Though challenging, an aquatics department can add high profit potential through repeat sales opportunities.
By David Lass
|High markup value means fish can be strong money makers for retailers. Photo by Paul Freed|
As the economy continues to flounder for direction and remains weak, many pet retailers are struggling to retain customers and maintain profits. For such stores, adding an aquatics department may be the key to achieving these goals.
But adding an aquatics department isn’t necessarily an easy task. It requires patience, knowledge of the hobby and fish husbandry needs, and the proper sales strategy, many retailers in the industry reported. The single most important factor is securing good sources for live fish.
“There are many fish suppliers out there,” said Saskia Whallon, owner of One Stop Country Pets with two locations, one in Brattleboro, Vt., and the other in Keene, N.H. “But the most important thing for us is that we have found suppliers who provide a good assortment of healthy fish. We don’t expect to have to medicate fish when they come into the store. That is the supplier’s job.”
For most pet retailers, livestock in the aquatics department has one of the highest markups of any retail item in the store. Several retailers reported that aquatic livestock typically sold at three or four times their cost.
“I made a spreadsheet of what our cost is and what the sell price should be,” said Brett Varnum, co-owner of Laconia Pet in Laconia, N.H. “I found it much easier than having whoever prices the fish do it on their own. The retail price averages three times cost—and the spreadsheet eliminates any guesswork.”
Other retailers report the same profit incentive.
“We try for a minimum of three times our cost for the retail price, sometimes four,” said Caroline Chalk, fishroom manager for Something Fishy in Easy Providence, R.I. “If [the fish] are really knock-your-eyes-out size or color, sometimes we can go a little higher than that.”
Even in locations where the aquatics markets are highly competitive, fish sales have the potential to show large profits over initial costs for fish.
“I’m in a very competitive market, and on most fish I can only sell fish at two to two and a half times my cost,” said Anthony Colpack, owner of Supersonic Pets in Johnston, R.I. “If they are especially large or in full color, I can get three times cost.”
However, the fish department can be the most expensive department to operate, and profitability is tied closely to limiting fish losses.
“Obviously, a fish room needs to look good, display the fish well, and be easy to both catch out of and maintain,” reported Bob Champlin, who along with his wife Kit owns two Critter Hut Aquarium and Pets in Narragansett and North Kingston, R.I. “Ease in keeping the tanks topped off, and in doing water changes is essential.”
The handling of fish is vital to their health, and this starts with getting fish from delivery bags into the display tanks.
“In a retail fish store, the methods and skills for handling fish are totally different from how a hobbyist handles fish,” said Scott Moore, sales manager for Segrest Farms in Gibsonton, Fla. “The single most important thing is not to use the bag water that the fish come in.”
The bag water has medications in it, and probably very high ammonia levels, Moore said. Once temperatures are equalized by a few minutes of floating, net the fish out of the bag directly into the tank.
Most distributors also recommend that whenever fish are introduced into a new tank, they should be given a dose of Quick-Cure (consisting of formalin and malachite green).
“We utilize a regimen that includes multiple treatments and time to reduce the possibility of disease for our customers,” reported Kurt Harrington, CEO of Something Fishy in Warwick and East Providence, RI. “Furthermore, all incoming fish are held in our systems for a few days after receipt. While most retailers encourage same-day purchasing and have customers lined up on fish shipment days, that’s really bad for the customer, and bad for the bottom line.”
Equally important as having healthy fish is displaying them in an attractive way.
“We wanted to have at least 3,000 gallons of display tanks,” said Anthony Colpak, owner of Supersonic Pets in Johnston, R.I. “In addition to the basic 20-gallon longs, we wanted a number of large tanks to keep big fish.”
With the huge selection of fish to choose from in the hobby, stores are finding that they need to have as many display tanks as possible.
“When we opened our second store,” said Kit Champlin, “we realized that a lot of our strength and reputation depended on the fish department, and so we installed a much larger number of tanks than in our first store.”
Professionally manufactured systems display fish attractively, and make maintenance easy. The newer systems are also very “green” in terms of energy cost and pollution output. A prominent feature of new retail-scale display systems feature LED lighting, designed to reduce operating costs and last longer than traditional lighting options.
“Our new systems come with light emitting diode lighting,” said Stan Owens, director of Marineland Commercial Systems, a division of United Pet Group, in Moorpark, Calif. “The LEDs provide full light for all tank areas, and the cost is only around 15 percent more than T5 fluorescent lighting.”
In addition to the quality of the light, LED systems give off much less heat than fluorescents, and the lamps last at least 50,000 hours, with virtually no degradation or color shift.
“Our CASCO display systems come with LED lighting,” said Craig DeWalt, vice president of Casco Commercial, a division of North American Pet Products, in Cerritos, Calif. “We replace 36 watts of fluorescent lighting with 8 watts of LEDs. The operating costs for LEDs is 25 percent of what it is for fluorescents.”
Pricing and promoting of the fish themselves is very important for the profitability of the aquatics department. The fish should be clearly labeled, with as few different species in each tank as possible. Regular specials that change weekly keep customers coming back to the store on a regular basis.
“We have some stores we sell to who have done well by having one or two tanks—say 29 to 40 gallons—that are packed with the weekly specials,” Moore said.
He added that this works best if the specials tanks are apart from the other tanks in the fish room.
“One clever store owner had ‘voting cards’ with a list of fish he knew he could get good pricing on at the checkout counter,” Moore said. “Customers were asked to vote for what fish they would like to see on special.”
In addition to livestock sales, another profitable offering for retailers is consumables—fish foods (dry and frozen), filter cartridges and water treatments, according to industry participants. Of those, frozen foods can be among the most profitable, and new display options are available for retailers to utilize.
“When I first started selling glass door freezers back in the 1980s, there was nowhere near the selection available today,” said Andy Schmidt, president of San Francisco Bay Brands in Newark, Calif. “Brine shrimp, plankton and krill were about it with a few formula foods. Basically, compared to what was available 20 years ago, today there is a smorgasbord of foods available to feed fish of any kind.”
The aquatics department of a modern pet store can prove to be the most profitable department in the store. Live fish have a huge markup, even though they do entail risk and effort. Foods, filter cartridges and water treatments also contribute excellent margins for retailers seeking to expand their bottom lines…and are there any retailers who aren’t? <HOME>
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