Euro-Reef hones its business model in the U.S.

by Owen James

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The marine aquarium equipment maker Euro-Reef sent me a press release a few days ago outlining a few changes in its business model.

To be honest I wasn’t at all familiar with the situation (I’m based in Europe) but sales director Clayton Taylor was kind enough to expand on the news over email.

Clayton responded to my query as follows:

In Nov. 2008 Euro Reef, inc sent out a press release that outlined changes to their business / sales model.  The press release was misinterpreted by many of its customers. Since then, the model has evolved a little bit, and we saw that a new press release be given.

This business model that Euro-Reef has implemented is designed to focus on the bricks-and-mortar retail establishments.  Euro-Reef sells their products on their own web site at MAP price.  This is a Minimum Advertised Price, not a “minimum price”.

Euro-Reef products may not be sold on any other web site.  They may be advertised (at MAP) but not sold. This protects the gross margin for all bricks-and-mortar retailers from cut-rate Internet sellers.  In short: this product is just for them.

The official online options are:

As well as a Buy Online button, each site’s product pages also enables you to search for a nearby aquatic dealer that stocks Euro-Reef products via a nifty Buy Locally button (seemingly using the same system as the Local Fish Store Locator website).

Euro-Reef is making an interesting stand regarding local fish stores.

While mail order livestock delivery has come on a very long way – and some local fish stores definitely deserve to go out of business – those of us with experience should remember that nearly everyone starts in fishkeeping at a local fish store.

Blogs and forums can do much of the instruction and hand-holding today, but still: I wonder if the hobby could sustain itself without local fish stores?

More thoughts in the press release from Euro-Reef below:

February 2009
Press Release: FOR IMMEDIATE RELEASE
www.euro-reef.com

EURO-REEF, INC. RE-LAUNCHES BRAND IN NORTH AMERICA

Euro-Reef is back and better than ever; poised to regain their seat as the world’s premier manufacturer of saltwater aquarium filtration products. Change- Euro-Reef Sells Only to Bricks & Mortar Retailers…

In 2007 Euro-Reef decided to implement a unique business model that focused on the retail bricks & mortar Local Fish Store (LFS) and pulled their products from all online retailers. The new model also called for the closure of all distributor accounts in North America.

Although their products have remained available to the LFS and qualified aquarium design/service professionals, the exposure of the brand suffered due to some confusion regarding 2008’s January Press Release.

“It was a tough decision, but we knew it was time to make a change and the choice to support the LFS exclusively was a key component of our new model.” says VP Jeff Macaré.

The VP says that they took the time to evaluate where the brand stood in the market place and to determine the best way to provide quality products to the Local Fish Stores.

“Our product belongs in the LFS.” Macaré said, “A potential Euro-Reef customer needs to see the quality of our product first hand. They also need expert advice, and they get that at their LFS.”

The company continues to enforce a Minimum Advertising Price (MAP) policy.

In order to serve hobbyists that cannot buy Euro-Reef products in their area, products may be purchased directly from the new Euro-Reef web site at the MAP.

“This,” Macaré says, “ensures that there is no online competition for our LFS dealers. The product is just for them and no other manufacturer is offering them that.” This philosophy, Jeff Macaré says, is the way of the future for this unique industry.

“The LFS is under more pressure than ever before and as they are the backbone of the entire hobby, it is devastating to see the numbers and rate at which they are going under. We as manufacturers have to take a close look at that and realize that every store that closes takes a lot of potential/future hobbyists with it. I think that manufacturers have been favoring giant PO’s from giant online dealers for far too long and the damaging effects can be seen quite clearly in our industry.”

Check out Katy's Tropical Fish Guide for more aquarium info.

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