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Thoughts on starting a LFS

1400 Views 10 Replies 7 Participants Last post by  eeng168
I'm probably not as serious about this as I think I am at the moment at 6:00 am and not asleep, but any thoughts on opening up a new LFS in Brooklyn? I'm merely a college student with limited funds, but I've been in the small business world for some time and the hobby long enough to think that a LFS can be a viable option.

I've identified a place that recently went up for rent and the neighborhood has undoubtedly been growing these past years. The value of the real estate there is likely to increase in the coming years. There's around 4 other LFS within a few avenues and each seem to have been doing well enough to stay afloat. (The place in question has garnered lots of interests as its a decent area to do business, and so I'm not completely sure it's still available.)

Just a passing thought and my entrepreneurial inclination, but just wondering what are people's thoughts/experience with this, and if there may be anyone interested in partnering up with me :icon_wink Maybe it could be something like a LFS by hobbyists for hobbyists kinda thing.
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I'm sure all of us would love to start a fish store, but in reality, overhead, and inventory can kill you. I run my own home-based business fixing electronics, game consoles and computers. I don't stock any computer parts, why, because they change in price and having 1 of everything in stock kills you when it doesn't sell or it goes down in price by 25% because the next generation of video cards, cpus, etc, come out. I had a retail store and overhead kills. Everything is twice as much for a business phone, business internet, business hydro, business insurance, etc.

Same with cell phone repair or laptop screen repair. To be good at it, you need everything in stock. No one wants to wait a week to get their cell phone fixed while you order a screen, they want it done the same day. Do you have an idea of how many different cell phones there are out there or laptops and how many screens you have to have in stock to keep people happy. Luckily, for those services, I outsource. lol. But I know in order to keep buying more cell phone screens and parts to keep in stock for repair, they have to sell stupid overpriced phone cases and swag in there store.

With a fish store, you're going to have to stock lots of crap that will sit there for a long time just to have it in stock in case someone wants it. Imagine you had 20 filters in stock, Fluval 105, 205, 305, and 405's. Well the 06 line just came out, everyone coming into your store is going to want the 06's, so what do you do with the 05's? Sell them at basically wholesale cost to dump them to even get enough money to buy the 06's.

To get an real discounts, you have to buy big from suppliers and that sometimes means contracts to buy so much, having to buy other products as well, etc.

If there are 4 other stores there, you'll have competition to deal with and more importantly, their customer base. Customer base is everything in business. Starting with a small home based business, get yourself established online and sell from there and see if you can make a profit. If you can't get any customers importing cheap filters and accessories from China and selling them or breeding fish/shrimp at home first, you won't make it with a retail front.

You do have an option to try for a specialty store if you did open one, one that focused on say plants and planted tank stuff, or shrimp or something. This place around me seems to be doing great and they do just that.

But with that, then comes dealing with less clients because 90% of joe consumer wants a cheap tank with a goldfish or betta to shut their kid up. Today with the internet and cheap prices, while it may be nice to go to a store and buy some nice plants or shrimp or CO2 gear, when you can order online and have it at your door in 2 days for 40% cheaper, most people just order online nowadays. lol.
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Why would you even consider it since you would have 4 competitors close by?

The first reply is dead on. I run a retail computer shop and it's tough when you first start. It took me 2 years just to stop losing money every month. Now I make good money and have put 3 of my competitors out of business in the last year by beating anyone's price by 10% on anything. But that is easy to do on service or used parts, with a fish store you aren't going to have that flexibility like I have. You will have set prices on new equipment and fish and if fish die you are just losing more money.

Save your money and get through college first and find yourself a niche market in a better area, maybe a planted tank store in say.... Beaverton Oregon? ;)
Unless you are going to be selling livestock that your competitors aren't then I don't think it would be worth it. The major chain stores have cheaper prices for dry goods for the most part and sometimes with fish as well. You can't compare computers and cellphones to a pet store even though electronics are being sold. New cellphones and computers seem to be coming out every second which makes the older models obsolete. But with older aquarium supplies they still have a use and can be sold. People still use box filters, older canister filters, power compact lights, ect. I don't think opening an aquarium/ pet store in the tristate area would be wise though. With rent, fuel prices, shipping cost and the competitors it isn't worth it. Oregon might not be that bad after all.
But with that, then comes dealing with less clients because 90% of joe consumer wants a cheap tank with a goldfish or betta to shut their kid up. Today with the internet and cheap prices, while it may be nice to go to a store and buy some nice plants or shrimp or CO2 gear, when you can order online and have it at your door in 2 days for 40% cheaper, most people just order online nowadays. lol.

sad but VERY true!
I know there's lots of risk in the retail business. My family owns one. While there's similarities between the retail computer shop business and a LFS, there are vast differences as well. Consumers of electronics always want the new and most updated even if there's not too big of a difference (e.g. iPhones) while most of the time, I believe customers of fish stores simply want something that works and does the job. Though of course many would still pay a premium for the newest equipment, I highly doubt the older generation can't be sold.

I've considered about all the costs of overhead, inventory, upfront, initial, etc, and it still seems viable. And I knew putting the 4 competitors thing there would make people think its a bad idea, haha. Depending on the area, it can be a totally different market. If you knew the area, I think you would both understand where I'm coming from and have a more optimistic view. It's an area where there's practically almost one or two bakeries and banks on every street. This general area is made up of a lot of immigrants, so ordering online is rarely an option for them. Many of them buy things locally and won't even go to big chain stores (or simply can't due to the lack of a car) for the same items, despite the prices being much higher (think maybe at least a 25-50% markup if you bought from a big chain and resold locally). The lower east side in Manhattan has 5 main LFS all within a walkable distance between each other, and each have been around for years.

A planted tank store is what I was thinking this store would focus on, as all four stores have very little of things in that niche. Of course, I think the traditional fishes should be carried as well to satisfy some customers, but wouldn't be the focus. I think NYC can use a planted tank store, just sayin' ;)
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Shrimp are one of those businesses where the quality is either there, or not. Applicable to all business, you need connections. Your stock must come from credible and reliable wholesalers.

If you wish to diversity yourself from the competition, go for quality then branch to quantity when the business is established. Or vice versa and be a cost leader by selling high volumes at low prices then bring in a premium line later. Depends on what you are after and how you want to run the business.

Alternatively, spend the money on a virtual store front showing your products. Its successfully done in the betta fish trade with international distribution.

Or maybe you'll be fine just building a fish/shrimp room and trading stock with hobbyists local or online... The world is your oyster
There's around 4 other LFS within a few avenues and each seem to have been doing well enough to stay afloat.
Owning a small business is hard, and owning a fish store I think it particularly hard work. It will take huge amount of hours, long days and nights, a lot of equipment/inventory, and just tons of work to make it successful. The upside is really not that great - even if your LFS is a smash hit the profit potential is limited and expansion is not going to be easy.

Are you sure you are willing to get involved in such a challenge for the possibility of 'staying afloat'? Working 100 hours/week to stay afloat doesn't seem like a very satisfying life to me.

Unless you have a plan to really succeed in a big way (not just stay afloat) it seems like a a lot of work for little reward. The only reason I would consider such a plan is if I just loved the idea of opening an LFS and was certain that I would enjoy it so much that I'd be willing to spend 90% of my time doing non fish-stuff (i.e. taxes, marketing, insurance, etc) to own an LFS.
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If you come out on the 9th, ill introduce you to the owner of WIN and aquastar. Ask them to give you their perspective. Its not all that much fun... Going out late nights to. Receive packages at the airport, tank maintenance, inventory shrinkage, customers nickel and diming you, the long hours, and more joys ;)
I know a computer store doesn't fully compare but small business vs big box is the same anywhere. Can I buy 5 laptop cheaper than bestbuy buying 1,000,000 at a time? Nope. Can you buy 5 fluval canister filters cheaper than petsmart buying a 1,000,000 at a time for all their stores. Nope.

Say you start off running it yourself because you can't afford to hire employees (and saying you have friends that will help for free, will wear out quickly with them, or when they're not getting paid, they'll call in, not show up, etc, a lot more. lol) 10am-8pm for weekdays? There's 80 hours there. Maybe another 10 on weekends, 90 hours so far. Picking up deliveries at the airport for livestock, even once a week, that never goes as planned all the time, say another 4 hours plus gas. Doing the books (if you can do them yourself), remitting taxes, paying bills, another 6 hours a week. Your up to 100. Changing water, picking out dead fish when you open, feeding, stocking, etc. Another 10? That leaves your 38hours a week to get to the store, get home, sleep, have a life, etc. You can cut down on your open hours, but then you're cutting down on potential money. How much is a 100 hours of work a week worth to you?

I've remodelled my business a few times, from having a store front and selling retail items, to not selling items to moving it to a home based business. It was killing me time wise between getting there early to open, leaving late when a customer comes in at the last minute. Sure walmart can kick everyone out at 9pm exactly and quit serving people but that doesn't work with the small business guy. Someone shows up at 8:59pm and takes 30mins, there's 30mins more of your time. I was burning myself out and as much as I loved what I did, it comes a time where having a life or keeping a business alive, a choice has to be made.

Figure out exactly what all the bills, everything will be each month, all in. Then sit down and contact some fish suppliers and equipment and see what wholesale costs are going to be, all in, including time to pickup, gas, etc. Then figure out how many neon's and plants you have to sell to break even, then how many more to make the 110 hours a week worth it. Factor in being able to put out 10k-20k for inventory to start with as well. It's hard with the fish store, because you need to keep so many different things in stock to keep people happy. Can you sell 1 sized bottle of prime? No, you need 3 or 4 sizes, and Amquel and other dechlor products as well. The first time someone comes in and wants Amquel and you don't stock it because you like Prime, will probably be the last time you see that person.

Anyways, good luck if you give it a shot, keep us posted.
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I'd said its pretty hard to open and upkeep a LFS...I see your location in Brooklyn and just between 7th and 8th ave from 50th to 56th, there's literally like 5 fish shops.

Same goes for Chinatown with the shops so close to each other and every carries the same stuff.

I actually don't even buy fish from the LFS if i don't have to. I make a trip up to westchester since I know someone who is a distributor and supplies the very same store i go to in Chinatown.

Why pay for a cardinal tetra $1.50 when I can get them for 50 cents or less and his cost is about 10-20 cents.

Medium sized lion heads or ranchus that goes for $50, I get them for about $20.

I'm not telling you this to brag but to tell that even he is struggling to keep his place running. The nickel and dimming, the overhead's a lot of work.
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