An easy angle on choosing an investment is price.  How much can you afford to spend?  Perhaps a better question is how much can you afford to spend on a single animal?  And an even better question is how much can you afford to spend on a single animal and lose it all?  Investing in high-end ball pythons is highly speculative.  Prices fall, animals die and economies fluctuate.  If you spend $20,000 on a single ball python there is no guarantee that you will ever make your  money back.  There is a lot of opportunity but no guarantees; this is the live animal business and prices are often set with whimsy.  Understand your own financial tolerances before you even begin to think about morphs.  Once you come to terms with where you fall on the risk-versus-reward scale you’re ready to start looking at specific projects.

Whether this is supposed to be a business or a self-sustaining hobby the ingredients of a successful breeding project are two parts personal preference, one part economic reality, and a healthy dose of marketing.  If you are 100% dedicated to money you have to breed animals, regardless of what they are, that will provide the best return on investment.  This makes it highly probable that you are going to produce some animals that bring you little joy.  And if  profit truly is your only motive I suggest entirely different lines of work.  When money is the sole objective breeding reptiles is not the right enterprise in which to be.  This planet offers plenty of ways to make great money with products that don’t poop on the shelves.  Ball pythons are depreciating assets that eat.  What other business can you be in where the value of your investments spirals rapidly downward, the costs of production continue to increase, and every ‘unit’ you sell produces a future competitor?

I suspect that all reptile breeders, even the most financially motivated of them, started doing this out of love for the critters.  I recommend finding the animal(s) that you like working with that also have a market capable of providing a return.  Easy to write, difficult to do, I know.  Animals you love that don’t have much commercial value are good to keep around in small quantities (to satisfy the soul) but most of us need to focus on animals that ride the line between joy and profit.  It’s okay to lean more to one side or the other but this business doesn’t really support going all in on one while ignoring the other.  Dedicate too much to the joy of husbandry and you’ll find yourself living in a money pit that grows continuously deeper.   Focus too much on profit and you’ll be mentioned in the same breath as other less than stellar names in the business.  Neither is desirable.

Unlike many other business ventures the world has to offer, reptile breeding requires that you derive some joy from the product making process.  I’m not talking about the so-called flippers, importers and large-scale wholesalers here; I’m talking about actual breeders.  Being a breeder and being in the reptile business are not always the same thing.  There are many shades of grey.  There is a big difference between a person who breeds reptiles to sell and the person who sells reptiles so he can buy and sell even more.  Both are in the same business but in very different ways.  In many ways breeders are idealists while flippers, wholesalers and importers are more pragmatic business people.  I know a few people who do well at both.  Breeders tend work with animals they like.  Businesspeople work with animals that make money.  The best of us attain an equilibrium between both needs.  And in this aspect of the business I continue to search for balance.  I am a steadfast idealist emulating a profit-oriented businessman.

Anybody who regularly reads what I write knows that I frequently reflect on the financial aspect of being a reptile breeder.  I think about it often which is interesting because I don’t live a life with money as the central point of motivation.  I like and want money, of course.  Almost all of us can say that.  But despite my frequent contemplations I’m not obsessed with making it.  And for lack of better words, that is a problem.  When observing other people and how they make money I have come to believe that those who are usually the most financially successful are the one’s who have a certain …ethical flexibility.  They put profit above all.  Those are dangerous words as I do not intend to imply that successful business people do things that are illegal, immoral or even unethical; they are just more likely to do things that are single-sided and exclusively profit-oriented.  Financially aggressive people see angles and take opportunities that I don’t.  From time-to-time my lack of this particular type of vision frustrates me.  And here’s the rub: even if I did see the opportunities I can’t say that I would always leverage them.  I am too well equipped to see and respect the others person’s needs.  And from a single-minded, make-all-the-money-you-can, business perspective this is a potentially fatal flaw.  In the eyes of some this dooms me to a life of comfortable modesty.  Impressive wealth is not likely in the cards.  I don’t tend to participate in “I win / you lose” business arrangements.  To steal words from author Stephen Covey I’m very much a “win/win-or-no-deal” type of businessman (and I am certainly not afraid of ‘no deal’).  This type of business means I actively trade some of the money I could be making for other, less tangible, things.  Fans and deriders of this business mentality are probably equal in their distribution.  But don’t take me wrong; it is not bad to be more aggressive [than me] when making money.  I applaud and occasionally envy the people who are better at it than I am.

Despite not taking excessive advantage during business transactions I am strongly driven to make a profit from what I do.  This only makes sense.  I am not an altruist.  Other people do not pay my mortgage.  Moonbeams and warm fuzzy feelings are not currency.  I do not give the product of my efforts without appropriate compensation; we must all work for what we have.

Allow me to offer you a scenario for consideration.  It’s comes from a business deal, but not a reptile one.  Imagine you are a professional speaker.  People come to you from all walks of life to hear what you have to say.  You charge $2,000 per person for a 5-day seminar.  There are 12 people enrolled in your next offering.  Most of your seats were sold at full retail and there were a few businesses who bought multiple seats so you extended them a modest discount.  The night before the seminar begins a colleague comes to you and says, “I have a friend who wants to take your seminar but he only has $550.  Will you let him attend for that amount?”

What would you do?  Would you let him attend at a 73% discount?  Most people can answer immediately.  It requires little thought or contemplation.  And your answer, I believe, tells to which side of the ball python business you lean.  If your answer is “yes” your primary focus is profit.  If you say “no” your focus is more idealistic.

Taking the money makes sense from the following perspective:  The seat is empty.  It is not going to sell at the retail price.  The course is going to run regardless of the someone sitting in that  13th seat and it won’t cost you anything extra to let them attend.  His attendance is $550 of pure profit for no additional effort on your behalf.

Taking the money does not make sense from this alternate perspective:  You have assigned a value to the product you provide.  Twelve other customers have paid full (or close to full) price to be there.  This lends credibility to the value of your product at the price being charged.  It is also disrespectful to those twelve if you take the $550.  Why was their seat not $550?  Are they somehow different?

That is not a make-believe scenario for me.  It has happened more than once in my ‘real job’.  As you might suspect my answer has always been “no”.  I have never even hesitated.  I didn’t even hesitate in the early days of my business when things were financially tight.  To my occasional financial detriment I have always had a principled approach to making money and that approach sometimes takes away from maximizing profits.  I had (and still have) an obligation to my customers and to myself that prevents me from taking every dollar possible.  It would have been catastrophic to my business if I had taken that money and my other customers found out.  It would also have been an admission that my product was not worth the retail price I was charging.  The friend who first approached me with the proposition stared at me in disbelief when I told him no.  To this day he thinks I’m crazy.  Who in their right mind would turn down an additional $550 when they didn’t have to do anything more to make it?  Well, …me.  Profit takes a back seat to ethics.  People who let profit ride shotgun are laughing at me right now… and  I’m cool with that.

Cheers,

Colin Weaver

Not long ago I was browsing an on-line reptile classified web site and I came across the ad of a well-known reptile wholesaler.  The ad was of the “want to buy” nature and he was offering to buy the entire breeding production that you have for sale.  After saying that he wants your production he typed in bold characters, “WE ARE ONLY PAYING WHOLESALE PRICES.”  Sadly, wholesale pricing in the reptile industry is often considered to be in the 50% off retail range (or more).  As I finished reading the ad a few choice words came to mind regarding how I felt about its audacity.  The brazen call for you to sell your production to someone else so they can make a profit equal to the person who did all the work (you) always gets me a little annoyed …almost as annoyed as I get at the idea that people regularly agree to the sale.

I have written more than once on the price of reptiles, ball pythons in particular.  Please take a moment to read the forum post I made about snake prices (on faunaclassifieds.com) back in April 2009 (http://www.faunaclassifieds.com/forums/showthread.php?t=130559).  After that, please read this post I made on my own site at around the same time (also regarding snake pricing) (http://ballpythonbreeder.com/2009/04/why-were-idiots-for-using-kingsnakecom-to-price-animals/).  Discussions surrounding how much animals should sell for are circular at best as the value of a snake is arbitrary.  What is right and what is wrong is ultimately irrelevant because no single individual can control what others do with their pricing.

Having said that we all need to understand that in the reptile business there are two basic mechanisms that determine the price of an animal:  value and margin.

Value Pricing

Value pricing is the type of pricing you set on an animal because you have an investment in its production.  This usually means you produced the animal through breeding.  When your product comes from your own breeding efforts you assign a value based on a variety of factors including (but not limited to), the amount invested in the parents, housing & caging, food, time spent, etc.  Put simply, all of those factors create value.  The production of the animal represents a lot of time, effort and money.  Accordingly, you want to see a return on that investment and you price your animals in a way that allows you to accomplish that objective.

Margin Pricing

Compared to value pricing, margin pricing is simple.  With margin pricing the sale price is not dependant upon any factor other than how much was paid for the animal.  If a wholesaler/flipper can buy an animal for $50 they sell it for $100 even if the current value price is $150.  If someone offers $75 they are likely to take it.  In the best case their profit is 100% on the original investment.  Even if they sell it for $75 after a $50 investment they still realize a 50% return.  Either way, the return on their investment is impressive.  This return is compounded by the fact that their production cost is $0.  Take a moment to notice how the margin seller did not consider value when pricing the animal.  Well, that’s not entirely true.  The margin seller does consider the value price in the following ways:

• His acquisition price must be significantly lower than the current value price.
• The acquisition price must be sufficiently low to allow a margin price that is still significantly less than the current value price.  This is necessary because the animals must be sold quickly, with as little maintenance as possible.
• The acquisition price must allow for a quick-sell margin price that still yields a 50-100% profit.  The current culture of the reptile business does not support a flipper making only a 15-20% return.  In fact, they scoff at the prospect of such returns.

Take a moment to picture two vendors at a reptile trade show.  Both are selling similar animals.  Seller #1 is you.  The animals you are selling were produced by you through your own breeding efforts.  You have a facility where you produced these animals and you have years invested in raising the parents, pairing them for breeding, incubating the eggs followed by a few months getting the babies established and ready for sale.  You are proud of your animals and you are ready to earn a financial reward for your efforts.  At the table next to you is Seller #2, a wholesaler/flipper.  He did not produce any of the animals on his table.  His arrived via FedEx the night before.  He opened the bags last night to make sure the animals were alive  but that’s it.  He did not set them up in cages, did not feed them and did not give them water.  The only investment he has in the animals is an invoice.

The show begins.  People visit your table and comment on how beautiful your animals are but they do not buy.  At the table next to you things are busy.  Cash is trading hands.  You visit Seller #2′s table and realize that he is selling the same animals as you but at a greatly reduced price.  You don’t stand a chance at moving any of your production as long as his animals are priced that way.  By the time the day is done you have not even made enough money to cover your tables fees and other costs associated with going to the show.  You are frustrated.  At the end of the show Seller #2, the flipper, comes by and offers you $3,000 cash for 10 animals that you value at $7,500.  You now have two choices:  go home having lost money or go home with $3,000.  Seller #2 walks away with 10 new animals and you feel slightly sick to your stomach.  But you did just make $3,000 and you still have a lot more animals back at the shop that you can sell for your value prices.  By the time you get home you have successfully rationalized the transaction and are feeling good about the wad of cash in your pocket.

Here is what happens to you in the aftermath of the trade show:

• On the Tuesday after the show you post your remaining animals on an Internet classified site.  You price them based on value.
• You decide to search the site to see who else is selling animals like yours and are horrified to see that Seller #2 has listed the actual animals you sold to him at the show and he is selling them for less than your value price.  The snake you just listed at a value price of $500 he is selling for a margin price of $400.  He is able to do this because he paid you less than $250 for it at the trade show (as part of your $3,000 deal).  He will sell before you and make a $150 profit.
• Knowing you don’t really stand a chance at getting $500 when animals just as good as yours (actually ARE yours) are being sold for $400 you reduce your price to $400 to match Seller #2.  And the market value of the animals is now officially $100 less than it was last week.
• Frustrated you rail against Seller #2 every chance you get.  You label him the destroyer of the trade.  People like him are the reason that animal prices fall so fast.

A month later you attend another reptile trade show.  Your animal, once value priced at $500, is now on your table for $400.  You had to lower the price to stand a chance against Seller #2.  Feeling like you are now competitive you expect to have a great show.  Things do not go according to plan.  Seller #2′s table is a mad-house yet again.  When you visit his table you see that your $400 animals are now $325 on his table.  Once again, you don’t stand a chance.  At the end of yet another miserable show you don’t wait for Seller #2 to visit you.  You go see him and you bring a tall stack of animals with you knowing all too well that you are about to sell them for less than half of their value.

And so the cycle continues.  You, the breeder, continue to lower the value you place on your animals in order to try and stay competitive with Seller #2.  He always seems to have lower prices than anybody else.  As time passes the value of your animals decreases while the costs associated with their maintenance continues to rise.  Because Seller #2 prices his animals based on margin rather than value you cannot win.  Seller #2, the so-called destroyer, continues to ruin the market.

But here is a little revelation for you:  Seller #2 isn’t the destroyer.  You are.

Seller #2 can’t sell animals at margin prices if he can’t buy them for less than 50% of their value.  And it was you, faced with the prospect of a money-losing trade show (or your mortgage being late, or your car breaking down, or your divorce, or whatever…), that decided to make something rather than nothing.  Your decision to place such a deep discount on value has created the market for the margin seller.  The margin seller, of flipper as he is so often labeled, is not ruining the trade.  He is a businessman, an innovator within the trade.  He has identified a market opportunity and is exploiting it.  Despite being frustrated by him, I will never fault him for that.  The person(s) accountable are the one’s that continue to sell their animals to him.  If breeders would wise up (which I have no hopes of them ever doing), the flippers would dry up and go away.  You wise up, they dry up.  The expression “no margin, no mission” applies to all business ventures; yours and the flippers.  When you sell to a flipper/wholesaler it is you who is slowly drying up.  It will one day be you, because of frustration and a lack of profitability, that goes away.  And when you do the wholesaler will move on and find another breeder to consume.  If the breeders would stand fast, resist the temptation to sell to the flippers, it would be the other way around.  But I see no signs of that ever happening.  As a diverse community we lack the business acumen to do so.

Flippers exist because breeders allow them to.  Flippers also exist because people almost always purchase reptiles on one factor:  price.  Don’t bother disagreeing with me.  I have been in this business for too long and can say with confidence that in excess of 85% of all transactions are price-driven.  People go on forums and talk about how quality is important and how they are willing to pay more for an exceptional animal but most of them are not going to stick to those guns when the wallet-pulling moment is at hand.  I’ve seen it too many times.  I am not kidding when I tell you that I have seen people buy animals that were sick, emaciated and near-death simply because they were $50 cheaper than a beautiful, healthy and vibrant animal at the next table over.  In fact, I was at a trade show yesterday where a sickly ball python morph was being sold for a ridiculously low price.  This prompted the question, “Why is it so cheap?”  The honest answer from the seller:  “I just picked it up in trade.  It has a respiratory infection.  I’m selling it as-is.”  What kind of a moron would buy an obviously sick snake in order to save a few bucks?  Well …that snake sold within five minutes of being put out for sale (and there were multiple people who were interested in buying it).

Regards,

Colin Weaver

Many enthusiastic ball python hobbyists answer “yes” to at least one of those questions.  If you’re a ball python breeder the answer to most or all of the above should be a foregone conclusion.  For many breeders they are project staples.  Considering only the single gene males for a moment, do you need any more of the same in your collection?  Probably not.  If you are not already doing so I’ll wager that you are focused on getting the existing males in your collection to the next level;  albino spiders, black pewters, honey bees, etc.  How exactly are you going about that particular process?  There is a long road and a short road to getting there.  Some of you are adding the next-level males to your collection by breeding your own (the long road) while others opt to buy or trade with someone to add them to the mix (the shorter road).

Sure, sure, many of us are still missing a wide variety of single gene males in our genetic armory.  Champagne males, ultramels, lavender albinos, and candy/toffee ball pythons are still pretty darn desirable and highly sought after. To not have them means you know what it is to covet.

What is true for a majority of us is that we are actively producing single-gene carrying animals like spiders, pastels, albinos, black pastels, pinstripes and piebalds.  Single gene females in your production output are always a valuable commodity because most breeders are glad to add more females to their breeding groups.  Larger breeders may have dozens of females of a particular morph.  But how many more single-gene males are they adding to their group?  Of the more common morphs I’ll wager the number is close to zero.  Since production efforts each season will certainly produce many single-gene males and neither you nor I need any more I have to ask the looming question:  To whom are we going to sell them?  The answer to that is simple:  fewer and fewer breeders, more and more hobbyists & pet owners.  Once the so-called ‘box’ is checked on a male for a particular morph (or two, I’m a big advocate of multiple males) the breeder need is satisfied.  The desire to add more of a particular single-gene morph to a collection shifts to having multiple females.  More males are no longer on the agenda.  How much you might want to sell one to me for is not a factor.  I don’t need them, regardless of how cheap you want to make them.  On the other hand I don’t think I can have enough females.  As the number of people who want to add single-gene males to their collection decreases I have to find my customers from an ever-changing pool of people.  My clients, like yours, include:

• Breeders new to the hobby.  Many single gene males have become very affordable and provide a quick and financially easy way to produce some very cool morphs.
• Long-time reptile enthusiasts who have recently decided to get into the ball python market.  There is a steady stream of people who once focused on boas, colubrids or other types of pythons who are making their way over the the ball python arena.
• Other larger scale breeders/wholesalers.  I can wholesale my single gene males out in large quantities for small dollars to a breeder with a larger client base than me.  With a larger base of clients they can move them more quickly than I can.  Granted, I will get quite a bit less money for them but they will all be gone instantly, no maintenance required.
• Pet owners.  Some people just like to have beautiful snakes.  They aren’t interested in breeding them.  Because the single gene morphs have finally become affordable, they are much more attractive to pet owners.  The pet owner/casual hobbyist need is an interesting one; many of these morphs cost several thousand dollars a few short years ago.  They were fun to look at but owning one as a pet was a luxury afforded to only the more affluent herper.  That is no longer the case.

Hang around me long enough and you’ll hear me say it:  “Satisfied needs don’t motivate.”  I regularly apply this to a host of scenarios in life.  Eating at a restaurant, having a headache, propane sales, selling snakes, the list goes on.  The food you eat is never worth as much to you after you have consumed it.  Do you have a headache right now?  If not, do you appreciate it?  I doubt it.  But when you do have a headache you are all too aware of how good it feels to not have one and you would be very grateful to return to that state.  Do you remember when you wanted a male spider ball python really bad?  Now that you have one how do you feel about them?  If you have all the single-gene males you need in your collection I am are not likely to be able to sell you another one no matter what price I put on it.  Imagine for a moment that I am a propane salesman.  I show up at your house and offer to sell you propane.  “No thanks”, you say,  “I have electric heat.  I don’t use propane.”  I proceed to explain to you that my propane is the cleanest burning you can buy and it’s cheaper than everyone else in town.  “Oh!”, you say, “In that case I’ll take a six month supply.”  Ha!  Yeah, right.  You actually tell me to go pack sand.  “Look, buddy.  I don’t use propane.  I don’t want to by any propane.  How cheap you make it isn’t going to change my mind.”

Two items of interest arise when trying to sell propane to people who don’t need it:

1. No matter how low you price it, they don’t buy it.
2. Because you tried to lowering the price to entice non-propane users into buying some you will find that those with a real need for propane now expect it for less.

What do you do if you go to a trade show with a pinstripe ball python to sell and nobody buys it in the first half of the show?  Do you lower the price?  What if the animal doesn’t sell at all?  Do you lower its price at the next show?  Industry-wide the answer is often a resounding “yes”.  How about on-line?  If you list your pinstripe in a classified ad and it doesn’t sell after two weeks do you lower the price?  Again, the industry seems to say “yes”.  But it’s silly.  The reason you didn’t sell your pinstripe probably wasn’t because it was too expensive; it’s because the people who came by your table (or read your ad) didn’t have a need for the animal.  Lowering the price does nothing to make them want it more.  It’s the same with propane; people who do not use propane do not suddenly become interested just because it is cheap.  The only thing it does is set the expectation in the minds of your table visitors that pinstripes are now cheaper than they were last week.  When the time comes for them to sell their own pinstripes they think back to the price you had on your table and they offer theirs for the same or less money.  And so the cycle begins anew.

I’m not writing to suggest that male pinstripes should still be $2,500.  There is an ever-expanding and viable market for animals as their prices drop.  Finances keep many of us on the sidelines when it comes to high-end reptile purchases.  It is a fairly small subset of the reptile community that will drop several thousand dollars on a single animal and a whole new crop of customers begin to appear when prices come out of the stratosphere.  Today, albino ball pythons are in the realm of affordability for the reptile connoisseur who has no particular need to build a breeding colony.  In practical application it is the single gene male that is leading the way for the ball python morphs to become a staple of the pet trade.

On more than one occasion in the past I have lamented the downward spiral of ball python prices.  Regardless of how much you initially pay for one they will be worth quite a bit less by the time you are producing your own.  Opinions regarding the nature of the free market and an individual’s right and/or responsibility to price animals in a certain way are as diverse as the community itself.  Prices will fall.  Nobody can stop that.  I wish they would not fall as fast as they do but I can’t stop that, either.  The Internet economy has taught us that there is always someone cheaper out there, another seller who is willing to undercut your price in order to sell the animal.  This is the nature of competitive business.

The ultimate point I want to make is that price matters.  It is not, however, the sole factor in the value of an animal.  Increasingly, price has less and less of an impact on the ability to sell an animal.  But this is true in more ways than one.  Buyers are always looking for the best animal for the smallest price.  This is a universal truth.  As a buyer myself I do the same thing.  But once the need is satisfied, price no longer matters.  Remember that the next time you put a price tag on one of your snakes.  Are you taking the lead on the downward spiral?  Do you think that lowering the price is really what is going to make the snake sell?  It might be.  Or maybe not.  Maybe all you really need is some extra patience.

Cheers,

Colin Weaver