What is a fair profit for retail sale of Asian arowana?

[Cirrus]

Ok, I am sure this topic will generate a lot of discussion.

First, let me give you some background on the current wholesale and retail situation for Asian arowana in Canada.

In general, a 8-10 inch Xback or SR from Singapore wholesales for about $700-800. Stores tend to mark the price up 4 times. Thus, a $700 fish will typically have a LFS price of $2800. People who are selling Indoreds out of their homes seem to have a smaller mark-up, of around 3 times. Thus, an indored that wholesales for say $550 will have an asking price of about $1500-$1600. I have seen $100 banjars with an asking price of $400, however,so the three times rule does not always apply.

Some farms charge more (like Panda), and some stock is hand-picked and higher graded, so the outline above is not perfect, only a general rule of thumb.

I wonder whether a standard 400% markup used by LFS for all tropical fish is appropriate for such an expensive fish as an Asian arowana? I wonder what an apropriate balance is to cover risk for the store owners?

It seems to me there are a lot of people in Canada who would love to keep Asian arowana, but the prices are just too high.

So, what kind of mark-up should there be for Asian arowana at the retail level? 100%? 200%? 300%? 400%?

I look forward to seeing what everyone thinks!

 

[protoxeno]

When you say prices are just too high even though lots of people want to own one, I agree of course let me just say it before some people will state that "there are people who have that kinda cash". Of course there will always be people with enough money to own anything right?

Anyways as a consumer, I would say 100% - 200% for stores. The 4x retail LFS uses just too insane when it comes to asian aros. Little fishes like tetras and others I understand if they do even 5x from 50 cents to 2.50 doesn't seem that big of a deal. When a live stock price tags go into the 1000's thats what makes me think its out of control.

My pure bred palm dog is 1400 with tax...so you could imagine.

One could argue they take a lot of risk investing 500 x 8-10 fishes but even in the investment market if you spend around that cash, your return would be lucky if it hits even hits 15%, so 100% - 200% profit for that type of risk seems fair enough. But 3x -4x is...out of the question.

Maybe I should do a Beta analysis and some SML charts to compare risk vs rewards?

 

[arl]

Don't forget that there's also that small shipping, CITES and taxes, additional cost on them.

 

[Yuppa]

yea thats the problem, even if LFS do get a batch of reds @ 800 each, by the time their shipped, taxes and duty, the actual cost is much higher.

If we factor in those costs, plus the risk of losing aro before they sell (we all know of aro's at LFS dieing) perhaps they are not really giving us 400% mark up?
seems more like 200% ...
that being said, the everage hobbyist who wants aro, cant afford 2500 + for a baby aro, maybe if lfs cut their "profit margin" they could move them faster and decrease their risk?

 

[taureandragon76]

yea thats the problem, even if LFS do get a batch of reds @ 800 each, by the time their shipped, taxes and duty, the actual cost is much higher.

If we factor in those costs, plus the risk of losing aro before they sell (we all know of aro's at LFS dieing) perhaps they are not really giving us 400% mark up?
seems more like 200% ...
that being said, the everage hobbyist who wants aro, cant afford 2500 + for a baby aro, maybe if lfs cut their "profit margin" they could move them faster and decrease their risk?

Totally agree, I know a certain store that has had the same aro for $2500 for quite some time and it looks like hell, finnage is all torn to shit. Now if the price would be a bit lower then it may have sold by now and the fish would not be suffering, plus it has to cost the store money to keep that fish for months on end.

 

[protoxeno]

yea thats the problem, even if LFS do get a batch of reds @ 800 each, by the time their shipped, taxes and duty, the actual cost is much higher.

If we factor in those costs, plus the risk of losing aro before they sell (we all know of aro's at LFS dieing) perhaps they are not really giving us 400% mark up?
seems more like 200% ...
that being said, the everage hobbyist who wants aro, cant afford 2500 + for a baby aro, maybe if lfs cut their "profit margin" they could move them faster and decrease their risk?

Well so far our panda orders in the past were $500USD to ship, $80 more in landing fees, not so sure what you meant by taxes, do you mean taxes LFS get charged when buying an aro overseas? That amount is already in the quote when they bought it at $800 each. And.....about taxes......ever been to chinatown where a store charge you tax? Its kinda naive to think.....chinese owned stores really do things legitimately about taxes....don't say I am racist or stereotypical,my dad works at a chinese restaurant and so have I over the years during summer and other chinese owned establishments. And.......taxes and worker rights aren't in practice at all...

So that mark up is no way 200% $600 in shipping spread over all the aros divided among all the LFS in the area.....well you get the picture.

 

[arl]

I guess we refer to GST you pay when clearing the aros at costoms here. You can call it Landiing fee I guess. I checked my transaction with panda and I guess the Singapore CITES is already included in their shipping charge of $500. They cost about $70 if you apply for them though. and Canadian CITES is free. But I think that $500 shipping handling fee is valid only for max of 12 aros at 6". They will charge you the same shipping fee even if you get less than 12 pcs. May not be much % for X-back but for greens and banjars thats 50% more the original cost.

 

[arl]

If I remember it correctly there is also a brokers fee or something that you have to pay Singapore airlines. I think I paid something like $75 before I was able to pull out my fish from the airline warehouse.

 

[Yuppa]

another thing to consider is the price of CAD vs USD

I know right now its pretty good, but in the past its been 30% extra for our conversion..
So some of these LFS that bought their aro's at +30% cost just because of USD conversion, that helps raise the prices too.. considering that most of the farms overseas want USD for their aro's...

I remember speaking with the owner of a unnamed large fish store many years ago, they were selling reds @ 2500 each, but the owner indicated the actual cost to him was 1400/ish a red by the time he got them in his store, and he was willing to haggle the tank price from 2500 to 2000...
unfortunately it was still too expensive for me, however it seemed reasonable..

dont get me wrong, im not defending the lfs, just giving an objective point of view.

 

[ninjaturtle]

lol, well its all business, nothing we can really do. plus... its canada.. everything is more expensive here. best option for hobbyist would be to do group buys directly cutting all the mediating costs. no prices will be cheaper than to get from point A to point B. to buy from lfs is goin thru point A to B to C to D

 

[DragonfishExotics]

The LFS here on the Island mark everything up 300-400%. Its almost robbery, I havent bought a fish here in a year or so, it used to pay for me to travel to Vancouver. Thats why I started selling exotic fish and equipment here on Vancouver Island, I can still make abit of money, and still keep fish at realistic prices for hobbists. The LFS need some competition.

 

[Cirrus]

another thing to consider is the price of CAD vs USD

I know right now its pretty good, but in the past its been 30% extra for our conversion..
So some of these LFS that bought their aro's at +30% cost just because of USD conversion, that helps raise the prices too.. considering that most of the farms overseas want USD for their aro's...

I remember speaking with the owner of a unnamed large fish store many years ago, they were selling reds @ 2500 each, but the owner indicated the actual cost to him was 1400/ish a red by the time he got them in his store, and he was willing to haggle the tank price from 2500 to 2000...
unfortunately it was still too expensive for me, however it seemed reasonable..

dont get me wrong, im not defending the lfs, just giving an objective point of view.

Yes, I know what you are talking about here Yuppa. That store was selling XienLeng at the time, and yes, those fish have a higher asking price, closer to 1000-1200 depending on the number you are ordering.

In the case of the cheaper Indoreds, they are actually offering to INCLUDE shipping for their $550-650 quote! Pretty amazing I think. But then of course you are back to that whole issue of trust, blah, blah, blah!

As for exchange rates, yes, in the past the LFS were at a disadvantage to some extent. What I find interesting is that the stores ARE NOT reducing their prices (in general). For example, a couple years ago when I arranged the first group imports SR's were $1700 plus GST/PST. Due to the stronger dollar we're able to offer them at under $1400...including the GST/PST. Thus, while group buy prices have come down by over 30 % (tracking the dollar's strength), the LFS prices are more or less the same. Is it any wonder that new LFS have popped up in last year or two that are specializing in Asian Arowana? Can't blame them though, there is an opportunity to make some easier money if people are willing to pay same prices as a few years ago (even though Canadian dollar has strengthened AND overseas wholesale cost is down!). From a pure hobyist point of view it is a bit annoying though.

 

[Cirrus]

The LFS here on the Island mark everything up 300-400%. Its almost robbery, I havent bought a fish here in a year or so, it used to pay for me to travel to Vancouver. Thats why I started selling exotic fish and equipment here on Vancouver Island, I can still make abit of money, and still keep fish at realistic prices for hobbists. The LFS need some competition.

Bingo!

Competition is good!

 

[protoxeno]

Thats how it should be, competition always good for the consumers.

 

[b-man]

first off, i'm not justifying anyone's prices, but i was curious to know how many of you own your own business? plus most fish stores do not import directly. they have transhippers and wholesalers who tack on their profits.

while some mark ups may seem excessive, it may not be. if selling fish/arowanas was your full time job and you had a store, lets remember to factor in the following

1) salary for yourself and employees
2) overhead expenses (rent, supplies, utilites bills, insurance..)
3) loses (fish die, things break, not every fish sells)
4) inventory / stocking the store

after things like that, than you have your profits. as you can see things are quite different when its a full time business......

 

[kootenayrays]

Yeah this is not an easy topic. I've sold to stores, and of course I buy
from some as well. I know what they pay from wholesalers, and you can
be assured that 400% is not unusual at all. Alot of those africans and
angels that sell for say $8-10 each, are bought for $1 each. I sell
Flowerhorns to some places, for $70 or so, they sell them for over $210,
and one sold 7 in one day! Makes me wonder sometimes which end of the
business I'd rather be in. A store has many disadvantages however. They
have to pay outrageous insurance fees, business licences, space rental,
utility costs(business rates), then employees on top of that. There is a
great deal of risk running any animal type business, because if you lose
a shipment or even part of one, thats money out of your pocket. If a bug
runs through even a few tanks(more/all if they are on a central sump sys.)
it can be devastating. Then to keep people coming in, you have to keep
a pretty decent amount of stock on hand, which is a huge investment.
You have to have a reasonable selection of dry goods to keep giving
customers a good reason to stop in- for supplies. Like me, when I get
supplies, I stop and check out the fish, and in alot of cases I end up
buying something live as well. As much as I'd love to get into the retail
end of things, I don't have the capital to get me going on any kind of
a large scale. I have fish for sale all the time, more than most of the
stores around here, but there's no way I could compete with stores in
places like Calgary. I can't keep the dry goods they do, for sure. I have
to admit though, the fish I do have are way better quality than most
fish I've seen in stores- for starters I quarantine everything new I get,
for a minimum of 2 weeks before selling, and as in my present case, I
have had pretty much everything I have currently, since Sept., with
the exception of some breeding stock. I also use individual filters on
ALL my tanks, so when I lose some, its limited to 1 tank.

 

[Cirrus]

That was a thoughtful resposne Kootenayrays. There are so many angles one can come at the issue from - business, retail, wholesale, average consumer, serious hobbyist.

I think that it is serious hobbyists dealing in high end exotics (rays, aros, marine) who are most concerned about the high retail mark-up on fish. Most consumers don't really care about the mark up I think, especially if we are talking about "average" fish costing less than 100-200 or so...

Add another zero to those amounts and suddenly the high mark-up becomes very annoying!

 

[kootenayrays]

Its kinda funny, talking about huge investments and higher end fish, I have
more than just a good idea how much is involved. When I first started into
fish, it was betta. Then fancy plecos- given the prices of say L046, I wouldn't
class them as low end either. Then I just started buying equipment a bit at a
time, and now here I am spending $2000 on a fish and although I know its
alot, its still worth it. I may never make alot of money doing it, but I like the
idea of breeding them and hopefully getting more of them 'out there' for
others to enjoy. I was thinking about getting into some saltwater fish, but
I've never done it before. A store owner who deals with saltwater exclusively
told me that if I can keep rays happy and breeding, saltwater should be a
snap. I look at rays as a challenge, but to be honest I never consider the
'difficulty'. Zebra plecos are a royal pain in the rear, but they are worth it.
Rays have the coolest personalities- they aren't aggressive, they like
watching me as much as I like watching them. They know who I am when
I walk in- I like that. If I won a lottery tomorrow, I'd have no issues spending
all of it on fish. I've run a number of business's, and I've done this as a hobby
long enough to know whats involved monetarily. I don't have much trouble
paying for the fish from a store, even though I can go to a wholesaler and
get it for a lot less. To some degree its a convenience thing, but I respect
what they put in as well. They get into it because they like the fish as well,
and I'm not going to blast them because they want to make money doing it.
Everyone needs to make a living somehow, I actually envy them because
they can do it while earning a living. Its an expensive hobby, and thats
just the way its always been. Just like any other business, markups and
profit are a natural part of capitalism. If you knew what Walmart paid for
their stock would you start avoiding shopping there because they are
making money? Hardly- this is no different. Its market driven. Prices are
usually based on supply and demand, stores won't charge more than they
can get because they will lose if they do. I've been 'short' more than a few
times since I started, and yep, the prices can hurt when you are, but thats
life. I do what I can afford. When I started rays and arro were just a dream,
but if you keep at it, the time will come. Not everyone can afford that
Mercedes, that doesn't make them overpriced, it just makes them out of
your price range for a while.

 

[EKen]

Its kinda funny, talking about huge investments and higher end fish, I have
more than just a good idea how much is involved. When I first started into
fish, it was betta. Then fancy plecos- given the prices of say L046, I wouldn't
class them as low end either. Then I just started buying equipment a bit at a
time, and now here I am spending $2000 on a fish and although I know its
alot, its still worth it. I may never make alot of money doing it, but I like the
idea of breeding them and hopefully getting more of them 'out there' for
others to enjoy. I was thinking about getting into some saltwater fish, but
I've never done it before. A store owner who deals with saltwater exclusively
told me that if I can keep rays happy and breeding, saltwater should be a
snap. I look at rays as a challenge, but to be honest I never consider the
'difficulty'. Zebra plecos are a royal pain in the rear, but they are worth it.
Rays have the coolest personalities- they aren't aggressive, they like
watching me as much as I like watching them. They know who I am when
I walk in- I like that. If I won a lottery tomorrow, I'd have no issues spending
all of it on fish. I've run a number of business's, and I've done this as a hobby
long enough to know whats involved monetarily. I don't have much trouble
paying for the fish from a store, even though I can go to a wholesaler and
get it for a lot less. To some degree its a convenience thing, but I respect
what they put in as well. They get into it because they like the fish as well,
and I'm not going to blast them because they want to make money doing it.
Everyone needs to make a living somehow, I actually envy them because
they can do it while earning a living. Its an expensive hobby, and thats
just the way its always been. Just like any other business, markups and
profit are a natural part of capitalism. If you knew what Walmart paid for
their stock would you start avoiding shopping there because they are
making money? Hardly- this is no different. Its market driven. Prices are
usually based on supply and demand, stores won't charge more than they
can get because they will lose if they do. I've been 'short' more than a few
times since I started, and yep, the prices can hurt when you are, but thats
life. I do what I can afford. When I started rays and arro were just a dream,
but if you keep at it, the time will come. Not everyone can afford that
Mercedes, that doesn't make them overpriced, it just makes them out of
your price range for a while.

Very very well said. I like you.

 

[Cirrus]

The question I posed at the start of this thread is controversial. The answer in the end is so simple: The "fair" price to charge for an Asian arowana is whatever the market will bear.

Eventually supply and demand meet some kind of equilirium.

One interesting thought I had concerns how green Asian aros can be had for about $50 in SEAsia. I assume this is the lowest possible price for selling the fish at retail. I would guess that in another 10-20 years, if the production of higher grades of fish goes up, that the prices could conceivably come down to a similar level...