More of a revolving door than a fast growing market

[snowmansnow]

Before anyone reads this, understand that this is just my opinion, and I'm not bashing anyone. I don't have anything against any sponsors, or anyone else, and will continue to support them as long as I can afford it.

I'm currently between tanks, and it gives me a platform to see things in a light I couldn't while in the throws of a reef tank.

If you don't mind a long post then read on.
________________________________________________________

____Seth TWG made a comment in another thread that the reef hobby is more of a revolving door than a fast growing market. The thread was concerned with a price drop with Ecotech pumps.

I DO AGREE with the statement, but it is unsettling. If this is true then as aquarists revolve out the market will starve as the left over won't be able to support the companies that are asking crazy high prices for their products.

Without an adequate influx of NEW people into the hobby the only option will be for companies like Ecotech to finally drop prices, and do it dramatically. Otherwise, the hobby won't survive.

Honestly, why in the WORLD is a MP40 worth $375? It is because they SAY it is. It isn't complicated, it isn't built particularly well, and it doesn't take a lot of RD to develop it.

It won't be long before someone sees what is happening, takes the bull by the horns, develops a line of products that is just as good but substantially cheaper, opens a store and drives these companies out of business.

Really, I think it could happen right now. Take the actual aquariums for example. I've been shopping for tanks and am floored at how MUCH a good aquarium costs. I'm not knocking any sponsors, or anyone else, and realize there IS overhead BUT.... I was quoted almost $2,000.00 for a 48x24x16 tank. Seriously? At that price this company will grab a SMALL percentage of the market. I realize you do pay for quality, but let's make a quality tank that size, charge $4 or $500 dollars for it, give it a few years for the word to spread, and grab a HUGE market share. Its a few slabs of glass glued together... not rocket science.

Another example is the skimmer "industry". I have a BK200 mini and paid a lot of cash for it because I wanted the best, but realize that someone with the correct tools could do the SAME exact thing for half or a third of the price, and before you know it most everyone in the hobby would have one.

Here's the point of the whole thing. In order for the hobby to survive long term, and ultimately to grow past the slim % of people who can afford to stay in it long term, companies will HAVE to make some changes.

Although the hobby has been around a while, I still think we are in the boom of technology for it, and companies are charging whatever they want because no one else has the tech... but this is changing.

Online superstores WILL drive premium stores out of business despite the few of us who are loyal to LFS, if someone doesn't "get it" soon.

I'm looking forward to the day when I can get the something that performs like a BK200 for $400. A great tank for <$500, a stinking water mover for $200, and lights (seriously... its just light) for <$300.

Right now "you get what you pay for" may be true, but the days be companies being able to push that is coming to an end fast, and they had better see the big picture or they will be finding another budding hobby to own a timed monopoly on.
_____________________________________

 

[rdnelson]

I agree completely. And would add, state of the art isn't always a requirement. It may make it easier but I have seen many nice tanks without state of the art equipment. To some, having those items is a "necessity" just like having a BMW. To others, getting to and from work comfortably in a decent looking car is fine without paying a premium for the status and perks of a high end car. JMO

 

[ripped tide]

In a capitolistic dictatorship, which I believe is called democracy in this country, there is a level of power in every (group of) purchaser(s) and every (group of) seller(s). However, he/she/it/they who holds both the powers of expectation and suggestion controls most everything. Is the farm animal not happy to see the farmer, holding food? Does the farmer not enjoy feeding and caring for the animal, knowing it will soon be food? The farmer also enjoys feeding ON the animal. If the animals all stop eating, and become unhealthy, the farmer will have to make accommodations - if he still wants to feed on those animals.

It's all a struggle of suggestion and expectation. When we figure out how to tip that in our favor, then you'll see the price drop. The companies expect us to pay the price they ask, and we expect to be told that we have the best. Doesn't everyone just want the best? Or something like that?

Just an opinion.

 

[snowmansnow]

even coral frags are a great example.. its just coral.. really. It doesn't take a great miracle to grow thriving corals. It drives me crazy to see people pay over $50 for a single polyp of ... anything...

Over the last 3 years, I bet I've sold over 1000 frags because of crowding ... broken colonies and so forth... I just grew them in my 120... thats it.

yes i had VERY little overhead so I could sell them at less than $20 for a pearlberry, or some other fancy name coral, but the problem isn't with overhead, its with bad business models.. and I think these business models are going to have to be reshaped in order for companies to survive long term.

 

[snowmansnow]

Ripped Tide;983547 wrote: In a capitolistic dictatorship, which I believe is called democracy in this country, there is a level of power in every (group of) purchaser(s) and every (group of) seller(s). However, he/she/it/they who holds both the powers of expectation and suggestion controls most everything. Is the farm animal not happy to see the farmer, holding food? Does the farmer not enjoy feeding and caring for the animal, knowing it will soon be food? The farmer also enjoys feeding ON the animal. If the animals all stop eating, and become unhealthy, the farmer will have to make accommodations - if he still wants to feed on those animals.

It's all a struggle of suggestion and expectation. When we figure out how to tip that in our favor, then you'll see the price drop. The companies expect us to pay the price they ask, and we expect to be told that we have the best. Doesn't everyone just want the best? Or something like that?

Just an opinion.

i feel you, and i suppose there will always be those who CAN sink 100,000 on a tank startup.

Thats why I think someone with enough gumption will change it from the other side... from the provider side.. and find the balance between volume sale and price point. When this happens there will be a LOT of current companies who have the rug pulled out from under them really quickly.

B

 

[snowmansnow]

Bassett22;983550 wrote: Luxury doesn't equal quality. The highest priced goods are the luxury, you can build and maintain a tank for years on a very low budget.

That being said, all hobbies experience the ebb and flow along with the economy, as the economy recovers, more people have extra cash to have fun with, and all various hobbies grow.

That is separate from the constant revolving door that you see as some people get into the hobby as others get out. It's just the nature of hobbies, people get in, they get bored, they get out, it's just a different time frame for everyone, some people will keep tanks for life.

I think people in the aquarium hobby get frustrated more than bored.. and a lot of that frustration comes with realizing that it DOES cost a lot to keep things running long term.

YES there are exceptions I'm sure... but they are very few.

 

[bulkrate]

Insofar as prices are concerned... we (the hobbiest in general) don't help.

An MP40 is $375 because Ecotech has found that someone (ie "us") will pay that and that enough someones (also us) will do it for Ecotech to consistently make money on the product. Ditto "premium", "LE", "deepwater", "lineaged" coral per polyp/inch/whatever pricing. I think you're right about the revolving door aspect of this, as you say once bought with even moderate skill these grow out to the point of being giveaways over time. Only a steady influx of "don't haves" could keep prices where they're at.

Best one can do is exert control over the aspects of the marketplace that "we" have say over. Keep that 3 pensive power head in decent shape and sell it at a loss when you need to move up. Make periodic cuttings of high-end corals and part with them for fair trades & prices instead of the "market" price when you do. Many in the club do this already - it's one if the awesome things about this community.

 

[mcphock]

They charge that much because we pay that much. Consumers vote with their wallet.

I purchased my ecotechs new because I wanted a warranty. I felt that that value add was worth it. I have only purchased a tank new once in my life. For me, new tanks are not a sound purchase, given they can be had from other hobbyists for a fraction of the price...with a little patience and good luck scoping out FS threads.

In regards to the turnover rate, this is not a new or recent development. Bob Fenner wrote to this effect years ago.

 

[jennm]

Having been in and out of the hobby (more in than out, but I've taken a hiatus or two over the years), I've seen a lot of things - and people - come and go. I've spent more than half my years in it, involved in the trade side.

I learned in retail, to spot pretty rapidly, who will stick with it, and who will drop out quickly. Much depends on the type of personality.

The patient learner tends to stick with it. The instant-gratification type tends not to. There are a few exceptions, but that's about where the line is drawn.

As for products - fads come and go there too, and since the dawn of the Internet and forums where people interact more than just by casual conversation at the LFS on a Saturday afternoon, the whole notion of keeping up with the Jones' is more prevalent than it was before.

The economy, discretionary spending, or lack thereof, plays a huge part. It's a hobby, not a necessity. When times are tough, fewer people get in. I'd noticed in the last 18 months before I closed a year ago, that a lot of people I hadn't seen in 6 or 7 years were getting back in. When the economy tanked (pardon the pun) they had to get out because they just couldn't justify the expense. Once things got better and they felt more secure with their finances, they got back in, because they really enjoyed it.

During the recession I saw a lot of people get out. Finances, divorce (we tore down a LOT of tanks for people divorcing - that was sad). A significant number who stayed in, cut back on their purchases. They didn't upgrade, ,they ran on bare minimum maintenance, just to hang on to what they had and keep it well, until things improved, and yes, some people let their stuff wither because they didn't want to part with it, but couldn't afford proper upkeep. That's the worst because it's sad to see things die just for the sake of somebody holding onto them.

There's no such thing as a 'cheap' hobby - at least not one that I know of. And it is a hobby, not a necessity, so it's more subject to the whims of people's circumstances than something that is necessary.

As for the price of some things - well everything has a cost - cost to produce, the overhead for the facility to create or grow or collect it, materials, upkeep, insurance, wages, taxes, research & development... and at the end of the day, people will only pay what they feel is a good value for something.

Yes, there are markups involved, but the seller has bills to pay too. You don't work for free do you? A free market usually finds the balance of what a person can charge for their work, and what people are willing to pay.

Jenn

 

[snowmansnow]

JennM;983572 wrote:

Yes, there are markups involved, but the seller has bills to pay too. You don't work for free do you? A free market usually finds the balance of what a person can charge for their work, and what people are willing to pay.

Jenn

I understand not working for free. That being said its still hard to understand why things are sooooo expensive. Things will have to change on the ground level at the companies that make the products before a LFS can pass that along.

B

 

[snowmansnow]

McPhock;983563 wrote: They charge that much because we pay that much. Consumers vote with their wallet.


http://www.wetwebmedia.com/ichartmar.htm">http://www.wetwebmedia.com/ichartmar.htm</a>[/QUOTE]

Well yes, but what I'm predicting is someone will be able to produce quality products that won't cost us $400 for a pump. When that kind of thing happens the "big names" are in trouble. Theres nothing wrong with making money because people will buy your products, but eventually its going to get undermined.

 

[sea atlanta]

SnowManSnow;983585 wrote: I understand not working for free. That being said its still hard to understand why things are sooooo expensive. Things will have to change on the ground level at the companies that make the products before a LFS can pass that along.

B

A big consideration in this is understanding what the products exactly are. Understanding the entirety of the product. You said, "Its a few slabs of glass glued together... not rocket science." I couldn't disagree more. There is more science and engineering that goes into commercially available aquariums than you could imagine. There are different grades of glass. There are different gluing and bonding techniques. There is quality control. There is warranties. Thats not even getting into the custom aspect of it. If I have an assembly line company, I can minimize the costs into because every product is the same. However, once someone wants something different, it takes extra time, material, training, break of the product line. My lawn company may mow my lawn for $75 with their assembly line commercial mowers and a crew. If I tell them I want it hand cut by scissors, do you think it will still be $75? Same end product, I've just specified customization.

I guess my point is even though you may be looking at two aquariums from different manufacturers that may be the same dimensions, that is not comparing apples to apples. A GlassCages aquarium *IS* exactly what you said: "Its a few slabs of glass glued together." And they have a reputation. Shoddily build, prone to failure, and cheap as heck. Compare their tank to say a ReefSavvy tank isn't a logical comparison in the slightest.

Something else to consider, about aquariums in specific. The cost is something to consider in the grand schemeOF YOUR HOME. If a cheap 150 gallon aquarium leaks in your home, you may lose a lesser amount in the tank, but the damage to your home will be immense. Trust me. We've been involved in some insurance claims regarding water damage from poorly built and installed aquariums and it quickly goes into the tens of thousands and climbs easily. It is much wiser to invest in a quality, well made unit, for the protection of your home.

 

[snowmansnow]

SEA Atlanta;983593 wrote: A big consideration in this is understanding what the products exactly are. Understanding the entirety of the product. You said, "Its a few slabs of glass glued together... not rocket science." I couldn't disagree more. There is more science and engineering that goes into commercially available aquariums than you could imagine. There are different grades of glass. There are different gluing and bonding techniques. There is quality control. There is warranties. Thats not even getting into the custom aspect of it. If I have an assembly line company, I can minimize the costs into because every product is the same. However, once someone wants something different, it takes extra time, material, training, break of the product line. My lawn company may mow my lawn for $75 with their assembly line commercial mowers and a crew. If I tell them I want it hand cut by scissors, do you think it will still be $75? Same end product, I've just specified customization.

I guess my point is even though you may be looking at two aquariums from different manufacturers that may be the same dimensions, that is not comparing apples to apples. A GlassCages aquarium *IS* exactly what you said: "Its a few slabs of glass glued together." And they have a reputation. Shoddily build, prone to failure, and cheap as heck. Compare their tank to say a ReefSavvy tank isn't a logical comparison in the slightest.

Something else to consider, about aquariums in specific. The cost is something to consider in the grand schemeOF YOUR HOME. If a cheap 150 gallon aquarium leaks in your home, you may lose a lesser amount in the tank, but the damage to your home will be immense. Trust me. We've been involved in some insurance claims regarding water damage from poorly built and installed aquariums and it quickly goes into the tens of thousands and climbs easily. It is much wiser to invest in a quality, well made unit, for the protection of your home.

I get that. BUT what I'm calling into question is "where is the middle ground"? I'm not saying a more expensive custom tank may not be better, but my concern is with the astronomical price of such a thing.

Yes glass cages is a LOT cheaper, and shabbier, but what happens when someone who takes more pride in their craft takes over with the same resources GCs has, and builds prettier tanks for just a little more than they charge now. I guess they get the glass from the same place a more expensive retailer may?

 

[morganatlanta]

I agree that there is no "cheap" hobby-- but not just because something is inherently expensive. I think it is mainly because we humans tend to spend as much as we personally can on the things that interest us, so our hobbies expand in scope until they are always expensive. In this hobby, we buy bigger tanks, fancier lights, more expensive fish-- not because we have to, but because we can.

Fishing is another example. As a kid, I caught a lot of fish with worms and crayfish I found under rocks. I probably spent $100 total on fishing equipment, and had a lot of fun doing it, before I graduated college . These days, fly to Mexico every year and spend an absurd amount of money to fish for mahi, sailfish and marlin.

Pretty much any hobby can expand in scope and expense to the hobbyist's financial capabilities (and beyond). Fishing, golf, wine, even camping, which should be as cheap a hobby as there is, can be made to be expensive. The sorry thing is that once people do things "big", even if it is outside their financial capabilities, it's hard to scale back to a personally sustainable level and be as happy with it as you used to be.

 

[sea atlanta]

SnowManSnow;983594 wrote: I get that. BUT what I'm calling into question is "where is the middle ground"? I'm not saying a more expensive custom tank may not be better, but my concern is with the astronomical price of such a thing.

Yes glass cages is a LOT cheaper, and shabbier, but what happens when someone who takes more pride in their craft takes over with the same resources GCs has, and builds prettier tanks for just a little more than they charge now. I guess they get the glass from the same place a more expensive retailer may?

Dont discount WHY</em> GlassCages is cheaper. Its not generosity or lesser margins. Its lesser quality materials, lesser effort, and no support. Those three things SPECIFICALLY take money to provide. If someone with greater "pride" buys the same glass, spends the same time building them, and offers no warranty, (too eliminate that overhead), I dont see how they would have more pride? It is the same product.

And, no, the glass is nowhere near the same. We all say "starfire" as a utility term. Its actually a brand of low iron glass. How that glass is made and treated and cut and polished and prepared and delivered makes a world of difference.

 

[acroholic]

SnowManSnow;983535 wrote: Before anyone reads this, understand that this is just my opinion, and I'm not bashing anyone. I don't have anything against any sponsors, or anyone else, and will continue to support them as long as I can afford it.

I'm currently between tanks, and it gives me a platform to see things in a light I couldn't while in the throws of a reef tank.

If you don't mind a long post then read on.
________________________________________________________

____Seth TWG made a comment in another thread that the reef hobby is more of a revolving door than a fast growing market. The thread was concerned with a price drop with Ecotech pumps.

I DO AGREE with the statement, but it is unsettling. If this is true then as aquarists revolve out the market will starve as the left over won't be able to support the companies that are asking crazy high prices for their products.

Without an adequate influx of NEW people into the hobby the only option will be for companies like Ecotech to finally drop prices, and do it dramatically. Otherwise, the hobby won't survive.

Honestly, why in the WORLD is a MP40 worth $375? It is because they SAY it is. It isn't complicated, it isn't built particularly well, and it doesn't take a lot of RD to develop it.

It won't be long before someone sees what is happening, takes the bull by the horns, develops a line of products that is just as good but substantially cheaper, opens a store and drives these companies out of business.

Really, I think it could happen right now. Take the actual aquariums for example. I've been shopping for tanks and am floored at how MUCH a good aquarium costs. I'm not knocking any sponsors, or anyone else, and realize there IS overhead BUT.... I was quoted almost $2,000.00 for a 48x24x16 tank. Seriously? At that price this company will grab a SMALL percentage of the market. I realize you do pay for quality, but let's make a quality tank that size, charge $4 or $500 dollars for it, give it a few years for the word to spread, and grab a HUGE market share. Its a few slabs of glass glued together... not rocket science.

Another example is the skimmer "industry". I have a BK200 mini and paid a lot of cash for it because I wanted the best, but realize that someone with the correct tools could do the SAME exact thing for half or a third of the price, and before you know it most everyone in the hobby would have one.

Here's the point of the whole thing. In order for the hobby to survive long term, and ultimately to grow past the slim % of people who can afford to stay in it long term, companies will HAVE to make some changes.

Although the hobby has been around a while, I still think we are in the boom of technology for it, and companies are charging whatever they want because no one else has the tech... but this is changing.

Online superstores WILL drive premium stores out of business despite the few of us who are loyal to LFS, if someone doesn't "get it" soon.

I'm looking forward to the day when I can get the something that performs like a BK200 for $400. A great tank for &lt;$500, a stinking water mover for $200, and lights (seriously... its just light) for &lt;$300.

Right now "you get what you pay for" may be true, but the days be companies being able to push that is coming to an end fast, and they had better see the big picture or they will be finding another budding hobby to own a timed monopoly on.
_____________________________________

Frankly, I have heard this same post worded differently in 100 different posts on multiple other reef forums over the years.

First off, if what SEA posted is true, the MP-40 price was just a temporary sale price and is back at whatever price it was, or will be soon.

Honestly, why in the WORLD is a MP40 worth $375? It is because they SAY it is. It isn't complicated, it isn't built particularly well, and it doesn't take a lot of RD to develop it.

Secondly, the Vortech MP line of pumps was revolutionary at the time of introduction, and still is, IMO. I think if you research it you will find that this is not just some equipment anyone could develop without a substantial investment into R&D. At the time of introduction, the Vortech was introduced as a competitor to the Tunze line of pumps, which were the only thing available on the market today that moved that amount of water in a compact power head type design. They were intended as upscale equipment when they started and continue to be presented in that fashion.

I have an MP40 that I have had in continuous operation for six years, that has never needed anything but regular vinegar soaks, so I cannot agree that they are not well built.

Secondly, welcome to the world of consumer goods. You are complaining about pricing and marketing strategy that spans every line of consumer goods available on the market today. Find me a single line of consumer goods where there is not marketing and product placement that does not denote either a perceived quality or actual quality difference. You will not find one. Find me a society on this planet where every product available to consumers is the same, generic, and cheap, and I'll show you a country where there is no private capitalism and the country leadership has the people under its feet.

As to the revolving door aspect of this hobby, that is the nature, and you will find it in this hobby as well as the freshwater hobby, and any other multitude of luxury pursuits. People get into what they think will be a fun hobby, and they find it is not what they expect with the required work a reef system entails, they have income changes, divorces, job transfers, job loss and any other of a multitude of things that either make it hard to physically maintain or afford a reef tank. It happens, and is not specific or exclusive to reefkeeping.

Finally, reef keeping is not a hobby for anyone with financial issues. There is a cost to this luxury hobby, and while you do not have to be rich to be in it, everything about it costs money, money that could be spent on other, more essential things. That description can be applied to any hobby that involves repeated, multiple purchases over time.

If there came a time where I could not meet my mortgage, or put food or clothes on the backs of my family, my reef hobby would be among the first of my luxury hobby pursuits to go.

The reef hobby requires continuous outlays of cash, be it chemicals, salt mix, electricity, water, worn out bulbs, food purchases, new corals, failed equipment, consumable equipment, ad infinitum.

Frankly, I see any revolving door aspect of this hobby not related to the cost of things in the hobby, but moreso a result of potential reef keepers not taking into account the actual work required to maintain a reef tank.

I will never understand the negative attitude towards personal achievement that folks have in this country. Companies that develop and market a successful product, like EcoTech, used to be admired, not scorned. A person can rise to however their ability takes them in our country. I believe that is a good thing.

And with these innovative, achieving companies comes a wide variety of consumer goods at many different price points. Vote with your dollars. Don't spend money on what you don't think is worth the cost. But I admire anyone that can achieve in our society through their hard work.

 

[snowmansnow]

I did state that i'm not agains a company making money. It's all well and good. That being said I don't "enjoy" overpaying for what should be simple things.

My overarching point is that I wouldn't be surprised if someone, in the very near future, started a line of aquarium goods that is near top line, but costs much less.

The revolving door aspect of the conversation that I'm concerned about is that folks seem to be leaving faster than are coming in, and no doubt cost is a big part of it. I don't have actual numbers to support this, but it just "feels that way".

Companies are in it for the money, and not to help out the hobby. With fewer clients they will have to drive up prices to stay in business. Which, in turn, makes it a less viable hobby to more of the population.

Once the market is saturated there will be no choice but to bring in new clients. This will be done by offering very good products at much lower point then they can be obtained now. I'm concerned about the lifespan of the hobby I guess.

 

[paul692]

Other hobbies are the same for example firearms ammo and reloading components were very hard to come by because of the demand every time there is a mass shooting in this country.most people bought more ammo and components that they could ever use thinking the government was going to outlaw or control these items thus driving up the price.we live in a capitalistic society that is controlled by what ever the market will bare and supply and demand. People that have more discretionary income than others will always be able to afford the best. Another example I-Phone 6 coming out next week if all you I-Phoners out there would just shut-up and quit demanding a new apple phone every 6months or so maybe they would not be so pricey .they are all to glad to take your money and watch you line up at their stores .count me in for one lol

 

[snowmansnow]

I really didn't mean for this to go into a socio-economic direction as much as I wanted to know more about why things get marked up to crazy $ figures.

I would be interested to know how much it ACTUALLY takes to make a MP40 pay someone to do it.. and maintain the machinery that did it.

Again.. I'm all for capitalism, but i'm in it as a hobby.. not a business

 

[snowmansnow]

according to 2012 reefbuilders article it is booming though..... I wonder if it still is 2 years later .. and coming OUT of a horrible economic crisis