Adventures with Corndog: Corndog's Fish Store

Silence_sl said:

What do you mean by letting a tank die?

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Bring in 300 fish into a tank. Miss that they are sick, first day you can lets say 2-3, next day the rest are dead. Easiest way to lose a lot of money in this industry. This is why there can be high margins. Cause a Place like Petsmart etc, can't keep them alive. They can buy tons of filters etc really cheap, but they can't train the staff to keep fish healthy at the stores.

Lyrical_sl said:

That's a respectable profit for a business starting out, especially since that's after your wage. Most businesses, on average, take 1.5 years to turn a profit, if they ever do. So you apparently have good business acumen. Don't make the same mistake most business owners make starting out (I made it also). Open up an account and put money aside each month for your personal and business taxes. No one is responsible for this but you. At the end of the first year, we had a huge tax liability to take care of. Now, we just pay what's owed in the same month to the Federal and state governments. You don't want to look up and owe 30k come tax time, trust me.

How did the mailer turn out? Tell me more about the specifics (cost per piece, total pieces sent out, close rate and ROI). I've been thinking on targeting wealthier neighborhoods with direct mail, I just haven't done this yet. I prefer customers that can rent a crew out for an entire day, or multiple days.

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For taxes, yeah, I took advise from the internet. Every month I put my B&O taxes into a savings account. My sales tax rate here is 9.5% so it adds up quick. They have me on quarterly payment. That was like 4900 this time.

I think my biggest factor to success besides having the right people helping me make things happen is having done the business for 5 years. I literally ran a fish store with someone else's money for 5 years. So once I inserted my own money I could do the decisions I thought were best instead of what someone else thought was best. Now obviously everyone thinks "I could do this better I know what I'm doing" so maybe I do have some extra business sense.

For the Mailer. It's a company that puts out a little booklet. It's like half the size of a sheet of paper. It was $350 to advertise on a "full page" ad. I put 3 offers on it. The big one was a free $5 store credit, not minimum etc. Just show up and spend $5. The other one was buy one plant get one free. The Third was a free package of fish food $4 value. All coupons state that you can only use 1 per visit. A few people think I'm basically just going to hand them $15 for walking in. The mailer is supposed to be sent to 15000 local homes only. No real way for me to prove how many are actually sent out etc. That's roughly 2.3 cents a home if it goes out to 15k homes.

So of the $350, I used some Co-Op budget from a product I carry. You should always try and find a Co-Op advertising credit. Basically I put the logo of a product that I sell in my store and they cut me a check for half. So It really only cost me $175.

I have the coupons in my register still. The coupons are good until the end of this month. I want to say 7 or so have been redeemed.

1 guy was already my customer. He used the $5 coupon and spent $52 on top of that. He's a pretty infrequent customer so I'd be inclined to say the mailer help bring him in.
Another guy use the $5 free, and spent $14 on top of that. Brand new customer never been in the store before. He returned the next day and used the buy 1 get 1 free plant and spent $5 roughly.
Another customer was brand new to the store spent $56 after the free $5.
A brand new customer used the buy 1 get 1 free plant spending $6
One older couple came in and haven't had a fish tank in 30 years. They ended up buying some gravel with their free $5. They ended up sending $1 and some change and are talking about possibly setting up another aquarium.

I'm pretty sure there are a couple more that I'm forgetting. But each coupon I write the amount of money on the back that I made after the coupon is applied.

My next dilemma is, They want to start writing copy for the next mailer. They mail 5 times a year. This one will hit early November and is for nov-dec I believe.

So I think I do it again, as supposedly it takes 3 impressions before most people will take action. Do I do another full page or a half page? I want to say a half page is like $220. I kinda feel like keeping a full page is the correct move.

On top of that, what am I going to do for offers. The customers I've gained, don't really need another free $5 etc. Since it's basically like I was paying them to check out my store. However the deals need to be good enough that if someone new finds me in the mailer they'll act on it. Say they threw the first one away, and they see me this time. I found some online free petstore videos that go over marking, finance, managing etc. In the marketing one they really tried to hammer home figuring out your average transaction then using coupons to improve that. So if my average sale is $43. Make it spend $55 get $5 etc. Or Spend $75 get $10 off.

There are 2 other mailers that go out in my city also. I wonder if it's worth bouncing around each month, so every 3rd month it's back in the same mailer?

Yeah, I was thinking something like that would be one of my offers. It's kind of weird though. My store is built to just steal the money right out of your pocket if you're already into aquariums. Getting someone new into aquariums is a lot harder sell with the high quality I sell. It's kind of weird, most of my customers come to me because I carry high quality stuff and would be put off if I carried lower end stuff. New potential aquarium owners are put off by my higher end prices. The value of what I sell is really high, but the cost of entry is also high.

I really brought in a high quality kit that lets someone new start out for about $150. Which is about $100 more than at a petsmart. But once you're in the hobby for a month, you'll be loving my tank and hating the $50 tank.. But it's still a rough sale.

So sales are down this month. This isn't that shocking to me. What is perplexing me is everyone else has been waiting for this time.

Let me explain. Summer months are slow for tropical fish as everyone is doing outdoor things etc. All the people in the industry over the summer etc say oh man can't wait till back to school, it's like money rains from the heavens. This is wholesalers, other store owners etc.

In my experience in the field the last 5 years I always experienced the opposite. I was in a remote location so I was thinking hey, maybe being in a larger city etc you do receive this windfall. I'm only 10 days into October and sales are on par to be like lets say a 12k month, as opposed to the past couple 20k months. The trend I saw in my previous store was Summer was meh, and then it was basically a drought from October to January. January to June being insane sales.

So next I thought well maybe it's because my old store and my current store ONLY do fish, not a full line pet store. Which this could be it, maybe there is a huge upswing in other pets like dogs and cats etc during these months. However talking to the wholesalers etc for fish wise etc, they seem like they're really struggling. They say they're still waiting for the upswing this year.

I haven't stopped advertising. I reupped for the mailer going out for nov/december. Still doing adwords. I'd say the biggest thing bringing customers in is Yelp still.

I've been watching a lot of videos geared towards pet stores. However the speakers aren't for just pet people. They're general business marking people etc. I'd recommend them to ANYONE who owns a business. I can take at least 1 good idea way from every video. I full believe that I'll have to watch these videos 10 times each in the next 5 years to implement all the ideas I like from them. go here and make a free account to watch the videos in the library. I promise if you own a business you can find useful information here.Pet Store Pro

So one of the underlying themes in the videos for the retail business is that we are not charging enough for products in stores. One guy says that every retail business is now simply a convenience store and will only become more so in the next few years. Being that everyone knows you can buy pretty much any product you ever want on amazon and it's 2 days away with free shipping. Most people only buy retail if they want it now. The studies etc show that our generation 80% of shoppers start their shopping experience online looking at reviews etc. If they need it now, they go buy it from best buy, pet store etc. If they can wait they click the order button.

With all of that said. If it's sitting in the store it should worth the owners time to carry it. Matching amazon price etc on your every day price is only hurting you.

Another concept is sorting out products/services etc into ABCD. A items would be something everyone knows the price of. Say the price of bottled water. Everyone roughly knows how much bottled water should be weather it's 1 bottle or a 48 pack etc. A products are ones you want to have a good price on. D items would be things you have no clue on, like you've never bought it before in your life,no competition, or need it right now! Things that are D are lets say A snow shovel, comcast internet(no competitors in my area) and lets say a humidifier for your sick child. D items are basically a license to make REALLY good money. Without doing it so much that when the customer sees a lower price they're offended.

The other thing is that getting more volume is almost always worse than getting more margin. There was a whole 1.5 hour video dedicated to this on what effects are on pricing products. Our brains know that more margin on an item is better. But our minds don't realize how much better it is.

An example. I sold neon tetras at $1 each. I pay 40 cents for the tetra. That means I make 60 cents each one sold. Last few months I've been selling basically 200 a month. Now because of the video I researched all of my competition and found prices on neon tetras from 1.49 to 2.49 each. I was the cheapest, I knew that, but by a lot.. Neon tetras are an item people in my industry would know. The problem is, if I'm at 1 and they shopped that store that is 50 minutes south of me they know I'm cheaper. If they don't go there which most of my customers wouldn't. The next cheapest is like 1.89. So I was under pricing.

I raised the price up to 1.59 each about a week ago and they've been sick so I haven't been able to sell any yet. But I don't expect the sales to drop very much. But the numbers change is insane.

Cost 40 cents.

$1 selling price 200 sold = $120 profit
$1.59 selling price 200 sold = $238 profit Basically double the profit from raising the baseline price by 60 cents.

Now lets say raising the price dropped sales on neon tetras by 25%.
$1.59 price selling 150 = $178.5

So even if my sales drop by 25% I still make $58 more.

Now I do have some actual data. I had some tetras that I was selling at $1.80 and I sell like 50 of them a month. I moved their price up to $2.49. I've sold a normal amount so far. The tetras cost me 65 cents. Each tetra at 1.80 I was making $1.15 vs now I make 1.84. At the old price, if I sold two tetras, It cost me $1.30 and I made $2.30 profit. This is only 50 cents more than selling 1 tetra now.

The important part for me is, with selling less numbers, I have less risk. If I have to bring in new fish all the time and get them stable, I can lose fish during that. The same would be true if you were using equipment to do a job etc. I have less risk when I touch less things.

The other thing I've been doing is identifying D items. Things that help solve a problem and people want right now. This is something like fish meds. If you wait 2 days to order them you might lose all your fish.

Zombie Thorne_sl said:

Small retail shops in any market just can't even come close to competing with big box stores, let alone Amazon. Don't even try, and don't be apologetic about it. Sell yourself, your service and your expertise. Yeah, your Neon Tetra may be 2 bucks even but if your customers walk away knowing more after the purchase and feel that Corndogs 2 buck Neon Tetra is the best damn Neon Tetra in town they will be back.

The Gun business is the same way, the local shop I do business with is 25% higher than most online shops but the service/experience I get is worth that to me. Most people these days know where to get the deals, you just have to make your shop experience worth the higher prices. Which it sounds like you do.

I've spent the past 6 months running a small town computer/IT shop that I may be buying, our prices on hardware is rediculous compared to amazon or newegg and our customers know it. But they keep coming back because they trust us.

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I agree. One of the videos that I linked earlier was basically saying everyone that is small isn't charging enough. Basically trying to compete... They say don't even try, but don't be WAY out of range.

Still shopping around and waiting for square's latest release in November. I'm really hoping they have customer tracking. I think that is one of the biggest things I'm missing right now. If I can find a good package of software I like I'd jump ship on square before their release even at this point.

Yeah I've done a couple of promoted posts. The problem I have with the system is, each post you put on facebook only reaches a % of your fans anyways. So I feel like it's kind of a fleeting thing. If only 60% of my fans see my message, thats not really good enough for me. Sure I can pay so all of my fans and non fans can see it, but I should only have to pay for non fans to see it.

That's a good point. Perhaps next month I'll look into that more to go along with the mailer I'm doing.