Penny Wise

There are several strategies that a pet retailer can adopt to control costs; it is all a matter of deciding which are most appropriate for the individual store.


No matter how much merchandise you sell, you will not make a profit unless you are able to control your costs. Fortunately, there are many ways to do this, with some being more effective than others.

One of the first things that many independent pet specialty retailers do when looking to gain greater control of costs is reduce the workforce. However, such a decision may cause all types of problems. The number of sales associates in a store should be commensurate with its volume of sales. If you have employees standing around doing nothing, something probably needs adjusting. You know the days and times when sales are typically at their peak and their nadir. Be certain you have sufficient people to handle a heavy load, as well as the right number working when things are slow.

Retailers may also want to avoid trying to control costs by hiring people at minimum wage. Knowledge of livestock and hard goods is critical to helping customers, and minimum wage is generally most appropriate for positions that do not require previous background or experience. Stores should seek to hire people who exhibit adequate knowledge of what they are selling. They should have experience, whether it is practical or professional. How can someone with no aquatics knowledge at all possibly help a customer identify which fish to buy or what filter they need for their tank? Your hiring practices, not your firing acumen, will go a long way to save you both time and money.

Still, much of a store’s cost-controlling strategies will involve product as opposed to people. When I walk down the aisles of a typical independent pet shop, I often see a wide range of products all in the same category. For example, you may carry six brands of canister filters, and perhaps there is nothing wrong with giving your customers a choice. I will wager, however, that you could easily remove one or two filter brands and still make the same amount of money. Two high-end and two economy brands should be sufficient. Freeing all that money tied up in merchandise may enable you to use it more judiciously somewhere else.

Store shelves should never look bare, but some shops prefer to sell out of certain items before they restock. Then they place a large order instead of restocking gradually. This works best when you receive a substantial discount for buying in volume. Sometimes wholesalers or manufacturers will extend credit for special purchases. This allows you to make money without using your own. I am not certain this qualifies as reducing costs, but it certainly frees up some funds that would otherwise not be available.

Livestock delivers by far the greatest return on cost, assuming you know how to keep the fish alive. A common tropical fish such as a zebra danio will cost you anywhere from eight to 12 cents, depending on size. You are going to sell this fish for a minimum of 79 cents. That’s close to a 700 to 800 percent profit. If only you could do this on everything in the store.

I believe that a successful store and one that stands out from the crowd will concentrate on livestock. Every other store can get the same merchandise as you, except for the fish. If you are price savvy, you know what to buy, how much to pay, where to buy and when to buy. This will give you a decided edge on your competition. You will have the best fish at the best price, and that will save you a lot of money by making you a lot of money. Find the right suppliers and buy from them on a regular basis. It will not be too long before they are willing to pay for the shipping on your order or at least give you a substantial discount. And you will certainly receive the best fish they have to offer.

A Frugal Approach
There are many expensive items in the marine field, including lighting, wet/dry filters (sumps), UV-sterilizers, protein skimmers, programmable power heads and lights, etc. These can add up to a staggering amount of money if you stock a large selection, and many customers will go online to buy such products, since they are often sold there as cheaply as you can purchase them. However, by having these products in active use in your livestock area, you can show people how well they work, and then tell them you can have the item available in less than a week. A down payment is all that’s required. In this way, you can sell the item cheaper than normal, since your customers are actually fronting much of the cost.

One area of spending that cannot be compromised is the cost of feeding the fish. In a shop, fish should be fed twice a day during store hours. Many owners prefer to feed before they open, but if you want the fish to be active when customers are present, it may be better to feed during store hours. I would feed lightly in the morning so the fish are fairly hungry in the evening when your store is full of customers. If you close at 9 p.m., do the second feeding around 8 p.m. 

Other cost-control strategies are tied to the nuts-and-bolts operation of a store. For example, how about trying to save money on your rent? If you are in a great location, moving is not an option. If you believe that there are other locations where you could do better, why not move? Relocating a pet shop is a massive undertaking, but it can be worth it if you increase business and lower overall costs as well. Many lessors expect not just a base rent, but also a percentage of a store’s total sales. The more you make, the more they make. Why give your money to someone else? Let’s say your present rent is $10,000 a month and you can find a great location at $12,000 a month, but will not be charged a percentage of revenue. The latter location is going to save you a lot of money—not to mention that your landlord will not be privy to your books.

Utilities are a hard nut to crack. Consumption of electricity, water and gas are difficult to change. Making fewer water changes in your display tanks is liable to compromise the health of the fish you sell, and the lights must be fully on when you are open for business. However, perhaps the method that you use to both light and filter your tanks can be improved. For example, using a separate lighting fixture and power filter for each tank will certainly drive up the utility bill. Instead, you can run systems that each have a communal sump. This will do away with all those individual filters. Go one step further by running lights over a series of tanks, rather than tank by tank. And don’t forget, the new LED lights consume less electricity than standard fluorescent bulbs if you decide to go that route. These LED bulbs also last a long time, much longer than other types.

How about heating and air conditioning as a way to save? Hopefully, you are using very few heaters in your aquariums. Fish like it warm, so the best solution would be to maintain a separate room for the fish. It will be warmer than the rest of the store. Few stores are able to do this, unfortunately. Almost as good is having a low ceiling over the fish and a high ceiling in the remainder of the store. Personally, I would never set my thermostat lower than 76 degrees. 

Cutting store hours may be another strategy to save money. Theoretically, you will have lower utility bills and lower salary costs. However, this is a tough decision to make, and there are several things to take into consideration. First, if you are located in a shopping area where stores stay open until 9 p.m., so must you. Second, if customers are used to you opening and closing at certain hours, they may freak out when you cut back. If you are still considering this option, run some diagnostics that provide figures on sales volumes at the top and bottom of the store’s schedule. My experience is that it is better to cut back in the morning than in the evening.

Finally, the very best way to save money is to pay yourself as little as possible from one pay period to the next. Take the bulk of your money at the end of your financial year, which, I believe, should be June. At that time you will know just how much you should give yourself as a bonus. Base that figure on your monetary situation with the store. Take less if you need it for reinvestment. Take more if you are flush with cash—one can only wish. Just remember, it is better to be penny wise than pound foolish.

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.


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