On the overriding "how does this differ from the MBI Marketplace"...well...if the coop has no intermediary involvement between buyer and/or seller, then it's no different than what was already tried and failed. What I saw in the coop concept is things like being able to get discounts on shipping, maybe do what Florida Fish Farmer's association does (which is provide better access to things like shipping supplies and medications), and providing a more seemless interface for buyers. Unless I'm mistaken, the concept was that all sellers items appear together being purchased from the coop, with breeders basically then fulfilling orders by drop ship. Amazon's independent sellers kinda come to mind as a variation on this theme, or maybe the most real-world example of it. I wonder if they maybe even have a shop setup that allows you to establish a branded online marketplace doing exactly this.?
The issues that are coming up are readily apparent when you see things like "using the coop's shipping account to get better fedex rates"...Coop has to handle money, pay bills, cover costs. The more "seemlessly" breeders are presented as being part of the "Coop" vs. "independent sellers", the more liability and reptuation risk falls onto the coop...the "one bad seed ruins it" concept.
Kathy, to your earlier points: 1. The shipping of the fish twice is what it is. What it
isn't is a problem.
2. The costs of shipping the fish twice are not doubled, because the volume of fish shipped in any one shipment more than offsets the "second shipping" cost. Example:
Scenario A: 5 Breeders have 50 fish each to sell, and for ease of math it costs $100 to ship from each breeder. 5 fish, 5 species, 5 shipments, $500. $2 per fish to get to the wholesaler. Each breeder makes one shipment.
Now, 10 buyers want to buy 5 of each species and want them shipped to them. That's 25 fish per buyer, going from one central gathering point to the end buyer. Assuming shipping weight and packing densities are the same and the rate doesn't vary, each shipment costs $50. That's 250 fish, 10 shipments, $500 in total shipping costs. Middleman makes 10 shipments.
Scenario B 10 Buyers want to buy 5 specimens of each species from 5 different breeders through a virtual coop online. Let's ignore reality here and just assume that in theory, you could ship 5 fish from point a to point b at a proportional price, which we've kinda pegged at $2 per fish. Each box of 5 fish costs $10 to ship.
Each Buyer is now set to receive 5 shipments a piece. Each breeder will make 10 shipments each. This is 50 shipments in scenario B, vs. 15 shipments in scenario A. There are 35 more chances for things to go wrong, never-mind the reality that a smaller box of fish is more at risk to exposure than a larger box with water, and thus temperature buffer capacity.
Now, in the hypothetical scenario, I said sure, $10 per shipment, 50 shipments = $500. But that's a fantasy that everyone one of us can recognize and realize isn't true. The cheapest you can overnight anything anywhere with national carriers is basically $40, regardless of order size. So even if I was to "halve" reality and say that a box of 5 (or 10) fish costs $20 to ship, monetarily we are right back at $1000 in shipping expense incurred, but with a hell of a lot more shipments going back and forth. In reality, if we acknowledge that there is a FLOOR, a minimum price on overnight shipping, and put that at $40? $2000 in shipping fees...in essence DOUBLING the actual "on the ground" expense of shipping because you avoided a centralized distribution point.
Reality - I think best case scenario the cost of shipping is indifferent whether you run this through a wholesaler or do nothing but direct drop shipments. But more likely, it's actually far less by moving larger quantities of fish from point and to point b to point c, vs. having many more shipments going directly from A to C. Nevermind that you actually have more physical boxes shuffling around, and those cost money too.
You also dramatically increase the success of fish going from point B to point C because it's a quality control checkpoint...we presume that the wholesaler will do a better job of shipping over the long term due to experience...and not just the experience of shipping and customer feedback, but also from observing the shipments sent to the wholesaler from the breeder.
To the regional issue - Yes, this might work regionally with the carrier we've discussed, but in the grand scheme of things it's a rather small market, and the "solution" of the co-op only works within this limited area. Small size of audience might hinder other aspects of such a project...there is a need for critical mass to get attention, particularly from buyers.
Functioning as a wholesaler Well Kathy, look at what the breeder trades off in all of this. Instead of making 10 shipments, they make ONE. Instead of chasing down payment from 10 sources, they have one trusted client. Of course there are RISKS, but that's WHY you get to take your cut; when I resell fish from other breeders I insist that I be able to double my money...otherwise a deal doesn't happen. You also remove some of the elements of "competition" among breeders..that is to say you have the option of setting your selling price for ocellaris, regardless of which breeder they come from. OR you grade them and you work with your breeders appropriately (which is what I do with Angels...different pairs produce very different offspring).
Originally Posted by
KathyL
You know, I hadn't considered that. Companies might want to advertise on a website that caters to aquarium stores. Not a bad idea.
We could even use the advertising income to discount shipping costs. Hmmm.
Now THERE is a freakin' brilliant idea Kathy! Use that income to offset the higher incurred shipping costs. I like the thinking.
The problem is that you really want to offset that cost to the buyer, not the seller. But there's no easy way to monthly, or yearly, pay out a rebate to every single buyer based on add revenues for the month...not saying it cannot be done, but unless all the payments come through the website and are handled by the coop, you wont' have the data / access you need. And more likely, the reality is that the revenues you might get from advertising will have to go directly towards coop set up and operating expenses.
If you COULD generate enough revenue to offset shipping costs and you wanted to rebate back to the seller (which is probably easier to manage), you'd have to have something like the seller eating half the shipping cost up front to keep the expense to buyers more reasonable, on the hope that it's a good advertising month and they're going to see a kickback to offset that expense incurred earlier.
But then I go right back to farm price to a wholesaler, vs. using the coop to sell wholesale direct to retailers. Is the coop going to charge vendors fees for the service? Will the vendor have to subsidize shipping costs? Unless this is free, and unless they get the full actual shipping costs paid for, the seller will be taking a hit on their price anyway. Will that amount to the same hit they take by selling at farm price to a wholesaler? Hard to say, but it certainly COULD.
Kathy, I'm not sure I already said it, but being regional, I'm certainly willing to join in the "test market" of this concept if it rolls, regardless of all my constructive criticism / thinking posted above. I have nothing to lose (unless I have to front some money to participate / fund it?) by trying out whatever you ultimately decide to do...if I don't like it, or it doesn't work for me, I simply don't have to participate.