Keeping up with the Koi Business in an Evolving Economy

Published on April 29, 2016

You never know who might pull in your driveway. As I write this article and look from my office window down the driveway, I think of all of the wonderful people I have met coming down this driveway to our koi business. Some had their first 10-gallon tank; others had expansive ponds. Some were just starting their first job. Others had started and brought up their business with sales close to a billion dollars. Meeting these people and sharing my knowledge, while getting advice and learning from them, has made my efforts of selling koi very much worthwhile for me and my business.

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We have sold millions and millions of dollars’ worth of koi — literally. There is something about these fish that grabs your attention and never lets go. For some, it’s because of the high price they can command. For others, it’s the constant pursuit of the perfect example of a variety. And for others, it’s just watching them swim around their pond nibbling on food and exploring their environment. Koi, just like dogs or cats, are pets that can mesmerize and calm frayed nerves.

Being in the pond trade, you may ask yourself if offering koi for sale is a part of the business you would like to include. This article will provide some information to those contemplating the possibilities, as well as to those who may already be selling koi at their shop. The focus is not to convince you either way, but to give you a better understanding of where the market is and where it’s heading.

The Early Days of Koi

Red, black and white koi continue to be a strong favorite in the koi hobby. This fish is a doitsu, or German scale/scaleless fish.
Red, black and white koi continue to be a strong favorite in the koi hobby. This fish is a doitsu, or German scale/scaleless fish.

In the early years of the koi industry — maybe 30 years ago — Japanese fish farmers produced koi in their ponds for enjoyment and profit. To purchase these fish, one would have to fly to Japan, get a driver and translator and handpick fish at the farm in the spring or fall. The fish would then be flown to the United States and placed in ponds or resold.

Before the internet, a friend of mine used to videotape the individual fish and send out the tapes to prospective clients. He had a very successful thing going. As the industry evolved and the U.S. economy flourished, the popularity of koi grew. More people began traveling and purchasing koi for resale. Large broker dealers would purchase in bulk and supply U.S. koi dealers with a wide selection of fish sizes, grades and types. This was a great service, and many mom-and-pop shops purchased large amounts of fish from the brokers.

As the economy slowed in the mid-2000s, discretionary income lessened, and many pond shops had a hard time selling enough fish to justify the cost of keeping them. At the same time, more and more breeders of koi had been perfecting the rearing of import quality fish in other countries. Farms popped up in Malaysia, China, Israel, Europe and the United States. As with any competition, prices for fish declined as availability increased. Imports from other countries had created less scarcity in the market. More fish meant a better value for the consumer. Fish produced in the United States now rival those imported from other countries — including Japan.

New Markets, New Challenges

American-bred ZNA (Zen Nippon Arinkai) Young champion, beating out a slew of imported fish.
American-bred ZNA (Zen Nippon Arinkai) Young champion, beating out a
slew of imported fish.

Up until the late ’90s, viral diseases were not something of common knowledge. With the larger amounts of fish changing hands (or ponds), the rise in disease occurrence followed. Two major diseases had become more common knowledge: KHV, or Koi Herpes Virus, and SVC, or Spring Viremia of Carp. Both are serious diseases with very bad outcomes. The ease of purchasing and bringing fish into the United States from other countries had begun to get more difficult as the government tried to limit our country’s exposure to somewhat foreign diseases. With these changes, many koi farms and brokers have adjusted their koi operations from as little as limiting from whom they purchase fish to as much as sealing off their farms (as we did 12 years ago) from any outside fish. Costs associated with importing fish rose substantially, and with lots of competition, it was difficult to pass these costs on to the consumer.

Present day sales of koi have continued to evolve. In the past, koi shows were the place pond hobbyists would bring their savings and splurge on fish from a large number of vendors. The internet has become a major force of commerce. Consumers can now purchase single fish or groups of fish on the internet while sitting on their couch. Prices have leveled out, and the consumer can make slower, more thought-out, educated purchases. Koi farms are selling retail to the consumers. Crazy profits from the old days are gone — and all of this ramped up in just the past five years.

What’s Next for Koi… and You?

The future of the fish business continues to evolve. Regulations to limit fish movement are active and will continue (think non-native lionfish in U.S. oceans). Disease-based regulations will force companies to change their methods or close. The internet will expose more and more people to this wonderful hobby and get them excited to have a pond and keep fish. Each decade has seen its challenges. We are in it because we love what we do. There are easier ways to make a profit, but they are not as rewarding overall.

So, how is it that you can make an argument to continue to carry and sell koi from your brick-and-mortar store? Without being too convincing either way, here are some ideas.

Pros: Koi are unique, and consumers pick the specific fish that they want in their pond. They are willing to pay more in your store than they would for a mixed group off the internet.

The greenhouse holds tanks at least 6 feet deep and display koi up to 40 inches for sale. Shopping for larger fish in Japan typically is only allowed a couple of months each fall.
The greenhouse holds tanks at least 6 feet deep and display koi up to 40 inches for sale. Shopping for larger fish in Japan typically is only allowed a couple of months each fall.

People visit pet stores not to look at a box of hamster food, but to watch all the cute hamsters run around their cages. Fish swimming around a pond at your store has a similar effect.

Using fish sales as a tool to help sell consumables, such as fish food and filter material, rather than just for profit, is a proven technique.
Shipments of new fish always bring people back to your store for another look.

CONS: Fish prices have leveled off, and the prospective merchant must realize that high profits based on market scarcity no longer exist, thanks to farm-direct sales and the internet.

Fish take work. They are alive and require daily attention. If you like the work, it’s easy. If you don’t, you will have to get someone on staff to tend to them, or avoid fish all together.

There can be an expensive learning curve to finding a reliable source for your fish. Research takes time. Neglecting this is costly and can be heartbreaking and detrimental to your business’ reputation.

To me, the power of koi is the fact that it’s the glue that makes all the other stuff stick together. It combines people, products, lifestyles and a way of life so many of us enjoy. But the market is changing. It’s a different economy. How you view and approach it will determine your success.

Pond season is here — go out and grab it with both hands, and be sure you’re having fun doing it!

Kloubec Koi Farm

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