Breeding For Profit Journey

[NOLANANO]

Hello Everyone,

I am starting a journal on my plan to breed shrimp and fish for profit.  I am not trying to quit my day job or anything, just trying to make a little extra money.  I have noticed a niche in my local market that I think I can fill. There seems to be an inconsistent (or completely lacking) supply of quality Neocardina shrimp, Endler Livebearers, and Java Moss.  I think these are 3 things that I can easily breed and would be easily sold in the local fish stores. I have watched all of Cory's videos on breeding for profit and have also checked out some shrimp specific videos on the topic as well.  I am still in the research stage of this plan but hope to get the ball rolling this summer. A few things I definitely learned from my research thus far is 1) to start small and keep the overhead as low as possible, 2) try to sell locally if possible because shipping can be hard and time consuming, and 3) Have a plan going in with set prices. Prices can be negotiated but asking them how much they would pay makes you seem like a hassle to deal with.

My Plan:

The Breeding: I plan to start with 2 plastic totes (preferably clear), a couple of sponge filters, some gravel, some rocks, some wood, and some Java moss in each tote. I already have some rocks, some wood (currently in main tank), some Java Moss (also in my main tank), and some extra gravel, though I may need to get some more. I plan to start with 2 color variants of neocardina shrimp. Definitely red (most common) and probably Yellow but possibly blue. I think long term I would strive to have all 3 colors but I want to start with 2 and see how it goes.  Once the shrimp get established and I get my foot in the door with 1-3 LFS (I will discuss this plan in more detail below), I will purchase 2 strains of Endlers to add to one to each tote with the shrimp. Another of the points Cory made is to make use of the space you already have. I figure endlers stay small and won't affect the shrimp population much, if at all. Plus like I said, there just aren't many endlers available near me and I personally think they are better than guppies for beginners because they are small enough to fit in a 5 or 10 gallon tank.  On top of these 4 offerings, I will eventually be able to offer Java Moss as well. I bought the moss almost 3 years ago and have never seen it in a LFS since.  If I can get that going, that's more profit. Plus the fish store can sell all 5 of my offerings to a single beginner with a 5-10 Gallon tank. A 10 gallon with 5 endlers, 10 shrimp, and some java moss is an awesome little starter package. Also long term I plan to plant my Bacopa clippings in these totes as well and try to sell that as well. But again, I plan to start with just the shrimp and work my way up.

The LFS: This is the trickiest part of the plan I think. I learned from Cory that I don't want to sell to every fish store within 5 miles because I will ruin my market. I plan to start with a single LFS in my area and then grow from there. In New Orleans (where I live) there is a lake that divides some markets so I plan to find 1 store on the South shore and another store on the North shore. The long term hope is to find a 3rd store in another area (I have an area in mind) but I definitely think starting with 1 and growing to 2 and then 3. This way I have multiple customers that aren't in direct competition with one another.  I plan to make a flyer with my contact info and a brief description of my purpose and plan. I obviously have listed what I am currently selling. I plan to offer the shrimp at $1.50 a piece with the indication that they can retail at $6 a piece.  There is only one store in our area that has shrimp (I dislike this store) and they sell them for $10 a piece so my price would allow the other store to undercut their price. And then list the hope for future offerings as the business grows. I can't decide if I should list the price that I am thinking for the future offerings or not.  I am thinking the endlers could be offered for $2 a piece and be retailed at $8 and the Java Moss could go for $3 per portion and be retailed at $10-12.  In the long term, if I can each store to buy 25 shrimp of each color, 10 Endlers of each color, and 10 portions of Java Moss each month, I could make $290 per month (gross) just getting 2 stores on board. If I can get a third store involved, that would increase to $435.  I'm getting a little ahead of myself because starting out by offering just 2 color variants of shrimp, I would only make $75 per store I can get signed up but still that's more than nothing.

I would love any feed back anyone has on this project. Particularly on specifics on my sales pitch. I am kind of nervous about that part because this entire plan hinges on getting at least 1 LFS in my surrounding area to agree to get shrimp and eventually endlers and moss from me. I will update this journal as I accumulate supplies, make my flyer, create a logo, etc.

Also at what point do I need to create an official business? Can I just go about this as a hobby or do I need to register with the state? I'd assume making $100 per month wouldn't raise any flags but would making $300 a month be noteworthy and require it to be more official?

Edited April 23 by NOLANANO

[gabdewulf]

Make friends with the store owners. Ask them if they buy from locals and what that requires/looks like. Most will do credit for the store but rarely straight money more than a quarter. Focus on what they want and be good at that.

[JettsPapa]

On 4/23/2024 at 10:24 AM, NOLANANO said:

. . . I would love any feed back anyone has on this project. Particularly on specifics on my sales pitch. I am kind of nervous about that part because this entire plan hinges on getting 2 LFS in my surrounding area to agree to get shrimp and eventually endlers and moss from me. I will update this journal as I accumulate supplies, make my flyer, create a logo, etc.

Also at what point do I need to create an official business? Can I just go about this as a hobby or do I need to register with the state? I'd assume making $100 per month wouldn't raise any flags but would making $300 a month be noteworthy and require it to be more official?

My first piece of advice would be to make sure you have a market before you get too far along.  Many stores will only give store credit instead of cash.  You can't go buy groceries or pay your electricity bill with fish store credit.

The second piece of advice would be to bring the plants in ready to sell, so all the store has to do it put them on the shelf or in the tank.  Have bacopa cuttings in bundles of at least 5 stems, with a plant weight at the bottom.  Have the Java moss in clear containers (I like the 5 ounce clear food-safe containers you can get at the grocery store), with a printed label.

The regulations regarding whether or not you need to register as a business will vary from one location to another, but I doubt that you would need to.  Taxes are another issue.  If you're using Paypal for payment they will send the info to the IRS, so be sure you track expenses along with sales for when you file your income tax.

[TOtrees]

I love that you're obviously thinking ahead, but you might be over-thinking it a bit. Putting too much thought into certain directions, that might not work out as you plan, and missing things that might work better. 

I recommend you start small(er). Get 1 product you can sell, and get that moving. If more than 1 that's fine, but start smaller. 

Relationships with the stores are king. You need to find a way to do business with them that works for them, and works for you. If they're only interested in paying via store credit, you could end up with hundreds of dollars of credit, no shopping needs, and no cash. So be flexible on payment terms. Take credit when you need something, but have a way to invoice them. Some might prefer to pay cash, others will prefer to receive an invoice and cut you a cheque. 

Remember you can't sell them anything if they don't need it, have space for it, and have a market for it. This speaks to timing. You might have 50 fish ready to go, but if they have inventory, or if they have no space, you will have to hang on to them until they're ready. 

Don't underestimate the number of tanks you will need. You really want to sell fish (and shrimps) at a larger size (75% full size or bigger), and that usually means competition with the babies, so that's your incentive to move the largest non-breeders into different tanks. 

I don't know your market, but I think asking $2 for endlers is a stretch. Ask the stores to tell you their wholesale price for similar items. Most will share that info. Your task is to make it worth their while to choose your product over the wholesaler (or in addition to the wholesaler). Is yours cheaper? Bigger? Healthier? Better looking? Survives better in the store's tanks? You don't have to check all these boxes, but at least 1 or 2. For myself, I do sell some premium guppies and shell dwellers to stores. I know I'm a hair above their wholesale, but my fish come in bigger, look better, and survive WAY better, both in the store and with the customer. All this gives the store confidence to put a premium price on the fish I provide, and also be confident they'll sell well despite that. So they're happy to buy from me, when it suits them. 

Scout the store(s) you sell to. Know what they need before you ask if they want some of your product. "I see you're low on endlers. How did mine sell last time, any issues? Did they survive well? Can I sell you another 2 dozen? When do you want them?" 

[NOLANANO]

On 4/23/2024 at 10:56 AM, gabdewulf said:

Ask them if they buy from locals and what that requires/looks like. 

This is one of the things that Cory kind of warned about in his videos is that if you go in asking them what they would pay or what they want, the LFS will brush you off because it doesn't seem like you have your act together or know what you are doing. He said to go in with a price list on letter head with your offerings and to act like a business selling to another business.  I definitely agree that I need to befriend the owner and be open to credit at least in the short term. 

The other part I forgot to mention is to get my foot in the door, Cory said to offer a sample of my product for free. This shows that I stand behind my product and they can see if it sells without any investment.

On 4/23/2024 at 11:28 AM, TOtrees said:

recommend you start small(er). Get 1 product you can sell, and get that moving. If more than 1 that's fine, but start smaller. 

I plan to start with just the shrimp. Java moss is slow growing so I think that I wouldn't be able to sell that for a good bit after I start selling shrimp.  My idea of letting them know about my future plans is to try to get them to see me as a legitimate business with a plan to grow.  I was thinking that would differentiate me from the average joe that walks in and says "my guppies are breeding like crazy can I sell you some?"

The reason I was thinking of doing 2 shrimp colonies is incase one crashes, I will still have the other to fall back on. Or if one starts breeding like crazy but the other takes more time, at least I can get started with one colony.

On 4/23/2024 at 10:58 AM, JettsPapa said:

The second piece of advice would be to bring the plants in ready to sell, so all the store has to do it put them on the shelf or in the tank.  Have bacopa cuttings in bundles of at least 5 stems, with a plant weight at the bottom.  Have the Java moss in clear containers (I like the 5 ounce clear food-safe containers you can get at the grocery store), with a printed label.

I already have a label maker and was thinking the same thing about the moss and the stems. Have them ready to sell.

[NOLANANO]

On 4/23/2024 at 11:28 AM, TOtrees said:

I don't know your market, but I think asking $2 for endlers is a stretch.

You might correct. From what Cory said, I should try to charge 1/4 of what they will sell for. I will have to do some recon on what they are selling guppies for. The reason I think I can sell them at that high of a price is because literally no one offers Endlers in our local market. But I will have plenty of time to figure out that side as I will probably be trying to sell the shrimp for a while before I even buy any endlers let alone have a large enough population to sell. Hopefully by that time, I will have a good enough relationship with the stores I work with to talk the price out.

On 4/23/2024 at 11:28 AM, TOtrees said:

You don't have to check all these boxes, but at least 1 or 2.

My angle is going to be quality, locally bred neocardina. These will look great and should have a good survival rate since they were bred in local water. And like I said, at $1.50 they can be priced to undercut the only other shrimp seller in town.

[TOtrees]

On 4/23/2024 at 12:57 PM, NOLANANO said:

The reason I think I can sell them at that high of a price is because literally no one offers Endlers in our local market.

There's no question they're available to stores through the wholesale environment, so my question is why aren't the store selling them? It's certainly NOT that they can't get them, so I'd be jumping to "they're not selling". Why do you think the store(s) will buy your endlers, when they are choosing to not carry them? I'm not trying to rain on your parade, but you need to know this before you jump into buying your breeders and getting in too deep. 

 

On 4/23/2024 at 12:57 PM, NOLANANO said:

And like I said, at $1.50 they can be priced to undercut the only other shrimp seller in town.

Don't aim to be the cheapest. If it works out that way, so be it. But don't set your price based on a certain amount less than the lowest seller. For myself, my prices vary based on quantity. I've sold anywhere from 50 up to 500 shrimps at a go, and the more a buyer takes, the lower I will go on unit price. If you are confident you can provide a better product that the other seller and/or wholesalers, your price should be higher. But whether the store will buy yours, at your price, will depend on whether they see a financial benefit to buying yours. Will they sell your shrimps at a higher price? If so, why? Is it that they expect to sell more of them? Or lose fewer to in-tank deaths? 

Good questions/discussion. 

[NOLANANO]

On 4/23/2024 at 12:30 PM, TOtrees said:

Why do you think the store(s) will buy your endlers, when they are choosing to not carry them? I'm not trying to rain on your parade, but you need to know this before you jump into buying your breeders and getting in too deep. 

No this is a good question. I could be totally off base here but there was a store that used to carry them and they would sell out of them quickly. That store changed owners and the new owner went in more of a monster and odd ball fish direction than nano fish.  I view endlers as a beginner fish that SHOULD be sold often times when a person wants a guppy. They are smaller and hardier.  A lot of beginners get a 5 or 10 gallon tank and then get some guppies which grow to be too big for their tank and/or die from weak genes. My thought that if the LFS had a consistent, locally bred supply of endlers, they could push them instead of guppies or other nano fish that should be kept in bigger numbers to these beginners.  

Scenario: Dad comes in with his 7 year old daughter. They just bought a 10 gallon and are looking to stock it.  They say they want 2 neon tetra and 2 guppies. The employee can point to the Endlers and explain that they are just as colorful and lively as guppies but are smaller, hardier, and locally bred. Instead of getting the 2 neon tetra they can try to sell them on shrimp. Came from the same local breeder as the endlers, matter of fact, they were bred in the same tank.  The shrimp will be a nice little cleanup crew and will also have cute little shrimp babies.

Maybe I am blinded by my affinity for endlers over guppies? I just feel like they are a better and more versatile than guppies.

Could I get lucky enough to have @Cory give his wisdom and maybe explain why Endlers might not sell in fish stores? And impart any other critiques of my initial plan?

Edited April 23 by NOLANANO

[Cory]

Every market will be different. Every store will be different. We retail Endlers at 4.99. Most customers only want males.  Also the easier something is to breed the more competition you'll have. Routinely someone just drops off 50+ endlers at the store for free because they are crowding their tank.

You quoted me saying operate like a business. But you also asked, do I need a business license. You're already on a path to no operating like a business. You need a business license. Any store wanting to do actual volume, needs you to have a business license. This allows them to properly account for them tax wise. You'll likely need to store their wholesale/resellers permit on file to be able to sell to them without charging tax. Both parties will want invoices so that they can deduct the items from taxes. You'll want to justify writing off foods, electricity, partial rent, tanks etc. They'll want to be able to show it as a COGS and deduct it from the profit.

Just because a store isn't selling something doesn't mean there isn't a market for it. I don't sell lots of stuff, but it's because we focus on a specific thing, planted community aquariums.

My best advise would be get started, learn along the way, run a legit company. Every time you step away from a legit company you're 1 step closer to just being a hobbyist. Get a business license, get a checking account and credit card in the business name. Buy everything with the credit card to make tax time easy. Then take cash, check, credit from the stores, with invoices. The easiest will be paypal invoices/credit cards at the beginning.

I don't mention this in videos, but lots of people are never meant to be the face of their business. People assume that's how it works because they watch me do it. But most companies have lots of people who aren't good at selling, but great at running day to day operations. You may be terrible at getting stores to buy, but a great breeder. Or vise versa. You'll need to learn where you struggle and improve on it. Often times you may have to create and supply marketing materials for the stores about your products. Theres a reason they don't sell it, could be education, could be marketing etc.

My advice is to start with something that's already selling at the stores. If they sell 50 red platies a month. And sell 0 endlers per month. Which do you think will be easier to get them to buy from you and have them sell volume? As you learn to supply necessities you can gamble some of your time/profits on what you think might be missing from the market.