Economics of the local fish store

[clipclop]

The area where I live has a population of around 4-5 million, depending on which suburbs you include in the count. However, it has only two good independent aquarium stores. There are a handful of other independents which aren't really worth a visit. There are also the usual big chain stores with a fish section.

It's always surprised me that the area has so few good stores. I assume, considering the population density, that there are some serious economic challenges to running an aquarium store here. Otherwise we'd have more stores. What sorts of things make or break the viability of an aquarium store? Commercial real estate prices? Competition from online and chain retailers? Local regulations? Access to wholesalers? I've never worked in retail, so I'm very curious.

[Crazygar]

Your market. While you may think that there would be a large demand for such a shop, you have to factoring in operating costs, which will be high. Unless all the hobbyists shop each day with big purchases, sometimes the risk is too great.

Also when dealing with live animals, you have to factor in untimely deaths which cut into the Profit Margin. Location (and a good one) also dictates how well a business will perform. I've seen Businesses with great locations do poorly, move to another not so good location and soar. I've also see the reverse.

EVERYTHING is Market based. Also you cater to a niche group. While many people have an aquarium, factor in that only say 20% to 30% are Hobbyists with more exotic tastes. Most people are happy with Tiger Barbs or Guppies and the Chain Stores offer that without having to trek into unfamiliar territories.

Chain Stores cater to the average Aquarist which seeks the Bread and Butter fish. Mom & Pop cater to the more Intermediate to Advanced. Also Internet Shopping has gaining momentum, many times, myself I have ordered plants via Internet Services since even some of the Mom and Pop stores can't get what I am seeking.

Heaters, Filters, Water and other equipment will drive costs up due to the nature of the requirement to keep things alive for resell.

4 or 5 million people, I find that a bit surprising though, there has to be more than just 1 or 2 Mom and Pop locations. In the Detroit Area I can count (still running today) 15 or 17 independent shops which are still doing great business, but the Detroit Area (I am including Windsor, Ontario Canada into this) has a large Hobbyist Base but is economically depressed due to the collapse of the Auto industry in 2008. What's the secret? A large specialist Hobbyist Base Market that can support the stores currently running.

If you open a Mom and Pop and people just want Guppies and Tiger Barbs, chances are you are going to charge more as your operating costs are more apparent, Chain Stores can get away with lower prices, they have many locations, Mom and Pop, only one, therefore higher prices. Regardless of more quality fish at the Mom and Pop, People are price driven.

Gary

[ScottFish]

Yep --the "Big Box stores" have taken over. If you think about it, that's been the way the past two decades in all areas of retail. How many "mom and pop" store do you visit regularly for anything? The internet is now taking over the big stores.

I miss those old fish stores --dark, damp, smelly --filled with glowing tanks, with the sound of a hundred tiny "waterfalls". Used to work in one as well --not as romantic when you have to do 25 water changes!

[Crazygar]

I worked at one as well, though it was a Chain Store that catered to the Hobbyists. Sadly, its gone the way of other Chain Stores offering nothing new.

I still prefer Mom and Pop and willing to pay a bit more for quality fish and interesting stuff.

Gary

[Saban2013]

I do miss the mom and pop locations. There are a few around where I live, but not much to offer. I have both owned and run a store of my own, and currently manage a larger chain store. One of the things that I found to be the biggest reason for poor business, at the independent level, is online sources. My store offered quite a few unique species along with the general everday staples. The problem is, larger chain stores could easily undercut my prices. That left only the unique species for me to make a profit. Most of my customers would see what I carried, and go find it online. Hense why I closed the doors I had. I am seriously considering going back to a saltwater only location and trying it again. Not much competition around here for that.

[J.B.]

That's probably the smart thing to do, Saban. Most of the "Big Box" stores do not carry a SW line, so your only competition would be the online stores and other hobbyist/clubs. The classified section of my local reef club forum is always busy.

[clipclop]

I'm very interested in your experience Saban. What you describe seems to match my local independent fish stores. The big box stores carry the usual assortment of neon tetras and zebra danios. The local fish store, in contrast, carries little of the mundane stuff but lots of more interesting things like chili rasboras, unusual cichlids, and various puffers. I remember at least four more indy stores in my area from 20 years ago. Three were in shopping plazas and sold the kinds of comets and guppies you'd find at a chain store. The forth was a larger store in a more industrial and warehouse oriented district. They had more cichlids and exotic stuff. The last time I went through the neighborhood, I found they'd been replaced by a store selling sailboats and jet skiis.

I was curious enough about the economics question to make small talk at the register with the owners of some of my local mom and pop retailers.

The deli/grocery owner, who has been around since before gentrification hit his area, said he'd be out of business if he didn't own his own building. Rents have become unaffordable for low margin businesses in his part of town.

One of the equestrian businesses says her biggest problems are online competition and maintaining inventory. One of the big online chain has been specifically targeting mom and pops in order to put them out of business and gain their clientele. Additionally, many of her wholesalers have minimum orders or ship items in bundles. For example, to get a size large shirt for a customer, she has to order a bundle which also includes two medium and one small shirt. Consequently, she's changing her focus to more online sales and high end services, like custom saddle fitting.

Our auto parts store has moved out to the far suburbs because of rents. One of the local small engine shops has switched to selling and maintaining sports equipment; they got fed up with dealing with yuppies whining about broken snowblowers. They found adolescent hockey players a more pleasant and profitable clientele. The other small engine shop has given up his retail location and works out of his house. Rent costs strike again.

[C. Andrew Nelson]

I live in the San Francisco Bay Area and we are fortunate to have quite a few good and (apparently) thriving mom & pop fish stores. But then keep in mind the size of the Bay Area and the fact the some hobbyists end up crossing bridges and driving for miles to get to their favorite shops. I'm very fortunate that I have an excellent independent LFS just 5 minutes from my house. Even though I buy all my fish from them (mostly because I know they put all their fish through a month of quarantine before they every place them on the showroom floor for customers) I will admit that I go to the big box store or online sources for many other fish supplies because I can find them cheaper there.

I think an independent shop can survive and thrive if it finds a niche. My LFS' niche is probably their quarantine policy and their rotating stock. They regularly rotate through different species so it always seems like they have something new to offer. Their customers know that they are going to get healthy fish every time so they keep coming back. When I go to the chain stores I usually don't even look at their tanks. I get the supplies I came in for and I leave. But I can't write off all the big box stores. Sometimes you find one that is run by someone who really loves the hobby and who works to lift their store up above mediocre. In fact I've noticed that there is a Petco in Emeryville, CA (not far from Pixar Animation Studios) that has excellent quality fish and pretty decent plants too. You can tell someone there actually cares and strives to deliver quality pets. I've been in there 4 or 5 times now and have found their tanks to be consistently clean and the fish to be healthy & hardy.

So I think for an independent store to succeed it has to a) find a niche or specialize, b) offer extremely knowledgeable & helpful customer service, c) reward customer loyalty, and d) offer something that you can't get at the chain stores. And me personally, I'm willing to pay a little bit more for a more unique species of fish at my LFS and know that I can see it in person and judge its quality rather than save a buck or two by buying online and wondering what I'm going to end up with.

[lou zello]

i only have one LFS left near me,the rest are all big box stores,some good some bad,i still go to all of them and look around but only buy from the good ones,and i get ALL my supplies off the internet from one place.

[Freshwater Tropic]

I Live in Saint Petersburg FL and I have to say, within about 10-15mi around me I can count nearly 10-15 "mom & pop" LFS not counting "Chain stores". Which in my case I am happy, 3 of the closest stores to my house keep nothing but SW. It is wonderful to see around here. A lot of the local Mom & Pop shops that have nothing but SW are BOOMING! I very rarely see them slow. One of them is a 4,000sq ft building with about 8-9 600G display tanks all filled with fish, Rare Corals and Very cool Inverts. It is my favorite place to visit. They are a bit more expensive, but they are extremely clean and organized. They almost always have what I am looking for without having to order it. Top notch place. I just don't like some of my surrounding chain stores. Time & Time again, I will be in there buying supplies listening in to the employee's conversations with some New aquarium owners(Being nosy) hearing their advice on things that aren't exactly correct. In some cases they aren't at all right. It's reasons like that I am happy they don't sell SW fish. Our reef systems are already at threat. We don't need people to be blindly buying fish only to get bad advice from an employee and kill it anyway. Not to say the Mom & pop stores give great advice, but usually they are a little more knowledgeable on the topic. All of my surrounding mom & pop stores really know what they are doing. I 100% trust their advice. Either way, that is why I am willing to spend more money on the Captive bred fish. So much more worth it. Just my

[meh]

I live out in the middle of no where and the closest Mom and Pop stores are 30 minutes away and there is about 2 or three between Columbia SC and Sumter.

[Crazygar]

If you own a garage or have some space in your house, why not do it out of your home? Get your licensing and do it from there. Overhead will be paid for (a partial amount) via write offs for owning/operating a business from your home?

I grew Cryptocoryne for years this way. One room in my house was totally a nursery with the odd fish every now and then, but for the most part, i did Crypts. Supplied a few Mom and Pop stores for a very long long time.

Gary

[Saban2013]

I've done that in the past. I raised small animals and reptiles and supplied most of the regions local pet stores. I later dealt in birds. Ended up doing only reptiles at the end. The problem with running a store, like a SW store from your home is, do you really want people in your home all day long? I have a long term business plan in place. It will take time to get the capital together in order to implement it should I decide to move forward.

[Crazygar]

If you have a garage this is where things can come in handy. A separate way into the house. It's just a thought, will save on some of the overhead needed to start a new business. Start small, build big.

Gary