Agreed. I grew up in a family aquarium business. Each sale's contribution margins are good, variable costs are manageable, but the problem is the labor + overhead. I think folks can be surprised that the mark up on livestock can be 5x to 3x the cost, but it's the overhead of utilities, labor effort, lease & property etc that is not apparent. If there's not enough volume of sales/transactions, the overhead is not spread out enough on a per sale basis to keep each sale in the black.
In a city of about 80K people, it would be a very small niche market that would be marine focused. I'd think for any aquarium store to be sustainably profitable in such a small city, they'd have to be an overall good aquarium shop with lots of freshwater & specialty items to realize the life time value of each customer as they go from a starter 10 gallon freshwater tank... to their 3rd & 4th tank... to conversion to SW etc...
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12-21-2014, 03:34 PM
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