Reptile & Amphibian Forums

This is a sort of addendum to my take (at link below) on the recent fire sale on snow hondos...

I noticed some people saying they lost money on some snake investments. I know this happens sometimes but i'd like to put it in perspective. Certainly it can happen if an animal dies (that's why i always get a backup male for my projects) but more typically people say they lose money because prices have dropped. I always look at these investments compared to the returns we can get on 3% certificates of deposit or the claimed 8 to 9 percent average annual returns on stock market investments. I factor in the fact that a) our labor is usually contributed free but should not be overlooked as a "cost" but b) if you're smart and only work with animals you really, really like, then there's an entertainment value to that work and it's not the same as digging ditches or toiling in a cubicle for the man.

So...

Say you bought a pair of animals when they were $1,000 each and by the time they're ready to breed the price has dropped to $200 (I don't think they usually drop that quickly but it helps make my point).

You've invested $2,000 in the pair. LEt's be realistic and say you also bought a trio of hets for another $1,000, about what you'd pay for the extra het females and a backup male, which i always recommend.

so your investment is $3,000.

Now, two, or three years later your animals begin to breed. What's a reasonable expectation for production? I use five or six babies per female in projecting production though my hondos often double or triple that. There's always a female that slugs out or has fewer babies than desired. Let's say six babies per female. The original $1,000 female produces 6 of the babies in question (since we're talking about a recessive trait here, in this example that means six homozygous animals, let's say albinos for the sake of this example. The two het females will each produce six babies, equals 12, half which will be homozygous, = six. So 6 6 = 12. And if they're now selling for 200 each, which i think is lower than realistic, that's 12 x 200 = 2400. Say the hets are only 100 each--six hets would be produced, on average, out of the 3 females--so that's another 600. 2400 600 = 3000. In the first year of breeding, the animals have produced their value in babies. In their first year.

You can massage these numbers up or down as you see fit. You can increase the return on investment by factoring in a couple additional het females in the original purchase, and you'll see you do even better. Then reduce the return by subtracting what you've paid for rodents, if you're not raising your own, and any other costs you want to include. Maybe you decide you need two years of breeding to break even. Maybe one. At any rate, once that point is reached, you still own the (now less valuable, but still of value) adults AND all future production is close to profit.

I'm not saying this always works. I'm not saying you should risk the family jewels (yeah, i'm trying to lighten things up) on this. But if you like a kind of snake and enjoy working with animals instead of some other second job, or for added income, it's not a bad scenario. And my example postulates two homozygous animals, which increases the production of more homoZ, albinos in this case. Since overproduction of a single type is an issue with the snow pricing this year, maybe that would produce more than you would feel comfortable finding buyers for, so you'd be better off with a homoZ male abnd a pair or trio of het females. But $200 babies are going to be easier to sell than $1,000 babies, too, there's simply a larger pool of prospective buyers as the price goes down.

Whatever, look at the numbers this way and figure out what your animals have really done for you. I know there will be happy and sad stories.

When i bought those first adult albinos from Louis Porras, i bred one male X several relatively cheap anery females, too, and produced double hets for snow, and X several hypos, launching the hybino project and producing double hets for hybino. All those added to sales without creating too many of one kind of animal. Yeah, prices for albino hondos eventually dropped to one tenth of what they sold for briefly, but i still profited from it. And i still am, now what, almost ten years later?--with the hybinos i produced this year (three females!) and the snows and any number of other phenotypes and genotypes tracing back to animals bought with that original investment--holdbacks helped build my collection, too, and were instrumental in trading for other things i wanted.

If you want to analyze your efforts in a business sense:
1. keep careful track of costs--things like gas driving to the pet store for rodents or the airport to ship animals; advertising; etc.
2. keep track of your sales. remember a trade is obtaining you something you otherwise would have had to pay for, so that new snake represents "income" too.
3. don't forget the animals originally purchased still have a value, either financially or as part of your ongoing breeding efforts.
4. and always, ask yourself if what you're doing is enjoyable. if it's not, consider alternatives. if it is, that's a return on your investment that doesn't show up in your pocketbook but has considerable value nontheless.

peace
terry
my take on pricing

amen doctor dunham. i had a hamster when i was a kid and i noticed it always relieved itself as far from where it slept as possible. congrats terry, you, at least, are as smart as my hamster. adios, kurt d

>>amen doctor dunham. i had a hamster when i was a kid and i noticed it always relieved itself as far from where it slept as possible. congrats terry, you, at least, are as smart as my hamster. adios, kurt d
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hey, kurt, thanks. I'd say more but i have to go back and keep running around that damn wheel...
terry

Terry,Good post and some really good points.
I would like to add some thoughts of my own.
You can take one good look at the end of the day and see that the market is saturated right now overall (not just hondos)cause one post will be a page and a half back.
This same time last year it would have only been at the bottom of the page at the most.But,Since we are talking about hondos and snows in Genral I will stay focust.

I had spoken in length months ago with many of my friends about this very thing happening.I believe that every new morph that comes out has its selling points and also has its levels of buyers.
First, you have the inovator or the peson that was lucky enough to hatch/import/buy/smugle/whatever the case may be to get the Morph in question off the ground and create his/her stock.
Once this is in place and they are avalible the first to buy of coarse are always the others that are into the same kind of sub-species or same kind of morphs.
This is were you will make your best money if done correctly (believe me)but this also can run dry depending on what kind of sub-species or morphs you are talking about?Imagine trying to market some amel Black Headed snakes or something like that?LOL......

Anyways,with the snows I think the level was pretty thick and ran pretty deep.I also know that not everybody could afford full blown snows so alot of them oppted for a snow and a anery het Amel and or a Amel het anery and a snow or some type of combo a couple years ago.Well,I think that by the end of last year that this level was pretty much filed up but nobody really new it for sure.I started to realize it when I started my ads early this year and only took orders for one snow?I had about five snows orders last year.Funny thing is that I still havn't produced one myself even though I have had the snakes to do it for five years.
Anyways,With that level filled were everybody that was willing to spend the large amounts of money over$1500.00ea(i.e."other breeders"then we had to drop to that second level.
You ask what that second level is.Well,That second level has always been the middle range level were most snakes are $500.00-1200.00 like ghosts tangerine albinos tri colored hypos etc.....
Well,As Tom indicated alot of the other morphs have fallen also and yes I don't think anybody expected the snows to fall like they have but it is what it is.There is no middle and there isn't a middle for alot of things anymore.
You would have thought that the snows would have landed softly at $1200.00ea and stayed there all year.........but this is Mr.Rodgers Niebor hood and I don't even see pairs fething this right now?Not by my choice mind you.I am in this Knee deep and plan on staying in it for years to come even if they are $50.00.

The other Key issue I see with the snow is that Yes,as adults they are stunning but we don't sell adults.I used to have this problem with Kunisurr Island Rats.They were born kinda ugly brown but turned into awesome aqua blua green adults.

No matter what color you paint a snow its still a snow.What I am trying to say is that Terry and others (Myself included )have been selling dbl-hets and Amels het anery and anerys het Amel for years now.So When you see a snow its the end product?No selling point?with the amels het anery and the anerys het amels you had selling points all day long.You could convince people (not to make it sound like its a bad thing here)that they were going to have a chance to produce a snow?
Even at a 1 in 16 odds with dbl-hets back in the days it was exciting.Now with the snows its the end product and yes they are killer looking but you know what you have and they are critical for producing other morphs.
What good would it do to produce a killer pinner snow or v.p. snow?That would be like producing a aberrant black milk?

Anyways,In short I think the will even out once the slide into the third level and thats the expo level.The expo level is the people lined up outside around the corner down the street holding the ticket with about $500.00 in there pocket just itching to get into the show to find that one killer snake that there one friend doesn't have yet in his collection?

Shannon

the originators of the pyramid make the most profit...as time passes and more and more "investors" enter the club more and more "product" is produced until in a "closed" customer base like we have...the market experiences a "glut"...esp. with animals that do well....the bottom fell out of the graybands and other mexicana...hypo coastals still hold value...but how many actually sell and survive??....unless you continually produce something new and market it ....reptile "investment" will usually be a downward spiral.....just my thoughts............

>>the originators of the pyramid make the most profit...as time passes and more and more "investors" enter the club more and more "product" is produced until in a "closed" customer base like we have...the market experiences a "glut"...esp. with animals that do well....the bottom fell out of the graybands and other mexicana...hypo coastals still hold value...but how many actually sell and survive??....unless you continually produce something new and market it ....reptile "investment" will usually be a downward spiral.....just my thoughts............
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Good points.

I agree, but you're describing a pyramid of buyers, the fact that there are more buyers at the base, who can afford inexpensive animals, then a mid-level where fewer but a significant number of buyers can afford more costly ones, and then a small number at the top who can afford/want to buy the very newest most exciting and rarest (and therefore most costly) animals. That's pretty standard, and it works hand-in-hand with the supply and demand principles. And as you observe, it results in prices gradually declining. With each decline there's a new group of buyers poised to act at that price point. Profits are possible for each level, because at each level people are investing less, and almost always the babies they produce will sell for less than they paid for the parents. The return on investment AS A PERCENTAGE may actually be the same, the difference is in the real dollars of the return: a 50% ROI over four years is a lot more bucks if the original investment was $10,000 than if it was $1,000. But as i say, the percentages can be similar.

"pyramid investments" is a term sometimes used to describe stock frauds where the seller peddles phony stocks and then reassures investors by selling more, and more, and using the returns from the additional sales to pay fake "dividends" to the original investors, making htem think their stocks are earning dividends when they're not. These ponzi schemes are quite different from the pyramid distribution of buyers at different sales levels, for an actual product.

peace
terry

you are correct...these are real products....but you have to be aware that by the time your product enters the market...there's a good chance that the selling price will be lower than you paid...it may take longer for you to realize a return on your investment...it seems livestock such as we work with only go down in value.....but that's people get in...and then they get out..or jump from species to species

"hypo coastals still hold value...but how many actually sell and survive??...."

For me very close to 100% but them I'm not slamming them for massive production. Out of three females, I breed two per year. Given they are hypo to het breedings I generally get about six hypos a year. These are tease fed tails twice weekly for 6-7 weeks before offering new born pinkies. After 2 or 3 of these they'll GENERALLY switch over to f/t.

In the context of the discussion, I don't think the price of these will hold forever but given that they don't produce massive or multiple clutches, at least the way I raise them, they should remain a good investment for some time. $400 IS the middle price but I don't see anyone doing them for less than $200. If the prices goes lower than that it'll be short live because those into it strictly for the money will stop working with them.

Like alot of us I have tinkered for years about the amateur going PRO(though my problem with a certain individual a few years back precluded it). Without asking for IRS audits or trade secrets I was wondering if you guys would cite examples of wins and losses,because there certainly are both.I know I lost my shirt in coastals years ago before I found the internet.My thought was to let us all compare and see trends;if there is a higher percentage of successful lines with certain species or if its just the certain breeder that makes the line.Guessing and guaging popularity years down the line is arguably the toughest thing,but establishing founder animals and developing markets isnt for everyone.I would also think this a good post to try and pull at the heart strings of people with founder animals......How many incredible lines have been lost due to unqualified individuals trying to be the first with something? If amateurs see the difference in successes and failures within the professional ranks they may be more eager to let someone else bring a morph to market rather than risking a complete loss. EXAMPLE--I lost in producing BLACK coastals,I did OK with locality coastals,and MONSTER island milks are still in its infancy despite 10 years of effort....Jeff

now just a feeder, oh well, times change and all. i think you nailed it, there being no middle. still as mr. lambert suggests, a great price to get for a colubrid, and a killer snake for sure. my only critique, is that i think it is unrealistic to think "i hatch them, take them to market, and i'm done". selling anything is a job in itself, and with a little more patience, maybe a middle might have been found. i hate to see anybody put down their money, take the time to raise for a couple of years and breed them, quite successfully by all indications, and then freak when the world fails to beat a path to their booth. by the way, none sold at daytona? don shores sold one to pete strelkow, and doug beard sold a pair he got from marc bailey, and i was only there a few hours. i think we'll all be fine, let's face it, these are very cool snakes. peace everybody, kd

Some very good points, Terry. As you say, you don't have to lose money just because the price goes down.

This happens with every hot item. People see they are expensive and visions of piles of money start going through their minds. They rush in, shelling out thousands for a pair of babies, but because dozens of other are also doing it, they find themselves trying to sell babies against dozens of others.

In some species, this has led to such a glut that the animals are hard to sell at all!

You left out another important factor on your list -

>>If you want to analyze your efforts in a business sense:
>>1. keep careful track of costs--things like gas driving to the pet store for rodents or the airport to ship animals; advertising; etc.
>>2. keep track of your sales. remember a trade is obtaining you something you otherwise would have had to pay for, so that new snake represents "income" too.
>>3. don't forget the animals originally purchased still have a value, either financially or as part of your ongoing breeding efforts.
>>4. and always, ask yourself if what you're doing is enjoyable. if it's not, consider alternatives. if it is, that's a return on your investment that doesn't show up in your pocketbook but has considerable value nontheless.

5. You have to pay yourself. How much time do you spend caring for the animals? How many hours per week? How many hours driving to the store, to expos, on the phone, emailing prospective customers, etc.
Now ask yourself how much your time is worth? Let's say, for example, you spend a total of 10 hours trying take care of, advertise, sell, and ship a pair of baby hondurans.
First you have to subtract what it physically cost you to produce them (feeding parents, etc). What you are left with is the "profit" for those babies. However, if you divide that by the 10 hours you spent on the sale, suddenly your $50 profit is starting to look like $5 an hour - you are working for less than minimum wage.
You can increase profits by producing larger numbers of babies, and the total hours spent per baby goes down, but the total time investment still goes up.

Its a good thing I do this as a HOBBY and don't expect to make money or break even. Actually the most money I have made selling snakes over the years hasn't been selling expensive snakes but rather it has been selling African Housesnake babies. I have sold many hundreds of babies for $25-45 each over the last 20 years and have probably made $10,000 selling snakes where I had less than $100 invested in the adults. I don't know why I got out of them again!
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Chris Harrison
Central Texas

I think everyone is missing some very simple economic principles: Supply and Demand. The higher the price a particular morph starts out at the faster the price will fall. When certain rare color phases and morphs are in their infant stages a hand full of breeders control the supply hence the pricing. As more become available prices will fall. Remember, competition benefits the consumer. Today there are more breeders than ever and they are the first to by the investment type animals. In my opinion, that is what happen the to the snow hondo market. The investors are satisfied and have breeding stock so now the animals will fall down to the next level. Supply and demand gentlemen. PS Watch what happens in the Ball Python market over the next few years!
best regards...mike

Amen Mike.....Watch the Ball Python market....it will certainly crash.....I have no clue where their prices come from anyway...........It seems too random.....and overrated to say the least...
John Lassiter

This reminds me of the albino burmese market back in the 80's. I knew a guy that spent over $2,000 on a pair of babies, only to watch the market drop like crazy in 3-4 years.
He was planning on selling his offspring for similar money, but the babies fell to less than $100 ea. when his snakes reached breeding size. They're not that hard to breed if you have room and the clutch size is 20 . Now most states are banning the big guys from private collections because of a few idiots walking around in public with these snakes draped around their necks. A common occurence in NYC before the new laws were enacted. Florida seems to be the focal point now with "released" animals.

Mike

Was just reading through the posts and saw the comment that that Ball Python market will crash ... while I know this is the Milksnake forum (I'm just visiting) thought I would reply... so not wanting to repeat many of the comments already made, there are some big differences between the Ball morph market and most others at the moment ... yes, most everyone in the Ball morph market expects continued downward pricing pressure as supply increases ...but at each price point there are hundreds of new buyers (Spiders this year were a good example, many of us Ball python breeders sold out months ago) ... but not a crash ... its new morphs which drive the markets and the Ball python market keeps expanding ... there are currently nearly 50 PROVEN basic Ball python color and pattern mutations ... and another 50 plus Designer morphs and counting ...this year we saw several totally new Ball mutations (real ones not the BS, some fools try to sell on KS) ...so the greatest threat to the Ball python morph market is its own success ... there is almost too much to choose from !! ... many Ball python breeders are starting to diversify into CA Boa morphs, Carpet Python morphs, Rainbow boa morphs and Blood/STP python morphs ... all markets with lots of new mutations and all in different stages of development .....its really all about knowing where the market is and then deciding if you are happy to play there .... at some stage the basic Ball morphs (Pastels, Albinos, Spiders, etc) will be produced in such huge numbers they will be seem cheap (compared to today) but others will still have a long way to come down and still have plenty of room to make some good profits .... well, at least thats my take ...

cheers, John
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John Berry Reptiles LLC

www.johnberryreptiles.com
www.investmentmorphs.com

John has made some good points and I would like to add a few things he left out.There are about 4 times as many customers in the Ball Python market as opposed to milk snakes( not proven but this is in my estimation).Ball Pytons do not double clutch and there clutches are slightly smaller than milks on average.As John pointed out the gene pool is far more advanced than milks.The one factor that may make an even larger difference is there are many colubrid breeders moving into balls and just a few ball people picking up colubrids to diversify there collections.

You still cannot ignore the simple ecomonic principle of supply and demand. Which is the higher price a product starts out at the faster it will fall. I am not pridicting a crash by any means but free markets forces of competetion will correct pricing. It may even take a couple years. I still believe there is money to made in balls and bought a pair of albinos this year. Yeah, I know, I am a hondo guy. Oh well.....
mike