Bubble Magus Pricing
 

In respect to a sponsor's request to keep this discussion out of his thread I would like to continue the discussion here. I would like to explore the reasons for the often large disparity in pricing of products in Canada vs. overseas pricing and specifically the Bubble Magus line.

Now I will first start by saying I think that the Bubble Magus line are a great bunch of products that are well made and work well. Their most attractive feature, however, was their price. The Bubblke Magus skimmers are as well built and perform as well or better than many other brands that are (or were) priced higher than Bubble Magus. I think that is what made Bubble Magus so attractive was the price point vs. the competition. They were bringing a quality product to the market at a very attractive price.

Now that some exclusive distributors have taken over the line the prices in Canada are much higher compared to overseas and the reasoning given does not seem sound to me.

So first let’s do some price comparisons:

Product China Price Canada Price Difference

BM-NAC6 skimmer $130 $195 $65 (+50%)
BM-NAC7 skimmer $170 $240 $70 (+41%)
BM 150Pro skimmer $236 $379 $143 (+60%)
BMQQ nano skimmer $68 $139 $71 (+104%)
BM 180CS skimmer $305 $500 $185 (+64%)
BM 220CS skimmer $500 $800 $300 (+60%)

BMT-01 Dosing Pump $276 $320 $44 (+15%)
BMT-02 Dosing Pump addon $130 $260 $130 (+100%)
BM 2.5L liquid storage bucket $20 $60 $40 (+200%)
BM 5.0L liquid storage bucket $25 $75 $50 (+200%)


The distributor attributes the higher costs to shipping costs, duties and providing warranty support. He also stated that they are paying the same to Bubble Magus as the Chinese retailers charge us or something to that effect (perhaps he would clarify that as the original post is not there anymore). Let me state my take on it:

1. Shipping costs. I was quoted $70 to ship a BM180CS skimmer from China by EMS. The distributor is having them shipped in a container by sea so the cost per unit to ship will be far less than $70. So that still leaves room for markups etc. and I would say the prices of the NAC line of skimmers are reasonable in Canada vs. the cost to get one from China. However, the prices of the Aquabee equipped 150Pro and CS cone skimmers is a bit inflated vs. the Chinese prices at close to $200 and $300 more than the overseas prices. There does not seem to be some set percentage or per item markup to cover shipping. It is somewhat variable.

2. Duties. I was not able to find specific information on this but it looks like there may be no duty on aquarium equipment. So the importer would pay GST and possibly some brokerage fees if using a customs broker instead of doing the paperwork themselves. I may be wrong about the duties but I could not find aquarium equipment in the tariff listings and haven’t taken time to try to contact Canada Customs to find out. If somebody knows about duties on aquarium equipment please chime in.

3. I would be curious to know what the cost of providing customer and warranty support is as a percentage of their sales. Shouldn’t be a huge percentage unless you are selling a bunch of low quality product which Bubble Magus does not appear to be. And from what I have heard from others this particular vendor isn’t the most responsive or helpful when it comes to warranty support.

4. Finally, it was implied that the wholesale price Bubble Magus is charging the distributor is the same as what the Chinese retailers are charging. I find this doubtful. Bubble Magus should set their wholesale price and the retailers then add a markup for their profit. I would find it had to believe that the wholesale price charged to Chinese retailers would be that much lower than what is charged to overseas customers. Sorry I don’t buy it.

So basically, I would like to understand the economics of the price differences. It doesn’t make sense to me and the reasoning presented in the other thread just did not seem believable.

There was some implication that Bubble Magus were not seen as a quality product because the prices were low. That is just an excuse to try to price gouge. Sorry. The attraction of the Bubble Magus line was the value proposition. Good quality products at lower prices. At these prices Bubble Magus is just another option in a sea of competitors and will not sell as well as they could at better prices. Those dosing solution containers are especially overpriced at 3 times the price for the same product in China.

I would love to hear some other opinions or additional input on this.

The attraction for BM when they came out was the cost for the product, now with the huge markup as part of the exclusive distributorship, I'm sure lots are staying with the other mainstream lines.

I agree, would think the cost of shipping a whole container rather than shipping individually would bring the total overall cost down, can't understand what happened there.

As for increased cost due warranty and custom service, balanced against that I've be running my ASM G3 skimmer for about 5 years, with no problems and really a skimmer is a simple device, I'd like to keep the cash.

Guys...
this is just the thing...lol

When the bubble magus frst came out retailers and high tech hobbyist alike were purporting the age old aquarium addage of "you get what you pay for" and dismissing them as cheap, made in china crap.

Then some brave (and cheap...lol) souls actually tried this line and reviewed them and suddenly the proof was out there.
A quality product for a fair price was on the market.

How long did you think it would take before retailers realized that significantly higher mark ups would equate to significantly higher profits?


You can't escape from this cycle, it's just free market capitalism at its finest.

I wish I'd thought of ordering them in bulk or inking a contract with the manufacturer or distributor in china and marking them up to sell to all of you.

Gobytron, that's the attitude that causes the problem. Why should we just accept it as a product of capitalism? It's up to us as consumers to vote with our wallets. We can also use this new fangled interwebs thing to spread and discuss this information with large numbers of hobbyists. If enough people complain about the pricing and buy other products then perhaps things change. Do nothing and just accept it and nothing changes.

I for one do not like to be overcharged for things and am always seeking ways to find a deal or get the best price. Ordering from China was not difficult. It arrived quickly. They provided good support for a small problem. Oh and the bonus was that the package was not charged any taxes etc (sometimes you get lucky and Canada Post doesn't charge the tax) so I saved a bunch there too.

Buying here I would have overpaid and also paid PST and GST on top of it. So I figured I saved nearly 20% on my Bubble Magus skimmer and dosing pump. If I had bought a higher end skimmer my savings would have been much larger. I would have spent about 30% ($185) less on a 180CS. $185 is a good chunk of change.

So vote with your wallets and voice your opinions. When you buy that Reef Octopus skimmer instead of the Bubble Magus (or better yet, skip a purchase altogether) tell the retailer that you were interested in the Bubble Magus and would have bought it if the price was better. The message will get across if enough people deliver it.

The markup is there . .... but i do agree with shipping and cost to support might be the difference if the importer is actually the one supporting the product .... In most cases i doubt it.

They even have a decent website .... so i wouldnt doubt they handle there own support / replacement parts .

Currently looking at one myself .... or an ASM skimmer ... ASM i have experience with. So undecided so far, and trying to find a reliable review .. not just " Pulls out gunk " would help hehe.

supply and demand Ron.

Unfortunately makes the world go 'round.

Ron,

This is quite simple if you wish to understand how distribution works and why manunfacturers wish to use distributors

yes i agree 100% getting a distributor involved increases the product price, But by doing so you give a genuinely good product a market available to the many not just the few that wish to shoot their luck with sending some $$ over to China and hope they get something back in a useable state.

Ok onto prices.

Originally BM were selling to anyone at their factory price, no hiding this fact, but also this created the issue they have now moving into main stream marketing. basically you could (minus duties taxes and shipping) prior to February this year get a BM for cost price, wahoo :) BUT their market was restricted to only those willing to buy oversees, they had zero marketing and no country based product support.

So for the company to establish itself it needed to create a distribution base, this means distribution margins and retailer margins, and this brings me onto two points

Why have a distributor - this is wholly down to two reasons 1. Very few small stores wish to purchase in the numbers that a factory demand so by not having a distributor again the product becomes market restrictive to the masses. and 2. support, a client wants to know they can get fast easy access to resolutions when things do not go overly well.

So pricing. Well you know roughly what the product costs us ;) shipping for a $10,000 order cost approx by sea freight $1500 so here immediatly is 15% across the product range. This is how all distributors work out shipping costs.

You then have taxes duties and disbusements, this can range from 0% to 6% depending on how customs view the shipment when it lands, basically this depends on how many entery lines they wish to charge us for.

So what is my margin - about 20%! shock horror wow, ok now sit back a slurp that beer and think, thats Gross margin, many dealers want free shipping then there is packing costs, advertising, cost of spare parts for warranty, no the factories do not offer these for free, then there is shipping losses, always happens with sea freight especially, no factory replaces those losses, so taking all that into account we may be lucky and see EEK 10-12%

Dealer margin - dealers have huge expenses to offer you a funky store front to go a browse on saturday afternoon they also have to offer from time to time things like free shipping to stay competitive just because mr cheap skate wants to shop for a deal and drag the poor dealers margin down further, did he not realise the guy behind the counter does not live on bread and water?

Dealer margins for any product run gross between 25% to 40% did you know other skimmers have margins of 50% plus!!

Yes i am sure you will rip this apart somehow but lets just sit back and look at reality. yes we all like the concept of Walmart pricing, but for a manufacturer to have any chance of mainstream supply they have to have retailers and distributors making sure the product is out there for all not just for the few willing to use their paypal account and send some dosh across to China.

Look at the big picture for the company making the unit not just your own need for cheap as possible irrelevant of effects. And yes prices went all over the place for sometime while real costs were worked out. Now they are set and set to stay.

I was going to purchase the BM 180 CS when they first were being offered by a Canadian Supplier. The landed cost was advertised for $349 Ca in the beginning of january. The cost went up about 20 days later to $399. I asked then why the price had changed and as told it was due to shipping prices from all 3 shippers came in 15% higher and the rate of exchange has gone from 1.02 to 1.08 at time of ordering and paying. BM has also set the MAP prices at above this, but we are negotiating down for you.The only thing that will ever change these figures now is if the USD goes above 1.10. Now that the Skimmers have officially hit the market the BM 180CS is going for $489-$499. At the $50 dollar price change I thought I can see that miscalculations in shipping might occur and the fluctuating canadian dollar might attribute to this. $150 dollar change I was done and am now looking to get a cheaper proven Skimmer instead.

I did notice though the BM 150 Pro that was originally posted at $309 I believe went up about $40 bucks to $349 20 days after the original post. It now sells for $379. This skimmer was not effected by the above reasoning as much as the Cone Skimmers.

Chris

Interesting. :neutral:

The BM-150Pro has a MAP (Minimum Advertised Price) of $399.00

Aqua Digital,

I do understand some things about importing and retail and distributor markups as I ran a business importing and selling model race cars from around the world. But some of your reasoning still does not make sense.

Firstly, most of us are buying from Chinese retailers such as fish-street or reefshops. They are not Bubble Magus selling direct but retailers in China. So the wholesale price that Bubble Magus charges for their product is less than the retail price at fish-street etc. We were not buying at factory direct prices, we were buying at chinese retail prices. If Bubble Magus is charging you the chinese retail price for large wholesale purchases you better be renegotiating with them. Now, if they want to expand into the newer markets they should be working with you to offer the best wholesale price possible in order to build their new market. You make up the small loss in per unit profit by significantly increasing sales volumes and make more money overall. That is standard and prudent business.

So let's run a hypothetical scenario. The BM180CS is $305 retail in China. Let's assume a 30% wholesale discount (although the usual discount is 40%) which gives a wholesale price of $213.50. Add your 15% for shipping brings the cost up to $245.52. Let's now add another 6% for brokerage fees and duties etc. as you indicated. We're now at $260.25. Your distributor margin is 20% bringing the canadian wholesale price the dealers pay to $312.30. Add 40% to that for retail markup and we have about $438, not $500 and also a significant increase over the overseas prices. So why is MAP at $499? I think most of us would be willing to pay a $50 premium to buy a skimmer locally rather than overseas. But a premium of $120 or more seems a bit high for most of us.

And how do you explain the prices of the dosing buckets? They are $20 and $25 in China and $60 and $75 here. That is a pretty significant increase. That's not a 50% increase but a 200% increase.

Now your comment about spare parts makes no sense. Do they not offer a manufacturer's warranty? If not then perhaps it's not a product worth carrying but as far as I know any decent manufacturer offers some sort of warranty. So I don't see how you are out of pocket for replacement parts which should be covered under the warranty.

Nobody is trying to stop you or the retailers from making money. My problem comes from the apparent extra money making at some stage here. The excitement over Bubble Magus was the expectation that we could have a quality product at a lower price then the competition. But now it is priced in line with the competition and some of us are disappointed and unhappy with that.

Walmart has nothing to do with it. The pricing of the product as available overseas sets expectations here. Yes, we expect to pay a reasonable premium over that once its available here. Some of us think the current premium is not reasonable. As I said above, if you want to expand sales do it by offering better value then the competition and you will expand sales and everybody makes more money; the manufacturer, the distributor and the retail stores.

But don't keep changing your tune and blaming shipping costs, or duties and taxes, or warranty support or some notion that price affects perceived notions of quality.

And you will have to deal with the new world economy. The internet and Paypal and international sellers are here now and it is easy and, for the most part, safe to deal with sellers all over the world. Buying things from all over the world on the internet is increasing all the time. You need to recognize that and adjust to it too. It's not about throwing dosh to China and hoping for the best. That is nothing more than a scare tactic to justify higher prices here. More and more people are doing this as they don't want to pay excessive premiums for things. I found dealing with the Chinese retailer to be a good experience. They were eager to help, shipped our order quickly and gave support afterwards. So why wouldn't I and others do the same to save large amounts of money? Where's your value proposition to the consumer? Really, why should I buy it locally vs. overseas? You have yet to provide a compelling reason to justify the much higher prices on much of the Bubble Magus line.

Just an FYI Ron, BM shut down supply of Fish street to stop them under selling their product line into the North American market.

You will find it very hard now to source BM from within China directly unless it is old stock, BM have shut everything down to protect their product brand from devaluation.

I have provided a very compelling reason wy BM is now more expensive. BM wants it accessable to all, not the few. If they want to set a price they feel the product is worth irrelevant whether you feel it is justified based on a very blinkered view and not looking at long term growth of a company, then this is up to them.

Lets put it another way, we imported nearly $20K of bubble magus in April, we sold all of it, and so did dealers, I think that is enough proof the price is set fairly at a price people think the product is worth, if not, simply put, we would be stuck with a whole lot of kit.

So the product sells well at this price, clients love the product, build quality and support, so I fail to see the problem other than the select few as always looking for a rock bottom bargain with no care what so ever of long term effects this sort of thing has on the survivability of our hobbies dealers

Go get a BM bucket shipped direct from china "if you could even source one" and then let me know what they would charge you in shipping. OOPs I have the answer here $48 direct to your door just for the shipping!

Not exactly $25 bucket anymore eh! ;)

As i said above, the product sells at these very reasonable prices and if you had not sen what they were being sold for direct before, then we would not be having this discussion, and in 6 months from now when the masses have access to the product and many new lines have been introduced, providing the client is happy, which seems they are, whjy should a factory bend to the few that just want "that deal"

Lets all bow down to Walmart and Ebay and look at what they have done to the global economy, wahoo mega cheap prices, suppliers struggling to stay in business to keep up with consumer greed for far reduced MAP prices way below product worth, and where will we all be in 10 years? Sourcing out of China direct to appease the few that dont see past their own view point and dont care who suffers down the supply chain.

Sad world we live in it really is.

Accept a product price or dont buy it, move on. Debating it here is changing nothing and certianly does not change any market strategy when we are stretched already to meet consumer demand.

We are stocking the Bubble Magus line now and we do NOT have to purchase them from any such "exclusive" distributor.

We will be pricing this whole product line in a fair manner in respect to our customers and for ourselves as far as margins and justifiable business is concerned. I personally think that MSRP's do have their place in the market but the markup on these skimmers is simply outrageous.

Do we have the ability to warranty these skimmers? Probably not but how about a replacement program if the warranty is justified?

This is our two cents.

Hiya Ian,

I will let Iven, and Victor and Socal know this then you may find you have difficulty getting supply from now on then.

We all had a very long communication about this late last night and into this morning, Jason was very clear at Bubble magus that they will not tolerate this.

BM are very serious about their policy, and also very serious about protecting the Canadian distributors and USA distributors pricing, simple response was, "if they cause trouble they lose supply"

If you have doubts over this please feel free to contact BM directly I will happily pass you the email address to contact.

So I've been following this thread because I found the topic quite interesting. After the last couple of posts I did some digging (just out of curiosity) and was quite confused by what I found.. AD lists the BM180CS for $399 retail while OC lists their BM180CS for $489 ?? Is that a typo ??

http://i1002.photobucket.com/albums/...g?t=1274391240

http://i1002.photobucket.com/albums/...g?t=1274391271

I'm just a little confused is all (but then that's usually a common state for me) :neutral:

This sounds great; however, I am not sourcing them from anyone that you have listed nor are we going to divulge where they are coming from, I will do everything in my powers to offer these products at a more reasonable price.

Thanks!

Just in case there are doubts here is the email from last night the relevant text that applies

Hi Michael ,
Just now I discussed with Ivan ,and We reached a consensus below.

The first , you are exclusive distributor in Canada ,this is truth , and ATB ,Socal and other dealers will not sell BM products to Canada .

we finalize this price at last (including shop price and wholesale price),everyone all must abide by this agreement .............

we will never send any products to new customers now .

At last ,if you have any questions ,tell me .
Regards
Jason
2010-05-20
________________________________________
Jason

Hi ian,

I would talk to your source quickly then, as things are a changin ;)

What?

Like I said, you won't win Michael.

You screwed yourself with us when you openly slagged our product on Reef builders,

Funny how someone like you would preach to all the perspective buyers here to buy overpriced products just because you have a captive audience when you clearly stated to everyone on Reef builders that it is easier to cut out the middle man and just get the product "yourself". A little of the Kettle calling the Pot black......??

This was taken from Reef Builders where Michael Hall (Aqua Digital commented on our NpX-Bio Bead announcement...

1. I’m curious about this stuff. Maybe someone who’s been using them for a few months will post here.
   As for the disclaimer on the page, I think that’s just a really bad way of saying “A good protein skimmer is an absolute must” just like manufacturers of other carbon/bacteria filtration products state. All nutrient reduction techniques using organic carbon/bacteria can crash a tank from oxygen depletion if the gunk isn’t removed by a properly functioning skimmer.
   
   http://www.gravatar.com/avatar/94401...6%3Fs%3D32&r=G Posted by: pickle
   April 27th, 2010 at 10:43 am
2. I don’t use this but I do think a good refugium at least 20% of tank size and a good LR Nitrate Test kit is a must. I have found that looking down the tube of a Lamotte that is less than 0.25 ppm Nitrate as NO3 is best way to have good growth without bleaching. Just a hint of color beyond blank. Not really a science but hazardously hoping organic fuel (either pellet or liquid) will balance itself out is reckless.
   
   http://www.gravatar.com/avatar/99d44...6%3Fs%3D32&r=G Posted by: iggy
   April 27th, 2010 at 1:16 pm
3. From what I have seen and heard form people who have used these biopellets they really aren’t that effective. Personally Would stick to vodka and bacteria dosing. It is a much cheaper alternative and has a proven track record of results.
   I have been dosing bacteria and vodka for almost two years now with great results. I do not run a refugium or conduct regular water changes. Carbon dosing works well but it is not free of faults. As Pickle has stated, a large skimmer is a must.
   
   http://www.gravatar.com/avatar/8c6ac...6%3Fs%3D32&r=G Posted by: Sonny
   April 27th, 2010 at 1:58 pm
4. Here is a link to a popular Canadian Reefing bulletin board with a ton of questions and answers (from Oceanic Corals themselves): http://www.canreef.com/vbulletin/forumdisplay.php?f=170
   
   http://www.gravatar.com/avatar/88b32...6%3Fs%3D32&r=G Posted by: Westcoast Frags
   April 27th, 2010 at 3:56 pm
5. “From what I have seen and heard form people who have used these biopellets they really aren’t that effective. Personally Would stick to vodka and bacteria dosing. It is a much cheaper alternative and has a proven track record of results.
   I have been dosing bacteria and vodka for almost two years now with great results. I do not run a refugium or conduct regular water changes. Carbon dosing works well but it is not free of faults. As Pickle has stated, a large skimmer is a must.”
   I agree with Sonny 100%. I also have been dosing vodka and bacteria for almost 2 years and following the various threads and really do not think it is worth the money.
   
   http://www.gravatar.com/avatar/02719...6%3Fs%3D32&r=G Posted by: Paul_PSU
   April 28th, 2010 at 6:46 am
6. Guys
   cut out the middle man on this stuff, seriously it is readily available to anyone wishing to buy in small bulk. You can even get it shipped from China for $35 including product for 1kg
   http://en.wikipedia.org/wiki/Polycaprolactone
   I am not going to make it easy for you to find a manufacturer as i have various here in canada and the USA, just google Polycaprolactone suppliers.
   
   http://www.gravatar.com/avatar/a15ed...6%3Fs%3D32&r=G Posted by: michael Hall
   April 28th, 2010 at 8:29 am
   
7. Polycaprolactone is NOT the same product as what is in Bioplastics used for denitrification! Michael (Aqua Digital), make sure you do your homework before suggesting people dump Chinese plastics in their expensive reef tanks. The biopellets used in the industry do not use Polycaprolactone, but instead use a similar (PHA) base polymer plastic with additional additives and mineral fillers.
   Bad advice.
   
   http://www.gravatar.com/avatar/f0182...6%3Fs%3D32&r=G Posted by: David Jones
   April 28th, 2010 at 10:22 am
8. Sorry to be miss informed then I better tell me friends using these with equal success.
   
   http://www.gravatar.com/avatar/a15ed...6%3Fs%3D32&r=G Posted by: michael Hall
   April 29th, 2010 at 7:25 am
   
9. Here is the Tetra USA patent that they hold on Polycaprolactone bio pellets for use in aquariums
   http://www.google.ca/patents?hl=en&l...uction&f=false
   
   http://www.gravatar.com/avatar/a15ed...6%3Fs%3D32&r=G Posted by: michael Hall
   April 29th, 2010 at 7:40 am
10. Great link Michael, too bad it does not apply to this product. Wonder why you suggest cutting out the middle man when you are the distributor for Fauna Marin additives, people could cut “you” the middle man out and just us the VSV method and also purchase the zeolith media from China in bulk.(same thing).
    
    http://www.gravatar.com/avatar/f0182...6%3Fs%3D32&r=G Posted by: Davis Jones
    April 29th, 2010 at 11:38 am
11. Alright everyone, please simmer down; let’s try to keep the discussion civil, respectful and distinguished.
    
    http://www.gravatar.com/avatar/a9ea7...6%3Fs%3D32&r=G Posted by: Jake Adams
    April 29th, 2010 at 11:43 am
12. Something tells me the Fauna Marin and Zeo distributors are getting a little anxious considering how well these biopellets are working for people! There will always be a game changer in the industry! We may have one on our hands here……….
    
    http://www.gravatar.com/avatar/9b85b...6%3Fs%3D32&r=G Posted by: Sean Wyan
    April 29th, 2010 at 11:44 am
13. Firstly, I will opnely apologise my first post it was not meant to rattle and could have been worded a lot better, i even contacted ryan to edit it.
    That being said, I have ben approached to make our own bio pellets but the market will soon get flooded with these, there is no point, they are readily avaiable to anyone willing to do the research in supply. I have a friend using Polycaprolactone pellets bought openly right now and are working just fine.
    That does not mean that for the average user they should not buy them from an LFS who has gone to great lengths to package these up and market them. But if you do your research and wish to buy in large quantities yourself they are available. I say the exact same thing about ZeoLith rock, its expensive to ship and for the price if you can get it direct do so.
    In regards to the patent, I do not see the difference, but it would be great to be educated in what exactly the diffeence between the tetra Polycaprolactone patent and the bio pellets on the market. The above post stated that they are not Polycaprolactone and Polycaprolactone could not be used in a reef system, so why is tetra doing just that?
    The patent states clearly “pure Polycaprolactone”
    
    http://www.gravatar.com/avatar/a15ed...6%3Fs%3D32&r=G Posted by: michael Hall
    April 29th, 2010 at 1:56 pm
14. You mentioned some interesting points, I was actually referred here by a friend of mine. Defaintely good info. http://ddl2.com/download/Brian-McKnight—Evolution-of-a-Man-(2009).html
    
    http://www.gravatar.com/avatar/f0208...6%3Fs%3D32&r=G Posted by: Elmo
    May 15th, 2010 at 4:29 am

S.w.c.

oh snap! It's on.. :pop2:

Later on in the thread it lists that the price went up another $50 so more like $449.00

And I think that was for a pre order promotion.

Oh and I need the popcorn icon

Actually, that $399 is the edited price with the +$50 factored in. Originally that post had the price lower. Plus this is the retail now if I'm not mistaken, as local retailers are using this as a price guide.

Edit: I reread this thread and Michael actually states that the MSRP/MAP for the BM180CS is $499, as opposed to the $399 that was in his original pricing thread. So confusing..

:lock1: Oh god I love vendor fights

:biggrin:

Here's an interesting read on RC.

http://www.reefcentral.com/forums/sh...438511&page=65

So why did they do that? Was there some outside influence ;) Some posts on Reef Central suggest that somebody influenced BM to raise the MAP in North America. They seemed happy selling at the previous price before you came on the scene.

Honestly, what the heck does that even mean? Protect the brand from devaluation? Whatever. They make it. It costs them a certain amount to make it. They add a reasonable margin on their production costs and that sets the wholesale price which in turn sets the retail price. That's the way it works before the greed of middle men etc get in the way. They were obviously happy selling at the price they were before "exclusive" distributors stepped in. Did it devalue the brand when fish-street was selling at price X? How exactly? They made sales to North America, Bubble Magus increased their sales because product was now going out of China and word started to spread that Bubble Magus was decent stuff at an attractive price. I doubt they were losing money or sitting there wishing that they had priced them higher? They made a product and sold it at what they thought was a reasonable price. End of story at that point.

Now you step in as the exclusive distributor for Canada and low and behold, they are underpriced which devalues the brand and the prices need to jump up drastically? Give us a break. Do you think we're stupid?

No you haven't. How does greater accessibility mean higher prices? You make these statements that have no basis in logic and do not make business sense. As I stated above, they have a manufacturing costs and then they set a mark up based on that cost. So what you are saying is they raised their wholesale prices? They are now charging much more for their product then they used to? That doesn't make sense unless the production costs have gone up drastically or they are spending a ton of money on R&D for new products. If anything, producing in higher volumes to meet the demand in new markets should drive per unit production costs down. Or did somebody tell them they could price them higher in North America so let's go for it?

Well bully for you. I guess you found lots of people who don't know any better or are sheep and don't want to question things. I feel sorry for this hobby because to many product are overpriced. You can argue otherwise but that's the truth. Slap "For Aquarium Use" on a product and the price goes way up compared to the same thing for another use.

It's not about a rock bottom price. It's about a reasonable price given the actual manufacturing and wholesale costs of the item in question. As I said, I am more then happy to pay reasonable premiums on things. Our argument thus becomes "what is reasonable?" So our hobby will only survive if we allow greedy people to overcharge us for products without question? Traditionally Canadians are passive and just accept that we pay more for things. But not all of us want to accept that and more and more people are starting to look beyond our fine Canadian tradition of screwing the consumer. That's why both my wife's car and my car were purchased south of the border saving thousands of dollars. More and more people are shopping on the internet outside of Canada because we want value for our dollar. It will catch up with you eventually.

Well by your numbers in a previous post that $25 bucket should cost no more than $51 here. And that is assuming you are paying Bubble Magus $25 for it wholesale which I doubt. So where does the extra 50% markup come from? You throw out all sorts of catch phrases and rhetoric but no numbers or facts to back it up.

So, did Bubble Magus drastically raise their wholesale prices thus causing the big increase in prices here from your first "estimates" and compared to overseas prices? Yes or No? Your original estimated price for a BM180CS was $349. Now it is $499. That's a big difference of 43% higher then your estimates which were only going to change based on small currency fluctuations and shipping costs. So you must have come up with those original estimates based on what Bubble Magus said they were going to charge you for their product? So I ask again, did Bubble Magus drastically raise the wholesale price? Yes or No?


Again, did Bubble Magus raise their wholesale prices? If so why? Who influenced them to do so? Is your factory cost on a dosing bucket $25? Is your factory cost on a BM-180CS skimmer $305? Those are the retail prices in China so are Bubble Magus selling at a lower cost to Chinese dealers then to their North American distributors? If so then you could do the market a huge favour by negotiating lower prices. As I stated several times this would make Bubble Magus more competitive, sales go up quite a bit and profits increase due to higher volumes. Everybody wins. I am still not convinced that your costs are that much higher.

Yes, we should bow down to Walmart and eBay for offering us alternatives to overpriced products when we live in a country were we are overtaxed and many products are overpriced. We frequently go shopping for groceries across the border because the prices are so much lower. For example, dairy products are half the price a mere 15 to 20 minute drive south. We are overcharged for to much in this country and it makes me sad and makes us less able to compete on a global scale.

The state of the global economy has nothing to do with Walmart and eBay and everything to do with greedy banks and stock traders etc. And really, almost everything we buy is now made in China or has alot of Chinese made parts in it. That's the reality because if we had to manufacture alot of products at North American or European labour rates few of us would be able to afford them. if you don't like Chinese sourced product why are you selling Bubble Magus? Why is a Chinese made skimmer priced the same as non Chinese skimmers if that is the way to save money? I'm glad you are struggling to meet consumer demand and are happy ripping people off because you have given me no reason to believe that is not what you are doing.

Oh, and you're pi$$ing match with Ian just makes you look petty. Look out Ian, Aqua Digital is going to tell on you :lol:

It's only the dosers he doesn't like. Can't figure out why though =)

Take a scroll-see:

http://glassbox-design.com/2009/bubb...umps-roll-out/

I have to agree with Ian on basicly everything.. although Aqua digital had found some nice products in other contries and had to forsite to get distrubitor rights, he has priced them out of the common persons reach for no reason.

way I see it, you can sell 10 products at a proffit of 150 each or sell 200 at a profit 20 each.. which one will make you more money?

as for losses during sea shipping, all containers are insured and yes it is common to lose containers but the purchaser doesn't lose money over this as the insurance company will make up the loss. we have to deal with the insurance company requirments all the time when searching containers for bad stuff. I should say had to as I don't do that anymore..


Steve

Hi Steve,

I have to correct one important point here

WE Aqua Digital DID NOT set the MAP price, lets be very clear on this.

Bubble Magus approached us as to what we thought the best MAP price would be, this was then taken to their company owner who then passed it onto all other distribtuors, as of yesterday ALL distributors and Bubble Magus agreed on the price.

I dont mind having muck thrown at me when it is deserved, but in this case, no we did not set the price and have no control over the MAP price.

Only last week we sent a revised price list with adjusted prices and here is the reply.

quote

Hi Michael ,
The retail price (shop price ) ,we still use previous price ,not the new price whcih you sent it to me some days ago .(please change your retail price at once ,thanks )
Regards
Jason


2010-05-20
________________________________________
Jason


In regards to claiming losses from shipping, our insurance bill would be mammoth if we claimed for every crushed skimmer we got, in fact our policy has a $5000 deductable, so yes this is quite valid as it is classed as uninsurable losses.

ah, but you did recomend the MAP and it was accepted which means you set the price. Basicly they were selling for xxx amount befor you.. you recomended xxx+xx amount for the N/A market and they said ok. then when you find out people can buy them cheeper overseas you send a e-mail complaining that local markets are undercutting you and selling in your area as per the agrement. the parent company either loses this market as they have signed some tearm with you as a minimum or they force the other retailers to increase prices..

I do have some experiance in distrubution as I am a distrubitor of a product in westren canada, but nothing to so with fish stuff.

Steve

I am going to drop out of this now as it is important for you guys to talk amongst yourselves over this but I will pinpoint some important facts below

1. The MAP price is set by Bubble magus, ALL distributors put on the table what they feel is correct based on market conditions and BM set the MAP from there taking all costs and market influences into consideration. So if you are unhappy with it contact them, we simply put our costs and proposals down and BM thumped the numbers from there based on everyones input.

2. BM is a high grade range, but they made an early mistake in marketing by selling it to anyone at factory prices. This in the short term has created threads just like this as "everyones" expectations were set so price point low. This will take time to reverse but it will do.

3. The product is selling like crazy we cant keep it in stock, same as the other distributors, so does that mean we, BM, other distributors around the world got the price wrong?

4. For the product to have a legitimate right in this maket it needs correct pricing and fair pricing based on current market trends and client expectations. As the product has been well received at these prices BM will not change this, furthermore with these prices the product has become more widely available to more stores so more users have access to the product.

Whichever way, you can continue to blame AQD for the price but then you are ignoring the genuine facts as per the email I placed in the last thread which clearly shows BM controlling our price.

This is classic.

A company (Buble-Magus in this case) develops a product and make it available for sale. After a while, customers are finding this to be a good thing at a damn good price. Word spreads throughout the community. At this point, product is being sold direct, on eBay, whatever it takes. Reputation is still below the radar though and most companies won't stock it.

Pretty soon, demand rises to a point where Bubble Magus realizes that they are losing out because their distribution isn't effective.

Around now, businesses are being asked for the product by the public and realize they can move units. Bubble-Magus is suddenly the hot, loose chick at the dance !

Now the problem becomes how to get rid of all the channels they had before the distributors came online.

Nothing new here; we're just watching the beginnings of a new company entering the market and we're seeing a few of the ugly truths of a market economy along the way. Most of us would be disgusted to learn how little it costs to make many of the products we buy every day but there's manufacturing costs, employee costs, insurance, distribution, warehousing, marketing, blah, blah, blah.

Of course, the guy at the LFS has to make some money on it too -and you should be happy that he does because if he didn't there wouldn't BE a LFS for you to run to when you needed it.

As a consumer, I always look for the best deal I can but I don't feel it's fair to berate businesses for working the system and trying to make a buck. Shop around; competition is good and makes sure that prices aren't inflated. In the end, speak with your wallet. If you can find something somewhere else for less and you're willing to wait , ship, etc. then go for it.

I always find these types of threads funny

There has been some pretty good points brought out on both sides, both by Michael and Ron/hobbyists.

Having worked as an distributor for ADA i can say that importing duties/ taxes/shipping price DOES take a big bite out of the profit of a distributor if they buy small quantities but when the amount gets near $10,000+ range most manufacture are willing to work out a deal with the distributor to cover a portion of the shipping cost so what it comes down to is the duties which isnt all that much..maybe a few %.

I wont give out the actual total of the shipping cost but i can say my purchases with ADA was under $1000 shipped to get a large quantity of products in which weighs 100-200 times (40lb bags) more than that of any skimmer/acrylic product but that doesnt apply as much since BM products going to Michael are in containers.

There are usually a fair amount of restrictions giving to a distributor on how they can sell there a product, in the case of ADA they had restricted no selling in the home country of ADA, pricing has to be higher or equal to that of home country distributors but in the case of ADA distribution we did not have an MAP but a MSRP.

Now i have to say a few things about Michael's list of few things he left with us.
I have never seen a manufacture ask the distributors for a suggested MAP pricing, but this might be the case with BM as they are trying to break into mainstream supply . What doesnt make sense to me is why BM is willing to cut out home country supplies just so they can break into mainstream distribution with a enough distributors to count on both hands, and that leaves me with 1 question, what happens to all those units that was sold in China, how do they get warranties?

I am not quite sure if that is a 100% true argument, i mean BM quality is definitely good, but i wouldn't put it in the category of high grade yet. But them stepping into Eheims and Aquabees is definitely a start to the change of quality of product. No one in this hobby expects cheap products anymore...we all expect the next skimmer to come out to have a hefty price tag. All that BM did was offer a product that we hobbyists thought was in the right price range, and for the first time...the product was not crap.

Same reason as stated above.

The biggest question is, how do you determine correct pricing, what manufacture set? or what hobbyists perceive as fair in terms of quality/service and etc.

Yes, BM has final say on the MAP but you obviously had influence on that. Higher MAP means higher profits for you does it not? Enough said.

As stated by others, BM is a decent mid range product, not high end. And I still don't buy this argument. They were not selling me a skimmer. They sold it to an overseas retailer who bought it from them just like they would get any other product directly from the manufacturer or through a distributor. I bought it from that retail store that happened to be overseas instead of down the street. So Bubble Magus had a wholesale price they sold at and the retailers added their markup and that's what I paid. Retail price in that market, not factory price. Stop trying to make this sound like Bubble Magus was selling directly to end users. They were not.

I guess in the end they (or you) charge what the market will bear. Good for you guys. Doesn't change the fact that they could have had larger market share by having a slightly lower price. Also doesn't change the fact that you and they have lost some additional sales due to the increased price. Eventually the initial spike in interest for BM will fill and they will become just another product competing with the Reef Octopus and Vertex and eShopps etc. I am far less likely to buy a BM again if there are other competing products in the same price range. I am not alone in that.

That is bull$hit. Sorry but it is. This is a bunch of hand waving BS to try to justify a certain price point that has little basis in the economics of the actual product and more on the economics of how products in our hobby in general are marketed. Market trends and client expectations should be far less of a concern then what it costs to to make the product plus a reasonable profit for all levels in the distribution chain. And how exactly does higher pricing equate to greater availability? Really, can you come up with a logical argument? Lower pricing would mean higher sales driving more demand from retail stores wanting to carry the line due t even higher demand from the customers.


What facts? Them confirming a MAP that you yourself said you had input into it?

You still didn't answer my question. Who is profiting from the increased MAP? Bubble Magus or you? Did BM raise their wholesale price significantly along with the raised MAP? Or are the other levels in the supply chain the ones benefitting more from the higher MAP?

Bubble Magus did not raise their wholesale pricing.

Just to add, you yourself set those expectations when you posted estimates of prices that went up dramatically by the time they actually reached the market. Now those original estimates must have been based on crunching the numbers such as the wholesale price from BM, the shipping costs, duty etc. which you should have been able to do easily since you have been in this business for a while.

You set some expectations and those then changed quite a bit. Not just a little but alot. A 180CS went from $349 to $499. That's a big jump. It's not unreasonable for us to now want an explanation as to why that went up so much. Who is the beneficiary of that big price jump? Goes back to my original question. Did BM raise the wholesale price dramatically? Did they raise it at all? Or are you benefitting from the big price jump?

I believe BM did not make a mistake early on. They new exactly what they were doing. They looked at the needs of market and made a skimmer that looks like certain ''other'' skimmers and priced it to sell to the masses.Their only mistake might of been their marketing or was it? Maybe originally it was only meant to be sold in Asia because the first time I saw these when they were sold online,the very first thing that came to mind was patent infringement.So now everything seems cool,they are selling like hot cakes,the original price is looked at by various people Hey,I can make more money or have a piece of the pie! Yes to a certain point but when you start putting Caddilac prices on Chevys , the crowds of Chevy customers start leaving. Not that there is any thing wrong with Chevs, it's just that you've lost your market share. Don't worry people.Before too long there will be another skimmer that looks like another certain skimmer which resembles another skimmer at a reasonable price. China never sleeps.

Hello,

Guys, I haven't read through the whole thread and I won't bother. But I'm just shaking my head simply from reading the comments some individuals have been making.

Telling off a distributor that his comments on market trends and client expectations is BS sounds to me that this is more like a personal issue than anything. Different people are entitled to have different estimates.

Market participants have the right to set prices at whatever they want. If consumers don't like the price, they can do two things: 1) Buy another product and eventually demand will fall to the point that the price needs to be adjusted, or 2) Buy it direct yourself.

Now, three experiences I do want to add:
1) There can be duties with aquarium goods. I used to import products and had to pay duty. It depends on the material and country of fabrication or assembly.
2) There are breakages with shipments. Just because an end user didn't experience this due to luck on a one time purchase doesn't mean a distributor doesn't see this with consistent purchases. Filing claims on damages do take time and sometimes the process involved just ain't worth it.
3) Businesses do need to make a profit, and this profit comes after all the rent, salaries, bills, taxes are all paid for.

Just to provide a comparison, does anyone know how much does an average Coach bag costs in Asia compared to North America? It works out to about 30% more expensive in Asia.

So what? People are going to file a petition demanding explanations from the Asian distribution chain? I'm sure that will hit the press as the joke of the day.

Just because an Asian consumer can order direct from Coach.com and get it shipped across without having to pay taxes and duties doesn't mean the local retailers don't have to pay for rent, insurance on the storefront and employees, advertising, warehousing, bills, salaries, corporate taxes, shareholder dividends, interests, etc. After all these you still need to have profit left over or the equity owners doesn't have an incentive to invest and run the business.

If someone really have the time, go take a look at some companies' corporate filings rather than trying to argue to death about something like this, which really isn't constructive in adding to knowledge on how to run an aquarium. A huge portion of the annual revenue goes to stuff that doesn't apply to the average individual.

Titus