Ron Brandt:
For me it's not practical to have a large amount of stock and most gear is custom ordered...that way, I can offer up internet type pricing.
Ron
It was much the same for us. We kept enough stock to try to make the place look like a dive shop but a lot of what we sold had to be ordered because it wasn't on the shelf. A lot of that crap is still sitting in my garage too.
The difference was that when I offered anything close to internet pricing I got caught. LOL, I got caught like the very first time I did it too...what are the odds?
I gave a guy a good price. Rather than buy the stuff and shut his mouth, he contacted another dealer and said..."Mike will give me this, what will you do?". The other dealer promptly contacted the manufacturer who wasted no time getting on the phone with me to read me the riot act.
Our primary equipment market was students. The bulk of the equipment sold was masks, fins, snorkels and boots. I'd guess one or two out of every fifteen or twenty students baught a complete equipment package. Maybe about the same number would take more classes. Con-ed courses being a little more profitable since you don't need to rent pools and package in equipment.
The economics were simple. I had to round up enough students and teach enough classes to sell enough mask, snorkel and fin packages to cover the costs of teaching the class (course fees didn't do that) and pay the other bills.
One of these days I'd like to pull out all the old books and crunch some numbers and actually publish them but here's the way it shook out. When I first opened the shop, I hadn't been teaching that long and taught the way I had been taught to teach. I was cranking them out! There were days when I had OW classes, AOW and specialties all going at the same time. I had dive masters on both sides of the quarry (the deep and the shallow) getting students ready and I ran back and forth. I'd get one group in and out, debrief and jog to the other side of the quarry with my tank still on and get the next group in. During this time, I thought some of the numbers looked pretty good though keep in mind the money was still coming from equipment sales. We were doing everything to keep a full class roster...advertising 2 for 1 specials and whatever else I could think of.
It wasn't long before I started to see the problem with teaching like that...though I was a bit slow considering the taste I had gotten before we opened a shop. To make a point here, my wife was one of my most active teaching assistants I had and she was so scared when we had students in the water that she would do just about anything to get assigned to some kind of shore duty. So, we set out to teach classes that resulted in students with good enough skills that I could get my heart out of my throat and my DM in the water. I think we did pretty good of that judging by the skills of the students. The problem was that I couldn't get as many through so equipment sales went through the floor. Additionally, regardless of the effectiveness of the class, a few extra hours and a few extra dollars wasn't really what prospective students wanted. If every shop offers the same card one class isn't any more highly valued than another...especially if it takes longer and is more work. The next shop would quote shorter times and lower prices and that would be that. We were really proud of the way our students were diving but there weren't many of them. No students = no equipment sales to speak of.
All this time the internet just got bigger and bigger. More and more students came in with their mask snorkel and fins already in hand. Without selling just about everybody mask, snorkel and fins I had to sell stock to pay the pool rental because course fees didn't do it. I had lots of discussions with manufacturers and insurance companies trying to come up with a way to do business differently but they wouldn't have it. We explored lots of ideas like servicing gear whether the manufacturers would approve it or not, selling gear without being authorized and so on. All those things are done but there are risks and you need to have deep enough pockets and an adequate corporate viel so we decided against all that stuff. We even spent money having an online store built but we didn't have many equipment lines at the time that we could sell online. the ones we could sell on line, we still couldn't discount. I still have the CD someplace though he he he.
At this point we had a choice. Go back to playing the game as it had been dictated to us or get out. I got on line, sold some stuff breaking ALL the rules in doing so and locked the doors before they marched in and canceled all our dealerships.
