all very hands-on hobbyists. The maintenance end of the business won't die to "online sales", in fact, our calendar is pretty full right now.

Out of my top 10 of all-time, 8 are or were maintenance customers. My biggest spending customer of all-time passed away in June, but the next closest one will probably take a couple or three more years to surpass her. My top spender was not a maintenance customer but we did work on her system from time to time.

That's only a part of the bigger picture though. While it's nice to have big-ticket customers, and maintenance keeps the cash flowing when walk-ins are slow, the people that pay the bills around here are the typical hobbyist buying this and that, on a regular basis. They might not spend a lot at a time, but that's OK. It's having enough people willing to come in and spend $20-50 now and then on what they need and want, that keeps the lights on and the doors open. The big-ticket customers are fewer and farther between, than the regular customer who comes in 2-4 times a month for a little something, or to ask a question, and they tell their friends, who in turn come in, and spend a little something.

Those small tickets are the ones that really add up.

At the end of the day, it takes a combination of different kinds of customers to make the thing work though. And for a customer, he or she needs to feel valued and appreciated at any business they frequent, not just the LFS.

These last few years have been particularly difficult for businesses that provide goods and services that are luxuries. Extras like aquariums are among the first things that people cut out of their budget when times are lean. Even the folks that have kept their tanks going, aren't spending as much as they used to, and many are doing just what is needed (or not even, in some instances), and I can't say that I blame them.

The pressure from etailers has been felt across the board. One complaint that many LFS owners have, is that some of the manufacturers and wholesalers are selling direct to the public at wholesale prices - so we can't compete, even if we wanted to. I don't blame anybody for saving money where they can, I'm as frugal as the next person. It really stinks to see manufacturer X selling to the public for less than I can buy it from the distributor for.

Just keep in mind that when you pay the same, or just a bit more, locally, for what you're buying, whether it's fish-related or otherwise, if you shop with a local independent, 68% of your money stays in the community. If you shop at a chain, only 43% stays in the community. Shop online (out of state, for example), and 0% stays in the community. Those stats are from the http://www.the350project.net/home.html">3/50 Project website.</a> Consider the value added in personal service - staff in the store who know your name, ask how that sick relative is doing, follow up on that last fish you bought, takes care of a warranty issue without any hassle or questions asked... there *is* value in that far beyond the dollar value of the item.

Jenn

 

[jholt1]

Hey is the a good lfs here in town? I am in Buckhead there don't seem to be many choices without driving pretty far.

 

[redstang]

jholt1;683375 wrote: Hey is the a good lfs here in town? I am in Buckhead there don't seem to be many choices without driving pretty far.

What do you consider far? And good ones are worth driving to IMO. I've spent most of my time at Pure Reef in Alpharetta and have been very happy with the livestock and service. I've also had the opportunity to visit JennM's store Imagine Ocean in Canton and wouldn't hesitate to go there if I didn't work so close to Pure Reef. Jenn WILL get some of my business one of these days though!

I'm not familiar with the ones ITP though. PR isn't THAT far away!

 

[diesel]

I know that I am new to this forum, but with in the past several months I have supported LFS around and plan on supporting them only. I have gotten to know a couple of them well, and have good experiences with everyone I have been in.

 

[grouper therapy]

JennM;683336 wrote: I haven't tracked it that closely, but not as many as you might think. On the flip side of that there are a number who present a valid card or receipt, and when I ask their screen name, they'll say, "Well it's .... but I never post."

Given the number of members, to the number of clients in my database, it's really only a small fraction. Plenty of them do peruse online sources of information, but not that many are actually active in a forum, compared to the number of clients that are out there.

What I can tell you is that out of my top 10 customers this year to date, in terms of spending, 6 are maintenance customers. None are ARC members that I'm aware of. The others are all very hands-on hobbyists. The maintenance end of the business won't die to "online sales", in fact, our calendar is pretty full right now.

Out of my top 10 of all-time, 8 are or were maintenance customers. My biggest spending customer of all-time passed away in June, but the next closest one will probably take a couple or three more years to surpass her. My top spender was not a maintenance customer but we did work on her system from time to time.

That's only a part of the bigger picture though. While it's nice to have big-ticket customers, and maintenance keeps the cash flowing when walk-ins are slow, the people that pay the bills around here are the typical hobbyist buying this and that, on a regular basis. They might not spend a lot at a time, but that's OK. It's having enough people willing to come in and spend $20-50 now and then on what they need and want, that keeps the lights on and the doors open. The big-ticket customers are fewer and farther between, than the regular customer who comes in 2-4 times a month for a little something, or to ask a question, and they tell their friends, who in turn come in, and spend a little something.

Those small tickets are the ones that really add up.

At the end of the day, it takes a combination of different kinds of customers to make the thing work though. And for a customer, he or she needs to feel valued and appreciated at any business they frequent, not just the LFS.

These last few years have been particularly difficult for businesses that provide goods and services that are luxuries. Extras like aquariums are among the first things that people cut out of their budget when times are lean. Even the folks that have kept their tanks going, aren't spending as much as they used to, and many are doing just what is needed (or not even, in some instances), and I can't say that I blame them.

The pressure from etailers has been felt across the board. One complaint that many LFS owners have, is that some of the manufacturers and wholesalers are selling direct to the public at wholesale prices - so we can't compete, even if we wanted to. I don't blame anybody for saving money where they can, I'm as frugal as the next person. It really stinks to see manufacturer X selling to the public for less than I can buy it from the distributor for.

Just keep in mind that when you pay the same, or just a bit more, locally, for what you're buying, whether it's fish-related or otherwise, if you shop with a local independent, 68% of your money stays in the community. If you shop at a chain, only 43% stays in the community. Shop online (out of state, for example), and 0% stays in the community. Those stats are from the http://www.the350project.net/home.html">3/50 Project website.</a> Consider the value added in personal service - staff in the store who know your name, ask how that sick relative is doing, follow up on that last fish you bought, takes care of a warranty issue without any hassle or questions asked... there *is* value in that far beyond the dollar value of the item.

Jenn[/QUOTE]
I was thinking how many members we have due to the lfs efforts to recruit members is why I ask. I know you have put a lot of effort into that.:up:

 

[jennm]

One can lead the horse to water... not everybody is interested.

One other thing I forgot to mention... many of my customers are small business owners, or work in a small business setting. I don't think it's a coincidence that a lot of people who are in small business, choose to support small business, even if that means paying a bit more from time to time. We're all in it together, so we all need to stick together!

Jenn

 

[grouper therapy]

JennM;683464 wrote: One can lead the horse to water... not everybody is interested.

One other thing I forgot to mention... many of my customers are small business owners, or work in a small business setting. I don't think it's a coincidence that a lot of people who are in small business, choose to support small business, even if that means paying a bit more from time to time. We're all in it together, so we all need to stick together!

Jenn

sho nuff

 

[seamonkeychar]

I think it's terrible that LFS are going as far down hill as they have. I've worked for a few LFS, and loved it, but like a PP said, locally stores seem to open, go downhill fast, and close up shop pretty quickly. I'd love to see one last inside the Perimeter.

 

[jennm]

There are lots of reasons why LFS, or any other kind of business, fails. Just because one is an accomplished hobbyist, for example, doesn't make them a savvy business person. When I started in the trade, I worked for somebody else. Learned tons about husbandry etc., but he didn't have a clue how to actually run a business, and it didn't last. You can't put every dollar that comes through the register, into your pocket... that money has to re-stock the shelves and tanks, pay the electric and water bill, pay the rent, the taxes and the staff... and *IF* there's any left... then the owner. Prices are what they are to cover those expenses, many of which remain the same, whether the store has good sales or not. Fixed costs are what they are regardless of whether it's a good month or not.

These days with so much competition from etail, as well as the state of the economy, it's a tough balance to charge enough to pay all the fixed costs, and the variable costs like replacing sold inventory, and still have enough left to live on, all the while trying to provide the best level of service and the most competitive pricing. Anybody who has either owned a small business, or has worked in one, can attest to that.

"Going downhill" can simply mean that there wasn't a solid business plan in place, or the plan that was made, didn't end up coming to pass, if projections were wrong, estimates were wrong, circumstances changed.

If it was easy, everybody would do it. Believe me, it's not easy.

Jenn

 

[seamonkeychar]

Of course it isn't easy, I never said it was. As I said, I've worked for LFS before. Every time one opens locally I root for them. I didn't mean that reply as snarky, I would genuinely like to see one remain open. I'd love to have a good, stable LFS to go to, one with good service and sensible stock. It's looking like I may be moving to Woodstock or Canton soon, so maybe things will improve for me in that department.

 

[jennm]

I didn't think your reply was snarky .. not in the least. Just adding to the discussion is all. I've seen quite a number come and go in the last 11 years or so, including the one I worked at, which I mentioned. That store could have done really well, had the owner applied a bit of common sense instead of pocketing every dollar that came in. It stinks to work in a saltwater LFS and have to send customers down the road to Petco because there wasn't a bag of salt to be had in the shop.

I can tell you this - I've worked in small and medium sized businesses my entire working life, and I learned more from that place, about how NOT to run a business...

Jenn

 

[atlweb]

Fish stores will always be a necessity IMO. I made the mistake of ordering equipment online and then having to pay $100 to ship it back when I was unhappy with it.

Dealing with someone locally who can offer advice, take things back / replace items easily, and provide a haven where I can purchase things I see and touch in real life, makes it worth spending the extra bucks every time IMO.

ps: where else would I go every Sunday afternoon? Nothing beats a stroll through the LFS.

 

[acroholic]

anomaly;688226 wrote: I buy everything online, but I also live in a far smaller city leaving me little choice. There is no LFS around here. When there was a local store, the fish were twice the cost of liveaquaria and no warranty. It was easier for me to order from them, cheaper, and I was given a 14 day warranty.

I do wish I had an awesome LFS around here though.

I'd do the same thing in a similar situation.

 

[rdnelson]

Seth The Wine Guy;674049 wrote: So how much longer do you really think they'll be around? As the market becomes more competitive and online retailers become more trustworthy, I don't see how there is any long-term viability for the current business models most commonly found.

I too am a contractor and I remember how all suppliers and contractors were up in arms because Home Depot moved into town. How were we going to compete against that???? Well, the answer was, we adapted and we overcame. We may not get the small little repairs that we used to get but people still need a contractor to do bigger jobs. The LFS are the same. Yes, this economy is tough for them but the good ones will survive I hope. I try to buy locally before on-line if I can. Would rather see them with my money than some huge conglomerate. Price is always a factor though. Wish it wasn't but......

 

[seth the wine guy]

rdnelson99;688553 wrote: I too am a contractor and I remember how all suppliers and contractors were up in arms because Home Depot moved into town. How were we going to compete against that???? Well, the answer was, we adapted and we overcame. We may not get the small little repairs that we used to get but people still need a contractor to do bigger jobs. The LFS are the same. Yes, this economy is tough for them but the good ones will survive I hope.

I wouldn't say it's an accurate analogy. When Home Depots came to town the abundance of mom and pop hardware stores completely disappeared. Same goes for sporting goods stores, electronics stores, and the list goes on. That's comparing retail outlet to retail outlet.
(If anything, I think Home Depot has improved our business by increasing awareness of home improvement opportunities and overall target marketing.)
Since this hobby doesn't have a market share or commonality large enough to justify a "Big Box" retail chain, it does provide the perfect niche for the emergence, and even potential dominance, of an e-tailer with profit margins for this hobby being well above the retail average.

Even the top 5% off all LFS in the country don't do a large volume by retail standards. They MUST maintain high margins to sustain profitability. Costco is the Gold Standard of how large volume can be enormously profitable with next to no margin. (Less than 3%) Yet they have some of the best pay and benefits for their employees of any large retailer. (Most cashiers make $40k+ per year)