Exclusive Interview with Ken Wong, CEO of Marine Depot

Ken Wong, CEO of Fins, Furs, & Feathers, Inc., parent company of MarineDepot.com and PetStore.com, was kind enough to take a few minutes out of his busy day to sit down with me and discuss the state of the saltwater market. Thank you, Ken, for taking the time to answer my questions. I appreciate your insight and commentary as both a fellow, dare I say, obsessed reefer and successful business owner in the space.

Let’s jump right in…

Derek:  It seems that the market is crowded with internet retailers catering to the aquarium trade.  What sets you apart?  What are the key benefits a customer gets from you versus the competition?

Ken: There are quite a few things that set Marine Depot apart.  #1 is that our level of customer service is vastly superior to our competition in the reef and marine aquarium space.  Everybody wants to achieve this and very few companies ever do.   We have been one of the few, due to a number of reasons.  From being situated in an area with very knowledgeable and well trained hobbyists, to nurturing a company ingrained a with strong work ethic, and to our hyper focus on continuously improving everything we do, we are able to ensure that customers receive the best service available.

Derek:  To me, it looks like retailers fall into 2 categories, those who stock generic goods and those who carry the high-end, specialty gear.  Marine Depot seems to span both categories.  What is your philosophy on what you carry?  How do you decide to carry Item X versus Item Y or do you try to carry everything on the market?

Ken: Selecting the right products to carry is more about quality and value to the consumer than about high, mid, or low end.  This ties in with the customer service I mentioned.  It is easy to carry the latest and greatest, and I see our competitors making a small fortune on this approach.  Our philosophy is a bit different.  Our goal is to find products that would a) benefit our customer’s aquariums at a reasonable cost, b) add value to our current offerings, and c) has the manufacturer support necessary for our customers to truly be satisfied with their product.

Derek:  Speaking of the “right products”, how would you segment your customers?  By that I mean, what percentage of your customers are general aquarium owners versus the borderline obsessed folks, like myself, who are willing to spend more for better equipment?

Ken: I think we would first need to define the segmentation more clearly.  First of all, it has to do more with what our hobby means to us more than what equipment we buy.  I would define myself and most our technical support staff as borderline obsessed.  I would say 25% or so of our customer are like us.  While all of our customers have much success and fulfillment from our hobby, I would venture to say it is our “geek” segment of our customer base that gets the most enjoyment out of hobby.

Derek:  As a self-described “reef geek” I am always evaluating new technologies.  It appears to me that while innovation is occurring all the time in reef keeping, there also appear to be fads that come and go.  In terms of new (or re-born) technologies that are here today, what are your thoughts on items like Turf Scrubbers , cone skimmers, LED lighting?

Ken: As an ethical retailer, I have strong feelings about fads.  My longstanding philosophy has been it is taking advantage of customers to bring to market a product before it has been established whether it would a) benefit our customer’s aquariums at a reasonable cost, b) add value to our current offerings, and c) has the manufacturer support necessary for our customers to truly be satisfied with their product.  This is a very, very difficult responsibility to implement, but I have seen Marine Depot to vastly outperform our competition in this regard.

Derek:  Let’s talk lighting for a second.  Right now, people are typically using metal halides and/or T5 lighting systems on their reef tanks.  Yet, technologies like LED lighting and now, plasma bulbs are starting to enter the market.  What is your take on the technologies?  Do you see these technologies replacing Metal Halides and T5 bulbs in the next 2-5 years?

Ken: There is a fit in the hobby for a more efficient longer lasting light. LED lighting definitely fills that void and looks to be quite promising. We carry a few different types of LED aquarium lighting which are new to the market and see a good demand for them. We have many customers that still use VHO and PC lighting over their tanks and continue to have success with them. As you know many people thought the VHO’s and PC’s would have gone away when the use of Metal Halide Lighting and T5 aquarium lighting became prevalent but they are still around. We see more people using LED’s in the future, however we feel that there is room for metal halides and T5’s in the market too. Manufacturers will continue to support the older technologies as readily as they have in the past.

Derek:  Let’s switch gears to talk directly about Marine Depot for a few minutes.  You used to sell live coral and fish, but I can’t find that on your site anymore.  Are you totally out of that business? Or do you plan on re-entering it?  If you are out of the business, who do you like to buy from or recommend?

Ken: I am a big fan of LFS that work hard, are knowledgeable, and help create success for their customers.  These LFS’s have invested into well maintained, high performing systems that livestock can thrive in.  I have learned that, in its current form, it is very difficult to outperform these LFS when it came to providing consumers with livestock we absolutely love.  Let’s use me as an example to illustrate the point.  I find my livestock purchases to be quite personal.  While I have purchased some livestock sight unseen, I have a strong preference to observing my coral or fish for extended periods of time before purchase.   The caveat is that the LFS must employ aggressive protein skimmers, use the best salt mixes, maintain alkalinity and calcium levels with good calcium reactors, and much TLC.

Derek:  Fins, Furs, and Feathers, Inc. is your parent company and also runs www.petstore.com.  I was surprised to see that you also have a wholesale business, Bayside Aquarium Supply.   As someone who deals in both the wholesale and retail side of the business, how do you see the market changing over the next 5 years?  Will we have more internet retailers, specialty players, or will there be a consolidation the market to just a few players.

Ken: There has both been consolidation of quality internet retailers and an increase in total internet retailers.  The number of quality retailers that provide a true value add to customers is really just Marine Depot and one other company.  The total number of internet retailers has skyrocketed, and I think it will continue to skyrocket.  With the net, it is hard for consumers to separate the great from terrible companies.  While the terrible companies will not really ever do well from a repeat business perspective, there are enough customers in the marketplace for them to churn and burn to keep them around for a long, long time.  While on this topic, it is interesting to know it is usually the customers that have shopped at these places that appreciate us the most.  I love hearing customers tell me we are doing a good job.

Derek:  Do you know how you rank nationally in sales against what I consider to be your top 2 competitors, Drs Foster and Smith and That Pet Place?

Ken: Number 1

Derek:  As with many reef tank enthusiasts, I border on obsessed (thus the name of the blog).  At some point or another, many of us, myself included, have contemplated getting into the business somehow.  In my case, I can never find a business model that will work.  Is there any advice you can give to those who are thinking about starting a business around their hobby?

Ken: That’s an easy one: know what you want from the business.  I worked over 100 hours per week (steady >5000 hours per year…not spurts) for over five years, and I made an average of about minimum wage net net.  I was fine with that, because I like what I do and I live modestly.  I’ve seen many, many people regret the decision to run their own business in this industry.  There are just so many people willing to do it for very, very little and that will severely restrict your ability to charge what you would need to to make a reasonable living.  On the flip side, if you love the hobby, love business, love learning about business, love process improvement, love technology, love automation, love working, love data analysis, love continuously improving EVERYTHING, love thinking about the hobby and the business all waking hours, there is no better industry to be in.  I feel extremely blessed to have found a home in this industry.

Derek:  Ken, Thank you for your time today.  I think my readers will definitely enjoy the perspective and appreciate your philosophies on running your business.  I know it makes me feel comfortable knowing that you put so much effort and care into your product selection.

Ken: Thank you, Derek.  We appreciate the opportunity and look forward to hearing feedback from your readers.

Well, there you have it folks! I hope you found it interesting and informative.  I know I did.  I am working on some other interviews in the near future, so stay tuned.  In the meantime, do you have feedback regaridng this interview or for Ken?  Just post your comments here and I will make sure he gets them.

Do you have a question you would like to ask or someone you would like to see interviewed?  Let me know!

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