Observations Of A Closed Society

[KNOBTAIL]

ALLEN, I was re reading your post,

and an incident came up in my mind that may best illustrate what I consider an endemic problem in this industry.

Last year I received a call from a promoter whom I am sure you may know. Ive been attending his show for the past 7 years. Any way he asked me if I knew of this ABC company, and I told him , no. You know our main business is breeding fruitflies and culturing materials. We have been in business for 15 years now.

Anyway, I asked the promoter why? apparently this company wants to get into his show, and sell fruitflies as well, and out of courtesy, he felt because of our long friendship he called me.

I called some people to try and find out who the ABC company was, and lo and behold, I find out that its run by a 14 year old kid, right out of his basement or bedroom. Not only that , but I see his ads now on Kingsnake.

So I call back the promoter and advise him of the fact . Apparently his mother was willing to take him to the show, and stay with him while he mans the booth and tries to sell his cultures at the show. Because he does not drive or have credit cards his mother has to be their to pay for the hotel and lodging.

I asked the promoter, if he had a problem with letting 14 year olds purchase tables at his show. His answer to me was, "we shall see".

Now Allen, this should never have happened, and my reservations have nothing to do with fair competition, but this child does not have any federal permits, and he advertises, he pays no taxes, and he is certainly not a business, but calls himself one. This is the only industry that I know of that allows these things to happen and possibly get rewarded as a vendor.
When you take this scenerio and multiply it ten fold, then you will understand why I have an attitude on this subject. This needless to say has nothing to do with David or You, but one day, you may run up against the same problem, and you will wish then that some restrictions have to be warranted. JERRY

 

[dwedeking]

I agree there is a portion of the industry that are either ignorant or negligent about how a business should be run. There are two solutions that I can see (since it's illegal to shoot stupid people ).

1. Regulation by government or some other large body organization. Personally I hate government involvement in anything other than foreign affairs or natural disasters as they tend to be inefficient, killing as many of the good businesses as the bad. A large organization would need involvement of the masses to be efficient, just unrealistic.

2. Market demands. I see this happening (although slowly). The general public is becoming more educated on getting what they desire. What makes my blood boil is when you see 2 or 3 "bad guy" posts about a company (these are repeat offenders, not people that have screwed up and fixed it as much as humanly possible) and then someone buys from them anyhow. 99% of what is sold in the reptile business can be found via another source why you would encourage shoddy business practices is beyond me.

 

[KNOBTAIL]

also ALLEN, it does not matter, if the

person is 14 or 40 their have to be boundries. You and I and David cannot afford to have these things happen when we have financial obligations as business men. If you find a justification for this type of activity, then , all is lost. JERRY

 

[dwedeking]

This is the only industry that I know of that allows these things to happen and possibly get rewarded as a vendor

Seen www.ebay.com yet? LOL. I found a product on there that I sell, it was less expensive than I could buy from the importer at my pricing structure.

What do I do to solve this?

1. Look at different ways to attract the customer before they reach ebay. Look at the value options I can provide (easy online ordering 24 hours a day, same day shipping etc, those things that are hard to measure with $$).

2. Find the same product from a different distributor or look at how to structure my buys so that I can compete.

I agree that if a business is going to compete in an area (fruitflies) that requires permits than all in that area should be the same. This can be controlled at the local level easily (a show for instance). There's no way to control it on a larger level (across national or international levels) otherwise manufacturing jobs wouldn't be leaving the US. Levi Straus just decided that competing at manufacturing in the US was not possible and closed the last two plants in the US. As I am sure you know Jerry business is far from fair so you just adapt to the climate and overcome the obstacles.

 

[JungleHabitats]

Daniel

OMG get out of my head its not enough room for us both in there lol


As Dan stated i have MUCH more problems with the ones who wcrew people over on a REGULAR basis i wont mention any names like Upstate Exotics or Enclosures by Design or anything as a main one ... Opps it slipped . When a venue that says it is dedicated to our hobby / trade such as KS is and repeatedly allows people like that to use there advertising venue to scam people or drag out things that should run like a well oiled machine all for the mighty dollar ... NOW thats gaulds me to the soft tissue. as Dan said there many more people that are more then happy to give a customer EXACTLY what they want or need in a timely fashion and create a repeat customer .I ca nunderstand what you stated about a 14 yr old in the buisness ... and i think Dan stated that someone like that would not have a vast knowledge of customer service due to there lack of time communicating with people in a business since. Heres my take at 14 if they are allowed to cut lawns and do work of that nature to make money by all means i have no problem with them being my compettiton or in my field of business.WHAT would make that different if that 14 yr old does something that they cant make good on such as be a slime ball aswe know that minors cant be held accountable for there actions but i would say in your case you gave the parent was or is aware of there kids actions so there for they would be held accounatble to make sure there kids does the right thing . if that 14 yr old screws up and makes a bad name for them self then the BOI & word of mouth will show it to them in not giving them buisness ... just beacuse there young isnt fully enough reason IMHO to not allow them the right or freedom to do something they like , who knows Jerry that 14 yr old starting off at that age could verywell be the
fruit fly king in 10-15-20 yrs ???? or could verywell find out in 6 months that what he thought he wanted to do he isnt cut out to do .. just my opinion of the case you gave nothing else

 

[herpetological]

I have to agree with quite a few of the points. However, when it comes to competition I welcome it! In the same scenario I've had many upstarts try to sell to "my customers". I say my customers but, they are only my customers if I can keep them. I keep them by supplying better quality, better service, guarantees and taking considerable time to educate them in the care and husbandry of the species I sell. Yes, sometimes the draw of a cheaper price does bring them to purchase from other sellers. A few weeks later they are calling me to find out how to treat their sick or non-feeding stock. It's a learning experience with them. The only reason the regular customer would go somewhere else is if someone else can support their needs better than you can. When I do a show and other dealers are selling for less, I often have customers asking for better prices. I simply explain how much work goes into each specimen and they are purchasing more than just a specimen. They are buying my support, advice and reputation. I have even helped a number of people get into the business. You do have some valid points in regards to the "need" for everyone to have overhead so to speak. However, if a person can provide the same service and quality that I can and do it for less(Considering they are legitimate) more power to them! We do seem to have quite a bit of change going through the industry... some for the good, some bad. I think our future is and always has been dealers with ethics and educated customers. This reflects in the same light for both wholesalers, jobbers or retailers. I've seen hundreds of wanna be dealers go in and out of the business over the years. In my eyes the competition from a 14 year old would be negligent. Would I support the 14 year old and help him...yes. Would I as a customer buy from a 14 year old? Most likely no. If I, as a customer wanted to purchase, it would be from the most reputable and experienced person possible. Having a monopoly on a product is not always a good thing. I makes us lazy so to speak when we are the only one with a certain item. This did not come out as clearly as I'd like to have made it but, maybe you can get my point. Again the problems with crooks, liars and thieves is nothing new. Back in the late 70's early 80's many dealers exchanged a "black list" of deadbeats etc.

 

[KNOBTAIL]

these things that you mention can

only be handled by regulations. Through some kind of enforcement, at least you would know who these people are and the possibility of loosing their licences if they get into the grey area of selling (i mean out and out thievery) as we both have witnessed on the BOI.

Not to jump back 40 years ago, these things could never happen because individuals as well as people who decided to become an instant herp business , could not get the animals from us. I could not afford to let a consistant customer come up against that. If we received complaints about certain individuals trying to get into the business through the side door, they would never be allowed in our establishment even if they became legal. Its a decision I made as well as the other few importers at that time because we needed to insure that our livestock was going to be sold, weekly and uninterupted because we needed them as much as they needed us. So you can understand what I meant by protecting our customer base.

Here we are 40 years later, and college kids, need money, so they go into the instant herp business, kids need money so become overnight breeders, shows are open to basically anyone who can buy a table and I dont know anyone on the internet!!!!

So as radical as my thinking is, if I offered you a solution to these problems and guaranteed that you would make money for your hard work , I think you would jump at the chance. That is why the herp business should have remained a closed society.

 

[dwedeking]

So as radical as my thinking is, if I offered you a solution to these problems and guaranteed that you would make money for your hard work , I think you would jump at the chance.

As long as I knew my place? God forbid I think I'm more than I am and strive for that? Personally, I'll take combat out here with the wolves and hyennas, with no guarantee knowing that I'm only limited by my own ability to compete. If I wanted security and protection I would have stayed at my hourly job, making decent money, full bennies (it was union), going home at a decent time and not thinking about work at all after the whistle blew.... course I'd end up eating a bullet being stifled like that

Out here on the west coast they require you to have a seller's permit to work the shows. That at least provides a contact point if there is an issue for the buyer.

I could not afford to let a consistant customer come up against that

To some extent we do this on our wholesale animals and cages. We have a set structure for pricing and we stick to that pricing even if it loses us sales to retail customers (lost one today because of this). But we do not try to control the pricing of our retailers, if you meet the requirements for the buy in then you get the product.

 

[dwedeking]

only be handled by regulations

Would these regulations be enforced by the same people trying to set vendors at the florida shows (you had posted previously about this incident on another thread) or would we import competent and intelligent government officials from somewhere else?

 

[KNOBTAIL]

DANIEL, this of course is hypothetical

but I would establish a Federal Users Permit that would regulate who is who. More than likely their would be 3 levels. Importers, wholesalers and Retail operations. Individuals would be excluded. If your a breeder, you would fall under the retail permit, if you were an importer/wholesaler you would fall under the higher catagory namely the importers licence. Yes their would be an administration fee. I would expect that each level provide a name, adddress and physical location of their operation. I would also expect that each operation be legal. By that I mean either a corp. or a business that allows you to run your business in the state you live in. Sales to non permit holders would be prohibited. This of course does not include the purchase of livestock from a retail store. If however someone decides to sell his collection, he would not be allowed to get into the herp show just to unload his own material without having the necessary permits to sell to the public. I am not talking about Fish and Wildlife permits, but rather what I am writing about. This would put a stop to the many people who decide to become weekend herpers. I would not allow sites that promote sales to accept anything other than bona fide permit holders advertising.

I am sure this may sound radical, but it would immediately eliminate alot of people, and I think you would agree with me that it would be much easier to know who is seriously interested in getting into this business than just making a fast buck without concern for any damage they may inflict on unsuspecting buyers or legit. businesses like me and yourself. Now assuming that you no longer wanted to have your collection, the animals could only be sold to another individual or back to the retail operation.

I saw this occur here in Fla. where someone began breeding Red eye tree frogs. He hit every pet store in So. Fla. selling them for $ 3.00 ea. , and why not he had over 1000. That market has now been destroyed. I am sure I could come up with some other ideas that would probably raise the hair on alot of peoples back, but this industry needs to be cleaned up, before someone else cleans it up for us, and their methods always lead to "prohibition" I saw the inception of this in the 70s, and I dont have to tell you that their are groups out their that would love to prevent you from having anything living. So my ideas as far fetched as they may appear maybe the lesser of two evils. JERRY

 

[dwedeking]

How is your federal regulations different than the regulations they have now? Seems to me Florida (and maybe Georgia) are the most heavily regulated and a lot of the BOI issues come from Florida (for the record I feel this is due to the large number of the businesses dealing with reptiles there and not a reflection on people living in Florida). Your own post (other thread) was about how enforcement was unfair and contained no common sense. That is stereo typical government and your force would be the same.

he would not be allowed to get into the herp show just to unload his own material without having the necessary permits to sell to the public

Required in California. Doesn't change anything.

For the record I feel that shows are a dying breed. The internet is a show everyday without the packing.

I would not allow sites that promote sales to accept anything other than bona fide permit holders advertising.

I may be the exception here but I do not sell many animals off of KS or Fauna. One thing about the internet is it's adaptability. What we did with marketing online a year ago is way different than how we market now (I used to own an online marketing firm which is how I built Scales). There are free search engine listings, mailing lists dealing with the sale of animals that are non-profit and set up anonymously, word of mouth, chat room spam. Your organization would not be able to keep up with the underground ways to sell products online. Yes these are not as efficient as the established communities but you'd be amazed how fast information spreads online. Google had a chart for a while (may still have it on their site) showing searches for a celebrities name when a scandal broke. You can physically see word spreading online about her as people from different countries start searching her name.

The only way to keep the illegitimate businesses out is to raise the entry level. To do that you would have to raise the prices of all animals sold. This would remove reptiles from many of the retail pet stores. This would also remove your market.

I'm curious how your regulations would stop the red tree frog guy? Your fee for retailers/breeders would need to be $1000 - $1500 to keep him from killing the market. Unless you think charging a fee is going to make someone more business smart?

 

[dwedeking]

Just wanted to clarify

While we disagree about the efficiency of a government regulated system (I think the free market system will eliminate those of doubtful credibility without removing the good vendor that is trying to get into the market which is what your system would do) it is not personal just a matter of differences in philosophy and business models.

One of my reasons for not wanting the regulation is selfish. It would raise my overhead (which is the point of the regulation as by your definition the small guy trying to come in the side door is not wanted from your standpoint) and remove one of my main points of competition. We are a small shop with the dreams and the drive to become much larger. We started with our own money so we do not have the means to purchase huge amounts of animals/supplies at extremely low costs like the Petsmarts and others in the industry. So we leverage those portions of the selling process that allow us to compete against the goliaths (quality and service).

 

[Rob @ RK Reptiles]

Just to clarify something about Florida and their license requirement. The state has a license that is $50 for the Class III over 25 animals (it was $25 until recent times) in order to "sell or exhibit reptiles" All a person in this state has to do to be able to sell at a show is have this license. IHonestly don' think it is right of that being the only requirement to be able to sell at all.

 

[dwedeking]

ok, so what should the requirements be?

 

[dwedeking]

I've done a few other pet expo events (these have a full range of animals and supplies not just reptiles). Here is how they eliminate the entry level companies. They charge $500 for a 10 X 10 booth space. Wouldn't have to worry about competition then ? How many reptile sellers could move enough animals at a two day show to make a profit at $500 per 10 X 10 plus other expenses?

 

[KNOBTAIL]

Daniel, as for me I think the requirements

in the state of Fla. should also include some proof of a legal business. Here is my reasoning. Pet shops are regulated in the state of Fla. as other businesses. Not only are Fish & Wildlife licences required as Rob mentioned, but local licences and maybe county licences as well. Now, Iam not in favour of having a permit for everything, but if you want to get into a show and their are many in FLa. you only need the F &W licence. So you can operate out of your bedroom, and sell to the public or anyone else and by pass the legal stores that have to pay for the privledge of being in business. Sounds familiar. This is exactly what happened to us with the example of that 14 year old I mentioned. As you are well aware these same people who are "back door vendors" also have the freedom to purchase where you buy your herps from and the dealers will gladly sell to them as well. This is a problem.

Strictly Reptiles sells to anyone. Ive been their, I know their operation, and they want the money. They provide no protection between a legit business such as Robs to anyone who has a name or calls himself ABC Reptiles. Incidently, their is a current thread in the BOI about Underground Reptiles which is a perfect example of why we should be regulated. That involved myself. I have not responded to this thread, but their was a previous one that I did respond to , and Rian called me , and he apologized so I have refrained from chiming in on that thread . Anyway, let me know your thoughts.

 

[dwedeking]

Again, just based on what we have going on here in California (as it's the only place I've done business other than one out of state show) getting a seller's permit makes you a legitimate business (by state standards) whether you run out of a store front or your bedroom. You have to provide an address and contact information to get the permit but the fee is small. If your within city limits you have to get a license from the city. Here that's $31. So I'm just over $50 and a "legal" business (legitmacy I contend is shown by your business practices not a permit).

I am not overly worried about competition that does not have my overhead. There are companies that I am besting based on the fact that I have lower overhead than them. Hell, Walmart is kicking everyone's butt because their overhead is extremely low. That's the nature of business and competition. Matter of fact 80% of my energy this year will be focused internally (getting better buys, streamlining production, better quality control, etc).

I've spent the last six months looking at expanding into a larger arena of animals. To do this I've been following posts about the importers/wholesalers and asking opinions of people that do this already to see which vendors I'll work with. Where I see a vendor who will not work with me on pricing (had a feeder vendor who gave the market to someone I consider a "bad company", this "bad company" is notorious for low-balling supplies and animals - note: they are a larger vendor and fill your requirements of legal legitamcy - but would not give me the same price at the same volume) or one of lacking quality I find other vendors. I feel that market forces will show these sub-standard companies either the error of their ways or the door.

Your goal is to remove anyone without deep pockets for start up costs, but if you make the business license fees and other permits low enough that the strip mall mom and pop shop doesn't get hurt then the "station wagon" vendor (who has less overhead so can absorb your extra permits) would not be effected.

If you are looking to keep everyone easily catagorized in their neat little box then your set to fail as it's not a problem to set up shell companies (one with a permit to import, one with a permit to sell retail). Charge a 1% mark up and use that retail business as a tax write off.

Personally, I'd rather see you provide 60 hours of basic business knowledge as part of the permit application. Teach those bearded dragon breeders that their dragons are easily eating $10 in crickets before they are old enough to sell so $10 dragons are a non-profit.

 

[JungleHabitats]

Jerry

Not to jump back 40 years ago, these things could never happen because individuals as well as people who decided to become an instant herp business , could not get the animals from us. I could not afford to let a consistant customer come up against that. If we received complaints about certain individuals trying to get into the business through the side door, they would never be allowed in our establishment even if they became legal. Its a decision I made as well as the other few importers at that time because we needed to insure that our livestock was going to be sold, weekly and uninterupted because we needed them as much as they needed us. So you can understand what I meant by protecting our customer base

Jerry this reminds me of when i see the " Neighborhood protectors....."

when you say

I could not afford to let a consistant customer come up against that. If we received complaints about certain individuals trying to get into the business through the side door, they would never be allowed in our establishment even if they became legal

it sounds like if they were not getting something from you then they are not going to get it at ALL to me thats just as bad as extorsion... make them adhere to the way i do buisness or they aint gonna do it attitude

Its a decision I made as well as the other few importers at that time because we needed to insure that our livestock was going to be sold, weekly and uninterupted because we needed them as much as they needed us.

As daniel has stated ... if you provide somthing they cant get at a cheaper price then you are doing your job and the rewards from doing GOOD buisness will come by the consumer seeing the benifit of paying for a more well adapted animal a easier animal to care for etc etc the ones low balling will make money no matter what but quaility will sell itself ALWAYS

 

[KNOBTAIL]

ALLEN, that certainly was not the case

or we would not have customers continuously coming back. What we did was provide our customers with other customers that were out of town, this would afford them an outlet to other states where the demand was very large. It made sense considering that we did not have to ship, deal with the weather or airlines, etc. In other words if anyone found out about us, we referred to our customers. This was part of the heirarchy that I mentioned. I was not about to have 10 hats like the importers do today, I did not sell to individuals, (with very rare exceptions), but only to wholesalers. If a jobber called I gave that information to anyone who was willing to ship. The other factor of course was that my DOAs were minimil because of it, and I got paid immediately. So when you factor all these things in, it paid for us to do business that way. You know longer have that luxury.

Please dont misunderstand if some of our suppliers wanted to sell to individuals, that was their business, and i would have nothing to say on the matter. I just would not do it. I mentioned one of those exceptions, and Ill tell you. His name was Trooper Walsh, a nice young man at the time, whom I understand has made a name for himself in the Herp world now. I sold him his first Chondro python. Any how I just wanted to set the record straight about my position back then.

Also, I dont want you to think that I was callous, but we were so far removed from the end user namely the consumer, that I really had concerns only for the people that I directly dealt with. I realize as animals get filtered down to the retail level, it requires a different mind set. but it was nothing that I was accustomed to dealing with as an importer for 14 years before I packed it in.

 

[dwedeking]

Jerry,

I agree it is a business plan that has advantages. I have a supplier of pet supplies that always reminds me why he doesn't sell to the end user Probably the same reason I don't answer the phones here

The issue I have is trying to force people to operate the same way through regulation. I have one business model theory but I in no way feel it is the only business model (I like wearing the 10 hats and always on the go).