Have you ever looked in your reef tank and wondered from where they came? It is something that never occurred to me until I actually went into business for myself while I did my Masters degree in Nova Scotia.
Learning about the reef aquarium industry
I moved from Toronto to Halifax to get ready for school. My girlfriend, my wife now, and I drove to Halifax with our 65 gallon long aquarium taking up most of the backseat along with all of it’s supplies. When we arrived and got settled in to our new place, I got excited to go to the local aquarium store; however, I noticed the prices were really high. I didn’t think the prices were right (I was a bit naive) so I decided to start my home marine aquarium business out of my home.
I admit that I learned a lot of things about the marine aquarium business and how the fish and critters get from the Ocean to your tanks!
One Business Model
There are 4 levels in the marine aquarium industry. Actually, the levels are more like individual businesses, which can be a real problem for marine conservation purposes (but we will get into that a little further down). The first business is the Collector. Pretty self explanatory title. This person catches the fish and critters. The Collector will sell the fish to the next level called the Middle Man. This guy buys the fish from the collector who turns around and sells them to the distributor. The Distributor sells the fish to the final stop before your tank, which is the Retailer.
It seems like a simple model where each level can have their own business and have the freedom to work whenever they like right…Wrong! The problem with this business model is that the collector is forced to collect the animals that are dictated by the Middleman because the Collector only sells to one Middleman where as the Middleman can buy from many Collectors. You see, the Collectors are so geographically isolated, living on smaller islands in remote places, that they only have access to sell to one Middleman. If the Middleman does not buy the Collector’s product, then the Collector does not have anyone to which to sell. In addition, the Collectors are forced to sell at a particular price set by the Middleman, which is quite cheap.
The Middleman will sell to the Distributor and make a fairly decent profit. The Middleman holds all of the power. They can force the Collector to specialize in collecting a specific species, which would put a lot of pressure against the species and could led to the local extinction of the species to the area. Do you see the problem? The Collector can’t choose to take other species and conserve the local environment because they can’t sell them to the Middleman. Now we have a big problem, especially because the hobbyist don’t really know about what is going on.
There is a way to fix this problem and there are some businesses who incorporate this model. Here it goes: The 4 levels are part of 1 business. Yes, the collectors, the middlemen, the distributors are all one business. So the business can decide on the fish they want to sell based on market demands. In fact, there is room to get a diverse amount of fish as it is more attractive to the buyer. The Collector is paid a full-time salary so they are not forced to collect one type of fish. They have more freedom. This business model not only helps saves reefs and provide a good living to the local community who in turn can save their coastal habitats.