Aqualung's stance on e commerce

[redacted]

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.

Perhaps the scuba industry should go ahead and implement price fixing on training and services. Then we'll have all this silly free market price competition out of the way so all the shops can live happily ever after.

Acutually, you'll know when you have raised your prices too much because your competition will be underselling you and stealing your customers.

Attempting to make Leisurepro and internet sales go away doesn't look like much a solution either, so why would anyone want to "stay the course"?

 

[friscuba]

Perhaps the scuba industry should go ahead and implement price fixing on training and services. Then we'll have all this silly free market price competition out of the way so all the shops can live happily ever after.

Acutually, you'll know when you have raised your prices too much because your competition will be underselling you and stealing your customers.

Attempting to make Leisurepro and internet sales go away doesn't look like much a solution either, so why would anyone want to "stay the course"?

It is a huge assumption that there actually is competition at all in many parts of the country. I lived in a town, prior to moving to Hawaii, of near 50K with 3 shops that became zero over the course of the last decade/decade and a half. If you drew a 70-80 mile radius around that town you'd probably have close to a half million people, where there used to be 9 or 10 shops, there are now maybe 3 shops (none are going gangbusters as far as I know) servicing that entire area, and depending on where you live, you'd have to drive nearly the entire 140 mile diameter to get to another shop if you were unhappy with your local shop.

Access to scuba services is pathetic compared to what it was a decade ago. If any of those remaining can't survive, it'll only get worse.

Some people live in areas with several shops and just assume there will always be competition and availability of services. A large portion of the country does not have that luxury... and the demise of a local shop can quite possibly very much restrict the diving in that area.

later,

 

[JungleJoe]

Al supplies LP.......... their statement is just a bunch of BS..........

grey market.. whooopeeeeee.... Netenforcer.... they ONLY go after the little guys on Ebay etc... not ones like LP

I know this to be fact......


but there are ways around netenforcer, just dont' claim to be a dealer and dont offer a warranty from the manufacturer, then you can sell all the darn regs/stuf you want under map pricing........

alot and I mean ALOT of companies use dual entities, one is the legit dive shop, that has the authorized lines, and they sell to their sub company to let the sell on the internet. take Dive US, otherwise known as Aquatech.

the list goes on..

Discount Divers aka Dive Las Vegas, aka Online Scuba Sales....

cough cough........


screw AL and the rest, I buy on price. I have a darn compressor and i've certed to a level that I don't need to go any further

 

[ams511]

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.

Mike,

Thank you for your lengthy and very informative post. However, when I read your words they seem to describe a broken system which does disservice to every one involved. I think they only reason the system survives is that running a scuba shop gives the owner satisfaction beyond the money she makes at it. This is where the manufacturers have an advantage and why they hate a Leisure Pro.

If you have a few online mega diveshops like LP which are run to generate a return, then the manufacturer's lose their advantage. The same as manufacturers lost their advantage when dealing with large chain stores. If they do not play ball with the chain then they lose their shelf space and ultimately sales. I am sure Aqualung would love to have a small store in every city to dictate policy too and have the owner sell their products at his time and expense. Before the internet people may not have heard of LP, but now a simple search for anything diving pulls up their name. The big guys cannot ignore it, and the little shops need a way to remain competitive. Either they give in and allow internet sales and pricing flexibility or they get tough on LP, but keeping the status quo is not sustainable and will hurt the small shops.

For all your hard work in building goodwill and finally selling the gear what is your reward when the customer is angry that you charged him double over what LP did?

 

[MikeFerrara]

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.

Well, why do you think I don't teach anymore? There's no money in it.

We don't know what people are willing to spend on an entry level class. No ones ever tested it. LOL I know that my former students had money. They would pay several thousand on a single dive trip but only a cople hundred on a long resource intensive training course to learn how to dive? They were doctors lawyers, ovners of construction firms, accounting firms and other professionals of all sorts.

Gas fills can be the same way in some locations. If you looked at the numbers around here, you couldn't make a business case for investing in a fill station at all. Here's how that works. In order to even get a dealership with most manufacturers you are required to be a full service dive shop. That means that you MUST provide air fills and you MUST offer classes. I never sold enough air to even come close to paying for the initial cost of the compressor. The compressor was convenient for teaching but both were a loss. If you aren't near a dive site and all the dive sites have a fill station, who needs to go out of their way to buy gas? Besides, at the price I was charging for a fill, I prefered people did buy their gas somplace else and put the hours on somene elses compressor. I couldn't afford to pump any more gas then I had to. There has to be a profit someplace.

Right now, it's equipment sales that are subsidizing the other services, at least in some places. In a local market where you need to make someone a diver before you can sell him equipment they are tied together. If I can tap into a non-local retail market why would I teach? I would sit at the computer where I could make real money.

Does LP teach or pump gas? Why or why not?

 

[MikeFerrara]

For all your hard work in building goodwill and finally selling the gear what is your reward when the customer is angry that you charged him double over what LP did?

The dive industry reminds me of Amway. Many people in the business do it just because they like it. All the instructors who don't make enough to put gas in their car...teaching on the weekend makes a nice hobby for a lawyer who likes to teach for fun. All the DM's who don't get paid anything. You bring someone up through the ranks, sell them some equipment and get them to work for free until they burn out. Then you replace then with some of your recent rescue course grads.

The year I opened my shop, my former course director (who owned a shop) had 16K of taxable income. He was able to do that because his wife was a nurse and supported the family.

The shop where I took most of my early training was also a video business.

The shop that was in town before I opened mine was also a camera store. He closed up to sell camera equipment on ebay full time.

Lots of shops are part time or owned by someone who has a day job. I never made any taxable income on my shop. My wife ran the store during the day and I worked as an engineer. After I got off work I went to the shop and taught classes all night and on the weekend. When I got tired of working 7 days a week til all hours of the night, with no profit in sight, I locked the doors. Really! I didn't even have a going out of business sale. I was talking to the landlord one day and he indicated that he would be willing to let me out of my contract. I locked the door and rented a truck. LOL that place was empty faster than you could say "PADI master scuba diver". I was one worn out puppy.

If you take out all the people who are doing it for free just because they like to, you wouldn't have very many left. Under water Amway.

It's only getting worse for the dive shop. They just don't have anything to offer. Resorts offer classes so the universal referal is all the rage but classroom is going online too. That leaves the shop with a small market for pool work...which is the SINGLE most costly and least profitable aspect of the business (We paid a fortune to get in pools.) And...the big retailers are just getting bigger, sell at great prices and some offer great service.

The industry creates vacation divers. A vacation diver who doesn't live near good diving doesn't EVER need to go near any local dive shop for anything.

The local diver who can do his own service, again, doesn't EVER need to go into a local dive shop. Except for buying gas fills when I'm in Florida I haven't spent a dime in a dive shop in years. The local recreational sites fill tanks on site. Once you get on in this a little and start diving gas that shops usually don't sell anyway and diving holes in the ground in Missouri where there aren't any dive shops, you either have a compressor or you know someone with one.

There just isn't any reason for a dive shop to exist in the middle of the corn belt. LOL

 

[JungleJoe]

I have over 3k dives, never been in the ocean......... sigh...



someday............


but you make the same points my local shop and friend did when he closed up.

there is NO MONEY in it....

it died 5+ years ago. started even longer .... .last 5 yrs they are losing dive shops like flies.

 

[fallcreek196]

This may or may not have been addressed and if so I apologize, I'm late to this thread and have not read it completely. My question is of curiosity only....if one were to purchase a product via the internet, do they have to show some proof of being a certified diver? And if not, would that web site then be liable for damages if that same untrained person went out and injured or worse, killed themselves? Is that what some of the LDS are woried about?

 

[matts1w]

This may or may not have been addressed and if so I apologize, I'm late to this thread and have not read it completely. My question is of curiosity only....if one were to purchase a product via the internet, do they have to show some proof of being a certified diver? And if not, would that web site then be liable for damages if that same untrained person went out and injured or worse, killed themselves? Is that what some of the LDS are woried about?

One does not need to be a certified diver to purchase scuba equipment. In fact, one does not need to be a certified diver to dive. Most places simply refuse to do air fills for divers w/o a c-card...unless they claim to be paint-ballers

 

[fallcreek196]

Didn't know that, thanks, Matt.