Future of DiveShops?

[Bagster]

The trouble with your formula, Rjp, is that you tie the profitability of one service to the overall profitability of the shop. In other words, the analysis of profitability of air fills will change depending on the net profit/loss of the business.

I suspect that air fills, even at five bucks, are an excellent source of cash flow for many shops, with an emphasis on cash, wink wink, nudge nudge.

The capital equipment involved is not that expensive or delicate. Labor expended is generally labor that has to be present and paid, air fills or no. And the product dispensed is invisible to the tax man.

 

[MrCultureJammer]

But rather I'm saying that scuba diving has an awareness/interest/image problem... which is what marketing and advertising are really good at solving.

I'll weigh in on this. As a creative director in an ad agency, I agree with this completely. Not enough ad/marketing dollars goes to SCUBA as an industry as a whole to get it on the radar of potential customers. I don't think in 20 years of diving I've ever seen an ad/poster...anything saying "come experience diving" to the general public. Sure, you may see a one page ad in a SCUBA magazine once a year, but that's a waste, in my opinion, as you're preaching to the choir at that point.

I've never really seen anything like it: a sport that has such an aversion to telling the general public about themselves, yet needing the public to show interest quite badly. So it's relegated to word-of-mouth and having a current diver do the heavy lifting of getting friends/neighbors/co workers in the door and interested. Which is a looong shot, at best. Plus, the conversation is then controlled by the diver bringing in that person. And we all know, new info is often regarded as THE GOSPEL by rookies. It's a niche sport, at best, and will remain on life support unless the industry puts serious effort and $ towards getting it's message out.

If you own a dive shop, how in the hell are you not raising hell DAILY with the industry marketing arm/PADI/SSI/NAUI etc to advertise more to the general public??! I'd be making it damn clear to each of them that they needed to do more to bring in new folks to the sport. To let them get away with the little they do without raising holy hell is not only digging your own grave, but paying for the service in advance, picking out the box, and laying down in it now & then to see how well it fits.

I liken a lot of the dive industry to my other passion/hobby: motorcycling. As a lifelong motorcyclist, we're a similar minority of folks. Roughly 2% of drivers hold a bike license. It's interesting though, to see how the bike world has handled it better. No training at all handled by the local bike shops: get your license elsewhere, and then come and see us for product/parts/accessories to suit your needs. They concentrate on product better. They concentrate on sales better. And even with the internet, there are still many bike shops, big and small, often in the same competing area.

 

[widget]

Speaking of which, people who buy a smart phone, sneakers, soda or a computer will be back at regular intervals to buy more.

Most scuba divers can do fine for a very long time with 1 BCD, 1 reg., 1 mask, 1 set of boots & fins. Maybe a tank or 2? Dive computers probably tend to get replaced on average after a few to several years.

That leaves the LDS market for the established diver down to gear servicing, gas fills and maybe group trips (which divers soon learn they don't need the LDS for...). And additional training, but nitrox courses are pretty cheap, so after AOW & maybe Rescue, you're largely back to square one with a lot of divers (unless you convince a lot of divers to pursue Master Scuba Diver or Dive Master ratings, or you teach tec. courses).

Assuming the typical dive shop caters mainly to recreational divers, what is the major ongoing income stream from the established customer base? How do you LDS make most of your money off them?

Richard.

Indeed, Indeed, as they say, Hammer -Nail - dive shop's generally sell once to a client, afterwards, if they want to stay in business they need to find a new customer, 0 rings, mask straps, air fills, octo holders, pretty pens to put your name on your gear and cap pins dont pay the rent, this is the brutal reality,.... and in my opinion, there just are not enough new customers interested in scuba.

 

[SeaCobra]

The trouble with your formula, Rjp, is that you tie the profitability of one service to the overall profitability of the shop. In other words, the analysis of profitability of air fills will change depending on the net profit/loss of the business.

I suspect that air fills, even at five bucks, are an excellent source of cash flow for many shops, with an emphasis on cash, wink wink, nudge nudge.

The capital equipment involved is not that expensive or delicate. Labor expended is generally labor that has to be present and paid, air fills or no. And the product dispensed is invisible to the tax man.

Huh? An excellent source of cash flow? First, who carries cash these days? I see people swipe their card at the convenience store for their $1.58 cup of morning coffee.

Capitol investment not that expensive? Have you priced out a compressor, filtration, fittings, hoses, training, oil, etc., etc., etc.?

And the labor expended is often labor that could be better spent on other higher ROI activities. Ever wonder why service stations do not sell gasoline anymore?

 

[RJP]

The trouble with your formula, Rjp, is that you tie the profitability of one service to the overall profitability of the shop. In other words, the analysis of profitability of air fills will change depending on the net profit/loss of the business.

Sorry, no. The formula (which ain't mine, it comes from people far smarter than I) is what you need to do to determine your COST on any item. Profit is different, and yes one can think about the profit on an item as being only loosely connected to the overall profitability of the business. The formula allows for this, as the business owner can certainly decide to put in a NEGATIVE number for the amount of profit they want to earn from any item or service... but that doesn't mean that the other costs aren't real as well. (ie their loss on an o-ring or air fill is much higher than simply "not making a profit")

 

[Eric Sedletzky]

There's also the economics factor.
Scuba is an expensive sport to get into and it continues to be expensive even after initial gear purchases/training costs in the form of going someplace to dive.
Most people aren't into cold water. Here in CA we have cold water and as such requires more gear and more money than someplace warm.
But to go dive in warm water from here means a plane ticket and hotel plus charter fees, etc. Plus the time off to do it.
We also have a big change in demographics here in CA.
What used to be considered a minority group of immigrants has now reached almost 50% of the population. The rich white yuppie with plenty of disposable income and a nice 2 or 3 week payed vacation is becoming less and less. Sure there are pockets down in Silicon Valley, San Francisco, and LA, but that's a small minority of big wage earners and the ones most likely to take up scuba diving. Most people in CA are moderate to poor and struggle just to make ends meet. We pay the highest taxes, rents, mortgages, gas, food, utilities, etc. in the entire nation. All this takes away from disposable income, and if there is anything left over it sure as hell isn't going to go to scuba diving, it's going to put gas in their cars.
All you people seem to think that all the scuba industry has to do is advertise and all of a sudden it will be more popular than ever and everybody will be rolling in money.
I don't think that's the case. I think that an advertising campaign (if it ever happened) would be very expensive with very little return.
I think from a national average, not CO and other high money pockets, the nation has a record of part time minimum wage jobs that pay no benefits and people are struggling.
I think you people sitting here with three figure jobs & perks are failing to see the reality.
Unfortunately the LDS is just a meter of what the "new" reality is. It has nothing to do with how they run their businesses, there just isn't the demand there once was simply because those types of people who fed them are fewer now.

 

[ktomlinson]

The advertising guy has a good point. I've seen one tv ad advertising the sport and I only saw it one time. One time doesn't do anything except give whoever published it something to hold up as effort.

---------- Post added November 16th, 2014 at 12:17 PM ----------

There's also the economics factor.
Scuba is an expensive sport to get into and it continues to be expensive even after initial gear purchases/training costs in the form of going someplace to dive.
Most people aren't into cold water. Here in CA we have cold water and as such requires more gear and more money than someplace warm.
But to go dive in warm water from here means a plane ticket and hotel plus charter fees, etc. Plus the time off to do it.
We also have a big change in demographics here in CA.
What used to be considered a minority group of immigrants has now reached almost 50% of the population. The rich white yuppie with plenty of disposable income and a nice 2 or 3 week payed vacation is becoming less and less. Sure there are pockets down in Silicon Valley, San Francisco, and LA, but that's a small minority of big wage earners and the ones most likely to take up scuba diving. Most people in CA are moderate to poor and struggle just to make ends meet. We pay the highest taxes, rents, mortgages, gas, food, utilities, etc. in the entire nation. All this takes away from disposable income, and if there is anything left over it sure as hell isn't going to go to scuba diving, it's going to put gas in their cars.
All you people seem to think that all the scuba industry has to do is advertise and all of a sudden it will be more popular than ever and everybody will be rolling in money.
I don't think that's the case. I think that an advertising campaign (if it ever happened) would be very expensive with very little return.
I think from a national average, not CO and other high money pockets, the nation has a record of part time minimum wage jobs that pay no benefits and people are struggling.
I think you people sitting here with three figure jobs & perks are failing to see the reality.
Unfortunately the LDS is just a meter of what the "new" reality is. It has nothing to do with how they run their businesses, there just isn't the demand there once was simply because those types of people who fed them are fewer now.

There are plenty of people with money to spend on fun. Good advertising would target demographics that have disposable income. It's not about getting every other person to dive, it's about increasing the percent of people that are active divers.

 

[Bob DBF]

If a dive shop had no competition they'd be rich.

Your competition is any goods/services that people spend money (or time) on INSTEAD of spending it on the goods/services you provide.

Sorry, English is my first language and I'm not very good at it.

There is no competition between local dive shops as you can buy the the same items at the same price at all of them locally. Somehow they also ignore, to their own loss, the competition of online SCUBA retailers, never mind anyone else that wants my recreational dollar. It is this lack of understanding of a world outside their personal hobby that is killing the shops here.

A local shop just changed hands to it's "manager" and is changing direction to a watersports shop. Although he will still maintain some of the LDS functions, he is marketing more to other watersports where he was making more profit. I look forward to chatting with him about the success of this change and will pass on anything interesting.


Hope this makes more sense.

Bob
------------------------------------------------
There are more ways than one to skin a cat, however the cat never likes it.

 

[MrCultureJammer]

I'd agree that getting into the sport ain't cheap, but once you pay for gear once, you have few recurring costs except air and the occasional service on items. And yeah, it's colder water here in CA usually, but I'm not convinced that you'd have to drop $ for travel. I walk in from the shore once a week, every week, either before work, after work, or on the weekend somewhere here, park a block away for free, and don't travel at all to dive, and still enjoy it immensely. I like it much better that when I lived in south Fl actually, b/c I don't have to pay to charter a boat to go out each and every time, and I can go year round (I'll never forget my constant frustration every fall when the South FL dive boats stop going out @ Labor Day basically, and declare the water "too cold" to dive until springtime, unless of course I had 7-10 friends who wanted to go out as well on the same boat. Since I moved from SoCal TO FL originally, I knew what "cold" really was, and it wasn't 70 degrees. Florida divers tend to dive in swim trunks, and the need to wear anything else to dive usually has them looking for something else to do, I found.)

 

[Eric Sedletzky]

Sorry, English is my first language and I'm not very good at it.

There is no competition between local dive shops as you can buy the the same items at the same price at all of them locally. Somehow they also ignore, to their own loss, the competition of online SCUBA retailers, never mind anyone else that wants my recreational dollar. It is this lack of understanding of a world outside their personal hobby that is killing the shops here.

A local shop just changed hands to it's "manager" and is changing direction to a watersports shop. Although he will still maintain some of the LDS functions, he is marketing more to other watersports where he was making more profit. I look forward to chatting with him about the success of this change and will pass on anything interesting.


Hope this makes more sense.

Bob
------------------------------------------------
There are more ways than one to skin a cat, however the cat never likes it.

I hope Scott does well, I think he's on the right track.
The reason the old shop was stagnant and dying was because of the old owner. I personally know scores of active divers who refused to go in there because they didn't like him. Instead they went to the shop down the freeway. I didn't care for the shop down the freeway just because of some of little miss sales lady's tactics, diverting people's eyes away from the price tags with her cleavage, which men should find demeaning. It implies we are all nothing but a bunch of horny neandrothols making buying decisions with our second brain. And then there was other stuff. They rusted out a few of my brand new tanks I bought from them and they filled exclusively, then wanted to charge me top dollar to have them cleaned. Just kind of tacky in my opinion. I gave them a chance but ultimately decided to move on.
So I chose to stay at the other shop even though I didn't care for the old owner. At least they had clean air. I just went in there when he wasn't there. We actually had relationship held in dynamic suspension and everything worked out, he didn't talk to me and I didn't talk to him.
But now it's a new chapter.

I just think of all the people I know who were dive buddies that have come and gone. I don't dive with any one of them anymore. They all quit or moved on. All those people used to go in there and support the shop.

Then there's Sub Surface in FB. They sure have a captive audience don't they? Great shop though. Just for the sake of conversation, what do you think would happen if another dive shop opened up in that area?
I'm kind of hinting to the point that too much competition can be just as bad as not enough.