# Big Time Change In National Chain Stores



## jones57742 (Sep 8, 2007)

Folks:

Something is going on out there in the retail chain world.

Approximately two years ago when I got back into fish keeping after 38 years a PetCo opened in San Angelo.

When the PetCo opened we had all of two LFS and one immediately went out of business. The other became totally useless.

For two years I had been able to order fish which were not on display from PetCo and not pay shipping costs.

Approximately six months ago a PetSmart opened in San Angelo and for several months I was able to order fish which were not on display and not pay shipping costs.

Approximately two months ago both chains discontinued this "fish ordering policy".

I believe that us regular fish keeping folks out in the booneys like San Angelo are now exclusively into Internet fish procurement and the shipping charges associated therewith.

Both chain stores appear to be marketing to the walk in and sell to them whatever you can customers.

An example is 2" red oscars which are very pretty on display.

This thread was set off by
http://www.fishforums.com/forum/water-hole/20058-petco-stop-selling-saltwater.html

TR


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## TheOldSalt (Jan 28, 2005)

Yeah, that's what the chains have always done. They make their money on the beginners who don't know better. Unfortunately, they make it very hard for the more advanced stores to stay in business, so once the customers outgrow the chains, they have nowhere to go.


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## jones57742 (Sep 8, 2007)

TheOldSalt said:


> ... they have nowhere to go.


Wrong bubba!!! :lol::lol::lol::lol::lol::lol:

We got Austin which is 210 miles from San Angelo, San Antonio which is 225 miles from San Angelo and lastly but not leastly Dallas which is 250 miles from San Angelo!

TR


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## COM (Mar 15, 2008)

The chains are in business to make big money for their shareholders. There is money in the livestock side of the biz, but the big bucks are in selling the consumer goods - equipment, feed, chemicals, etc. The independent stores always were able to sell the fish for a reasonable price and bring in variety and special orders to serve their customers at a low profit level and offset this with higher margins from selling fish food and supplies. Now the chains sell the supplies at lower retail prices because they are buying in bulk and getting better prices from manufacturers. Then you have online operators like Big Al's that are dumping product barely over cost.

The consumer benefits from lower retail prices for supplies but suffers because it is driving the specialty merchants who really care about the hobby and want to offer big variety out of business or at east out of town. This is the same in almost any retail business, be it aquarium or linen (think Bed Bath and Beyond). I have admittedly made a good living accelerating the decline of small businesses by selling consumer goods mainly to big retail chains by leveraging their buying power to make multi-million dollar deals that are intentionally predatory.


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## emc7 (Jul 23, 2005)

> This is the same in almost any retail business


 This is modern retailing. Wal-mart killed all the local fabric stores by undercutting their prices and is now closing 80% of its fabric departments to use the space more profitably.


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## Jgray152 (Jan 16, 2007)

There is one small private owned LFS near me which I try to give buisness too now and than. I hope to order 30+ fish from them when I get my 180 all set up. 

The problem is that small LFS are usually very pricey. The big problem with the LFS near me is the owner, she can be a BI*CH! Other times, very cold sense of humor.


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## Obsidian (May 20, 2007)

Firemouth at LFS: $8.99
Firemouth at PetSmart: $2.99

For one fish I would go LFS just to support them, but I just cannot afford that for multiple fish. I'm not that rich.


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## Jgray152 (Jan 16, 2007)

> For one fish I would go LFS just to support them, but I just cannot afford that for multiple fish. I'm not that rich.


$10 per african cichlid at my LFS. I told the LFS that I would like to purchase 30+ fish but I don't want to pay $10 per fish. She said she would work something out. I believe I told her I want to get down near $5-6 per fish.


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## COM (Mar 15, 2008)

I totally understand shopping at the chains to save money and I do it all the time. I just don't like the way that they maintain their fish in most locations. They also will hire almost anybody from what I have experienced and they clearly do not systematically train their employees. I posted on another thread about how I explained the fish "expert" at a PetSmart that the word "Tropical" implied from the tropics and thus these fish are warm water fish. She didn't know that heating the water was necessary!


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## TheOldSalt (Jan 28, 2005)

You wanna know a secret?

In many cases, the chainstores don't even own their fish.

That's right. Local wholesale vendors own the fish, and simply give the chainstores a percentage cut of the sales as "rent" for letting them sell the fish at retail through their stores.

When you stop to think about it, this explains pretty much everything.


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## COM (Mar 15, 2008)

In the biz we call that a "consignment stock operating agreement." 

There are two main ways that this happens:
-The vendor and the retailer agree to a commission rate or "cut" for the retailer to sell stock (as TOS describes).
-The vendor provides the product to the retailer on the condition of receiving payment after it has been sold and agrees to take back any unsold after a certain date.

I do a lot of sales the second way and usually tie it to some sort of a promotion, ie I'll ship you 20 million units of razors on consignment and you run an ad in your weekly supermarket circulars with a hot price for a month and pay me three weeks after the promotion ends.

Wal-Mart will often try and force certain suppliers to operate on consignment.


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