Why are Gem tangs so expensive?

[4FordFamily]

Out of curiosity, can someone explain why Gem Tangs and even Black Tangs command such a high price?

I mean, they're cool, especially the Gem tang... but not $3000 cool... there has to be a myriad of factors that lead to the high price tag

 

[1.0reef]

It's their rarity. First off, they really are only caught in Mauritus, and very few collectors dive there. Let alone try and collect these guys, which aren't the easiest to find. Plus there's a huge demands, yet a small supply,causing the price to inflate. BTW they are usually under $3000.

 

[4FordFamily]

It's their rarity. First off, they really are only caught in Mauritus, and very few collectors dive there. Let alone try and collect these guys, which aren't the easiest to find. Plus there's a huge demands, yet a small supply,causing the price to inflate. BTW they are usually under $3000.

I've seen them from 2-3k.

And I know quite a bit about economics, especially long run models of economics... So if there was such a demand for this fish, as a collector, I would be entering the market and specializing in the collection of this fish. Sounds like a fantastic market to enter. Not sure what the barriers of entry are but if I were a collector already, especially one in Mauritus I would be ALL over things that could fetch that kind of margin!

So to me that can't tell the whole story. The demand and profit potential would create vacuum of firms entering the market. Even if they are hard to find, they would find a way. That's innovation, and for that type of margin you could afford the innovation and R&D!

 

[evolved]

if I were a collector already, especially one in Mauritus I would be ALL over things that could fetch that kind of margin!

They are, but it's not that simple. Finding them to collect is tough, coupled with finding and catching those of desirable size. Sometimes they go weeks without finding some; they're not consistently in the same places.

 

[4FordFamily]

They are, but it's not that simple. Finding them to collect is tough, coupled with finding and catching those of desirable size. Sometimes they go weeks without finding some; they're not consistently in the same places.

The business guy in me knows (thinks) that one could be hired to study them 24/7 and figure all of that out, and I could cover those costs easily with the price they fetch in the market!

 

[evolved]

The business guy left out some factors; the profit margin isn't as large as you think. The price here gets driven higher by primarily fright and having to change hands somewhere along the way (Europe).

 

[ssdawood]

^^^ What business do you have Bud.

Just trying to understand what you do for a living.

Nice question.

 

[pciscott]

South Africa does not allow the export of ornamental fish, this makes the fish off limits to most. A few have permits to collect, and some probably come in not so legal. Search a South African aquarium message board and you will find that there are many, just not legal to sell for profit. Also there is no direct flights so they would have to be shipped somewhere else before they come here. I almost had a deal lined up with a South African Reefer to trade a Gem for a Black. To them Black Tangs are much more hard to get. We were trying to figure out shipping and I got my Christmas bonus and jumped on a small one from a LFS. Beautiful fish and mine is buddies with my Black Tang.

 

[eatbreakfast]

There is only one small company that is family operated that collects and exports fish from Mauritius.

There are no direct flights from Mauritius to the U.S. so not only is there an extra flight involved, the fish often have to be unpacked and repacked.

The collector doesn't only sell gem tangs either, so a wholesaler has to buy other, more common fish, that are found in other locales at a higher price, but the market won't bear the added cost to these, so the loss on these fish have to be recouped elsewhere.

While these may not fully justify a $3000 prie tag, I am sure there are other factors that may be added, such as local government regulations on where, how and who can collect and export.

 

[Mr. Microscope]

I'm just going to go ahead and ask the obvious question here: if they're really that rare and limited, should we even be collecting them? It seems like the kind of thing that will give our hobby a bad name if we they stop showing up in nature.
Forgive me, but there's like a gajillion yellow tangs out there. Aren't they pretty enough?!

That being said, it seems like they pop up for sale pretty often. I wonder if they really are all that rare? Perhaps there's just a lot of hype whenever one shows up, but I feel like I hear about or see one once every couple months or so, especially on Divers Den.

 

[Oscaror]

I love the colour, but I hate the size. I only want 1 BIG fish, this isn't it.

Harlequin tusk <3 Someday gonna get one, when I upgrade, but that time keeps getting closer

 

[JJ Ocean]

A lot of the factors have been mentioned on the cost of the Gem Tang. I’ve been fortunate to source a couple fish out of there. The largest cost is the location – Mauritius.

1. Single Location - Gem Tangs are almost exclusive to Mauritius. There are a handful of accounts of Gems caught off the mainland of Africa – mainly S. Africa, but not enough for commercial trade.

2. Rare - Gems aren’t abundant, but not uber rare in the wild though. It is the other factors that add to the rarity - they are seasonal at reasonable collection depths and the Mauritius government limits exportation. Nobody can just go there and collect without a permit & they aren’t giving any out – let alone to foreigners.

3. Shipping Cost – to get to the U.S. you are talking about multiple flights with ~40 hours of travel time and most trans shipments from there are repackaged in the UK (if not staged for a period of time and later shipped).

4. Loss – none of the exporters guarantee live arrival, so those willing to source from there take a huge hit if even one fish passes in transport. Prices make up for those losses.

5. Importers are forced to source other fish – you can’t just order only 10 Gems. Importers have to take other fish that aren’t unique to Mauritius in an order. They are generally sold at a loss since they can’t command prices for the exact same fish coming from another locale with 5x lower shipping costs. They have to make up the loss on the profit of the handful of unique Mauritius fish – Gems, Flasher Wrasses, Gaster Clowns, etc.

 

[Leen]

In Singapore, my supplier sells it at only USD $1,200. I got one in my coral tank and it's been there for 8months already

 

[Ezeke1]

Here is one for sale at a cool $2999

http://www.liveaquaria.com/diversden/ItemDisplay.cfm?c=2733+3&ddid=268993

 

[4FordFamily]

The business guy left out some factors; the profit margin isn't as large as you think. The price here gets driven higher by primarily fright and having to change hands somewhere along the way (Europe).

Where there is a will, there is a way. Somehow, some way. Especially with that kind of sales revenue.

 

[4FordFamily]

^^^ What business do you have Bud.

Just trying to understand what you do for a living.

Nice question.

I am citing an IU Kelley school of business undergraduate degree in marketing, and international business, and a minor in economics, and also an MBA (Masters of business administration) from Butler, University.

My experience has been finance and sales outside of education.

 

[4FordFamily]

A lot of the factors have been mentioned on the cost of the Gem Tang. I’ve been fortunate to source a couple fish out of there. The largest cost is the location – Mauritius.

1. Single Location - Gem Tangs are almost exclusive to Mauritius. There are a handful of accounts of Gems caught off the mainland of Africa – mainly S. Africa, but not enough for commercial trade.

2. Rare - Gems aren’t abundant, but not uber rare in the wild though. It is the other factors that add to the rarity - they are seasonal at reasonable collection depths and the Mauritius government limits exportation. Nobody can just go there and collect without a permit & they aren’t giving any out – let alone to foreigners.

3. Shipping Cost – to get to the U.S. you are talking about multiple flights with ~40 hours of travel time and most trans shipments from there are repackaged in the UK (if not staged for a period of time and later shipped).

4. Loss – none of the exporters guarantee live arrival, so those willing to source from there take a huge hit if even one fish passes in transport. Prices make up for those losses.

5. Importers are forced to source other fish – you can’t just order only 10 Gems. Importers have to take other fish that aren’t unique to Mauritius in an order. They are generally sold at a loss since they can’t command prices for the exact same fish coming from another locale with 5x lower shipping costs. They have to make up the loss on the profit of the handful of unique Mauritius fish – Gems, Flasher Wrasses, Gaster Clowns, etc.

So basically gem tangs that are specific to Mauritus are subsidizing the other fish (not exclusive to Mauritus) that need to be sold at some degree of loss in order to compete with these fish from other locations. That makes some sense.

It still begs the question though, why would a company have a myriad of loss leaders and one (or few) cash cow or star? Why not let the other fish get sourced from other sources where they have a competitive advantage (in the form of a cost advantage for the reasons you've all mentioned) and the collectors in Mauritus focus predominantly on those rare, unique fish that can fetch higher margins, and lose the loss leaders?

I understand that by not shipping other fish they may lose some degree of benefit from economies of scale and economies of scope but in this circumstance I can't imagine that it would impact a firm that does this because they have exclusive access to these fish and thus it is a "premium product", and those costs can be absorbed and then no losses occur over the other portfolio of fish, they focus on their competitive advantage and core competency, and make significantly more money.

People are willing to pay for exclusivity and rarity in this hobby, but if the losses on other fish did not need to be recooped, the total net loss of benefit would be far less by focusing on something people are actually willing to pay for.

To put it another way, even being shipped four times is a small expense relative to the full cost of the fish (product). It's a small fraction. And no matter the scenario, the loss leaders aren't really adding any value other than marginally (seemingly irrelevant) cost savings through selling more units (economies of scale) and several types of fish (economies of scope, which seems less relevant here than in many other industries/markets). The monitized value of those two factors surely cannot exceed the losses allocated to this fish by other species collected.

I am sure I don't have the full picture but that just seems like immensely inefficient cost accounting and business/distribution strategy.

 

[Shep]

Pretty much like everyone has said, limited collection areas, huge shipping risks and cost and somewhat rare in the wild, plus then you add on cost so that the people doing this can make money. Its not surprising that they cost as much as they do. I am sure you could turn it into a profitable company but you would operate on thin margins and the loss of one fish could take you out of the game. Also you have to consider the fact that few people are going to be willing to drop that kind of cash on a fish, so this limits your market by a lot.

 

[4FordFamily]

Pretty much like everyone has said, limited collection areas, huge shipping risks and cost and somewhat rare in the wild, plus then you add on cost so that the people doing this can make money. Its not surprising that they cost as much as they do. I am sure you could turn it into a profitable company but you would operate on thin margins and the loss of one fish could take you out of the game. Also you have to consider the fact that few people are going to be willing to drop that kind of cash on a fish, so this limits your market by a lot.

That is true about the smaller market. But if costs were driven down you might be able to sell more, assuming supply was there.

I also hear gem tangs are pretty hardy, like other zebrasoma tangs. So that also strikes me as odd.

 

[sawdonkey]

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