Collector's corals VS making money

[Dan H]

I was just looking around on the ole internets and saw a picture of a tiny Walt Disney "colony" and the owner was proudly stating that it was ready for trimming. Now I know that those are crazy expensive, and people are willing to pay some pretty crazy prices for itsy-bitsy frags, but if I got one, I would not be fragging it while it's still a small colony. I'm a fan of letting the beautiful corals get nice and big before fragging - after all, isn't part of the hobby enjoying your own little beautiful indoor aqua-garden full of amazing specimens?

Now don't get me wrong, there are definitely some corals I buy simply to frag up so I can put even more money into the tank, but to me, that's a means to the end - which in this case the end goal being to collect some of the rare / expensive / super beautiful corals. Plus fragging is fun and part of the hobby! But at the same time, there are some corals I buy with no intentions of fragging it. (Meg's red Yuma, Blasto's, etc...) That's not to say sometimes pruning to prevent from overgrowing or going to battle with it's neighbors isn't necessary.

So I just wanted to get some thoughts from all of you. Do you buy certain frags purely to re-frag and make money? Do you have some NO WAY I'LL EVER FRAG corals? Does the resellability of a coral factor in when buying corals? Are you trying to collect some of the super rare (read: expensive) corals?

Let's make it fun and post up some pictures of these rare/collector beauties!

Here's a few of our NOPE to fragging corals:

Blastomussa Welsi

Ironman Blastomussa Welsi

Red Ricordea Yuma

Mint Blastomussa Welsi

Rainbow Stylophora

Strawberry shortcake Acropora

[Jimbo662]

I wish this guy would frag this colony!!!!

http://www.reef2reef.com/threads/the-pd-blastos-new-release-i-cant-believe-my-eyes.239136/

[jolt]

I buy the pieces I like, whether they are $5 unknown frags or $100 named frags.

I don't buy frags with the intention of making money. I am not averse to fragging to make some money, but its not the main goal of owning a coral for me, and I try to charge reasonable hobbyist prices when I do sell

I often wonder if the craze over little photoshopped nubs is something a hobbyist will eventually outgrow as they spend more time in the hobby, but I'm not completely convinced.

I won't say I have anything I will *never* frag, but I definitely have things I consider "in growout".

[jestep]

Personally, I do not, but I would consider it for some types of zoas and SPS if I can even get a hold of them myself. I lean more towards the SPS because zoa value tends to plummet as a certain strain is distributed around the reefing community. For example, I remember when certain rastas were going for $50pp and I've seen them as low as $2 - $5pp a few years later. Not a good investment IMO.

At the same time, I would much rather frag a healthy coral that is growing too close to neighbors or in a direction that I don't like rather than the chop shop fragging that I often see on some of the larger forums where people literally buy a mini colony and distribute it in as many pieces as they can get to survive. Additionally, for me to purchase the super rare SPS, I need some form of confirmation of lineage, so that I know it's not some maricultured doppleganger that going to STN on me over the course of a few months. Some of the PC SPS like the superman table is at the top of my list both in potential resaleability and that's it just an awesome and seldom seen color and growth pattern.

I have an amazing half volley ball size duncan that I got from Richard here on ARC that is my will not frag coral. I may make an exception on some of the smaller heads that develop near the base, but only because they have a hard time surviving in the shade.

[Timfish]

Everything I buy I expect to grow and frag someday. But I'm with you Dan, I like to see big colonies. Some corals though are not good candidates for getting big. As they get bigger there's less light reaching the lower parts and dieoff occurs which will threaten the stability of the colony forcing me to have to frag it and sell. It just seems like there's always something.

[+KimP]

I just buy whatever I like, assuming I can afford it, regardless of whether it's highly sought after or not. I really love lps though and they don't lend well to fragging, generally. I do enjoy having frags to sell or give away when I end up with them though! I try to make the prices very reasonable.

[Neon Reefer]

I bought 2 large frags from a local reefer at near shop prices when he was closing his tank down. Namely My Miami chalice and Tyree's Golden eye chalice. Both had ~ 5 eyes and were pretty pricey. I let them double in size over a six month period and fragged them both in half to repay myself for the splurge. Now I would never frag them and both are ~ 10 eyes each and are free to me

[Dan H]

It is pretty cool that in this hobby you can help offset some of the cost by fragging, granted it's always a net negative proposition but still it helps.

I have to say, when it comes to a beautiful coral, I really don't care about who or where it comes from... I just want it to be pretty... But at the same time, it's handy when you can say the name, and it's known so people know what you're talking about. As much as I hate the marketing names that have appeared in this hobby, they can be helpful in distinguishing what you are actually talking about when no pictures are available.

[FarmerTy]

I buy what I like but I do keep an eye on resaleability.

For the super expensive frags online, I can understand that they want to make their money back on it before something happens to it. I had the same experience with the Colorado Sunburst Anemone. I almost lost my anemone when I first got it. Luckily it survived and the first split almost paid for itself when I sold it.

Specifically for the Walt Disney, what a sham of a coral. I despise this trend of corals that only look good in blue lighting or are heavily photoshopped... but that's the last I'll say about that piece in particular. Haha.

Almost everything is open to being fragged in my tank except for the smaller pieces that are still growing out or if it's in a hard to reach area.

[Gig 'em @ NDstructible]

I never buy any coral with the intention of making money. This is my hobby, not a business. Sure, if my coral colonies ever grow to the point that they need to be fragged to keep them in check I'll try and sell that I trim. I'll also sell any branches that accidentally brake off while I'm fiddling in the tank. Selling these things and used equipment helps me sustain the costs of the hobby, but I never look at a coral or coral colony and think to myself "oh what an amazing business opportunity!"

I'll buy whatever I think looks good and will survive in my tank. If it happens to grow well and I need to produce frags I'll sell them. I don't really support hobbyists who are out to make money by buying a coral, chopping it up, and selling be pieces at an even higher price. I like to think club members are friends and we're all out to support each other and help each other in our goals in this hobby. Sometimes that means giving away frags or selling frags at a reasonable price. If a hobbyist buys a coral, chops it up into tiny pieces and then tries to sell all the little pieces at a ridiculous price I don't really want to associate myself with them personally.

All that being said, I still support reaping the fruits of your labor and selling frags from the abundant growth of a healthy tank, just not the chop shop mentality.

[Dan H]

I would suggest that when hobbyists buy larger colonies and frag them up it's actually beneficial to the community. Take for example Ty's gigantic Warp Speed Monti that I bought and fragged up. There pretty much was nobody in town that could fit that sucker whole... So it was necessary to frag it up. Ty didn't have the space to deal with it at the time, so he had to either sell it to a shop, or sell it to a hobbyist. I had the space, and we struck a deal. Because of this, there are now about 30 frags that people got, mostly in Austin, and mostly at very cheap prices. If he had sold it to a shop, the frags certainly would have been more expensive.

I really don't see much of a difference between a hobbyist buying a colony, fragging, and selling it VS a shop buying a colony, fragging, and selling it.

I do agree that some of the markups have gotten out of hand - but that's usually with some of the well known named corals that are just hard to come by (Walt Disney, Beach Bum, etc...). But at the same time, it's capitalism! If someone's willing to pay that much, then that's what the market will bear.

[Gig 'em @ NDstructible]

I respectfully disagree with you Dan, there is a difference between a hobbyist buying and fragging colonies and a shop doing it. A brick and mortar store has a good reason to create frags and sell them at a mark up to create a profit and pay for their overhead costs, stay in business, and provider for their families. A hobbyist doing the same thing just to make a few bucks undercuts the locally owned LFS's and makes it difficult for them to make money selling coral frags.

I agree that Ty cutting up an overgrown coral he no longer wanted and selling it cheaply to locals was a great thing to do and helped him, local hobbyists, and the environment. Now taking a wild colony out of the ocean, chopping it up into a bunch of frags, and selling them really only benefits the person who bought the colony and sold the frags. Wild corals have a bad track record of survival and chopping them up and selling them without giving them enough time to acclimate to captivity with ample time (by ample I mean a year or more in captivity) to prove they are capable of enduring environmental swings leads to a lot of dead frags. This leaves only a few lucky hobbyists who don't lose their wild cut frags while the person who chopped up the coral is the only winner sitting on their profit.

Sure, in a perfect world splitting up a wild colony to everyone would give us all a piece to grow into a full colony, but again those wild pieces don't do as well as the battle tested captive raised lineages. If a hobbyist wants to make a business of selling corals, they're in the wrong place here in Austin, the market is already saturated. Capitalism definitely will take its course if we all import wild colonies and chop them up, but that will lead to the demise of some of the Austin LFS's who can't sell as cheaply as those without overhead costs. I just don't know if I can do that to the stores that have taken care of us.

[Dan H]

I hear ya, but disagree.

[Gig 'em @ NDstructible]

Right on, I'm just expressing a personal opinion, there's no right or wrong answer. I just like to rant from time to time

[FarmerTy]

I can see how both sides of the argument are valid. Don't get me wrong, at the end of the day, I'm a capitalist. If I can make good money doing something and nobody gets hurt, I will. Well, throw in there that it's got to be ethical as well but that's a given.

I often dream about running my own version of Austin Aqua Farms, AAF. Renting a storage somewhere, getting a wholesaler license, and running troughs full of corals as far as the eye can see. I'd sell everything online and have a day open for walk-ins once a week. That would be awesome!

I know I couldn't do a storefront. The thought of having to be there at certain specified times of the day and engaging with customers all day long seems against what I would want in a business. Most of you guys know I can talk, but even chatter gets old if you do it all day long.

Anyways, geting off point but in the AAF-like scenario, there's a clear line that I'm not a hobbyist anymore. I'm a vendor at that point. I have a place of business, I have overhead, I may even have an employee, I have a business license and insurance, etc. When you're buying from me, you are buying from somebody clearing looking to make money off their product. It is a for-profit business.

Since those are pipedreams for now, currently, if you're buying from Ty the hobbyist, you're getting frags from corals that have grown in my tank. You're getting pieces that broke off, pieces from colonies that are encroaching on their neighbor, pieces from colonies I don't want anymore, or pieces from colonies that people have bugged me about so much that I finally fragged it to get them to stop harassing me. Okay, the last one was a joke.

Either case, I frag for fun right now, and I like it that way. People buy frags from me assuming they are healthy and acclimated to tank life, at least that's why I think they do. I've never done swaps before but started doing them this last year. They are a ton of fun and a good way to get rid of additional frags as well. Bonus... I get to meet even more reefers!

Getting to the chop shop mentality, even before this thread was started, I know personally I was on the fence about it. I know I buy some acro colonies sometimes thinking, if that thing turns into a beauty, I can sell some good frags of it. This discussion got me thinking, was I buying the colony for myself? Or was I really buying it for the opportunity to strike gold if it was a gorgeous colony and sell off frags of it. The true answer I believe is somewhere in between. I no doubt have an obsession with beautiful acro colonies. I would love to have them all! So, if I buy a colony, even with an eye on potentially finding a diamond in the rough and making money off it by selling frags of it, at the end of the day, it's so beautiful, I bought it to keep... not to chop up and sell off.

Then you bring in the ethical element of doing the chop shop selling method that Gig'em brought up and how it affects the LFSs in our area. He alluded to its impact... cutting profits from the stores and allowing them not to be able to compete as they have overhead to deal with while running a storefront, having employees, holding inventory, etc. Then you also bring into the discussion at home vendors like TrueBlueReefs. Basically gets the same access to wholesalers without all the overhead. He passes the savings along to the community but to what end goal? Reduces profits for the LFSs around town as they have overhead to deal with and can't compete with his garage setup. Let's go worst-case scenario, everyone starts buying corals from him and fish and the LFSs go out of business. He opens up a storefront because business gets so busy that it can't be contained in a garage anymore. He opens up his own storefront and starts selling out of there. Now he has overhead so raises the prices to compensate. Somebody else starts their own garage business and does the same to him. All we've done is really destroy the LFS in the end. Sorry, not trying to single TrueBlueReefs out but his business model is very pertinent to the discussion.

To me, chop shop is right somewhere in between that gray area of hobbyists selling to hobbyists and LFSs selling to hobbyist. It's in the same gray area where an at home garage business sits too. Personally, anything I can do to not support that, I will. I had my own ethical dilemma when acquiring the ice fire echinata. True Blue had a good price on one... I was that close to pulling the trigger... but at the end of the day, I decided to support one of the LFS that has been so good to me all these years and bought it from Niko's. I'm not saying I made the right decision for everyone, just the right decision for myself. I'm not saying anybody is wrong either for choosing the other route, just saying what I felt like it was a good decision in supporting the LFSs that have done so much to support me up to this point. I've had my own ethical dilemma as well from going chop shop myself on some maricultures and making some money on the side. I think this thread and the discussion that followed has made me take a more solid stance on that. The final answer for me is no chop shop for this guy but that's just my own personal decision. Nobody needs an unnecessary added middle man in a industry where there's plenty of middle men already.

I still buy my bulk items from BRS when I could buy from the LFS... yes. Not everything is black and white. Sometimes, savings are a big deal. But, when possible, I like to support my LFSs. Alright, enough of me babbling on. Happy reefing everyone!

[jolt]

I've seen that some local hobbyists actually supply quality frags to LFS in turn for discounts, other considerations, or trades. I personally think that is a good thing. I'd like to get to that point as well someday.

[FarmerTy]

I've seen that some local hobbyists actually supply quality frags to LFS in turn for discounts, other considerations, or trades. I personally think that is a good thing. I'd like to get to that point as well someday.

Funny you mention, more of my frags have been going to LFS these days... And magically turned into new fishes for the tank! It's a nice way for hobbyist and LFSs can coexist and help each other out. [emoji106]

[Gig 'em @ NDstructible]

I think you made a great point there Ty about the gray area of being a hobbyist and a business. That really hits it on the head about what really digs at the back of my mind on this issue. I like to know that a LFS is a business and they are clearly out to make a profit out of selling equipment and livestock. A hobbyist who buys corals just to make money or with a chop shop is dangerously close to that line of being a business, but they're not paying taxes, licensed or insured.

A hobbyist who buys corals to make money would make me question their motivation all the time. Are you in the hobby for fun or to profit from me? If you're doing this just to make money off me, I'm just going to go to the LFS who I've built up a relationship with over the years and I know won't try and screw me over because they want to keep my business. I like clarity in my hobby, I want my LFS to sell me equipment and livestock and hobbyists to sell me frags that have been born out of over abundance or accidental fragging.

I think starting garage businesses and chop shops is a dangerous game that will only hurt the Austin reefing community over time. Sure, the people who sell coral to make money without overhead will benefit and profit from their endeavor, but if that forces out the LFS's, we're all going so suffer. How integral are LFS to the introduction of individuals into the hobby, the sustainability of our hobby, and convenience of having a brick and mortar store to go to? Losing them to people who want to do business out of their homes will be detrimental over time to the whole hobby in Austin. I just don't feel it's worth it to save a few bucks.

I want to make sure I'm not insulting anyone here, I'm just expressing my opinion and concern. No opinion is either right or wrong. It's my own $0.02, and it's probably only worth that much

[FarmerTy]

I'll give you one cent for it. I plan to turn it around for 10 cents if it colors up well. [emoji6]

[Gig 'em @ NDstructible]

You cheeky Realtor

I'll give you one cent for it. I plan to turn it around for 10 cents if it colors up well. [emoji6]

[Dan H]

I don't think anyone is insulted, if anything I think it's a great dialogue. I think the LFS argument is very reasonable, but I also think that the argument is currently being presented as very black and white. There is a lot of grey. Not all LFS are good for the hobby, and not all "chop shop" hobbyists are bad.

Just to be upfront, I put myself into the hobbyist that also is trying to make money category. I wouldn't say I'm trying to run a chop shop, but I definitely have bought mariculture colonies and fragged them up... I try to be as ethical as possible only buying mariculture, no wild colonies, buying the parent colonies from LFS's so they make some money on me as well, and making sure the frags are healthy and healed up before selling, not just fragging then selling the next day. I believe what I'm doing is helpful to the community as a whole. It introduces some new corals that weren't previously available, and does so at a markedly lower price. I end up meeting a lot of people and get the opportunity to share some of my experience with newer hobbyists, helping them as much as I can. I've even made it a point to put many of the frags into the auctions where clearly making money is not a priority.

I realize this could affect some of the LFS's business, but there clearly is a large market demand for frags from colonies. I don't really see many (if any!) LFS's bringing in colonies, fragging them up, letting them heal, then selling the frags. The LFS's can't afford to let the frags sit and heal up. They have to turn over stock. More commonly, LFS's bring in colonies and sell them whole. If they do frag up a colony, it's literally from the shipping box to the chopping table to the display tank to be sold in an hour. And because they have a retail store, those frags are probably sold in days.

The reality of LFS's is that because they are there to make a profit, their intentions are actually more capitalistic in motivation than a hobbyist selling frags. The unspoken sad truth about LFS is that they make a lot of their money by failure on the hobbyist's part - whether that's because they are new, or unknowingly bought an animal that they shouldn't have. How many times have you gone to a LFS and seen animals that are nearly impossible to keep? Don't get me wrong, I don't fault the LFS's for that, it's just the reality of the hobby. Yes, there are plenty of chop shop hobbyists that are probably not being very ethical either. So it goes both ways...

But back to my first statement in this post, there are good and bad LFS's, and good and bad hobbyists. I'm not trying to crap on LFS's, just presenting both side of the argument. But the reality of living in a capitalistic society is that the good guy doesn't always win. Many times it's the one that has the lowest price, or innovative business plan. If TrueBlue found a new niche that gives him a business advantage, then you can't fault him for taking advantage of a gap in the market. If hobbyists are buying what he's selling, then clearly the demand is there. LFS's should probably take heed and adapt or innovate further.

Blockbuster VS Netflix, Taxis VS Uber, Myspace VS Facebook. All simply are a new way of solving an existing problem.

I really think we have some great shops to choose from here in Austin, and I should state to be very clear that I prefer our LFS's as well, and do what I can to support them... But along those lines, I am a capitalistic consumer, and I don't always feel the need to pay more simply because I like you. My system would probably have cost close to 25 - 50% more just to have bought it locally. Sorry, I'm not willing to fork out an extra $5,000 - 10,000 and have no regrets buying a lot of my equipment online.

So... Deep Sand Beds...

Seriously though, I'm glad that this is a civil debate, not just some internet flame war. I'm genuinely interested in hearing opposing views and the arguments presented with them. It's enlightening. And just because your viewpoint isn't mine doesn't mean we can't have a beer and talk tank.

[FarmerTy]

Someone say beer? Porter or stout and I'm there!

Good points made there as well Dan.

[Gig 'em @ NDstructible]

Well put Dan, and you're right, it's not a black and white issue. There are plenty of gray areas and it's always difficult-to-impossible to foresee the economical impact of our actions.

Right now a few chop shops and garage operated businesses aren't going to cripple the LFS of Austin, but I like to think of worst case scenarios if a whole bunch of hobbyists joined this movement.. then it certainly could happen. Obviously LFS are already dealing with the competition of online vendors and their cheaper prices and wider selection and have had to adjust their businesses to compensate without going out of business. Question is how long can they sustain the price cutting and competing with more and more cheap competitors? Would we be ok with them leaving so that we can save a few bucks?

I'm not saying to only buy from LFS's, I think we all tend to go to online vendors for large orders of equipment because the savings can't be beat and LFS's just don't carry that much equipment. I freely admit I get testing reagents and filter media from BRS all the time. I think LFS's make more of their money on selling livestock and if we take that away by always buying from each other then we'll eventually see the fall of many local stores in Austin.

To address one of your comments in particular, there is at least one LFS that brings in colonies and farms them out. I know that RCA has an off-site SPS farm where they grow out corals in captivity to frag and heal before selling in the store. I think that is a great practice for RCA to do since it reduces the prices we have to pay for their coral frags and it helps wild reefs by reducing the number of coral colonies removed for export. I am even volunteering with RCA to visit wholesalers in LA and cherry pick amazing corals for them to farm and eventually sell once they have been fully acclimated to life in captivity. I think it's this level of care and customer service that I don't want to see leave by driving local stores out of business, or at least out of coral selling.

[Dan H]

Which reminds me Ty, we definitely should have an informal Bar/Beer meeting soon. Maybe in a few weeks while the weather is nice.

If RCA is doing that, fantastic! I hope they kick some butt and do very well.

The one thing that should reduce some of your concerns that bunches of hobbyists are just going to start up chop shops is that there is enough risk and investment required that it'll weed out most - plus it does take a substantial amount of time and effort. I've personally had to invest a good chunk of change just to take care of the frags, and currently have well over $1k tied up in livestock alone. Most hobbyists aren't going to risk $1k just to possibly make a little money. Also consider the scale of a hobbyist is pretty minuscule compared to the LFS. And lastly, it's pretty much impossible to sell only locally. You can't just produce 50 frags of the same coral and expect them all to sell in Austin. You'd simply saturate the market and kill the price. Trust me, I practically had to give away Ty's warp speed in Austin... And just ask anyone with an orange/red Monti cap.

LFS's do have a hard gig. Online competition, hobbyists competition, large pet shop competition, overhead costs... There's no denying it's tough to survive all of that. But it's a business, not a charity. I've personally started or been an employee at many startups now. Some succeeded, some failed. Sometimes I made money, sometimes I lost money. It's business, that's just how it goes. But for a business to expect to survive with non-competitive prices just because people like them, they are certainly doomed to failure. I'd propose that the only reason LFS's can survive even though they in many ways are not competitive on prices is simply because demand is greater than supply for this hobby. That's why livestock prices are higher today than 10 years ago.

The entire hobby creates a very fascinating marketplace. It's 100% non-essential and based purely on disposable income. This suggests that the average hobbyist is probably reasonably wealthy when compared to the population as a whole. Because of this, the elasticity of pricing gets all out of whack. Is that $500 Walt Disney frag really worth $500? Is a bubble coral really worth $1000?! Depends how the buyer values it in their mind. And if it's demand is fueled partly by hype, then the price can only go up. Why is a coral that can be traced back to some person worth more than the same coral fragged by someone else? Scarcity. Competition. You get to say you now have that super special XXX frag with lineage to so and so... OOH! AHH! The only people who care are other hobbyists.

You want to hear something hilarious? We had a Ricordea Yuma that bleached from too much light. It ended up looking rather interesting - bright white with neon orange tips. When non-hobbyists would visit, inevitably they would all ask "WOW! What type of coral is that? It's beautiful!" And point to the bleached yuma. Meg and I then had to explain that actually, it was unhealthy and looked like it was knocking on death's door. "But hey, look at this other perfectly healthy yuma..." "Yeah, it's not as cool looking."

[FarmerTy]

Beer:30 is always on the clock for me. Maybe we should organize an informal event, like beers at 4th tap off Metric one night this month. Have a beer, talk tank, swap some frags, and enjoy some nerdy like-minded discussions that generally make our spouses and friends eyes glaze over normally.