More and more chameleon breeders join our ranks every day. And you may be one of those curious about starting a chameleon breeding business. There are scores of instructional materials on how to start a business. But we have an extra twist that our product is a living creature. And with that comes added responsibility. Today we will talk about the basics of pricing your chameleon babies and how your choices affect much more than how quickly you sell the clutch.
This episode is for anyone who has thought about starting a chameleon breeding business or has already put out a shingle. You have heard a lot on this podcast on how to take care of chameleons. And it is true that your chameleon husbandry must be solid before even attempting breeding, much less calling yourself a business. But there are a number of other skills that must be in place for you to have a thriving business. We are going to talk about the most basic skill of pricing your product. And why is this important? Simply because so many people start businesses without understanding how to do it. And why is pricing theory relevant to a podcast on chameleons? Well, that is because commerce is critical for the foundation of a thriving community. When we insist on buying $45 chameleons then there is no way it can be profitable for anyone to breed chameleons. Therefore, you will get sporadic clutches here and there as breeders dabble in the species. But two years after the last import any remaining specimens are so few and far between that the chameleon species is generally lost to the hobby. When we are willing to pay a price to cover what it costs to breed the chameleon then we as a community earn the right to have that species in the hobby. Instead of berating buyers to care about the community I would like to direct today’s message to the sellers.
Breeders and potential breeders: Today we will go over the way you determine your fair selling price, how to deal with agressive customers, and what is this whole supply/demand thing.
Before we jump in I’ll share a bit about me. …when I am not chameleon wrangling I lead the product marketing function for a tech company in Silicone Valley. Product Marketing is essentially the business management for product lines. I identify needs within the market, develop the proper products, create the pricing structure, and then manage the short term lifecycle and long term roadmap of that product. So, I run businesses within the overarching company umbrella. I am the founder and head of the Dragon Strand chameleon caging company which has been making specialty cages for our community for five years now. I have, in the past, bred chameleons on small and large scales in both retail and wholesale environments. And, yes, I have one of those MBA things. So… I create… businesses. I am pretty good at it. Though you should know, that experience has been built on also learning what not to do by doing it myself. I am that guy who, if I am interviewing you, I want to know what you have failed at and what you learned. That means you earned that wisdom. I am not necessarily encouraging failure. If you listen to all the wisdom bouncing around and use it to navigate to success on your first try then two thumbs up for you. But do not get cocky and think you own that wisdom. You borrowed it effectively. No shame in that. Believe me, if I didn’t have this affinity for the road less travelled I would have borrowed a whole lot more wisdom! But I am very cognizant of what I have earned and what I have borrowed. If you pretend you earned more than you did it will eventually show itself.
So let’s jump in.
First, the definition between a business and a hobby. The IRS, or any other tax collecting entity will have its definitions. For the purposes of our discussion I am going to call any time you charge money for a chameleon an attempt at business. The reason why I am having a such a general definition is because my purpose here is not really to hold a class in business. My motive here is to create a strong community. And anytime you post a price as to how much you will sell a chameleon you are establishing a monetary trade amount which either increases or decreases the perceived value of a chameleon.
Perceived value is basically how much the chameleon is worth. An adult captive bred parson’s chameleon could easily be worth $1000 while an adult captive bred veiled chameleon could be sold for $75. Why? Our human minds have done a weighing in our minds regarding the scarcity of the chameleon, the subjective attractiveness of the chameleon, the prestige connected to the chameleon, and, in some cases, the breeding potential, meaning the future revenue generating potential of the animal. Most of this is emotion. We try to convince ourselves that our decisions are logical, but it comes down to emotion. And this is why marketing works and is an entire profession. Perceived value is a major force that you are both victim of as well as a creator of.
Perceived value is what makes your chameleons easy to sell, if you are at or below that value in price, or difficult to sell, if you are above that price.
And here is where I get into detail as to why I care, you should care, and the community should care. There are three reason why you should care about pricing of chameleons.
- The perceived value of the chameleon dictates the level of care the chameleon will receive. Parson’s Chameleons get everything they need from correct lighting to veterinary visits. Veiled Chameleons may not get the correct UVB light. Sure, the purchasers of $25 veiled chameleon babies may buy everything needed or, unfortunately, it can be viewed as a throw away pet that the buyer doesn’t want to get a UVB bulb because he refuses to spend more for equipment than the chameleon costs. If you think I am exaggerating just vend at a reptile show where vendors are slashing prices so they don’t have to take a bunch of veiled babies they bought specifically to flip at the show home. By the way, “flipping” is the act of purchasing a chameleon or, usually, group of chameleons for a cheap price with the intention of selling them as soon as possible right after. Sometimes without even taking possession of the animal. The lower the cost of the animal you offer the lower the quality of customer you will reach. And this is why people that sell chameleons for $25 or $50 on the public market are doing a huge disservice to the chameleon and the community. Sell it for whatever you want – heck, give them away for free, privately to people you know will value the animal. But when you post a chameleon for less than $100 on the open market you are setting a perceived value in that open market and you are not only inviting a lower class husbandry for your chameleons, but you have made it that much more difficult for serious breeders. Selling chameleons for a cheap price so you can move them out hurts our community.
- A selling price below what it costs to raise them up stunts the breeding community and prevents it from being established. My personal estimate is that it costs at least $150 to raise a baby panther to selling age. This will go up for chameleons that have less than 25 babies, but will not go down for higher clutches because the costs of feeding and housing go up as well. I welcome other calculations as this is only my data point. But let’s accept this number for now. If the cost of raising up a clutch of say, flapneck chameleons or Chamaeleo dilepis, is $150 but you can only get $75 for them then there will not be an established breeding community for C. dilepis. And, now you know why Chamaeleo dielpis, the flapneck chameleon, exists only as wild caught imports. If captive bred carpet chameleons can be sold for at least $200 then you will have a community of carpet chameleon breeders and that community will slowly grow. And this is why we have captive bred carpet chameleons available to us each year. See how this works? Now, there are other factors that go into establishing a functional breeding community around a certain species, but price for babies is #1. #2 is size of the market, but that is a different topic. An important one, but I’ll have to touch on that in a future episode!
- A strong breeding community is the foundation to a strong community. If we are not a breeding community then we are a transient community that is blown around by the whims of the world stage. We work with what species are available at the time and when imports stop we have to go on to whatever is available. Under this scenario we do not generate depth. Depth is important because it is a sign of how well we know our chameleons. When we breed to multiple generations we can say we know our species. It is difficult to do this if you cannot sell your offspring. In an ironic twist, it is easy to sell cheap species babies to people that will never breed. It is easy to sell expensive species babies to breeders that know they can make money from working with the species. Before you get too far down the mantra about breeding for the love of it and how money is evil, please make a list of how many sub $150 chameleons are bred on a regular basis and are established in captivity. I know you’ll say veiled chameleons. That will be your only example and I will counter that the condition of the veiled chameleon in captivity is not one I want to replicate for any animal. Do not buy into the idea that you charge less than it costs to raise your chameleon species because you are only doing it for the love of the hobby. I don’t know how to say this gently, but you are hurting the hobby and the chameleons by doing this.
So how do we determine pricing?
Pricing seems like it should be a easy thing to do. Figure out how much it costs and add a percentage over that that provide profit. But it is not that simple for us. The costs of raising up a clutch of chameleon babies has to include the following:
- The care it took to take care of the parents from mating until egg laying. Each clutch should bear an appropriate portion of this cost.
- Caging, lighting, and food. These are really the easy ones. You have the credit card statements and receipts just add them up and divide by the number of babies
- Here’s a fun exercise. You know how many watt-hours you use up by the ratings on your lamps. You can estimate how much water you use. It is a good exercise to go through to know just how much it all costs!
- Rent…Okay, here is where maybe we don’t have to include space rental. If this were a real business we would. But since we are wanting to establish a healthy level of cost so that a breeding community can be established we can assume that most breeders will be doing their breeding in a house where the mortgage is already being paid.
- A percentage of profit
Whoa! Hold the phones! Profit? Isn’t profit evil? You love your animals! You are not doing it for the money! Okay…pitch forks down, please. let’s go over what a business is. Even what a hobby business is. It is important that your business is healthy and sustainable. Profit is what makes a business healthy. In fact, if you do not profit after a certain number of years, the IRS will say this is just a recreational hobby. Pretend that you are an employee. An employee needs to be paid. You want to be a non-profit business to prove your love for the animals and that it isn’t about the money? Well then pay yourself what you would pay someone to do it for you. And why is this important? Because a healthy business sticks around. A profitable business lasts longer than that passing fancy to call yourself an entrepreneur. Every year you stay in business breeding chameleons increases the depth of our community knowledge. You learn more and more of that level of wisdom that cannot be just read off a Facebook post. Breeders being profitable creates and stores a level of expertise in our community. You being profitable increases your value to the community. Stop cheating yourself because it is just condemning the chameleon to being cared for less and it is ensuring you will not spend the years it takes to become an asset to the community. It is a certain state of misery for us to be in where all our breeders are enthusiastic inexperienced beginners who just read the breeding recipe in a Facebook post. When I started this podcast I had one of these arrogant newbie breeders arguing with me about how they could cohabitate panthers. Their website showed males in the same cage. They were so confident they knew what they were talking about. This is the garbage we are left with if the entire breeding community is made up of beginners. So structure this new venture so you stick around a while. You will be much more bearable when you are out of your teenage know-it-all stage! Then you can take your place in helping maintain the community. And, no, that particular blemish on our breeding community does not seem to be around anymore. Surprise…. surprise….
Now say you have run your numbers. You now have some sort of idea what you need to charge to be able to stay healthy, and, lo and behold, it is $500 per veiled chameleon. This is good because you can now figure out something called operational efficiency. This is where you start the dubia colony to cut down on the food bill. This is where you look for produce at the 99 cent store to feed your crickets instead of getting all organic from Whole Foods. This is where you start streamlining your operation so you are maintaining the same quality, but at a lower cost. And please, please, please remember, a decrease in quality is not savings. Finding cheaper carrots or making your own gutload instead of buying it is a valid efficiency. Cutting out a grain gutload to save money is cutting corners. This is what companies that appeal to price shoppers do. Do not cut corners. That is not saving money. It is decreasing quality. While making a cage cheaper by using components that will rust or break sooner is a good way to capture the inexperienced entry level buyer, when breeding you are dealing with a living animal. It is unethical to cut corners with a living being. Trim the fat in your operations costs and then run the numbers again. Remember, the fat that needs to be trimmed is usually the parts where you have someone else do the work – like buying dubia instead of raising them.
The second part is the market level. The one constant that we as breeders do not have control over is the price for wild caught chameleons. A good general rule is that you can sell captive bred chameleons for $50 to 50% of the wild caught import price. So if you get a Trioceros sternfeldi in for $60 then you can probably sell captive born for $90. So the only time you would be able to push it to the $150 minimum threshold is if imports were halted like they are now. sternfeldi is such a wonderful little livebearer that I would happily pay $150 or even $200 for a captive born specimen. If a chameleon comes in at $100 then $150 is a reasonable level that you can expect the market to absorb. So picking the species is an important part of this.
What you will also find is that customers will have this problem with spending more on shipping than they do on the chameleon. It is a strange thing that we do not acknowledge that these are two completely independent items. It is the same dynamic that price shoppers use to get the cheapest equipment for the cheap chameleon. This is a life. Overnight shipping is required to protect that life regardless of what our arbitrary value system places the monetary exchange at. If someone complains that the cost of shipping a live animal is too great a percentage of the animal cost I generally ease myself out of that transaction. If they are going to complain about what it takes to safely transport this living being then they really aren’t a good candidate for my baby.
So now we have a price. You are 50% above the wild caught import price. And sales are slow. In fact, you are now sweating it because your babies are getting older and you are going to have to separate them fast before they start gnawing on each other and you get bite marks. Is it time to lower price? Okay, here is your classic supply/demand situation. You have supply and there is not the demand to absorb it at the price you have set. I am going to address this in two ways. The first is with a time machine. The second is with marketing. The third is with price, but that takes no imagination and will be sabotaging.
So the first is a time machine. Let’s go back to when you started breeding. This is the time to plan for sales. How popular is the species and how many can you hold long term? If you decide to breed Furcifer verrucosus you will be targeting a very small niche. They are a passionate lot, but it is relatively small. It will be very easy to saturate the market. “Saturating the market” means you have supplied the entire demand. Any more items being sold would have to be to an expansion of the market. A quick google search says that a typical clutch may be 30 to 50. If you love Verrucosus and want to work with this species then you have picked a wonderful chameleon, but be very careful about your breeding schedule. With, say, 40 babies in a clutch you would not want to get a trio and have two clutches of babies to be sold. I know the calculator says that price times number of babies means instant wealth, but it doesn’t work that way. You will not be able to sell 80 babies at retail prices. Now, this changes if you get two pair and then are able to sell unrelated pairs of babies. Now you have a story to tell with your marketing. The point of this is plan ahead of time. Do not get all excited and buy excess females to increase your baby number beyond what you believe you can sell and. More importantly, what you can house if they don’t sell right away.
Now let’s fast forward back to our present situation. Say we have our verrucosus babies that we are selling for $150 because that is what we decided it costs us. Wild Caughts tend to come in at $60 so you are asking more than 50% above wild caught price. Regardless, this is a fair price. The object now is not to reduce price to where it is unsustainable for you to continue your work. The object is to communicate the value of these chameleons and explain why they are worth $150. No parasite load or import damage is top of the list. Look at the bright colors coming in on this one! I made up this five page care sheet with pictures as to how to take care of one. Hey, I have a tight knit verrucosus breeding community you can join if you want. You can learn all about these very cool chameleons. All of these are adding value to the chameleon. They are not waxing poetic such as “come see the deepest greens this side of Madagascar!”. It is real value of support and community. And, yes, captive bred is worth it. One vet visit will wipe out any savings to getting a wild caught animal. So add value to your breeding efforts before you think of cutting a fair price.
I want to say that there is nothing wrong with selling your offspring privately for low prices, trading, or even giving them away for free. I know everyone gets excited about getting chameleons for free, but when I am talking about giving a chameleon for free I am talking about to dedicated breeders who have been working with this non-commercially viable species and need to diversify their bloodlines. Believe me, a person like this has already paid many times over. Here is that unicorn of a person who is doing it truly for the love of the chameleons. They have put in their time, and have given back to the community with advice and sharing of their experience. What this is not doing is posting it publicly and placing pricing pressure on other breeders who are trying to maintain a healthy market.
And if you have to get rid of babies quickly because you have more than you can handle then speak to a reptile store or some online reptile retailers. They will take bulk shipments and , although it will affect the market, it won’t be as disruptive. They key, of course, is to limit your supply to what you can hold on to until they sell.
I’ll take a break here for a minute or two and talk to the buyers. And all of us breeders are also buyers, right? We can all take care of our community when we shop as well.
As a breeder, you should know very well the value of a captive born animal. You know we are not just making this up! So be savvy. Choose quality. All panther chameleons are not equal. The quality of the chameleon is based on the care and nutrition of the mothers and the care and nutrition of those critical first months of life. The best way to get a low price is to buy from someone flipping the animal (which means they buy it wholesale at a low price and turn it around at a higher price to you) or someone who is panicking because they can’t take care of the situation they got themselves in. So what level of care do you think those babies had? Can you even know what level of nutrition the mother had? By shopping for the lowest price you encourage businesses to cut corners. It is all a game of figuring out what corners can be cut before the sale won’t happen. You can’t treat chameleons like you can treat electronics where you can search for a part number and buy from the lowest retailer. In that case, a particular camera will be the same no matter where you get it. In the case of a chameleon species, yes, you will probably get the species you purchase, but the quality of life and the quality of the experience you have with it will range drastically depending on who produced it. And, surprise, surprise, the breeders you can most rely on are the ones that are established, have a reputation to protect, and charge a reasonable enough amount that they are able to maintain their breeder stock with those expensive UVB lights and gutloaded insects. I know many people feel clever when they get the cheapest price. But you also have to know the difference between you getting a good deal and you getting served up a cheap product because the retailer, or flipper, knows you value low price over quality. Two places I refuse to price shop are with living animals and anything I plug into an electrical socket. $100 dollars more spread out over a five to seven year lifespan is a trivial savings to me and cutting corners on something that might catch fire is foolhardy.
And so, to conclude, Breeders, do you really have a vision of making a business out of breeding? Or maybe just a hobby business? Be smart. Know your costs. Don’t pretend at being a business so you can have a business card to hand out and a logo to put on a coffee mug. Price things so you can make money. Yes, buyers will tell you your chameleon is not worth it. It is impressive how they talk about supply and demand as if they had any understanding of it beyond a wikipedia article. They will get offended that you dare think your chameleon is worth what it takes to breed it. They will predict that you will never sell your chameleons at that price. They will have a melt down and a fit and try everything in the book to guilt or pressure you to lower your price. They will accuse you of “caring only about the money”. All of this is emotional manipulation. Somehow the buyer whittling you down in price or tacking on, sure, I’ll pay that if it includes shipping, is them being shrewd purchasers. But you charging a fair price is being greedy. Emotional manipulation. Yes, it is true. If you sell your captive bred animals for the price of wild-caughts they will sell. But you just cheated yourself and every other breeder. If you are not ready to take care of the amount of animals you hatch out then you just put yourself in a weak position. The buyers know you can’t hold out forever and that the longer they wait the more desperate you become. So, the secret to doing this right?
- Know how much it costs for you to raise up a clutch.
- Price the babies at a level that pays for their care and allows you to upgrade your facility.
- Strictly control your production to the level you can maintain. How many times have we seen new breeders brag about how many eggs they have incubating? Flippers love hearing this because they know you are in over your head and whatever survives they can get at a low enough price that they can sell at a profit to a buyer who thinks they are getting a great deal. Make sure you produce only as much as you can raise up and hold onto for the time it takes to get a fair price.
- Market yourself and your product. You can charge and get a higher price for your chameleons if you have developed a level of trust in the community. Be active without falling into the trap of puffing yourself up beyond your experience level. What you are doing is creating value. This is the intangible that the inexperienced business person is missing.
- Hold on to the price that is fair. Not everyone is your customer. Do not let them bluster, intimidate, or scare you into their narrative. A buyer never has your best interests at heart. If you truly set a fair price then accept that you will not be able to sell to everyone. There will be others whose only way of competing is to come in at a lower price. Set yourself up so you do not have to play that game. There are buyers out there that care about quality and to get them you have to show that you believe your product is valuable and you will not let yourself be cheated.
In the end, a strong breeder base is a strong community. It is up to us as buyers to keep our money in the community, building the community, and supporting the community. And this means supporting our breeders. Breeders? Have confidence in your product. Raise and maintain your chameleons in a way that you are convinced of their value. Be prepared and have patience. We will always have inexperienced breeders that sell at unsustainable levels. You also have to wait out these guys. Offer consistency, reliability, and never waver from quality care and husbandry. And then your chameleons truly are healthier than the guy who thinks cutting corners is the way to make it in the world.
Establishing sustainable pricing starts with breeders. Breeders are the depth to our community and we need you to be long term breeders. Make sure you take care of yourself fairly.