What to Expect: Owning a Retail Koi Store

Have your store be an inviting destination.
Have your store be an inviting destination.

Coming Up Step Four Expectations (continued from prior issues) – Make sure you know what to expect from your retail system; some fish are going to die, some customers are going to kill’em, and so forth. There is a lot to talk about when gauging your success in retailing. It’s more than just the amount of sales you are making. Making sales is part of it, but not all of it.

Ok, so you’re ready to retail some fish. What should you expect from the endeavor? How do you know if you are on course and are successful? I write this segment of this series thinking back on our 10 years of experience selling to retail pond/fish shops, as well as owning and managing a retail shop.

It all starts with ordering your fish. Typically you can determine what the fish farms have ready to go by checking their web site or calling them. In many cases, they will contact you to let you know what they have. Keep in mind American koi farms have a better selection because they have a longer growing season and fish can be purchased from spring through fall or in places like Florida, 12 months a year. Imported fish are typically sold only in the spring and fall and once they are sold, they are gone unless you buy through a broker who stockpiles them for sales at a later date.

Ok, so you have ordered your fish. Fish are shipped typically by airlines (yes right along with the baggage) or by a courier service such as UPS or Fed Ex. With the airlines, you get cheaper prices…BUT there is a chance for more delays and there will be times when you have already driven to the airport only to find the fish did not make the flight even though you were told they were on it. This happens 10% of the time and can be very, very frustrating during the busy season. Direct flights are not so bad and we have found Southwest Airlines to be the best airline to use by far.

The courier services have become our preferred choice because they pick up at our door (saving us time and money not having to go to the airport) and they deliver to your door. Thus no waiting at the airport for the next flight. The downside for the fish farmer is there is absolutely no live arrival guarantee and if the fish arrive dead or in poor shape (unusual), there is no recourse or refund and the farmer/shipper has to absorb the costs. The cost for door-to-door shipping is around 30% more or an additional 25 cents a fish. A small cost for less running around and more time spending with your customers at your shop. In our experience, we have had less than a 2% problem rate shipping with FedEx.

So the fish arrive, you look through the bag and they are not moving much, they may look somewhat dull and not what you ordered. Open the bags, get them into a fresh batch of water (holding system) and give them a day. In most instances, you will find they look better the next day after they have had a chance to rest and adjust. The fish are shipped in dense quantities and although the water may be a bit dirty, special chemicals are added to the shipping water to help reduce shipping stress. Typically in boxes with 60 fish, you may have one dead fish in every third box or so. Fish ship very well within 24 hours, they ship ok in 36 hours, and past that, a lot of outside environmental factors affect survival. If the water is kept cold, they do much better.

Probably my most frequent complaint as the owner of a koi shipping business is when someone complains about paying 75 cents a fish to ship it overnight to their door. Our boxes are very heavy and we use a lot of water per package to help ensure a greater survival rate and faster revival of the fish for sale. Some people have chosen their fish supplier more on shipping costs than quality and reputation of the shipper. When it comes to shipping a live product, cheap is not good. A little extra goes a long way, especially when the clock is ticking.

The fish have arrived. They are in great shape and you have placed them in a separate LOW DENSITY quarantine system for the next two weeks out of the public’s eye. You make sure they are in top condition before being transferred to your retail system.

Here’s What Will (or Could) Happen Next

1. The fish will jump out. Cover the fish ANY time you move them to another tank. They will find even a small hole. After a few days they will stop jumping.

2. You or your staff does a water exchange with the hose. The phone rings and you forget and leave the hose on and find that the fish are all dead the next day. Ok, if you’re reading this and you already retail fish, you know what I am talking about.

Let me save you some money. For $10 at the hardware store you can buy a meter/valve that goes on the end of the hose. You turn the dial and it dispenses a certain amount of water and shuts off (regardless if you get distracted or not). This will save you thousands of dollars the easy way, not the hard way–the sad lesson of forgetting to turn off the water.

Do me a favor–spend the 10 bucks, send me a check for a couple hundred bucks, and consider it a great savings to your business (grin).

One note of caution, meters do not last forever. You still should check to make sure it is working properly.

3. The fish arrive DOA – yep, dead on arrival. It happens to all of us. As long as you have your quarantine system and a two-week holding period, you can order some more fish and things keep moving forward. If you are the type to sell them two days after they arrive…you will get caught in a bind, with no fish to sell. Spend the money, get a good system and do it right…from the beginning.

4. Your fish looked great on arrival but within a week, they are flashing (scratching) and not acting right. Typically, this is response from stress and the few “bugs” a fish typically has that can take over and cause a problem. A salt treatment and use of another “bug” treatment is all that is necessary. Again, with a quarantine system, you should maintain business as usual without your customers ever seeing a hiccup.

5. Make sure your systems have redundancy. Plug the aerator on a separate circuit breaker than your system’s water pump, so if one fails the other keeps them alive. Your system has both a water circulation pump AND an aeration device, right?

6. You sell some fish to a customer and they come back the next day saying they all died. You know fish don’t typically die overnight unless something is grossly wrong with their environment. Remember from the earlier parts of this series…now is the time to win the customer over by helping fix their pond problem AND save face (embarrassment) of killing the first batch of fish. Figure less than 2% occurrence of this incident.

The Actual Fish

Your fish are now placed in your retail system, the customers are coming in and buying fish. Here are some things that come to mind.

1. Keep enough fish in the systems to look full, but do not overstock. Too many fish causes what I call “Koi Blindness.” There are so many fish that look similar that customers just cannot pick and sometimes go away frustrated and overwhelmed.

2. Keep a separate tank of fish that you choose as special picks by you. Charge a little more for these, as people will value your opinion. With experience, you will soon be able to pick out the higher quality fish in a shipment.

3. Don’t be afraid that all the best fish will sell right away. I especially see this at koi vendor booths at koi shows. People will buy what they like more often than what is “best” by any judging standard. I have seen the best fish still in their tanks after 2,000 people have been by. That fish you consider ugly may be the one someone has been looking for. Have you ever sold an all orange with black, speckled koi? Sort of an AKA Bekko. We see 1,000’s of these when we are culling, but believe it or not, people are attracted to the contrast of colors. Give them what they want…not specifically what YOU want them to have. Be honest if they ask your opinion, but above all, make sure they go away happy with whatever they choose.

What does it mean to be successful in this business of selling live fish? In dollars and cents here is a breakdown of what to expect.

4-6˝ Medium Grade Koi $6.50
Shipping from 1,000 Miles Away $0.75
Holding System Costs• $0.42
Other• $2.00
Bad Luck Factor••• $0.13
Customer Kill Cost•••• $0.13
Total Cost of Fish $9.93 each

Typically these fish sell for $25.00 each or five for $100.00. Some places sell for more, but this is still a great profit margin.

• Assuming 100 boxes of fish will be sold during the life of the system–100 boxes of 60 fish holding system =$2,500/6,000 fish = $0.4166

•• Assumed cost of rent, electricity, labor, advertising, and so forth.

•••The bad luck factor is the assumption of 2% loss of stock. That equates to two boxes out of 100 shipped that are completely lost or DOA. This is higher than actual, but also accounts for other things such as jumpers, disease, and so forth; that will happen along the way. So two boxes of medium grade fish (120) x $6.50 each = $780.00/6000 fish during the life of the system= $0.13 per fish sold.

•••• This is the 2% of new customers who will have the fish die due to the holding conditions at their place. No fault of yours…but it will happen.

So how do YOU know if you’re successful? It may be just the bottom line of profit, but to most that have been in the business for a while, they are in it for more than just the profits. If I had to describe the perfect pond storeowner/business, here’s what I would picture.

ABC Koi Shop is a locally owned business that is open to the public selling fish, plants and products designed to bring enjoyment to the backyard hobbyist koi keeper/water gardener. The owners have a great reputation of providing good products and pricing and have many, many loyal customers who bring repeat business and tell others about their place. The owners are able to spend time away from their business frequently because all of their staff has the knowledge needed to answer 90% of the most common questions in the pond trade. The business provides enough profits to pay the owners and their employees a decent wage that allows for quality of life.

ABC Koi Shop operates using common sense practices and repeatable procedures and products. It understands that it cannot be everything to everybody, but also understands that a happy customer is a repeat customer and honesty, although sometimes not the most comfortable thing to say, is always the best policy.

Enjoying owning and operating ABC Koi Shop is…in a way…profit in itself. The industry attracts a lot of great people who the owners and staff have met along the way or that they hope to meet in our future years running (and enjoying) their business.

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