Bubble Magus Pricing

[Ron99]

In respect to a sponsor's request to keep this discussion out of his thread I would like to continue the discussion here. I would like to explore the reasons for the often large disparity in pricing of products in Canada vs. overseas pricing and specifically the Bubble Magus line.

Now I will first start by saying I think that the Bubble Magus line are a great bunch of products that are well made and work well. Their most attractive feature, however, was their price. The Bubblke Magus skimmers are as well built and perform as well or better than many other brands that are (or were) priced higher than Bubble Magus. I think that is what made Bubble Magus so attractive was the price point vs. the competition. They were bringing a quality product to the market at a very attractive price.

Now that some exclusive distributors have taken over the line the prices in Canada are much higher compared to overseas and the reasoning given does not seem sound to me.

So first let’s do some price comparisons:

Product China Price Canada Price Difference

BM-NAC6 skimmer $130 $195 $65 (+50%)
BM-NAC7 skimmer $170 $240 $70 (+41%)
BM 150Pro skimmer $236 $379 $143 (+60%)
BMQQ nano skimmer $68 $139 $71 (+104%)
BM 180CS skimmer $305 $500 $185 (+64%)
BM 220CS skimmer $500 $800 $300 (+60%)

BMT-01 Dosing Pump $276 $320 $44 (+15%)
BMT-02 Dosing Pump addon $130 $260 $130 (+100%)
BM 2.5L liquid storage bucket $20 $60 $40 (+200%)
BM 5.0L liquid storage bucket $25 $75 $50 (+200%)


The distributor attributes the higher costs to shipping costs, duties and providing warranty support. He also stated that they are paying the same to Bubble Magus as the Chinese retailers charge us or something to that effect (perhaps he would clarify that as the original post is not there anymore). Let me state my take on it:

1. Shipping costs. I was quoted $70 to ship a BM180CS skimmer from China by EMS. The distributor is having them shipped in a container by sea so the cost per unit to ship will be far less than $70. So that still leaves room for markups etc. and I would say the prices of the NAC line of skimmers are reasonable in Canada vs. the cost to get one from China. However, the prices of the Aquabee equipped 150Pro and CS cone skimmers is a bit inflated vs. the Chinese prices at close to $200 and $300 more than the overseas prices. There does not seem to be some set percentage or per item markup to cover shipping. It is somewhat variable.

2. Duties. I was not able to find specific information on this but it looks like there may be no duty on aquarium equipment. So the importer would pay GST and possibly some brokerage fees if using a customs broker instead of doing the paperwork themselves. I may be wrong about the duties but I could not find aquarium equipment in the tariff listings and haven’t taken time to try to contact Canada Customs to find out. If somebody knows about duties on aquarium equipment please chime in.

3. I would be curious to know what the cost of providing customer and warranty support is as a percentage of their sales. Shouldn’t be a huge percentage unless you are selling a bunch of low quality product which Bubble Magus does not appear to be. And from what I have heard from others this particular vendor isn’t the most responsive or helpful when it comes to warranty support.

4. Finally, it was implied that the wholesale price Bubble Magus is charging the distributor is the same as what the Chinese retailers are charging. I find this doubtful. Bubble Magus should set their wholesale price and the retailers then add a markup for their profit. I would find it had to believe that the wholesale price charged to Chinese retailers would be that much lower than what is charged to overseas customers. Sorry I don’t buy it.

So basically, I would like to understand the economics of the price differences. It doesn’t make sense to me and the reasoning presented in the other thread just did not seem believable.

There was some implication that Bubble Magus were not seen as a quality product because the prices were low. That is just an excuse to try to price gouge. Sorry. The attraction of the Bubble Magus line was the value proposition. Good quality products at lower prices. At these prices Bubble Magus is just another option in a sea of competitors and will not sell as well as they could at better prices. Those dosing solution containers are especially overpriced at 3 times the price for the same product in China.

I would love to hear some other opinions or additional input on this.

[mark]

The attraction for BM when they came out was the cost for the product, now with the huge markup as part of the exclusive distributorship, I'm sure lots are staying with the other mainstream lines.

I agree, would think the cost of shipping a whole container rather than shipping individually would bring the total overall cost down, can't understand what happened there.

As for increased cost due warranty and custom service, balanced against that I've be running my ASM G3 skimmer for about 5 years, with no problems and really a skimmer is a simple device, I'd like to keep the cash.

[gobytron]

Guys...
this is just the thing...lol

When the bubble magus frst came out retailers and high tech hobbyist alike were purporting the age old aquarium addage of "you get what you pay for" and dismissing them as cheap, made in china crap.

Then some brave (and cheap...lol) souls actually tried this line and reviewed them and suddenly the proof was out there.
A quality product for a fair price was on the market.

How long did you think it would take before retailers realized that significantly higher mark ups would equate to significantly higher profits?


You can't escape from this cycle, it's just free market capitalism at its finest.

I wish I'd thought of ordering them in bulk or inking a contract with the manufacturer or distributor in china and marking them up to sell to all of you.

[Ron99]

Originally Posted by gobytron

Guys...
this is just the thing...lol

When the bubble magus frst came out retailers and high tech hobbyist alike were purporting the age old aquarium addage of "you get what you pay for" and dismissing them as cheap, made in china crap.

Then some brave (and cheap...lol) souls actually tried this line and reviewed them and suddenly the proof was out there.
A quality product for a fair price was on the market.

How long did you think it would take before retailers realized that significantly higher mark ups would equate to significantly higher profits?


You can't escape from this cycle, it's just free market capitalism at its finest.

I wish I'd thought of ordering them in bulk or inking a contract with the manufacturer or distributor in china and marking them up to sell to all of you.

Gobytron, that's the attitude that causes the problem. Why should we just accept it as a product of capitalism? It's up to us as consumers to vote with our wallets. We can also use this new fangled interwebs thing to spread and discuss this information with large numbers of hobbyists. If enough people complain about the pricing and buy other products then perhaps things change. Do nothing and just accept it and nothing changes.

I for one do not like to be overcharged for things and am always seeking ways to find a deal or get the best price. Ordering from China was not difficult. It arrived quickly. They provided good support for a small problem. Oh and the bonus was that the package was not charged any taxes etc (sometimes you get lucky and Canada Post doesn't charge the tax) so I saved a bunch there too.

Buying here I would have overpaid and also paid PST and GST on top of it. So I figured I saved nearly 20% on my Bubble Magus skimmer and dosing pump. If I had bought a higher end skimmer my savings would have been much larger. I would have spent about 30% ($185) less on a 180CS. $185 is a good chunk of change.

So vote with your wallets and voice your opinions. When you buy that Reef Octopus skimmer instead of the Bubble Magus (or better yet, skip a purchase altogether) tell the retailer that you were interested in the Bubble Magus and would have bought it if the price was better. The message will get across if enough people deliver it.

[dankent]

The markup is there . .... but i do agree with shipping and cost to support might be the difference if the importer is actually the one supporting the product .... In most cases i doubt it.

They even have a decent website .... so i wouldnt doubt they handle there own support / replacement parts .

Currently looking at one myself .... or an ASM skimmer ... ASM i have experience with. So undecided so far, and trying to find a reliable review .. not just " Pulls out gunk " would help hehe.

[gobytron]

supply and demand Ron.

Unfortunately makes the world go 'round.

[Aqua-Digital]

Ron,

This is quite simple if you wish to understand how distribution works and why manunfacturers wish to use distributors

yes i agree 100% getting a distributor involved increases the product price, But by doing so you give a genuinely good product a market available to the many not just the few that wish to shoot their luck with sending some $$ over to China and hope they get something back in a useable state.

Ok onto prices.

Originally BM were selling to anyone at their factory price, no hiding this fact, but also this created the issue they have now moving into main stream marketing. basically you could (minus duties taxes and shipping) prior to February this year get a BM for cost price, wahoo BUT their market was restricted to only those willing to buy oversees, they had zero marketing and no country based product support.

So for the company to establish itself it needed to create a distribution base, this means distribution margins and retailer margins, and this brings me onto two points

Why have a distributor - this is wholly down to two reasons 1. Very few small stores wish to purchase in the numbers that a factory demand so by not having a distributor again the product becomes market restrictive to the masses. and 2. support, a client wants to know they can get fast easy access to resolutions when things do not go overly well.

So pricing. Well you know roughly what the product costs us shipping for a $10,000 order cost approx by sea freight $1500 so here immediatly is 15% across the product range. This is how all distributors work out shipping costs.

You then have taxes duties and disbusements, this can range from 0% to 6% depending on how customs view the shipment when it lands, basically this depends on how many entery lines they wish to charge us for.

So what is my margin - about 20%! shock horror wow, ok now sit back a slurp that beer and think, thats Gross margin, many dealers want free shipping then there is packing costs, advertising, cost of spare parts for warranty, no the factories do not offer these for free, then there is shipping losses, always happens with sea freight especially, no factory replaces those losses, so taking all that into account we may be lucky and see EEK 10-12%

Dealer margin - dealers have huge expenses to offer you a funky store front to go a browse on saturday afternoon they also have to offer from time to time things like free shipping to stay competitive just because mr cheap skate wants to shop for a deal and drag the poor dealers margin down further, did he not realise the guy behind the counter does not live on bread and water?

Dealer margins for any product run gross between 25% to 40% did you know other skimmers have margins of 50% plus!!

Yes i am sure you will rip this apart somehow but lets just sit back and look at reality. yes we all like the concept of Walmart pricing, but for a manufacturer to have any chance of mainstream supply they have to have retailers and distributors making sure the product is out there for all not just for the few willing to use their paypal account and send some dosh across to China.

Look at the big picture for the company making the unit not just your own need for cheap as possible irrelevant of effects. And yes prices went all over the place for sometime while real costs were worked out. Now they are set and set to stay.

[Chowder]

I was going to purchase the BM 180 CS when they first were being offered by a Canadian Supplier. The landed cost was advertised for $349 Ca in the beginning of january. The cost went up about 20 days later to $399. I asked then why the price had changed and as told it was due to shipping prices from all 3 shippers came in 15% higher and the rate of exchange has gone from 1.02 to 1.08 at time of ordering and paying. BM has also set the MAP prices at above this, but we are negotiating down for you.The only thing that will ever change these figures now is if the USD goes above 1.10. Now that the Skimmers have officially hit the market the BM 180CS is going for $489-$499. At the $50 dollar price change I thought I can see that miscalculations in shipping might occur and the fluctuating canadian dollar might attribute to this. $150 dollar change I was done and am now looking to get a cheaper proven Skimmer instead.

I did notice though the BM 150 Pro that was originally posted at $309 I believe went up about $40 bucks to $349 20 days after the original post. It now sells for $379. This skimmer was not effected by the above reasoning as much as the Cone Skimmers.

Chris

[Delphinus]

Originally Posted by Chowder

I did notice though the BM 150 Pro that was originally posted at $309 I believe went up about $40 bucks to $349 20 days after the original post. It now sells for $379. This skimmer was not effected by the above reasoning as much as the Cone Skimmers.

Interesting.

[Interior_Reef]

The BM-150Pro has a MAP (Minimum Advertised Price) of $399.00