Aqualung's stance on e commerce

[fire_diver]

When there is not enough grass for all the cattle, you have to get rid of some so the rest can survive.

LOL spoken like a true Texan!

FD

 

[ams511]

On thing the maufacturers are not addressing is the barriers of entry into scuba diving. A potential diver may be turned off to diving because it is too expensive. She walks into a store and finds out to be outfitted in equipment it costs $1,500 and decides it is too expensive or decides she would rather rent than buy gear for her Caribbean vacation each year. The LDS loses this potential sale because of high prices. As Mike mentioned in a prior post, most students do not buy a complete setup. Perhaps they would if the price was more reasonable. I met many people who were interested in diving but always said it is too expensive and never decided to get certified. The dive industry is more interested in protecting their profit margins than diving. There was a recent thread were PADI was requiring divers in certain locations to present some sort of sticker from their course pack in order to complete the certification. I am sure they have some excuse for it but we all know the real reason is to sell more course packs and kill the used book market.

 

[mdb]

LOL spoken like a true Texan! FD

Yep, adapt or die. Some are adapting and others are dying. Of course most companies are selling direct to the so called "gray market" they just deny it so the LDS is somewhat pacified. It seems that a clean price list and an honest policy would benefit all. In our case the local dive store can buy at exactly the same price as our largest dealer. We don't play any "inside" games. It seems to work for us. Diving is such a great sport that we all hope for more new divers and a healthly industry.

 

[barebones]

So is price fixing, but you never hear the industry types complaining about that.

You can bet the lawyers at Aqua Lung and Scubapro are keeping their policies well within the law. Don't believe me --- go try to find an attorney to head a class action suit against them on contingency.

 

[coach_izzy]

On thing the maufacturers are not addressing is the barriers of entry into scuba diving. A potential diver may be turned off to diving because it is too expensive. She walks into a store and finds out to be outfitted in equipment it costs $1,500 and decides it is too expensive or decides she would rather rent than buy gear for her Caribbean vacation each year. The LDS loses this potential sale because of high prices. As Mike mentioned in a prior post, most students do not buy a complete setup. Perhaps they would if the price was more reasonable. I met many people who were interested in diving but always said it is too expensive and never decided to get certified. The dive industry is more interested in protecting their profit margins than diving. There was a recent thread were PADI was requiring divers in certain locations to present some sort of sticker from their course pack in order to complete the certification. I am sure they have some excuse for it but we all know the real reason is to sell more course packs and kill the used book market.

I know of a dive shop in New York that boots students out for buying gear in the forbidden city (AKA Leisure Pro) and not from them. If they didn't sell a 5 cent O ring for 3 bucks, then perhaps they could get those students to buy from them.. Ugh!

 

[mike_s]

Leisure pro gets the grey market stuff from overseas. The regulators are made in Europe.

Overseas? Since when is San Diego overseas?

Yes some regulators are made in Europe. Many are made in Tawain also.

Yes LeisurePro does get some gear from overseas. Aqualung is readily sold on the internet in Europe also by the way. Which is ironic because Aqualung USA is the only one that doesn't allow that (internet sales).

But not all of LP's gear is obtained overseas. Leisure Pro is a valid dealer for many of its lines it carries. It also gets many of it's lines directly fromt he manufacturer on many lines also, or so it is beleived, though it's not a listed dealer for them.

yet it still does buy "indirectly" in large quantities from some dive shops that re-sell to them. Whether they are in say San Diego (for example) or any other city. It's just one of those little-dark-secrets of the dive industry. Aqualung knows exactly where it's stoff is going and who's paying the bills.

 

[MikeFerrara]

Shops in most smaller markets would die if their retail sales tumble. If the only way to get dive equipment was online, the service portion of diving would also dry up in most parts of the nation and the hobby would suffer and shrink. Aqualung probably realizes this.

One would think that if the local market for equipment goes down (which it has) and if there is still a market for local training, that training prices would go up to make up the difference. You just go from a large markup on equipment and small markup on training to a reasonable markup on both. I like that better than having to pay for someone's open water class when I buy a reg.

The shops are hanging on still trying to use loss leader classes to sell equipment. It's working too, it's just that they're selling it for LP. Aqualung still gets their cut though.

 

[MikeFerrara]

On thing the maufacturers are not addressing is the barriers of entry into scuba diving. A potential diver may be turned off to diving because it is too expensive. She walks into a store and finds out to be outfitted in equipment it costs $1,500 and decides it is too expensive or decides she would rather rent than buy gear for her Caribbean vacation each year. The LDS loses this potential sale because of high prices. As Mike mentioned in a prior post, most students do not buy a complete setup. Perhaps they would if the price was more reasonable. I met many people who were interested in diving but always said it is too expensive and never decided to get certified. The dive industry is more interested in protecting their profit margins than diving. There was a recent thread were PADI was requiring divers in certain locations to present some sort of sticker from their course pack in order to complete the certification. I am sure they have some excuse for it but we all know the real reason is to sell more course packs and kill the used book market.

Entry costs can be prohibitive but, what does a new diver percieve as, entry costs? Around here it's not equipment costs because most of them think they are only going to dive on vacation and some are only thinking about one specific vacation. When I first got certified I never thought I was going to dive often enough around here to need a bunch of equipment.

Most of them see certification costs as the costs of entry. How do you sell expensive drugs? You give away some free samples. Same here. You certify them cheap...make the class short and easy...show them a good time. After they're certified you call them and invite them diving. They're short of money after OW weekend so you cut them a deal on rental gear. If local water is to cold for them you invite them on a trip and of course you have some 3 day jaunts to the gulf or the east coast planned. You invite them to a club meeting. Maybe have an award dinner where you recognize all the new graduates, the new DMs, the new Master scuba divers or whatever. Once you get them in the door and going you'd be surprised at what they'll spend. I've seen some people of pretty modest income spend a small fortune in a very short time. I didn't make those things up. They're all commonly done.

The problem for the shop owner is this. Notice that all of the things I mentioned above that are done to get them diving and to keep them diving and hanging out with divers are things that take a lot of work from the shop owner and cost the shop money. It all pays off IF the person buys lots of gear (the markup isn't on the gear you sold but rather a very small compensation for the thousands of hours you put into all that other stuff) and take con-ed courses which are usually higher margine than an OW class.

The whole house of cards completely falls apart if you do all that work and spend all that money to get them diving and they turn around and buy the gear from someone else. Now you don't have anyway to get paid.

It's easy to see why Aqualung wants a shop and a club in every town. They want that shop to have Aqualung gear all over the walls. They know that the shop will sell the diver on AL gear and they don't care if a bunch of them do buy it online.

If the shops sell to little gear, then they have to charge more for something else. Lets face it, even if all the shops go online and the price restrictions were gone the market still isn't going to support 50 million retailers. Diving isn't like toilet paper (almost everyone uses it)...not everyone dives or even wants to.

Now, what can a shop do for a local diver? Training. They could charge more. I think that might create a barrier to entry but it hasn't been tested. There is still a problem in many areas though. Our temperate water. There are just a lot of divers around here that have no intention of ever doing a dive here. I've known divers who went all the way to instructor without ever doing a single local dive. You can do all your training at resorts. How many posts have I seen here in just the last few days that talk about resorts offering specialties for $10 more than it costs just to get a spot on the boat. Resorts give away training to sell boat rides and rooms just like the LDS gives it away to sell equipment.

Training itself has little value. This whole model is now moving into the tech scene in a big way so that should be fun to watch.

 

[DIR-Atlanta]

So is price fixing, but you never hear the industry types complaining about that.

You can bet the lawyers at Aqua Lung and Scubapro are keeping their policies well within the law. Don't believe me --- go try to find an attorney to head a class action suit against them on contingency.

I do not view the policies as being "well within the law" - more like "just legal enough to keep them out of trouble". They may follow the letter of the law, but they certainly violate the spirit, and the end result is the same as if they were engaging in price fixing.

If it quacks like a duck and walks like a duck ...

 

[friscuba]

One would think that if the local market for equipment goes down (which it has) and if there is still a market for local training, that training prices would go up to make up the difference. You just go from a large markup on equipment and small markup on training to a reasonable markup on both. I like that better than having to pay for someone's open water class when I buy a reg.

The shops are hanging on still trying to use loss leader classes to sell equipment. It's working too, it's just that they're selling it for LP. Aqualung still gets their cut though.

I would think that you, as a former shop owner, would have to admit that bumping up prices on services isn't necessarily going to be the sole solution to making a living in the business. There's only so much people are willing to pay before they just plain do without.