Purple Haze said:
My understanding is that most of the stores have a sort of gentlemans agreement to not bring prices down below a certain point.
It's my understanding that this act is illegal.
I'll have to look into it further to make sure.
Yes, price fixing is illegal. However proving it's going on is nearly impossible unless someone's stupid enough to write things down.
All of this is hearsay, and conjecture, and rumor, but a lot of it makes sense.
The fact is that many of the fish store owners in that part of town know one another, some of them are actually related. They're gonna talk to one another, and from what I've heard, (although I couldn't prove it.), they often get together to make very large purchases to save on freight charges. Owning a fish store isn't a way to get rich, and most of these guys are just scraping by. They honestly still compete in pricing. You are not going to go into one store and find EVERYTHING is the same price as at one of the other stores. But you will find that in 4 out of 5 sailfin tangs are gonna go for $18-$25. Go across town to some of the other stores and they might be $15, or more likely $40. Each store seems to have a different 'focus' if you will. So one store might have more SPS than the others, or more LPS, or more inverts, etc... I don't think what they're doing is illegal, and even if it was, good luck trying to figure it out, much less prove it. From the outside it looks just like normal consumer-driven-pricing.
From stories I've heard, about 4yrs ago a young kid who was a major p*thead opened a store where Fish World used to be. The guy totally knew his stuff about keeping fish, he managed to bring in stuff that was fairly uncommon in Houston, his tanks looked good, and all his livestock did well. The thing was, he wasn't any good at business. Remember the p*thead comment? He would get shipments in, if something hadn't sold in about a week or so, he'd get paranoid that his prices were too high, and drop them below his cost. He evidently was open for about a year, and he set off a huge price war in that part of town because he didn't know what he was doing. He nearly drove all the stores on that side of town out of business because everyone ended up having to sell stuff below or at their cost.
To give you an example my friend stocked his 180, reasonably full for less than $1000. That includes his liverock. The guy was selling grade A croceas and maximas for $10-$15.
After he inevitably went under the rest of the shops prices remarkably stabilized overnight.
In the past year City Pets prices have dropped quite a bit. I've had more than one person say that they're trying to drive everyone else on that side of town out of business. So far I think they're plan appears to be working, 2 of the other 5 will be gone by years end.
Nothing CP is doing is illegal, or really even unethical. It doesn't change the fact that they're driving several stores out of business that know much more about caring for SW tanks, and have MUCH better customer service.
