Are we talking about a certain very large warehouse, that had a very large quantity of salt, that was going out of business, that sold huge quantities of salt for pennies, creating the cheap salt influx that we see right now in the west coast??? I have personally talked to some of the head honchos in the salt industry, they are not pleased... they feel that these silly low prices degrade their product.

We can see Christy has started celebrating already.......lol

Mitch

Well I would buy I/O even if it was selling for a lot more money.
This is a product that I have trusted for over 6 years, and I'm happy with it's results :biggrin:

160gl pail you say!, well a new pail should still last me about 32 water changes, two and a half years or when the t-shirt is falling off my back:mrgreen: :mrgreen: :razz:

dang how did this get to 3 pages already?? I thought I put that on page 2! :wink:

business decisions are made daily - some work, some don't.

You have the most profitable retailer in the world, walmart, pushing cheap product for a cheap price. You can't say the high volume, low margin business model doesnt work.

Raising the price of salt is not going to lower the cost of an expensive skimmer made from everyday pvc and acrylic (why does a euroreef cost $600 for $40 worth of plastic and 3 hours labour? Because people will pay for it), raising the price of salt is not going to result in healthy or more diversified livestock being brought in to fish stores and raising the price of salt is not going to change the world.

This is a pretty silly, 3 page argument :)

If salt is cheap now, I will enjoy the price break, because they come so rarely in this hobby. If, in the future, a salt manufacturer does indeed feel their product is being sold too cheaply and steps in to enforce a minimum selling price for salt that is higher then what I currently pay, then I will pay more - and so will everyone who wants salt. Personally, I doubt it will happen, as the salt was originally purchased by the retailers/wholesalers and the salt manufacturer has already made their profit, they dont care if the product is then sold at a loss - their business isnt directly hurt by the LFS losing a few bucks on a product

Bringing responsibility and ethics as an aquarist into the discussion is uncalled for. It just twists your arguments and makes it look like you are all attacking each other on a personal level.

If you want to talk about ethics, talk about the stores that say you can start a saltwater tank for a couple hundred bucks and keep a dozen fish and a dozen corals plus 3 anemones in a 20 gallon tank - which I have personally seen happen at 3 stores (all slightly different scenarios, but you get the point).

And finally, impulse buying that algae scrubber, fishnet or PH monitor does not make one an irresponsible aquarist.

Lostmind,

I will say that the high volume, low margin model works in some business, but not in an aquarium store. The numbers your talking about from Walmart, I beilive $229 mill last year is FAR beyond what any aquarium store could ever even DREAM about making.

Is raising the salt going to make the Euroreef skimmer (or another product) cheaper? How could you say no?

If a store does not make profit on one item, the mark another up higher. If they don't, they go out of business. If they drop prices on one side, they raise them on another. And of course it would result in more diversified livestock. The store is not going to just be scraping by because of low margins, and order from new suppliers or try new things. They are going to order thier bread and butter, not risking already low capital. This is simple.

Manufacturers do care about the price retailers move thier product for. Perhpas read through the last 3 pages of this topic and you will see evidence of that.

You could keep 12 neon gobys, 12 discoma and 3+ condys in a 20 gallon long. Easy.

Do you have any experiance into the business end of this hobby?

This is all very interesting and totally different from what I would do if I started a store. I would price my items simply based on supply and demand (profit maximization).

If no one wants to buy my salt at my high price causing me to lower the price of salt, I wouldn't automatically raise the price of my other goods. That's because we know from the Law of Demand (downward slope of the demand curve) that artificially raising the price of a good would lower quantity demanded, increase surplus, and reduce profit/revenue.

http://en.wikipedia.org/wiki/Supply_...ilibrium_Point

This is the generally accepted theory for perfectly competitive markets (ex. not monopolies).

That does not take into account goods that have a stable demand regardless of price fluxuations, like livestock. People want thier Nemo!

Stores have to profit. It's simple as that. If they have lower prices then everywhere else, and do not provide any reason for people to come into the store, other then price, they will fail. Look at the fierce competition between King Ed's and J&L. One of them is going to lose. King Ed's has been around a LONGGG time, and has a full pet line (dogs, cats, rabbits, birds ect.) backing them. King Ed's could lose money on thier marine end and still make enough on dog supplies to get by. J&L can't. They have to profit in order to survive. There is no way these stores can lose money, they have to pay thier bills like anyone else. If they don't profit on salt, they have to make it up somewhere. Every square foot of that store has to produce X amount of money to keep them in business. Anyone happen to notice any change in livestock, lighting or any other prices at these stores?

Other stores which do not have as low prices are doing growing and doing well despite have higher prices. They provide another reason for customers to come there other then price. No where in North America I have heard about is here a situation like there is in the lower mainland regarding these stores.

This thread has at least reminded me to get some salt...I'm almost out. :rolleyes:

Yes, the theory takes livestock demand into account. Yes, of course people want their Nemo. But the Law of Demand states that more people will want Nemo at $15 vs $30. That's hard to argue.

I didn't know either of those 2 stores that you mentioned were losing. Do you know for sure this is the case? I thought both stores are profiting.

In all of my years of studies and research, I have not found any theory that says you can make more revenue by artificially raising prices of goods in a perfectly competitive market.

If it is certain that prices are artificially low, then yes of course the businesses are not maximizing their revenue and will have more demand than supply and will eventually raise their prices.

Firms enter the market to make money and exit when they can't. No doubt. If prices are low because there is too much supply (too many pet shops) then having a store lose and exit the market is inevitable.

In those other regions that you point out, prices and demand are high. But that creates a new business opportunity for a new store to enter the market and get a piece of the pie. Eventually, when more competition is created, prices will also go down. Its all part of Business and Economics.

Welcome to free enterprise. The fact is that someone WILL lower the price (salt, computer, TV, car, couch, food, etc) and people may buy because of it. Retailers will employ whatever strategy they believe will give the best combination of profit and/or market share. Every market has discount sellers and premium/quality outlets and there is room for both. I am sure that no retailer likes being undercut by a competitor but they can be assured of 2 things; it will happen and they choose how to respond. Price cutting is not the only business model. It does not make competitors go out of business. Competition is healthy, the retailer who can't compete isn't any better for the market than the discounter may be viewed (by "compete" I don't mean price). Ultimately the customer decides on any retailer's perceived value. No one can artificially set price/value or quality/value standards and think it is good for the market. If the discounter can't make a profit and goes out of business then their business model was wrong. If a retailer believes their premium level of expertise/support/product is worth more and the customer does not then their business model is wrong. If educating customers advances the market (hobby) so that quality is recognized and valued then the premium vendors gain an advantage.

Just my $0.02

Justin. I dont want to cause bad blood here, but your arguments fall flat.

Sorry. Logic, common sense and economics betray your points.

Easy... the price of the euroreef is based on what the market will bear. Not the price of salt or the profit made from sale of salt.

I did read the thread before I posted. I see no evidence of this. Perhaps if salt prices suddenly went up at the LFS or certain brands of salt were removed from the sales floor, I could MAYBE make an educated guess that the salt manufacturers were ****ed about low prices, but without the salt manufacturer making a public notice about it, I wont know for sure.

Smooth dodge. Entirely avoids the thrust of my point. So, with $200 of equip to support this tank, what is the long term health of the tank? Continuous replacement of livestock?

No. Yet I am a small biz owner. But what does that have to do with the discussion at hand?

Man, look what I started. Wish I didn't bring it up. :rolleyes:

I just don't want the 160g bucket costing the same as or more than the 200g bucket. Sound fair?

Jack I hear ya- :rolleyes: Maybe I/O are reducing there salt to cut cost so they can use more funding for there quality assurance statement :mrgreen:, as I saw a new add for I/O that states:As for the King Ed's/ J&L's thing, I would rather go shopping for meat at a butcher than at the supermarket- so as long as there quality, supply, service, and price stay fare then I will keep giving J&L's my $$$. Although time in a day doesn't alway's allow us to go to the butchers, so instead we go to the supermarket for price, selection, or convienence. Hopefully J&L's move to go into fresh won't effect there saltwater focus, if it keeps them afloat then there just staying competitive in a crazy-cut-throat buisness world. :exclaim:

just my two-cents,

Rich, I agree. It will always come down to price no matter what people say.

Maybe Instant Ocean had to change a bunch of quality control issues hence the new lid and smaller buckets. :lol: We can only guess. :rolleyes:

Have a good Christmas guys.

Yup...exactly, let me introduce you to 90% of all fish keepers :mrgreen: why do you think if you look in the buy and sell of big cities you see tones of tanks for sale (big and small)

why do you think most LFS still bring in morish idols and flowerpot corals.. these are the majority, and everyone seams to always forget we are the minority.

Steve

sure it does, I know a bunch of people that buy salt when it is cheep.


spoken just like a store owner :rolleyes: "please pay me extrodnary prices so I can get rich and retire."


Sorry to inform you buy high prices won't stop flash in the pan hobbiests and classified adds. and I guess you and Kyle both look at it that way because you are ivolved with the industry. either that or you are trying for a hobbiest of the year award.

The fact is 400% mark ups are hiway robery and just plain taking advantage of hobiests by making the hobby sound more important than it is. only 10% of us are responcibe buyser and the sad fact is less than that percentage of LFS are responcible sellers. I don't know any store that won't sell a tank and everything and tell them to come back tomorrow after there salt is mixed to get a few fish. I have even seen the fish sold at the same time as the tank in more places than I care to know.

Steve

I am not trying to cause bad blood either, but I suppose we will agree to disagree.

There is nothing more I can really say, I work in the aquarium industry and it constantly betrays what I was taught in school. It's a different type of industry, based on hobby. It's all optional, not like food. We all need to eat. We don't all need a fish tank.

I totally understand the point your trying to make, and I understand you think I am wrong. But I will go to work on Boxing day and what I say is based on what I see at work, and what I see is reality, and it's completely opposite to what your saying.

Again I totally understand where your comming from, but they are common rules, they do not apply to this hobby/business/industry.

Consider the livestock issue again. Cost does not impact demand, quote economics till your blue in the face and it still won't change the reality of the situation. Just beacuse a clownfish is cheap, it does not increase it's demand. People cannot buy more just because they are cheap. Thier demand is based on what thier system can tolerate. They buy them if they are $12.88 or three times that, just as fast.

And that system for a couple hundred dollars, buy it used, why would you need to change the rock? It's moot, but I understand you point.

Either way it's christmas, happy holidays guys.

I still don't understand why you disagree that demand for livestock is determined by price. I'm not just quoting Economics. This is the real world. Its common sense. Ask this board how many people would buy a clownfish for $20. Then ask how many people would buy a clownfish for $40, $60. You will then see that as the price goes up, less and less people will buy it. Its common sense. You can keep denying Economic theory until you're blue in the face but Economic theory is still the most generally accepted theory for explaining market behavior.

I really would like some references that denies Economic theories for the Aquarium market. In order for price not be an issue in demand, the demand curve has to be vertical (by definition). This is fundamental first and 2nd year Microeconomics.

Here's a reference:

http://spot.colorado.edu/~kaplan/eco.../section4.html

"The other extreme is a good with a vertical demand curve and is perfectly inelastic. Perfectly inelastic goods have no substitutes and are necessities. An example of this type of good is insulin or other pharmaceuticals that are required for someone to live. If the demand curve is vertical, the firm can raise prices by 1% or (higher) and the quantity demanded will not change. Consumers find a way to continue buying the good."

So this seems to contradict your claim that the livestock demand curve is not affected by price due to it not being essential. In fact, the only time that price does not affect the demand curve is when a good IS essential.

In fact, the demand curve for livestock is very elastic and very sensitive to price change because 1. livestock is NOT essential, and 2. livestock has many substitutes. If the price of clownfish is too high, people will either buy a cheaper fish (because there are substitutes) or not buy the fish at all (because its not essential).

Here's a reference:

http://spot.colorado.edu/~kaplan/eco.../section4.html

"Perfectly elastic goods have a horizontal demand curve reflecting the presence of identical substitutes. For example, assume that you are shopping for flour at the local grocer. You find two bins of wheat flour located side by side. One is full of flour labeled "wheat flour from wheat grown in Zeppo County, Kansas" and costs $0.75 a pound. The other bin is also full and labeled "wheat flour from wheat grown in Harpo County, Kansas" and costs $0.40 a pound, otherwise the attributes of the flour are identical. Which would you purchase?"

Nothing I see at the aquarium stores betrays what I learned in Economics. Everything matches exactly as expected. I can't see any reason at all why the Aquarium market should defy Economic theory and behavior. What I see on this board and in the stores matches everything that is taught and documented to the Tee.

If you have any references why the Aquarium industry does not follow Economic theory, I would love to read it.

If we took a poll here, we should see that the reefers' buying behaviors agree with Economic theory.

I see points from many different people with different ideas, and they all make sense in certain applications. One point I could make is that there are many niche markets inside of this niche market of marine life. In my opinion, and Im not putting anyone down cuz Im the same way in many aspects... hobbyists, like the ones on this board, are generaly "cheap", usually looking for a deal, some shop at wherever the product they want is cheapest, trading frags, buying frags, trading livestock of any sort. This is not a bad thing, I think it is a good thing, it keeps our hobby a little more enviro friendly, "a little". Then there are people that want a pretty tank in their house and have little time, or put little effort into maintaining it, this group in my experience makes up half of the costomers of this hobby. Then there are the elite hobbyists, they have lots of cash, and spend big bucks, they also usually put alot of time into the hobby, these folks make up a small portion of this hobby. Then there are the status customers, "I like the blue one, can we have that yellowish one, those are pretty, can you put lots of them in..." these are the customers who have loads of cash, no interest in learning the hobby, but want their friends and foes to envy them. Bling, Bling customers you could say. These make up most of my customer base, they dont care what things cost, with some things they would pick the more expensive item just to say that they have it. In kelowna there is a funny attitude among the more well off folks, they wont buy it unless its expensive, makes no sense but its true, if you give them a quote on something and they hesitate, tell them youll get back with them, let them know about the new inflated quote and they say, sure lets do it... works for me, I supply to mostly the later 2 groups, I setup and maintain their tanks, they pay a premium for this service, they pay more for livestock than I charge to caring hobbyists, people like you on this board are able to take the livestock and take care of it yourself, thus cheaper, less work for me, customers who make me work harder get charged more for the same thing. dont know if this makes sense to anyone, but running my business this way is the only reason I have been doing well business wise. my product and quality are top notch, you get what you pay for, but it does come at a premium. I know the way i run our business dashes the economic laws to pieces, but thats the way it is.
When I ran my business the way economic laws would dictate, I was not doing very well at it, now things are peachy.... since this thread was origionaly about salt, sorry if I kinda ruined you thread. I too think that if the quantity of salt is less in the new buckets, i would like to see the price adjusted accordingly...

That's cool. As a collective group, the demand curve remains the same though, since only an insignificant number of customers buy more livestock when prices are higher (Ie. The customers who would rather buy a clownfish at $30 and refuse at $15).

Now, if 100% of the group is like that for livestock, then and only then would that contradict the theory.

If 100% of the people buy more livestock when prices are higher, then you have what is called a giffen good which doesn't really exist in the real world.

http://en2.wikipedia.org/wiki/Giffen_paradox

"For most products, price elasticity of demand is negative. In other words, price and demand pull in opposite directions; price goes up and quantity demanded goes down, or vice versa. Giffen goods are an exception to this. Their price elasticity of demand is positive. When price goes up the quantity demanded also goes up, and vice versa. In order to be a true Giffen good, price must be the only thing that changes to get a change in demand.
...
Despite years of searching, no generally agreed upon example has been found. "


Harvard Reference

http://ksgnotes1.harvard.edu/researc...4?OpenDocument

"Economists have long searched, unsuccessfully, for convincing evidence of a Giffen behavior, i.e., consumers who, under some circumstances, respond to an increase in the price of a good by demanding more of it."

Everything has an explanation you see. Livestock is definitely not a Giffen good. Lots of references out there for Giffen goods and the Paradox.

Anyways Justin, perhaps you are right and I dont know :)

In either case, I would feel ripped off if I was suddenly paying the same price for a lesser product :)

In the end, merry xmas and happy holidays and lets just disagree :mrgreen:

I will agree to disagree. I guess sometimes, people who are hobbiests can't understand the business end of the hooby, and those in the business end sometimes can't understand the hobbiest end of it.

Back to salt prices , I live near toronto , other than Big Al`s & a few LFS
that have boxing week sales , the regular price of IO 200g pail is $99. + Tax = $115. a pail of the new IO 160g is $ 91. with tax.
I have read over time the salt prices you lucky people pay & have thought if I was to drive out west to visit relatives some day, I would toss the lugage & My Vehicle would be doing a wheelie on the way home, che-ching. :mrgreen: