The LFS business model...

[samsmobb]

This type of thing seems to make some sense to me... other LFS's aren't the enemy right now... Band together and push towards a common goal of providing better service and product than the big box can.

That being said, if margins are as tight as stated earlier, good luck trying to convince a cash strapped owner to invest in a whole new operation... Ladies and gentlemen, the Catch-22...

of course this makes sense, however under the nash equilibrium principle of econonics, every competitor looks after their selves EVEN if working together they mutually end up better.
it is difficult to not try to move towards your own goals.

one main thing i realized though, is customer service builds customer relations and keeps them coming back. (I KNOW HOW YOU ALL HATE PETSMART/PETCO BUT I WORK AT PETSMART AND AM A TEEN TOO.)
At petsmart we strive for customer service, i CANT tell you how so many people come back when we walk them through getting EVERYTHING they need for the new found pet, usually a puppy but also reptiles and fish.
MOST everyone working cares about their new pet and also asks about how their doing and to see how theyve grown up. (i know i do)
we have people who make stopping by petsmart a regular weekend trip(i know because i see them at the same time everything saturday or sunday) bring their dog to get their free treat and free unlimited petting.
we make sure our customer service is amazing not just for revenue because my store really cares for them animals (i would say out of the 30 people that work at MY Germantown petsmart, about 3-5 dont care, still leave 25 people.)
i also know Hans, from his discus farm, gave AWAY FREE discus fry a little while ago to younger kids! GREAT WAY to get the younger generation into the hobby from the get go.
(check out simplydiscus, hans sponsor sedtion, KIDS CORNER)

sorry if i got off topic..


advanced hobbyist as well may be to blame for dying lfs, with us wanted great products but not willing to pay the price at lfs for them so we go online. i cant convince someone to pay more theres no point. but what can we do so that we get as much marginal utility for the higher price we pay? product X gives us enough satisfation to pay amount X for it online, but can a lfs give us enough satisfaction from something else along with the product for us to justify pay amount Y for it?

we all know about petsmart/co 's extensive return policy on dead fish (even up to 30 days!), so they really arent making much money on fish, i see it that we make more money on the food and supplies for them. we offer fish at a low price to have enough people justify paying a little extra on food in store rather than online. maybe a strategy is to be had there?...

 

[Shane]

There are two different discussions going on here:

1) The LFS business model (what can stores do to remain profitable enough to stay open?)
2) How and why hobbyists should support them

I'm not convinced that the LFS business model can or should focus on true hobbyists.

These are two different, but related, topics. The answer to number 1 is simple: the LFS (like other businesses cited in the thread) can not survive if they fail to change their business model. If they keep carrying bread and butter fish and common dry goods sold across the street at the big box store for less they are doomed. This may have made them a great living in the 80s and 90s, but it is economic suicide to stick to that model in the aquarium trade today.

When I moved to Vienna in the fall of last year I had a Petco and a LFS within 5 minutes. Six months later I have two Petcos and a Petsmart within 5 minutes. The LFS is gone. I spent hours talking to the owner, and while a very nice man, it was clear his shop was doomed. Did he carry fish not carried by the chains, nope: plants not carried by the chians, nope: magazines and books not carried by the chains, nope; hign tech lighting systems, CO2 set ups, and filration systems not carried by the chains, nope. Bad location, yes; dingy, dirty store, yes; lack of knowledge about the current state of the hobby and what hobbyists are looking for, yes.

Sadly way too many LFS go under for all the reasons cited above while the owner talks your ear off about how it is the box store's fault s/he is going out of business.

The club/store relationship is a huge missed opportunity for the LFS. In line with what was said above, the same shop told me that a local fish club rep had come in asking for a discount for club members. The store owner told them "no."

I can't remember who made the analogy to wargaming above, but I worked in a game shop in university and can tell you that the majority of our sales came from partnering with all the local gaming clubs. The prizes we gave out at the store and the time dedicating to holding the contests and tournaments were far outstripped by the asociated sales and repeat business. Sadly, very few LFS appear to understand this. If I were a retailer I would be offering space for meetings with special dicount sales to club members after meetings, special club only orders that could be picked up at the next month's meeting, behind the scenes tours, advertsing for new employees to the club first, etc, etc.

Luckily I travel a lot and see a lot of fish stores around the world. There are many of them that are doing it right and having great success. Visit Pier in the UK, Steve's place in Portland, The Fish Place in Seattle, and Glasser in Germany for some great examples. How many LFS owners are looking at these places and trying to emulate them? Sadly, very few in our area.

-Shane

 

[JasonC]

Fantastic post... and I think the way this relates to question #2, is as club members, are we required to help those who don't seem to be helping themselves? Show us a desire to fight. Come up with a plan. Even if its crazy and everyone thinks it wont work, I would be much more apt to support it, cause at least your trying to go up against the BB's and are going down swinging rather than cowering in the back corner.

Okay.. here is a real, practical, hands on suggestion for how clubs can help the LFS... I have always been amazed at the variety of skill sets and career paths that are followed by the club members. Is it way too far out there to have, say, a store cleanup day? Volunteer our time if the store owner provides materials... swarm the store, give it a coat of paint, some new ceiling tiles, new tubes in the florescents, maybe, depending on how much we like the place, even implement some new projects... creating a knock-your-socks-off display tank, installing pinspot lighting for tanks/shelves, speakers for music/intercom, wireless nodes to provide free wifi, and implementing a QR system for every species. This way it would be a true partnership... they pay for materials, we help them shave the cost of labor. they get a better looking store, we absolve some of the guilt from the big order we made from an online vendor last week ;P

Or am I completely off my rocker?

These are two different, but related, topics. The answer to number 1 is simple: the LFS (like other businesses cited in the thread) can not survive if they fail to change their business model. If they keep carrying bread and butter fish and common dry goods sold across the street at the big box store for less they are doomed. This may have made them a great living in the 80s and 90s, but it is economic suicide to stick to that model in the aquarium trade today.

When I moved to Vienna in the fall of last year I had a Petco and a LFS within 5 minutes. Six months later I have two Petcos and a Petsmart within 5 minutes. The LFS is gone. I spent hours talking to the owner, and while a very nice man, it was clear his shop was doomed. Did he carry fish not carried by the chains, nope: plants not carried by the chians, nope: magazines and books not carried by the chains, nope; hign tech lighting systems, CO2 set ups, and filration systems not carried by the chains, nope. Bad location, yes; dingy, dirty store, yes; lack of knowledge about the current state of the hobby and what hobbyists are looking for, yes.

Sadly way too many LFS go under for all the reasons cited above while the owner talks your ear off about how it is the box store's fault s/he is going out of business.

The club/store relationship is a huge missed opportunity for the LFS. In line with what was said above, the same shop told me that a local fish club rep had come in asking for a discount for club members. The store owner told them "no."

I can't remember who made the analogy to wargaming above, but I worked in a game shop in university and can tell you that the majority of our sales came from partnering with all the local gaming clubs. The prizes we gave out at the store and the time dedicating to holding the contests and tournaments were far outstripped by the asociated sales and repeat business. Sadly, very few LFS appear to understand this. If I were a retailer I would be offering space for meetings with special dicount sales to club members after meetings, special club only orders that could be picked up at the next month's meeting, behind the scenes tours, advertsing for new employees to the club first, etc, etc.

Luckily I travel a lot and see a lot of fish stores around the world. There are many of them that are doing it right and having great success. Visit Pier in the UK, Steve's place in Portland, The Fish Place in Seattle, and Glasser in Germany for some great examples. How many LFS owners are looking at these places and trying to emulate them? Sadly, very few in our area.

-Shane

 

[JasonC]

Thanks for the input Andrew. As someone who did spend almost exclusively at your store (after I was too scared to go into HOT), I have to say that you *did get it* Your store was bright, clean, staff for the most part was friendly and knowledgeable, and You participated and were supported by the clubs. That's why it was such a *huge* shock to me when you had to close.

But 100% honesty time... is there anything you could/would do differently "next time" to protect/establish yourself from the BB's? What do the remaining fish stores need to be looking at so they don't end up with going out of business signs on their front doors too? What is their end of the bargain?

I think you have a unique perspective on this, and I look forward to hearing more of your input!

I had all of these suggestions and still couldn't make it work. So did Tropical Fish World and Exotic Aquatics.

You want fish stores to stick around, go spend money there. Even if it costs more. Otherwise, forget it.

The manufacturers and big fish distributors have all bitten the hands that feed them in favor of big box and online retail.

Problem is, no one ever bought their first fish tank online. Eventually Central, UPG and the other big guys who have shot the average LFS in the chest will go out of business too. Check their stock prices over the last five years.