Why Isn't There a Free Market for Scuba Equipment?

[jviehe]

Im confused as to why businesses would sell the products of a manufacturer that they have such large disagreements with about their sales requests. Or rather, im confused as to why there is such complaining when its obvious that the manufacturers have a product that is in high demand, that the people are willing to spend big bucks for, and that makes decent profits for resellers.

It seems that resellers want to sell te product, but want to control the product. Basically if you dont like Aqua Lungs policies, for example, dont sell them. You lose credibility when you push their products and then complain about their policies. They made the product, they have a right to control its distribution. You have a right not to buy their product if you dont like it.

 

[offthewall1]

Here's a flash for you: Such similar stores already are selling SCUBA gear. Heard of Gander Mountain, have you? Not the first national or regional chain to have this product line. As these local chains grow tired of giving floor space to dive sales, they clearance it out. The "for rent" signs still hang in the closed LDS they left in their wake. Happy now?

I'm not here to argue good or bad- but it already has destroyed the retail SCUBA industry. The economy and consumer savvy, added to the internet- this will destroy the classic system of SCUBA Pro Shops. The strong shall survive.

But everyone, you, the LDS and the manufacturers know one thing: Where you going to buy the air?

Ed,

If more poorly run LDS's fall... Yes, I'll be happy. These shops have been killing the industry for more than a decade. For years only "hobbyists" opened dive shops. It was kind of like hobby shops selling trains and remote control cars or the corner Archery store etc... Today Scuba (still how small it is) has grown to the point where businessmen have become interested.

Good businessmen make good things happen for consumers and manufacturers. Good businessmen keep prices low and keep manufacturers in business. The two go hand in hand. Lower prices mean more sales (happy consumers) which mean more manufacturing, which means more jobs and more industry growth.

I keep beating a dead horse - the industry is dying... not because of the internet and retailers selling below MAP and MARP... but because there is NO FREE TRADE. There is no competition. There is no advertising of great deals on scuba equipment... no lead ins with training and special prices on that first set of gear... because there is no motivation to break the MAP and MARP cycle of protection by piss poor businessmen.

 

[offthewall1]

Im confused as to why businesses would sell the products of a manufacturer that they have such large disagreements with about their sales requests. Or rather, im confused as to why there is such complaining when its obvious that the manufacturers have a product that is in high demand, that the people are willing to spend big bucks for, and that makes decent profits for resellers.

It seems that resellers want to sell te product, but want to control the product. Basically if you dont like Aqua Lungs policies, for example, dont sell them. You lose credibility when you push their products and then complain about their policies. They made the product, they have a right to control its distribution. You have a right not to buy their product if you dont like it.

I would agree - except that a few of your points are wrong:

1. You may disagree - but just like anything else in this world - when you buy something (pay your hard earned money for it,) you own it don't you. When a retailer buys a product, pays the manufacturer - he/she owns it. He or she can do whatever they want with it - upto and including giving it away free. If the manufacturer holds ownership - meaning the product can be returned by the retailer to the manufacturer for full credit - then I would agree that the retailer can be held accountable for pricing.

The problem is MAP pricing makes it harder for retailers to move product because they can not advertise it at a price to lure in buyers. If Walmart for example were held to a MAP price on Coke... you'd never go to Walmart to get 3 - 12 packs for $10.00. You may actually decide not to buy coke at $4.99 a 12 pack. You may switch brands. In this example, MAP hurts you because you now feel priced out of purchasing Coke and even though you like Coke you may not drink it anymore. Coke sales plummet and so do Walmarts.

2. Yes, they have the right to control distribution - and even their own pricing - but not a right to dictate to a business owner how much that owner can sell it for. That is where the problem comes in. As a retailer, I don't question their prices to me. They get their money one way or the other. If they can set their price... common sense alone says I should be able to set mine. We are each privately owned businesses buying products. They buy raw goods and make a product. The manufacturer of those raw goods is not dictating to them how much they can resell their product for. Think about it.

3. To say this particular brand is in high demand would be an errant statement. I rarely have anyone ask me for the brand or why we don't carry it... but when they do ask... I'm happy to inform them of the price fixing and how the customer can buy equal quality gear for far less money.

 

[redacted]

But everyone, you, the LDS and the manufacturers know one thing: Where you going to buy the air?

Well, I've seen LDSs in my area come and go. Over the past 15 years, online retailers have gone from a few mavericks selling off-brand or gray market goods to a growing number of authorized, well stocked, online dealers with reputations for superlative service. And I have never had any problems getting airfills. If necessary, I'll get my own compressor. But so far, that threat of Where you going to buy the air? has been cried many times but the sky is still up there.

 

[lmorin]

Over the past few weeks I have spent a good bit of time trying to become educated on the nuances of different pieces of scuba equipment with a focus on regulators and BCs. One thing that I have learned is that there is something for everyone out there at prices ranging from reasonably inexpensive to "it costs how much?" which means, to me at least, that you should be able to find some that meets your needs and your budget.
........................
Is there a reason why Seaquest (not singling them out...just top of mind) dealers in a metro area are not allowed to compete based on things like customer care, staff knowledge, post-sale service and support, and training programs while letting them set the selling price for a Titan LX or Legend which provides a reasonable profit? I guess that this might drive some LDS out of business, but is that necessarily a bad thing? Good shops will do more volume at lower markups...isn't that what free markets are all about? Wouldn't you expect a manufacturer to reward and encourage this type of business practice?.................

These are almost exactly the same questions I had when looking around for our first equipment. I sent complaints to the US Dept. of Justice and the NY Attorney General's office. Never got a response from the latter; the former said it was of no interest.

Apart from the theoretical/legal issues that abound, I found a practical solution that you probably can use also. I bargained with my LDS which sold the equipment brands that I wanted. I started by going to a good LDS about 20 mi away and asked for pricing on a package purchase of BCD, computer and regs for two people. Not all the gear was from the same manufacturer. Then, with the package price in hand, I went to another LDS about 2 mi from my house and asked the same thing. The nearby LDS suggested alternative regs and I accepted the advice because the rationale was reasonable.

The nearby LDS pricing came out about $100 more per person, but that was quite acceptable. Note that the BCDs were Seaquest, the regs Apeks (I had originally requested an Aqualung model, but the LDS had a similar Apeks that it wanted to move) and the computers Oceanic. The price was over 30% below list and I paid cash which has other advantages.

The LDS was not allowed to price things 30% off, but my LDS is a good LDS. The folks there try to build a clientele and work with them, both on original purchases and by providing continuing excellent service. They have periodic open house parties for all clients (they have a hose on the tank fill station console that dispenses beer!) and run a variety of trips for people in the area. In return, I do not hesitate to buy more gear there and recommend them to snorklers and would-be divers. The net result is that my wife and I have greatly benefitted from the LDS expertise and they have benefitted from us. That said, I do not feel obligated to buy everything at the LDS. They don't carry Henderson suits, for example, so we bought ours via internet ($70 less than the price at another LDS).

Have fun sorting everything out!

 

[offthewall1]

These are almost exactly the same questions I had when looking around for our first equipment. I sent complaints to the US Dept. of Justice and the NY Attorney General's office. Never got a response from the latter; the former said it was of no interest.

Here is why they don't have an interest.. and what you can do to change that...

1. The SCUBA Industry is small. Unlike the music industry which settled out of court after 30 states ganged up on them, the Attorney Generals often feel like there is not a broad enough impact on consumers to be bothered with it. They get a call here or a call there from irate divers but there is no picketing, no outrage, no news media coverage, no anything for a sport that less than 1% of the population participate in. If you're small - you have to carry a bigger stick. Don't think single phone call or letter... think getting signatures on petitions and having everyone you know place a phone call on the same day to the Attorney Generals office. Bombard them. This gets their attention.

2. Write directly to the manufacturers telling them you will no longer support their products as long as they continue MAP and MARP pricing policies. Let them know you're serious by hitting them where it hurts. Simply buy different products. There is no shortage of quality Scuba Manufacturers who do not keep these types of policies.

3. Educate, Educate, Educate all new divers you know - how to steer clear of being price gouged by these practices.

With any luck... a grass roots movement within the industry can fix the problem. End MAP and MARP pricing and allow the industry to prosper for the benfit of everyone involved.

 

[AbyssalPlains]

I think with "free market" you mean "low prices". This is incorrect. There is a free market in scuba equipment.

Not true. If you are a retailer and want to hold a gear sale, and you price a ScubaPro item below a certain price set by SP by only a few cents, you will get a call from the rep the next morning. If you do it again, whether by accident or intentionally, for example because you believe in competition (god forbid), the rep will call you again and let you know that with immediate effect, you are no longer a SP authorized dealer.

 

[offthewall1]

Scubaboard is a great medium for divers and in theory should be interested in helping to protect consumers from price fixing. Why not ask Scubaboard to become a driving force in helping to eradicate MAP pricing. It would be the perfect place to have a petition listed to gather names to be forwarded to the manufacturers, federal trade commission and states attorney generals to say enough is enough.

I officially ask the founders of scubaboard to list a page for people to sign up to help eradicate MAP and MARP pricing from the industry.

In the meantime, if you agree with our position that MAP and MARP pricing are hurting consumers and should be considered illegal price fixing, please feel free to send us an email. We will store all emails and collect them for forwarding on to the appropriate authorities and manufacturers. In the meantime, consider boycotting products from dealers and manufacturers who inflate pricing in this way.

Together, we can change the industry for the better.

 

[Brian Sharpe]

This is an interesting thread but one point that has been completely overlooked is the age old......who benefits from MAP or MARP?

If an equipment manufacturer sells their product to the retailer for $xxx what do they care what the retailer sells it for? The manufacturer will always get their target price whether we buy from our LDS or an on-line retailer. The beneficiaries of price fixing are the retailers who get to sigh, shrug their collective shoulders and blame the pricing on the manufacturer.

 

[bamamedic]

I've always thought that a lot of the Minimum Advertised Price and Minimum Allowed Retail Price had to do with the illusion of "quality"? People tend to value things they pay more for; they believe they are getting a better product if it is only sold in one or two shops, and if they had to pay a premium for it. Correct me if I'm wrong, please, but I've always thought that one of the reasons the MAP and MARP policies were in place was to keep the brand "exclusive". If Scubapro regulators costs $600 for an MK11/S555, but you can buy a comparable Dive Rite regulator (with better features!) for only $400...

As a new diver, I just assumed that the more expensive and "exclusive" (only sold by one LDS in the area) was a better quality regulator. If all the dealers sold MK11/S555's for $400, then it might not be perceived as "higher quality"....

As a slightly less "new" diver, I've learned to compare the actual features of anything I'm planning on purchasing, not the price... but when I purchased my initial gear, I went with Scubapro over Sherwood or Mares (the other brands sold by that shop) simply becaue it was more expensive and I thought the quality would be better (that, and because my instructor was diving Scubapro LOL)