And another sale gone, another one down... another one bites the dust!

[Zagnut]

Gedunk once bubbled...
Does anyone honestly think there is really such a thing as free estimates? Whether you believe it or not someone pays for the overhead it takes any business to provide "free estimates." It might not be you if you don't accept the estimate and purchase the goods or services but it will be the next person who does.

This is true. So by not having to pay for those missed bids, one is essentially charging the customer for costs he didn't incur. This would be less than honest. If a contractor wants to have a higher profit margin, more power to him. If I know better, and the contractor tries to snow me into thinking it's overhead and not profit at the start of our business relationship, how can I build a trusting relationship with someone that is trying to snow me from the get go?
His other option is to lower his total base bid which will put him in a more favorable light compared to other bidders which greatly reduces, if not eliminates the risk of me wasting his time and then going with another contractor.

 

[djhall]

Genesis once bubbled...
However, the value of instant gratification (that is, have it in STOCK!) is real.

Maybe, but I can have a ScubaPro regulator shipped to my front door tomorrow by FedEx overnight for a whole lot less than my LDS will charge to give it to me today!

 

[Genesis]

but even there you have some value in immediate gratification, especially if they have a pool and you can check it out RIGHT NOW.

Coupled with a "no-nonsense" immediate swap policy on failures in warranty, and you have something worthwhile.

The guy that I used to by my PCs from for my company had this kind of combination. Could I get "free" included service from DELL or Gateway, and quick shipping? Yeah. But was the PACKAGE all there? No.

Rom was a bit more expensive (by a couple of bucks), but if I had a problem I could call him and quite literally in a couple of HOURS one of his guys would show up with a replacement part. No arguing over why it died, or what happened, or shipping things back to the manufacturer.

Just "here, have another one, sorry about the hassle".

THAT kind of policy has value. It says loud and clear that you are not only a valued customer up front, but even when it costs the seller something to fix what's broken, it will be done, immediately, without argument and with a smile besides.

 

[Zagnut]

Your a making sense to me, Genesis.

The LDS in my town sucks. It is much like shop Genesis has been dealing with. Unlike Genesis, though, I didn't bother to point out their shortfalls to them and try to help/coax them into making the sale. I just walked. I did my homework and then drove 40 miles to Dallas to Scubatoys to spend my $4,000 dollars gearing my wife and myself up.

Mike, sorry to hear about your lease. Judging from how you say you treat your customers and students in this thread, I would definately frequent your shop and make my purchases there if you were in my hometown. If a salesman talks me out of buying something I don't really need (like you said earlier in this thread you sometimes do), I have no problems paying more to support someone like him. The money I save on not buying the crap I don't need will go right back to him by me buying his higher priced gear. I come out more or less the same with the exception that I have now found a LDS I can trust and that is valuable to me...valuable enough to pay more for gear.

Have you checked out rental spaces in Texas?

 

[yknot]

gedunk once bubbled...
Does anyone honestly think there is really such a thing as free estimates? Whether you believe it or not someone pays for the overhead it takes any business to provide "free estimates." It might not be you if you don't accept the estimate and purchase the goods or services but it will be the next person who does.

No for profit business can truely provide free anything and still stay in business. The cost of doing business has to be paid for or sooner or later ..... no more business.

This is simple really, LP - high volume, low overhead can operated on lower margins than most, LDS - low volume, higher overhead businesses. Make your choice and move on. Don't try to make LDS something they can't be. Unless the manufacturers do something to protect their licensed dealers, by offering them lower prices than LP can purchase gear for, the LDS will never compete with LP on cost of the same gear. That is a basic business fact.

No "free" estimates? Perhaps part of the dispute here is how we look at ourselves. I manage an engineering account where the employees are basicaly sub contractors to the business. I work for a salary and am thus basicly "overhead". Whether the business does $10 or $10million a year I cost the same. This means that I often do things of a customer service nature (read "for free") myself to avoid having to pay an employee for that work. I COST the same whether I do any work or not. How is this any different from a LDS owner? I have yet to witness a customer in a LDS leave because the help was busy giving free advice to someone who wasn't buying anything. You post your hours and stay open accordingly.

 

[TCDiver1]

Zagnut once bubbled...


This is true. So by not having to pay for those missed bids, one is essentially charging the customer for costs he didn't incur. This would be less than honest. If a contractor wants to have a higher profit margin, more power to him. If I know better, and the contractor tries to snow me into thinking it's overhead and not profit at the start of our business relationship, how can I build a trusting relationship with someone that is trying to snow me from the get go?
His other option is to lower his total base bid which will put him in a more favorable light compared to other bidders which greatly reduces, if not eliminates the risk of me wasting his time and then going with another contractor.

I'm not sure i follow what your saying here.

What i'm saying is providing an estimate is not a no cost proposition for most businesses. Time is money, the paper the estimate is written on is money, the phone number you called is money .... etc..... In my business we get less than 10% of the bids we put out there. Sound bad? It is, but it is the nature of the market (construction in our area) we live in. We don't specifically charge for our estimates but if we did, every one of our estimates would be lower. We don't charge for estimates because thats not how things have been done in our area.

I'm honestly not trying to flame you here but your fooling yourself if you don't think you ultimately pay for things like "free estimates" or worse yet advertising for most produces. There are costs that must be covered by profit margins of products and services that are sold. A pretty basic business principle that many new business owners don't understand and a big reason most new businesses fail in the first couple years.

Nothing dishonest about covering the cost of doing business by marking your products up to hopefully more than cover your cost.
It's just good business to cover your costs and stay in business.

 

[djhall]

Zagnut once bubbled...


This is true. So by not having to pay for those missed bids, one is essentially charging the customer for costs he didn't incur. This would be less than honest. If a contractor wants to have a higher profit margin, more power to him. If I know better, and the contractor tries to snow me into thinking it's overhead and not profit at the start of our business relationship, how can I build a trusting relationship with someone that is trying to snow me from the get go?
His other option is to lower his total base bid which will put him in a more favorable light compared to other bidders which greatly reduces, if not eliminates the risk of me wasting his time and then going with another contractor.

Am I correct in reading this to mean that: If the contractor charges a "bid fee" and then fails to remove the bidding costs from the calculation of the bid, then they are simply pocketing the "bid fee" as extra profit and unfairly misleading the customer. On the other hand, if they charge the bid fee up-front and remove the bidding cost from their bid calculation, the resulting bid will be lower in relation to the other bidders whose bids do include bidding costs and will tend to result in a higher bid acceptance rate. Thus, any contractor who charges a bid fee ought, practially and ethically, to submit a lower bid than they would if they didn't charge a bid fee? Is there something else you were trying to say????

I certainly would agree with that, but I am not at all certain I would pay a contractor a bid fee BEFORE I knew what kind of bid they were going to submit. How would you know the contractor would not simply take your fee and submit a bid comparable with everyone else who didn't charge a bid fee? Thanks for the extra cash, sucker! What are you going to do? Send him a bill for an unreasonable bidder fee for wasting your time and money by paying him to bid??? This sounds a bit like the doctors office that charges a $55 fee if you fail to cancel an appointment at least 24 hours in advance, then tells you the doctor is running behind for whatever reason, makes you wait in the waiting room for two hours even though you were there on time, and then is offended that you feel it is only fair that they pay you for wasting your time. What? It is fair for me to pay you if I waste your time, but it isn't fair for you to pay me if you waste mine????

Wait... what was I thinking? Lawyers already charge you a "consultation fee" to tell you if they will take your business and how much they will charge if they do. Maybe this could become a new profit center for local dive shops. When a Genesis comes in and asks what the price is on a new piece of gear, they could refuse to tell him the price until he pays a "pricing fee". They could then generously offer to deduct the "pricing fee" from the cost of the item in order to add "value" to the sale. If he didn't like the offer, they could then keep his "pricing fee" as compensation for wasting their time by having the audacity to ask them for the price of their goods and then not liking the answer that was so helpfully given.

You know, this could go over real well in WalMart, too. Think of how much money they could make by eliminating all those profit draining "price shoppers" by removing all the price tags from the store shelves. A simple modification to the "can't find the price" scanners is all that would be necessary to require customers to deposit 25 cents before scanning and pricing an item. Then, if they decide not to buy the item, WalMart still keeps their 25 cents

Something is definitely not right about this.

 

[redacted]

djhall once bubbled...


Something is definitely not right about this.

Yes, there is one major flaw in your proposal - telephone inquiries. But that could easily be corrected by either going with an unlisted number or, better yet, go for the 900- number and turn that into profit. And I guess you could charge for air while they browse - that is another thing the LDS sells and customers have already shown their willingness to buy.

 

[djhall]

Genesis once bubbled...
but even there you have some value in immediate gratification, especially if they have a pool and you can check it out RIGHT NOW.

Coupled with a "no-nonsense" immediate swap policy on failures in warranty, and you have something worthwhile.

The guy that I used to by my PCs from for my company had this kind of combination. Could I get "free" included service from DELL or Gateway, and quick shipping? Yeah. But was the PACKAGE all there? No.

Rom was a bit more expensive (by a couple of bucks), but if I had a problem I could call him and quite literally in a couple of HOURS one of his guys would show up with a replacement part. No arguing over why it died, or what happened, or shipping things back to the manufacturer.

Just "here, have another one, sorry about the hassle".

THAT kind of policy has value. It says loud and clear that you are not only a valued customer up front, but even when it costs the seller something to fix what's broken, it will be done, immediately, without argument and with a smile besides.

I can definitely see how that would have value to you. I work with computer servers a bit myself, and the savings of an inexpensive mail order server look tiny compared to the cost of having it "down" even overnight while repair parts are shipped.

On the other hand, what percentage of divers dive frequently enough that shipping time is likely to become a limiting issue? I would be quite happy to do business with a dive shop the way I do business with Dell. You take my credit card number and ship me a replacement reg today. I send you my defective one back using the return label included. If I don't return a regulator at all, you charge my card. Alternatively, I ship you my reg first, and you ship me a replacement when it arrives. Of course, this makes the large assumption that the online dealer has that kind of customer service ethic. Shipping my reg in and not seeing it again for three months is not my idea of customer sevice, warranty service or not.

 

[yknot]

MikeFerrara- sorry to hear about your lease. I still would like to ask you why you are retailing scuba in the market you are in and attemting to lay any blame on LP and gear manufacturers. No one will pity me if I locate the headquarters of my bikini company above the Arctic Circle and subsequently fail. I can understand opening a small business in the area you and your family live but when that market won't support your plan who is really to blame?LP isn't doing anything any of us couldn't do. They just seem to do it cheaper. If you do manage to become an online reseller I would buy from you. Perhaps the value you could offer over LP then would be better online product info.