Why do some LFS survive and some don't? What do we want to see in a good LFS?

[dkk08]

Why do some LFS survive and some don't? What does it takes to be a successful LFS and how to keep going?

I'm just curious as I've seen some LFS which was famous for their uniqueness closed down or looks like on the verge of closing... just to name a few (hope I'm allowed to do that here) e.g. Chong Sua, Cichlid Forever, Reborn , Gratiola, Eco Culture...

I've in the past even thought of setting up my own fish/pet shop in future but looking at how things have turn out for all these Fish Shops I'm sure I'm not the only one that's put off by the statistics...

[Aquanoob]

Some say that you need a Unique Selling Proposition (USP) to be successful in any business but when the product is almost the same for the entire sector and the market has no continuous demands together with the overheads that the business is suffering, it won't last long. Some LFS go for mass discount and a supermarket concept like Seaview and is doing well, while some carry a huge range of fishes and products in a small space like C328, Y934 and Y618. The margin in this business is low and nowadays with the marketplace around, I don't even need to buy fishes, plants, accessories from the LFS, I can simply buy from fellow hobbies here.

[jwuog]

To put forward my 2¢ worth – I feel the main problems facing LFS or any retailer locally are:

1) Rental
2) Small market

From what I read, retail rental is high coupled with low margins (I assume for aquarium products), you'd have to generate high dollar per square foot to break even, let alone turn a profit.

Which brings the second point, small market logically means low volume. Say your population is 5m, of this 0.5% is avid aquarist, that makes 25,000.

Say you have 100 aquarium shops + farms here, that makes 250 customers per shop – so assume these 250 hobbyists visit the shop once a month, can 250 customers sustain a shop? Now assume from each of these 250 people, the shop garners net $20 profit, that makes 5000$ net profit per month.

I just pull a figure $20 net profit because I hardly even spend more than that in a local fish store. A popular fish like cardinal tetra sells say $2. Say if the margin is 100%, the store has to sell 5000 cardinal tetras to net 5000$ profit. How many fish store can sell 5000 tetras in a month?

I believe c328 or Polyart are thriving because of history (been around for long time which leads to repeat customers), proximity to each other to create like a 'mini-hub' to draw in customers, and probably those guys own the store, ie. no rental.

I know the numbers and rationale are overly simplified, but if you think about it, the fish business downright smells rotten.

As to what we want in a good LFS, it really depends. Some are into plecs, corys, aros, tetras, apistos. Naturally if someone is into plecs, a fish specializes in plecs will be best and heavenly but will have minimal interests to a betta lover. Or some are only into plants and scaping where fish are just a by product/support cast. You need volume/no. of hobbyist to sustain different 'concept' stores.

[dkk08]

The USP and what bro jwuog have mentioned are very interesting... I love the inputs so far...

One question... does that mean that if I've the space at home to self bred my own livestocks and to stock products to sell online it would seem like a better idea then to rent a shop and do business?

[Aquanoob]

Desmond, we have people breeding Bettas, Cichlid, L series pleco before and now those few hundred dollars a piece Black King Kong shrimp, and it is quite doable from what you can see at the marketplace. No offence, but there maybe even full-time breeders making good bucks selling in the marketplace without registering as a merchant.

[dkk08]

Desmond, we have people breeding Bettas, Cichlid, L series pleco before and now those few hundred dollars a piece Black King Kong shrimp, and it is quite doable from what you can see at the marketplace. No offence, but there maybe even full-time breeders making good bucks selling in the marketplace without registering as a merchant.

I've to agree with you on this part and I think I even know some of the full-time breeders of shrimps... hmmm

[Mr.Oink]

Rent will be the killer for all retailers. If your business is good, be prepared that the landlord will increase your rental.
Unless we are expecting a hit and run business. Come in with "odd balls" products eg. "luo han" or "bubble tea" pollute the market and make a run with the monies made or franchise it out.

[zonkkie]

Sometimes also need to reinvent yourself. I see shops that have not moved on with times... like those aquarium sitting in markets, selling basic lifestock and equipment. Bulk of the sales I see comes from selling feeders, tubifex worms to people keeping fishes nearby who buy on a daily basis. Minimal profits.

Now aquascaping is pretty hot, so having a variety of plants and ferts and a beautiful moss tank helps to pull in customers + you can sell some of the moss as well. Or now there are a number of e-tailers who's delivery service is a boon to many aquarist who do not own cars - tanks, chillers, lightsets are all big and bulky.

[shearerkk]

Agreed with Aquanoob,

I was at Colourful a few days back and was chatting with Uncle Richard... and he commented that business is difficult nowadays.

With tightening custom policies, open market on the internet, it is getting very difficult for him. He even talk abt calling a quit in a few years time!!! Wow... if colourful being very successful alrdy in the LFS market call it a quit.... who else can survive?!?!?!

Some say that you need a Unique Selling Proposition (USP) to be successful in any business but when the product is almost the same for the entire sector and the market has no continuous demands together with the overheads that the business is suffering, it won't last long. Some LFS go for mass discount and a supermarket concept like Seaview and is doing well, while some carry a huge range of fishes and products in a small space like C328, Y934 and Y618. The margin in this business is low and nowadays with the marketplace around, I don't even need to buy fishes, plants, accessories from the LFS, I can simply buy from fellow hobbies here.

[dkk08]

Agreed with Aquanoob,

I was at Colourful a few days back and was chatting with Uncle Richard... and he commented that business is difficult nowadays.

With tightening custom policies, open market on the internet, it is getting very difficult for him. He even talk abt calling a quit in a few years time!!! Wow... if colourful being very successful alrdy in the LFS market call it a quit.... who else can survive?!?!?!

So I guess the internet is a creator and a destroyer so to speak... hmmmm maybe soon all LFS will become e-tailers?

[Merviso]

Desmond, I think what you have listed is the basic requirements for a LFS to do business.... Btw, service attitude of the staffs is an important factor too, especially in the case of turn off factors.

For a LFS to do well, I believe that it is now important to continuously engage the customer, so as to know what is the latest trends and hypes. It is also important for the LFS bosses to start engaging customers in the new social media such as websites, forums and facebook. The more successful LFS now are those that are constantly publishing what are available stocks currently in their stores, and even sharing their fish importing list so that fish lovers can straight away give them indication what to import in the first place.

Think a few good example will be NKS, aquahobby & JZX - 津中秀... Just a few weeks ago, there is a huge craze with SA Cichlids, and my colleague everyday will ask me if I want to go with him to this few LFS because they got stock of this and that.... ....

Even better is to post nice photos and videos of the fish and make fish lovers wanting to own those fish....

Think the LFS must really evolved to pull customers to their shop instead of waiting for customers to drop by once in a blue moon....

[dkk08]

Hey Merv, ya you're right, the list is just some basic requirements as I'm sure there're many more where my 6 came from... which is the purpose of this thread...

I do hope some of the remaining LFS/merchants/e-traders can learn from this thread as I'm sure many will agree with me that the Fish/Pet Hobbyist trade in Singapore is really going downhill, coupled with so many other external factors recently like Economy, Natural Disasters, Inflation, Civil Unrest in many countries and rising property prices in Singapore and around the region...

I'm glad to see where this thread is going as I'm sure a lot of us are willing to give our insights or 2 cents worth in order to help upgrade or advance the Fish/Pet trade in Singapore... Perhaps our foreign friends who've flip through this thread can give us some of their insights as well...

[stormhawk]

IMO, it's all about time, money and basically, competition.

LFS have to compete not just with each other for customers, but also with fish farms that entertain walk-in customers and home breeders. For example, shrimps. There are many shrimp breeders in Singapore, with good quality shrimp for sale that can pretty much match or are better than what the LFS/farms can offer. Buyers are spoilt for choice as it is.

Always the usual, local hobbyists tend to see cost above anything else. Otherwise you would not have people asking for delivery on items to sell, especially small items, and the tendency to ask for discounts. Nothing wrong with that however, I do it too, but at times shoppers can be very persistent on their bargaining. The issue of rent, finding staff willing to work for not-so-awesome pay and long hours, feeding and housing livestock, clearing inventory of aquarium equipment, all these weigh heavily on the minds of the LFS owners. If there is no profitability to be made from this business, they would rather close shop and do something else, than to keep the shop open and bleed more money for the sake of a handful of customers.

When a home seller is selling mosses (for example) at lower prices and bigger quantities than a LFS does, why would a prospective buyer go to the LFS to purchase the moss? Therefore, any LFS without a steady stream of regular customers, will not survive very long, irregardless of what they are selling or are best in. This is why shops like CS, CF, Reborn, Gratiola all closed down eventually. Even in my area, the last LFS just closed down.

The Luohan era was a good example of the boom years for the local LFS scene. After the fad died down, how many LFS eventually closed down? Best example, there were 3 LFS along the same row as C328, the middle store selling Luohan and other assorted fish finally closed down. Specialising in a niche market, like cichlids, has it's ups and downs. The best thing an LFS can do at this point of time, is to sell livestock that are popular, and at good prices for bulk purchases. Hence the reason why more LFS tend to sell small fishes in bags of 30/50/100 pieces at a good price. This is better than selling 1-2 fish at a time.

LFS need to move with the times, hence the owner must be able to foresee how long a fad will last. Cash in while a craze is hot, then move along before the bubble bursts.

[dkk08]

The Fish shop at Ave 4 closed down already??

[Shadow]

Many fish shop close down, I wonder did we update our fish shop directory?

[stormhawk]

Desmond, I was referring to the LFS at West Ave 8 at a wet market near an NTUC branch. Passed by the place a few times in the day and at night, never open so I guess it's closed for good.

[dkk08]

oh I thought the one at Ave 4 closed down...

And Yes it a good time to update our LFS directory...

[zonkkie]

Haha... Ang Mo Kio Ave 4 Lam Hong close down already... the one that sells Arowanas. Uncle is in ill health and the wife cannot run the shop alone. Shop is up for lease in case anyone is interested in opening a LFS? Near my house... I will support.

[dkk08]

Haha... Ang Mo Kio Ave 4 Lam Hong close down already... the one that sells Arowanas. Uncle is in ill health and the wife cannot run the shop alone. Shop is up for lease in case anyone is interested in opening a LFS? Near my house... I will support.

Well not sure if you can do this but perhaps you can gather more info from the Uncle or his wife and post the info here or on other forums...

[ivanthensf]

Would a centralised concentration of LFS revive their profits? Like the Goldfish Street in Hong Kong, perhaps a dedicated row of shophouses with low rent only for aquatic shops and in an accessible and central part of Singapore?

As it is for those without a car its very troublesome to drop by LFS let alone visit multiple ones to check out prices or offerings before buying. Thats why I usually plan a trip after work since its on the way.