Reef Tank Report
Pet specialty retailers can dominate their outside competitors in the reef tank category, as long as they have the right expertise.
Reef tanks reign supreme in the aquatics segment of the pet trade. Over the past few years, their numbers have steadily risen in spite of the painfully slow contraction for the remainder of the industry. There are numerous reasons for the category’s growth in independent pet specialty—most notably is the continued expansion of the big-box chain retailers in the freshwater segment of the trade. Very few of these entities stock many products in the marine segment, and certainly, even fewer carry saltwater livestock. This means that reef sales are left almost exclusively to the locally owned and operated pet shops. However, take this victory with a grain of salt—literally—because large retailers are realizing what they are missing out on. If they can figure out how to get in on the reef tank action, they will.
Reef tanks are specialty items, so unless your business is located in a metropolitan area large enough to support multiple stores, you will have few competitors. Still, since both marine livestock and hardware is relatively expensive, many people order their fish and supplies online. Fortunately, there are several things you can do to minimize the damage to your business from reef tank competitors.
Number one is to have the shelves fully stocked with product and the tanks bulging with livestock. People will come in just to browse, and they are bound to buy something.
The larger the shipments of marine livestock you get in, the more people come to your shop when a shipment is due. If you choose to do so, you can sell fish right out of the bag or even the bag they came in. Keep in mind, however, that it only works if you have an employee who is waiting on customers while you put the livestock away. You do not want to slow down the transfer of animals from the shipping bags to your tanks.
All new items should be quarantined, but it is just not reasonable to do so in most cases. You would need a giant facility to handle this level of redundancy. However, there are a few things I would never throw in a system that already contains live fish for sale. At the top of the list are many species of tangs, which have the reputation for being magnets for ich (white spot disease). All tangs should go in aquariums with heavy UV-sterilization and massive protein-skimming capabilities. The presence of live Caulerpa algae is highly desirable, so the fish have a natural food source available 24 hours a day.
I would advise against placing a guarantee on marine fish. First, no matter how good a store’s display tank may be, the retailer can’t vouch for the health of its customers’ setups. A perfectly healthy fish can leave your tank one afternoon, and be dead—or almost dead—by the next morning. This could be due to bad water conditions, or it could be that other livestock did the damage, but customers often aren’t going to admit—or necessarily even know—the cause of the problem when they bring the item back. Fish guarantees are not a reasonable accessory in your store. In fact, the same practice extends to all reef animals, including coral and motile invertebrates as well.
When customers order livestock online, the best they can do is receive credit for items that actually come in dead. If a fish dies the next day, that’s on them—and online retailers tend to make this point clear. Likewise, brick-and-mortar retailers need to be certain that customers understand the no-guarantee, no-store-credit and no-refunds policies when it comes to marine livestock. Once that condition is made clear, the retailer is free to handle people on an individual basis, which is the way it should work.
Let’s say that Frank has a 200-gallon reef tank at home, and you know he is a good aquarist. One day, when you are not there, he buys a really nice pair of giant hawkfish, believing they would be a good fit for his large tank. Two days later, he brings them back, and tells you that they are wreaking havoc with the soft corals by sitting on them constantly. In fact, they are even sleeping on the leather corals. Okay, what should you do in this case? Frank is a good customer, his tank is pristine, he knows how to keep animals healthy—he just never had giant hawkfish before. This is your call.
This point also speaks to another key component to beating competitors in the reef arena— individual customer service. Know your better customers by name. How do you manage this? You hire the best people you can get, and pay them a reasonable wage for their expertise with livestock and their customer skills. Avoid hiring an employee who talks down to customers who do not already have everything figured out. You also don’t want a young, aggressive sales associate who will sell anything to anyone, just to make a sale. The person you seek is that rare individual who knows his stuff and really enjoys explaining to novices what they must do to be successful. This employee can both hold his own with any local experts or start from scratch with beginners—all without being pompous or over-selling.
A person working the reef department also needs to be permitted some flexibility when it comes to sales, and the ability to give people deals—something that a big-box chain retailer can never do. Only one person at a time should be able to do this. You don’t want two sales associates making counter offers. If there is a manager present, he or she can make the call. If no manager is there, then anyone authorized to make a price change can do it. The point is, this is the level of individual service that a customer can only receive at independent stores. People do appreciate this, and they will come to you strictly because of this flexibility in your policy.
To be successful in reef sales, it also helps to keep an eye on the livestock supply. The supply of reef animals at this time is not too bad, but it could be better. Prices keep rising because the reef hobby is exploding all over the world. Already big in Europe, the U.S. and Japan, it is reaching new heights in other areas of the Far East and the Middle East. Wherever there is plenty of money, you will find high sales of reef animals. Rare items are showing up again like Clarion angels, long-nosed black tangs, old-wife fish from southern Australia, and even Centropyge debelius, or the peppermint dwarf angel. Of course, most of these rarities are out of the ballpark for the majority of your customers. That does not mean you can’t have one on display to make people dream.
The problem with the global popularity of reef livestock is that the U.S. finds itself being the poor relative when it comes to not only these rare items, but also the regular day-to-day things. If Hong Kong will pay twice as much as the U.S. for something like an Atlantic dottyback, then those fish are going to be shipped out rather than stay in our own backyard. It’s not out of control, but it could get worse. The answer to this, of course, is captive breeding—and on that front, the news is very promising.
More and more species are being spawned and reared in captivity, and plankton-capture is turning out to be a way to gain access to species that, thus far, have defied all attempts at captive breeding. If you know where and when a certain species of reef fish is spawning, then you go to that spot and wait. You wait until the magic day when most of the individuals of that species mass together and enter synchronous spawning mode. Then, at the right time, you inspect the plankton in that area. If you are lucky and know what you are doing, the majority of that plankton will be larvae of a single species of reef fish. Now, collect that plankton, keep it alive until you get it back to your facility, and start to feed it the appropriate food for each stage of larval development. People have figured this out for many species of schooling reef fishes.
Although the nano-, micro-, mini- and dwarf-tank craze is still going on, it is not the star I would hitch my wagon to. Small marine tanks are, by far, the most difficult to maintain. They are for experts who like to show off their skills—sort of like with Bonsai trees. Novices should start with nothing smaller than a 30-gallon tank. That way, they are much more likely to stay in the hobby, since success rates will be better. You need to encourage this by putting together a 30-gallon reef tank package with the best, but least-expensive, accessories you can find. The lights will be the real challenge. Also, designate a section of your marine department as “Tiny Treasures.” These are species that will not outgrow a 30-gallon tank.
One major problem I find with beginners to the reef hobby is that they frequently neglect the tank temperature. In the summer, if no one is home during the day, people may reset or even turn off their air conditioners to save money. This can cause the temperature in a reef tank to rise quickly—especially if all the lights are on. One way to prevent this is to use a chiller, but many people try to cut corners and do without this important piece of equipment. If a customer lives in a house, condo or apartment that has room-by-room temperature control, he will not have a problem with his tank. If he does not, that chiller is looking like a good investment.
Edward C. Taylor has been in the pet industry for over 30 years as a retailer, live fish importer and wholesaler, and fish-hatchery manager.