So Im looking into opening a saltwater shop because my LFS is the only one within 100miles, does tons of buisness and I know I can cut his prices by almost 50%. I drew up a buisness plan and looks like It would be about $75000 to start everything. Anyone have any tips/tricks for this adventure?
Opening a Shop
- Thread starter Greenman
- Start date
yote
In Memoriam
Never start an adventure like that with the plan of cutting the competitions throat. You'll end up cutting your own instead.
If you can cut his prices by 50%, then I'm betting you've missed something in the figures.
Here's a list of overhead costs for the LFS I help at:
Rent-$1500.00/ month
Electricity- $2000.00/ month yes that is two thousand.
Water is covered in the rent/ lease
medications- we spend about $500 a month
Foods- $500 a month
Shipping generally cost us $600 weekly. That is for a $3500 order which is about average for us.
Then you have your water conditioners that you'll go through weekly.
Payroll. You can't take care of a store by yourself and keep up with everything else.
You'll have to account for the livestock that dies within hours of receiving them. Wholesalers don't warranty those. They will credit your account for whats DOA.
You'll have fish come in with Ick, ulcers, flukes, and a host of other ailments.
You'll have corals and anemones come in bleached. Corals will have nudis, acro eating redbugs, rock covered in aiptasia and algae, flatworms, uncid worms, you name it, you'll get it.
I'm not trying to talk you out of opening a shop. Just don't open one and expect to cut the other guys throat and still keep your own doors open.
If you can cut his prices by 50%, then I'm betting you've missed something in the figures.
Here's a list of overhead costs for the LFS I help at:
Rent-$1500.00/ month
Electricity- $2000.00/ month yes that is two thousand.
Water is covered in the rent/ lease
medications- we spend about $500 a month
Foods- $500 a month
Shipping generally cost us $600 weekly. That is for a $3500 order which is about average for us.
Then you have your water conditioners that you'll go through weekly.
Payroll. You can't take care of a store by yourself and keep up with everything else.
You'll have to account for the livestock that dies within hours of receiving them. Wholesalers don't warranty those. They will credit your account for whats DOA.
You'll have fish come in with Ick, ulcers, flukes, and a host of other ailments.
You'll have corals and anemones come in bleached. Corals will have nudis, acro eating redbugs, rock covered in aiptasia and algae, flatworms, uncid worms, you name it, you'll get it.
I'm not trying to talk you out of opening a shop. Just don't open one and expect to cut the other guys throat and still keep your own doors open.
Now why is it you go that way with the whole sellers. I was planning on ordering from LIve Aquaria which has no limit on orders, free shipping on orders over $250 and a 1 month guarentee on everything. The only reason I said I could cut his costs by 50% is because I used to work for him and I know he does about a 200% markup on his products.
Excellent info Yote but you left out the cost of RO water and salt. Greenman, you better be ready to do a lot of DIY on plumbing, electricity and other stuff. If you buy all the equipment to run your tanks (instead of DIY) you will NEVER make a profit. My LFS even has DIY MH light fixtures made of plywood.
Not trying to talk you out of your idea but you need to think about this stuff.
Not trying to talk you out of your idea but you need to think about this stuff.
It may be less risky to start with 80% fresh and 20% salt and if your are successful then change the ratio,
fastrd400
It wasn't me!
Start in your garage. Get a wholesalers liscence and advertise on Craigslist. Get your feet wst and work your way up to bigger and better.
Sounds like a good business adventure, and Yote and Sen has you covered 100%. I know a guy who left the lfs he was working at to open his own, and he told me that new business owners must be prepared to struggle and lose money during that first year or so. Just like buying and moving into a new house, you must start fresh and purchase everything you need, but one you have everything and get a hold of your budget, it'll get better. We wish you the best of luck and success. 
Not that I know of, Im in kind of an off beat location but I know the market is here. Why is the fish bought with Wholesale insted of ordering inv. off of LIve Aquaria? My dad owns a strip mall here in town so he was going to give me a spot free until the buisness takes off.
bjohanson1234
.........
I am guessing because whole sale is cheaper than liveaquaria would be even after deaths.
yote
In Memoriam
Guess what WE pay for this fish from our wholesaler?
Saltwater Aquarium Fish for Marine Aquariums: Scribbled Angelfish
The large female. I'll give you hint, We'd pay $400. less than what they have it for.
Bifferwine
I am a girl
Live Aquaria already sells their livestock at a huge markup.
I have a question though... If you are just going to buy fish from Live Aquaria and resell them, why would someone buy a fish from you when they could get the exact same one from Live Aquaria for the same price or cheaper? Wholesale prices are appealing to LFS because the public generally doesn't have access to them. They don't have to compete with the public and they can mark those prices up substantially. I don't see how you could make any money reselling fish from Live Aquaria without hugely marking them up. Not to mention, I'm betting that Live Aquaria probably wouldn't allow you to buy their livestock for the sole purpose of reselling it at a markup for yourself. You are just making yourself a very expensive middle man with this plan. Marking up fish from Live Aquaria isn't going to pay the bills of a fish store.
MitchReef
reef noobie, since 1986
think really hard before you decide to proceed with a hobby-only business. If the economy isnt happening, you will feel the pain more than most businesses but it can also make you a ton of money if the economy is good. It something to seriously consider before you make the investment.
yote
In Memoriam
That was a typo on my part.:grumble: I meant the large male that's $599.99:shock:
MitchReef
reef noobie, since 1986
Wow...I need to get a wholesale account....how do you do that??? LOL!!!
Marine LFSs are essentially luxury retailers. That is a hard business to run when the economy is still slow.
Still looking at doing this but def. seems like I have my hands full with research. A friend and myself are both Computer Programmers, We've talkied about opening a computer repair shop and doing a FS shop on the side. Not actually keeping them in stock but doing orders and setting up tanks for people.
wontonflip
I failed Kobayashi Maru
Hehehe....one of the smaller lfs' near me started out in a little shop they shared with an electronics repair store. They had one wall and the back room for their tanks and equipment. They eventually moved, got into their own big space. Just saltwater. They had an investor. They ended up shutting down after a year. They did open back up 6 months later, and split the store into freshwater and saltwater (more fresh than salt) because of the local market. I still shop there though. Great people.
One of the best LFS in Houston started as a liquor store, selling coral out the back room. They finally converted to a full fledged LFS and now make 3x as much. It's small and in the hood, but the livestock is awesome, always changing and great prices.
