Reef Discussion
Yeah I am in consulting and the norm is in that range. Maybe service industries are different to hard goods, fewer direct costs.
@Buddy wtf do you do to make 200% margin?
Margin is a lot different than what goes into the books at the end of the day. Say I buy 10 ritteri anemones for $50 each. I will put them up for sale at $150 each. Now ritteris ship like shit so out of that box of anemones, maybe I lost 4 so now my cost is $83 each, almost 25% of my margin is wiped out. Standard mark up on marine fish here is 2-300%, higher end specimens on the low end, cheaper stuff on the higher end. Dry goods get doubled and a little more added. I wouldn't stock Vortec just because of their shit margins, because if I'm going to gamble with my money, there's going to have to be a decent profit at the end. I would order them in for people, but I wouldn't stock them. By the time inventory taxes come out, your margin is in the 5-10% range, not worth it for me.
i have no issues with people bringing in a product that is not in aus and selling cheap, the issues is when grey imports come in where buisnesses can not buy them as they need to go through the distributer.
@MTG RS is the distributer for those products they bring in as no one else stocks them.
@MTG RS is the distributer for those products they bring in as no one else stocks them.
It is very easy to bring in a brand name skimmer or pump from Germany. More people should do it! Think of the savings you could make over the life of your aquarium keeping!
Why would anyone bring in a container load of stock?
What is the point? Everyone can get it cheaper direct by themselves, correct?
If someone brings in a container load of stock to service the hobby, what are the real costs?
1) Initial item cost
2) Multiply that by say..100 units
3) Covert total purchase amount to Australian dollars
4) Freight & handling on getting your order packed into the container & onto the boat
now the fun begins---
The boat just pulled into port & your container is almost ready for pick up,
better call the customs man
Add to the costs incurred so far....
5) Customs broker fee say 5% of your AUD order
6) Customs clearance / agency fees another 10%
7) Customs disbursement charge another 10% of order total
8) 5% duty
9) Add AQIS processing charge
10) Declaration charge
11) AQIS container charges
12) Now add another 10% GST
All good & paid up!
Now you can go & collect your goods!
So you rock up to the freight yard & now your hit with....
13) Terminal handling charges
14) Delivery order fee
15) Seacargo automation
16) Cargo management re-engineering fee
17) Destination security surcharge
18) Documentation fee
19) Destination port charge
20) Import processing surcharge
21) CISF fee
22) PCS fee
23) PFC fee
You now have your goods in hand if you pick up direct from the freight company.
That is unless you need to pay a truck driver to deliver the container to your depot.
24) Truck hire
25) Container hire while it is in your depot until it is returned.
As an importer, you now have your warehouse full of stock! Woohoo!!
You now have $500,000 worth of stock to support LFS's across the country
Joe blow can walk into a LFS & buy a skimmer now & then
So now we need to work out a total cost on each item sitting on the shelf.
This is YOUR business now. YOU have just gone through all above to get the stock on YOUR shelf.
What do YOU think is a fair markup % for wholesale sales to any LFS?
This is YOU now, this is YOUR lively hood, this is what pays YOUR bills & puts food on the table for YOUR kids.
Now don't forget! For ANY product YOU sell, you will have to pay the taxman 10% of that price!
20% ? Someone made the comment "why even bother being in business?"
List what YOU would mark up by.
Mr. LFS wants to place a $2500 order, nothing huge by LFS standards
$2500 in product
$$$ in freight getting it to the shop
Now what ever he sells, 10% of that will go to the taxman don't forget, so that $600 skimmer you just brought, 10% goes straight to the taxman.
Now you have to add your mark up again, what do YOU think is fair???
This is the guy that is always there for you, when you have a problem you will ask your LFS at some stage
The guy you send a Facebook message to at midnight & get pissed off when there is no reply because he has gone home for the day, he has finished work, just like you.
The guy you ask for advice about the bargain price chiller you got online because your LFS was to expensive when it breaks down & you need it fixed NOW.
The guy ask advice from about a coral or item you brought online or another LFS
The guy on the other side of town that you message for advice in the middle of the night but will never step foot in his store because it's to far away.
The guy who explained everything you need to start a marine tank, which you went & brought online because it was cheaper, then went back to the LFS & asked what next?
The guy who tests your water each week for months & months for FREE because you can't be bothered buying your own test kits.
The guy who spends thousands of dollars each week on stock, so you MIGHT buy something when you come in for the cheap water & free tests
The guy that always gives you a little discount when you finally get something from him
The guy that actually provides a service when you need it most
You know, that guy, the guy you say always rips you off & just wants to sell you stuff you don't need.
Come to think of it, why do we really need a LFS?
Cheaper to import it yourself, just need to stay under that $1000 mark!
As for fish & corals, Facebook, forums & home chop shops pretty much have it covered!
What can't you get from these places cheaper then your local LFS?
I'll probably piss a lot of people off with all the above, but tuff luck lol.
We all have an opinion & this is my 2cw :p
Why would anyone bring in a container load of stock?
What is the point? Everyone can get it cheaper direct by themselves, correct?
If someone brings in a container load of stock to service the hobby, what are the real costs?
1) Initial item cost
2) Multiply that by say..100 units
3) Covert total purchase amount to Australian dollars
4) Freight & handling on getting your order packed into the container & onto the boat
now the fun begins---
The boat just pulled into port & your container is almost ready for pick up,
better call the customs man
Add to the costs incurred so far....
5) Customs broker fee say 5% of your AUD order
6) Customs clearance / agency fees another 10%
7) Customs disbursement charge another 10% of order total
8) 5% duty
9) Add AQIS processing charge
10) Declaration charge
11) AQIS container charges
12) Now add another 10% GST
All good & paid up!
Now you can go & collect your goods!
So you rock up to the freight yard & now your hit with....
13) Terminal handling charges
14) Delivery order fee
15) Seacargo automation
16) Cargo management re-engineering fee
17) Destination security surcharge
18) Documentation fee
19) Destination port charge
20) Import processing surcharge
21) CISF fee
22) PCS fee
23) PFC fee
You now have your goods in hand if you pick up direct from the freight company.
That is unless you need to pay a truck driver to deliver the container to your depot.
24) Truck hire
25) Container hire while it is in your depot until it is returned.
As an importer, you now have your warehouse full of stock! Woohoo!!
You now have $500,000 worth of stock to support LFS's across the country
Joe blow can walk into a LFS & buy a skimmer now & then
So now we need to work out a total cost on each item sitting on the shelf.
This is YOUR business now. YOU have just gone through all above to get the stock on YOUR shelf.
What do YOU think is a fair markup % for wholesale sales to any LFS?
This is YOU now, this is YOUR lively hood, this is what pays YOUR bills & puts food on the table for YOUR kids.
Now don't forget! For ANY product YOU sell, you will have to pay the taxman 10% of that price!
20% ? Someone made the comment "why even bother being in business?"
List what YOU would mark up by.
Mr. LFS wants to place a $2500 order, nothing huge by LFS standards
$2500 in product
$$$ in freight getting it to the shop
Now what ever he sells, 10% of that will go to the taxman don't forget, so that $600 skimmer you just brought, 10% goes straight to the taxman.
Now you have to add your mark up again, what do YOU think is fair???
This is the guy that is always there for you, when you have a problem you will ask your LFS at some stage
The guy you send a Facebook message to at midnight & get pissed off when there is no reply because he has gone home for the day, he has finished work, just like you.
The guy you ask for advice about the bargain price chiller you got online because your LFS was to expensive when it breaks down & you need it fixed NOW.
The guy ask advice from about a coral or item you brought online or another LFS
The guy on the other side of town that you message for advice in the middle of the night but will never step foot in his store because it's to far away.
The guy who explained everything you need to start a marine tank, which you went & brought online because it was cheaper, then went back to the LFS & asked what next?
The guy who tests your water each week for months & months for FREE because you can't be bothered buying your own test kits.
The guy who spends thousands of dollars each week on stock, so you MIGHT buy something when you come in for the cheap water & free tests
The guy that always gives you a little discount when you finally get something from him
The guy that actually provides a service when you need it most
You know, that guy, the guy you say always rips you off & just wants to sell you stuff you don't need.
Come to think of it, why do we really need a LFS?
Cheaper to import it yourself, just need to stay under that $1000 mark!
As for fish & corals, Facebook, forums & home chop shops pretty much have it covered!
What can't you get from these places cheaper then your local LFS?
I'll probably piss a lot of people off with all the above, but tuff luck lol.
We all have an opinion & this is my 2cw :p
So true, not many think would think of the above, they think LFS should work for free, and work on low margins.
Thanks for a very thoughtful post. Hopefully it will give people who think the cost of trading is negligible, some food for thought. :)
The hobby would be a lot poorer without LFS. You get to see the latest equipment in action, get to pick and choose livestock, and yes, you get to annoy the staff. FWIW, the LFS is especially valuable to new hobbyists IMO, and vice versa.
But...addressing your list above, the importer adds his margin before the shop can add theirs. The final retail on equipment can certainly be above the cost of buying direct from Germany...but not to the point where it is cheaper for a shop to buy from overseas than from the Australian distributor wholesale. Therefore, I still believe that the future business model will be distributor to hobbyist, OR LFS to hobbyist, but the middleman must go unless he becomes far more competitive.
I know we have an Australia tax, but I also know some distributors are fighting tooth and nail to hold onto an outdated business model thats no longer relevant.
Jm2c, as usual.
The hobby would be a lot poorer without LFS. You get to see the latest equipment in action, get to pick and choose livestock, and yes, you get to annoy the staff. FWIW, the LFS is especially valuable to new hobbyists IMO, and vice versa.
But...addressing your list above, the importer adds his margin before the shop can add theirs. The final retail on equipment can certainly be above the cost of buying direct from Germany...but not to the point where it is cheaper for a shop to buy from overseas than from the Australian distributor wholesale. Therefore, I still believe that the future business model will be distributor to hobbyist, OR LFS to hobbyist, but the middleman must go unless he becomes far more competitive.
I know we have an Australia tax, but I also know some distributors are fighting tooth and nail to hold onto an outdated business model thats no longer relevant.
Jm2c, as usual.
Yup there is a crapload of fees involved!
What I do is basically divide the price by .8 to convert USD to AUD, then add 25% to cover the said fees above, then our labour costs.
So $10000/.8 = 12500
+ 25% = $15625 This is the cost to get a $10000 product imported here.
+200% = $46875
Then our labour here, 12 hours @ $70 per hour = $840
Your price to buy this is $47715 +Freight and GST
If I sold somthing with less than a 100% mark up I would get my arse kicked lol:)
What I do is basically divide the price by .8 to convert USD to AUD, then add 25% to cover the said fees above, then our labour costs.
So $10000/.8 = 12500
+ 25% = $15625 This is the cost to get a $10000 product imported here.
+200% = $46875
Then our labour here, 12 hours @ $70 per hour = $840
Your price to buy this is $47715 +Freight and GST
If I sold somthing with less than a 100% mark up I would get my arse kicked lol:)
Great posts folks. Here in The States, big corporations have driven about 90% of the small mom and pop shops out of business and unless you're doing what I'm doing, you don't stand a snowball's chance in Hell. I need to get off my ass and do a WYSIWYG page so I can sell to everyone because that's what most of the wholesalers are doing here. You shits might think you're slick, but I can see through your sham like a wet T-shirt. Petco, Petsmart and to a lesser extent, WalMart have driven small business from the landscape here.
Thats what they said 20 years ago that distributors will go, but not the case, that is because it takes a lot of cash to hold stock, distribute products is not easy as you need the distribution and get permits , clear goods ,etc.
Plus to get export pricing you need to buy in volume, most stores don't have the space and cash to make this happen, plus manufacturer don't have the structure to sell small volumes.
Really good point @suta42 "distributor to hobbyist, OR LFS to hobbyist" I think many LFS's have looked at this but the upfront expense is daunting to the smaller LFS. Again it may be a catch22 situation. A few of the distributor's may close, leaving a number of LFS's to take over & just continue on with the current price structure.
The same thing is happening here @ReeferRob, just look at the hardware chains. Where have the small thrifty hardware stores gone? Masters, Bunnings & Mitre10 have that market sown up. The big corporations will take over the retail world & people will follow like sheep, because there will be nowhere else to shop lol! I compare the future to the movie "Wall-E" the human race is almost to the point where big corporations have won, telling us what to eat, when to eat, where to buy it from lol. Petco is looking here already aren't they?
Think you hit the nail on the head there @Reef
:)
Some clarity for the unaware
Gross profit and mark ups are two different things.
Warehouse Distributor GP% in most industries is around 5%
A good retail GP% is anywhere between 15 and 35% depending on turnover.
Unfortunately we do pay more for retail in Australia I feel it's a lot to do with greedy retailers of te past taking advantage of our isolated economy. Now that there is more transparency to the world economy we are left wondering why we pay a premium here.
I reckon more manufacturers need to distribute their products themselves.
Gross profit and mark ups are two different things.
Warehouse Distributor GP% in most industries is around 5%
A good retail GP% is anywhere between 15 and 35% depending on turnover.
Unfortunately we do pay more for retail in Australia I feel it's a lot to do with greedy retailers of te past taking advantage of our isolated economy. Now that there is more transparency to the world economy we are left wondering why we pay a premium here.
I reckon more manufacturers need to distribute their products themselves.
I think the cost of transport also plays a part.
I can go online and buy a product from oversea's and have it shipped to my door for say $35. If the distributor buys a large quantity, it is shipped via Singapore in some cases, which adds to shipping. I also don't pay GST if I keep it under $1K, the distributor does. Lots of little things make the price difference.
I can go online and buy a product from oversea's and have it shipped to my door for say $35. If the distributor buys a large quantity, it is shipped via Singapore in some cases, which adds to shipping. I also don't pay GST if I keep it under $1K, the distributor does. Lots of little things make the price difference.
So Pet Barn took over City Farmers. Rumor is one of the managers that left City Farmers is taking over Guppies.
Would the hint that he used to manage Pet City with Butters help?
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