Ball Python Pricing
The prices of ball pythons are supposed to be driven by the same factors that control other commodity-based industries. In forum post after forum post people rally around the notion of "supply and demand" as the most controlling factor in the value of a reptile. While there are slivers of reality in this notion it is only a tiny part of what drives prices.
Let us better define the question. We are not asking, "Why do ball python prices fall?" Prices always fall. It is a natural phenomonon. What we really need to be asking is, "Why do ball python prices fall so far so fast?" What is it that is making this happen?
The answer is multi-faceted and I can't cover them all on this post. One of the first things I want you to do is
read this article on the pricing of ball pythons on on-line classified sites. I hope it will scare you enough to begin to pay a little more attention to what is going on in the industry.
There is a general lack of business acumen in the reptile breeding community. Certainly there are some very smart business people in this arena but they are in the minority. I know exactly zero breeders who actually calculate all the costs that go into the production of an animal. They instead focus on a an unsubstantiated final result; cash in hand.
The cost of an animal should include some of these factors:
- Housing costs
- Feeding Costs
- Equipment wear and tear
- Personnel payroll
- Advertising costs
- Shipping costs
- Shipping material costs
- Transportation costs (e.g. fuel and vehicle maintenance for driving to shows)
- Vendor fees for trade shows
- Display systems for trade shows
- Substrate & bedding
- Facility costs (e.g. electricity, water, sewer)
- Facility supplies (paper towels, soap, hand sanitizer, disinfectant, etc.)
- Insurance
- On-line advertising fees
- Marketing material costs (business cards, flyers)
- Licensing & permits
All of these things should be accounted for to determine the break-even point on a reptile. And then you have to build some profit into it. You do, after all, deserve to be paid for your time and for your risk (these animals can die).
Unfortunately these things do not drive the costs (even though they should). The single biggest factor that drives the cost of a ball python is the most recently listed price on an Internet classified site. This price can be posted by the largest breeder in the country or by a guy with two snake who got lucky and produced some babies. The lack of a centralized mechanism to provide pricing guidance and longevity to the industry has left us victims of the least intelligent people in our industry.
Reptile breeders tend to think that lowering prices will cause animals to sell. There is a bit of truth to this but it is not a panacea. Consider this somewhat simplified analogy (and yes, I know I am neglecting things like 'net present value' in this example):
Imagine that you are a hamburger vendor. You sell hamburgers for $10. I am hungry so I pay you $10 for a hamburger. After eating the hamburger I am no longer hungry. I am no longer willing to pay you $10 for a hamburger. Rather than seeking out another hungry person who will pay $10 for a hamburger you tell me that you will sell me a hamburger for $8. No thanks, I say. I'm not hungry. I don't want to pay $8 for a hamburger. So you say, "How about a hamburger for $6?" Because some time has passed I have once again become hungry. During the time I was not hungry you lowered the price of your hamburgers thinking that price controlled hunger. It doesn't. But now that I am hungry again I am glad to see that I can buy the same hamburger for $6. After eating my $6 hamburger I am again no longer hungry. In your desperation you once again try to lower the price to make me hungry again. Given enough time you will be selling hamburgers to me for less than it costs you to make them. This is true because you forgot to calculate what went into producing them in the first place. Satisfied needs don't motivate. Why am I alway broke, you ask? Simple: you sell your hamburgers for less than they are worth. You are your own worst enemy.
But there is another side-story going on here. During the time when you are having difficulty selling your hamburgers you feel you have a surplus. A competing hamburger vendor offers to buy most of your $10 hamburgers for $5 each. Seeing only the combined value of selling 100 hamburgers for $5 (e.g. $500 in your pocket) you jump at the opportunity. You might be surprised to learn that your hamburger selling competitor doesn't even have a facility to make hamburgers of his own. He just buys from people like you. His overhead is almost zero while yours is very high. Your competitor now has $10 hamburgers that he only paid $5 for. This means he has $5 of margin per burger to play with. It doesn't make sense for him to hold out for the full $10/burger. With no facility he doesn't even have the ability to keep them warm. So he sells them all for $7/burger. That's $3 less than you are trying to sell yours for. Devaluing a $10 burger by $3 doesn't hurt him because he's still making $2/burger. And you did all the work to make them. Your panicked decision to wholesale your burgers actually precipitated a $3 price decline in the value of your own burgers. Burger wholesalers don't have to apply cost analysis processes to determine what a burger is worth. All he has to do is sell the burger for a little bit more than he paid for it and he's making money; and destroying your future ability to sell burgers for a profit.
I hope some of you will see the moral of the hamburgler. If you wholesale your animals to breeders for the "big payday" you actually de-value the entire market. If you actually exhibited just a little bit of patience you would find that you actually sold all your own animals and made a bigger, better profit for yourself.
Please read my blog:
http://www.ballpythonbreeder.com. I discuss these things often and would very much like the ball python community to begin to behave in a much more rational manner, one that will provide for the long term viability of the industry.
Cheers,
Colin Weaver
[email protected]
