Ethics vs. Legality

[The BoidSmith]

Not so long ago I was reading a post in the BOI. There was obviously some confusion between what’s within your legal rights to do as a business and what would be considered ethical by US standards. There’s no doubt business ethics and morals vary between individuals not to mention between countries. What’s immoral for us is within the law for other cultures. There are people who think that if they are conducting “business” and not breaking the law in the process they are proceeding “ethically”. One thing has nothing to do with the other. You can be protected by the law and still breaking ethical standards. Again everyone is entitled to their opinion on this subject but it would be nice to discuss these issues that we see happening over and over again not only in our “hobby” but in many other business venues. Examples are more than welcome. One that immediately comes to mind is overcharging for merchandise. Yes, it is legal (you can charge whatever you want for your animals) some have even gone to the extreme to describe people that do so as "excellent businessmen". The question is: "Is it ethical"?

Regards.

[kmurphy]

I don't feel overcharging for anything is unethical. To me it's just bad business. For example, I don't know anything about cars. If I bring my car into a shop and he charges me 200 to replace the muffler I would have it done. Then I may find out everyone else in town charges 150 for the same thing. Do I think the guy I went to was unethical. No. Will I ever go to him again. No.
Just because I am uneducated when it comes to the cost of auto repair doesn't make the guy that takes advantage of me unethical. It's not his job to educate me. His job is to make as much money as he can. If he is shortsighted and charges too much then it will cost him in the end. He won't have loyal, and repeat customers, and eventually he will either fall in line or go out of business.
A "legal" practice that I would call unethical is the "buyer-beware" policy that some reptile sellers have. For example, the seller may know that this snake hasn't eaten for 3 months but unless the buyer asks, the information is not forthcoming.

[The BoidSmith]

Just because I am uneducated when it comes to the cost of auto repair doesn't make the guy that takes advantage of me unethical. It's not his job to educate me. His job is to make as much money as he can.

Is his job to make as much money as he can at the expense of someone that doesn’t know better (bear in mind I’m not talking about you :) )?

To me business transactions are about win-win situations. Not about one person making a lot of money. Each party has to go out of the deal feeling satisfied. In your example one party made a lot of money at the expense of the ignorance of the other. Had the buyer been educated the sale would have not been made. Someone correct me if I’m wrong, but isn’t this is one of the main reasons why minors cannot enter legal binding contracts? Isn’t the bottom line that they don’t’ know better and lack experience and thus someone can take advantage of them?

Regards

[kmurphy]

To me business transactions are about win-win situations.
Yes but who sets the price? Not the buyer or the seller. It's the market. I may think charging $3000 for a "new" ball python morph that you need a good imagination to discern is unethical. But the next guys goes wow and gladly pays the $3000. There's a gray area I think.
I believe the original thread regarding pricing ethics was about overcharging for shipping. There again I would say it is shortsighted on the seller's part. He may make a few bucks now but eventually even the suckers will catch on.

[varnyard]

I understand your point, but is this not true in eveything that is for sale? In that case almost everything we buy is unethical. Look at Wal-mart, they made billions, are they unethical? IMO, I would say they won.

We have a market on reptiles. On that market, we have snakes that sell for high dollars. Are all of these sellers unethical? Should they sell these morphs as normals? Say a $5,000.00 pied ball python, for $100.00?

[The BoidSmith]

We have a market on reptiles. On that market, we have snakes that sell for high dollars. Are all of these sellers unethical? Should they sell these morphs as normals? Say a $5,000.00 pied ball python, for $100.00?

No, by no means, in that case I would say you set the price. You own an animal and if that's your price then it's just fine. One man's trash is another man's treasure as they say. The point is when something sells to another party that "doesn't know better". That even touches legal aspects. You cannot sell to people that are mentally impaired, if I'm not mistaken the law even goes as far as to nullify contracts made with people that were temporarily impaired (e.g. drunk). Similarly a person who buys from someone that doesn’t know better at an unfair price falls also into a similar category. To me a business transaction has to be a win-win situation. It shouldn’t be about one party making the most money out of it. But this is not just because it will be short-lived as once the buyer learns about it he/she will never purchase from you again. The point should be the satisfaction you as a seller should have for having been fair to your client. Or is the satisfaction so tightly related to how much money you could take out of an uneducated person? On one hand we keep saying we need to educate the public, on the other we don’t hesitate to sell not at market prices but as how much that person will be willing to pay. Isn’t there some sort of contradiction here?

Regards

[hhmoore]

Just for the sake of discussion, let us look at the converse situation...using for example albino boas (Kahl strain). At the start of this year, speculation was that prices would drop some, but (from conversations I had) many felt the market would sustain a $750 pricetag. Then, out of nowhere, somebody drops to $600, then another goes to $500...I've even seen $450, and we're only midway through the year. What do you think about the practice of undercutting the market significantly to sell your animals?

[varnyard]

I will ask this. Does anyone remember when albino berms first hit the market? What was the price that you remember? What are they bringing now?

It is the same thing we have here. The more these morphs are produced, the cheaper they will get. I seen the same pastel ball pythons bringing $750.00 last year, this year the same snake is $325.00. The same thing happen with the Mojave, last year I know that someone paid $15,000.00 for a male. This year I have seen them as cheap as $1,695.00. It was a breeding size male. And the second price is a hatchling. But talk about a drop in price, that is a major drop.

I will also say this. I sell my tegu hatchlings for $100.00 plus shipping. There are some people selling them for $65.00. Mine are not imports, or farmed. They are out of proven tame adults. Should I drop my price to compete with the other people that are selling them much cheaper? No way!! It will not happen. I feel that mine are worth more than the other guys. The only reason, mine are out of tame, parasite free adults.

[hhmoore]

You're throwing a couple of different things into the mix there, but why not. Sure, dominant and codominant morphs drop hard - hence the huge differences in pastel, spider, mojave, etc bps vs last year (and take a look at those same animals two years ago...yikes). Typically though, simple recessive traits hold their value for longer, and don't drop as precipitously. While boas are significantly more prolific than BPs, they are not on the same plane as burms and retics. The fact that people are undercutting the market so badly amazes me. I'll be honest, it won't surprise me to see albino boas at $200-250 next year (sadden me, yes, but not surprise)...but the integrity of the animals will suffer the consequences. The problems seen by many from albino to albino breedings will likely become more commonplace. With prices this low, they are well within reach of the average consumer & anybody with any thoughts of breeding them is unlikely to mess around with hets. I already regret the choices I made for my males, and I haven't even tried to breed them yet. Albino boas are not my main interest, but I figured that they would at least be marketable. If it wasn't for the fact that I want a nice sunglow for myself, I would seriously consider scrapping my albinos and hypos all together. (before anybody jumps to the incorrect conclusion that I am "only in this for the money", I am just much more dedicated to several species that do not require as much space and are ultimately more in line with my goals). It will be interesting however to see where some of the big names set their prices next spring.

[The BoidSmith]

Just for the sake of discussion, let us look at the converse situation...using for example albino boas (Kahl strain). At the start of this year, speculation was that prices would drop some, but (from conversations I had) many felt the market would sustain a $750 pricetag. Then, out of nowhere, somebody drops to $600, then another goes to $500...I've even seen $450, and we're only midway through the year. What do you think about the practice of undercutting the market significantly to sell your animals?

In my opinion undercutting the market is unfair competition and as a practice I probably dislike more than when someone overprices his animals. When someone sets the price tag at an incredibly high price compared to the competition he may be lucky and find “that particular client” who likes precisely that animal and no other and is willing to pay the difference. I’m referring here to overpricing something for what it is, not when someone misleads in an ad. Offering for sale a CH normal male ball python for $300, if it was advertised as such and someone likes it so much to pay the price, so be it. Chances are you are not going to sell it, but, even if you do you will not be competing with breeders that have higher costs of production. On the other hand when you undercut prices you are entering into unfair competition with those who have worked hard to get to the point where they are at. Again, there’s no law against it, it’s a free market and you can set your price as low as you want. In fact sometimes you need to sell even at a loss to maintain your cash flow.

Regards.

[kmurphy]

Here is a definition for Fair Market Value.

The price that an interested but not desperate buyer would be willing to pay and an interested but not desperate seller would be willing to accept on the open market assuming a reasonable period of time for an agreement to arise.

As with my stance on charging too much I have the same stance on charging too little. If an individual feels that he can still get a decent return on his investment by undercutting the prevailing market than why not do it. It is not his/her fault that others don't feel that way. To artificially keep prices inflated so that everyone can make more money is somewhat dishonest. It's too bad the market falls and a guy can't make back his investment on a $15,000 bp. It was simply a bad investment. It is the risk you take. In a fair and honest transaction where both parties agree there is no such thing as charging too much or too little.

[The BoidSmith]

Here is a definition for Fair Market Value.



As with my stance on charging too much I have the same stance on charging too little. If an individual feels that he can still get a decent return on his investment by undercutting the prevailing market than why not do it. It is not his/her fault that others don't feel that way. To artificially keep prices inflated so that everyone can make more money is somewhat dishonest. It's too bad the market falls and a guy can't make back his investment on a $15,000 bp. It was simply a bad investment. It is the risk you take. In a fair and honest transaction where both parties agree there is no such thing as charging too much or too little.

Excellent post Kevin, and I particularly like your quote. Business transaction [B]have[/QUOTE] to be win-win situations for both parties regardless of the price in question.

[varnyard]

I agree!! Good post Kevin!!

I will also say this. I bought some pastel ball pythons this year. I bought them cheap from a breeder. I sold them and made a profit. Should I have jacked up the price even higher to match the prices that some breeders are wanting? IMO, no. If I did that, then I would be seen as a bad seller for jacking the price so high. But at the same time, a few breeders still thought I was wrong for selling them so cheap. So what do we do? I am going to give my customers the best deal I can. They are the ones that put food on my table. That is my view on this, and how I have been looking at it. I am sorry that some people are upset with my selling prices, but I will try to please customers. They are the ones that pay the bills. JMHO.

[hunterjackson]

Bobby,
I completely agree. If I get a good deal, I like to pass it on to my customers. This is such as 1. they keep coming back 2. they will be happy 3. I will make more money in the long run because they are repeat customers.

I have people who have raised ethical questions on me. I do not guarantee live arrival of amphibians and I require that people notify me within 4 hrs of a DOA. Those are my terms, and they agree to them before purchasing.

The reason for the 4 hr DOA requirement is, people who recieve the animal are expecting the animal, and IF something goes wrong, I want to correct the problem asap, learn from my mistakes (ie weather or anything of the sort), and make my customer happy.

Bobby has helped me a lot, and showed me some good business skills which I greatly appreciate.

Note: I have never had a DOA animal, and never had to use anything in my TOS against a customer.

Hunter Jackson