Aqualung's stance on e commerce

[mikerault]

So the LDS buys from online with a low markup for convienience. They don't have to buy and stock expensive items, they get a markup to pay for their effort and the online retailer gets a share. Everyone wins. If I opened a LDS about the only stuff I would stock would be trinkets and maybe custom wet/dry suits everythihng else I would have one for them to try on, but I would order it online for them to have the next day or so.

Need to change the entire market place, take advantage of the cheap prices but provide local service and such.

Mike

 

[The Chairman]

I have been approached by three e-tailers to do just that! They want me to do that here on ScubaBoard, but that would make me not neutral.

 

[mikerault]

The suppliers are obviously making money from the "grey" sales (it can't all be stolen merchandise) so why not do something radical...sell to the LDS at the same price as they sell to the grey market...then let the LDS price it as they need to for local competition. That is a level playing field. If the price difference was only $10-20 bucks to allow for B&M expenses, I would buy my gear from LDS locally, but when it is $100-200 bucks I can't justify it.

Mike

 

[PhilEllis]

The suppliers are obviously making money from the "grey" sales (it can't all be stolen merchandise) so why not do something radical...sell to the LDS at the same price as they sell to the grey market...then let the LDS price it as they need to for local competition. That is a level playing field. If the price difference was only $10-20 bucks to allow for B&M expenses, I would buy my gear from LDS locally, but when it is $100-200 bucks I can't justify it.

Mike

It is already sold to the local dive store for the same price it is sold to the grey market (or anyone else). It is the difference in the business models and the business volume that makes it difficult for the local store to compete on price.

Phil Ellis

 

[Hoosier]

Bad precedent. Manufacturers have quite a bit of latitude in their private forums and we do that for a reason. They also get e-mails everytime someone posts in there so they CAN respond. AL has already suffered some bad press on here and I don't want to exacerbate that one whit. I even e-mailed and called their corporate office (no response) when those negative threads came up. They need to be here to CLARIFY things (such as this statement) and to give us their side. We clearly want them here as well. It's a win/win situation for everyone involved.

It sounds like they are scared and afraid of being on the net to me. Nobody knows that their own forum will go positive or negative side. If they don't agree with some arguments, they can make a point instead of threatening a law suit..

There is no customer on their policy and statement, only supplier. The money is from the customer's pockets if they aren't doing the business on the customer's head..

Let's see how their market share will be in a couple of year.

 

[MikeFerrara]

So the LDS buys from online with a low markup for convienience. They don't have to buy and stock expensive items, they get a markup to pay for their effort and the online retailer gets a share. Everyone wins. If I opened a LDS about the only stuff I would stock would be trinkets and maybe custom wet/dry suits everythihng else I would have one for them to try on, but I would order it online for them to have the next day or so.

Need to change the entire market place, take advantage of the cheap prices but provide local service and such.

Mike

The problem is that if you aren't an authorized dealer you won't be able to sevice that gear. With at least some of the insurance companies there might be product liability concerns also. Service isn't an issue with all products but it is for some. Also, if the seller doesn't adequately support it, you don't have many options because the manufacturer isn't going to help you.

Funny story though. For a while we were selling mostly Cressi masks, snorkels and fins. We didn't sell much else that they made because we didn't sell much else and the other stuff they made was junk...especially their regs. LOL

Anyway, a lady wanted a cressi mask but we didn't have the color that she wanted. My wife went to order it but cressi told her that we were behind on our orders for the year and they wouldn't ship us anything unless we spent $1000. My wife checked LP and they had it for just a couple of dollars more than what it cost us from Cressi. We called cressi and told them what we were going to do and they told us we were going to the enemy. We carefully explained that it was Cressi who was the enemy. We told the lady where we were getting the mask and told her that she could order it herself just as easy and it would be cheaper. She still prefered that we order it so we did what you're suggesting. We baught it from LP and marked it up a few bucks and sold it.

 

[The Chairman]

This just in from an Aqualung dealer, who wishes to remain anonymous. Can YOU spot the difference between this and the one sent to the industry? Do you think it's significant?

RE: Aqua Lung’s Retail Philosophy

January 2, 2007

Dear Valued Aqua Lung Retailers,

Recently a major industry stakeholder endorsed on-line gear sales and encouraged dive retailers to set up shopping carts to ‘embrace the future.’ This may have some of you asking if Aqua Lung America’s position on e-commerce has changed. The answer is No.

The Internet is a tool to be recognized and the dive industry needs to embrace its technology. We need to continue to look for the opportunities and benefits that it offers. In fact, Aqua Lung has been at the forefront of bringing technology to its retailers. We were the first manufacturer to enable you to order products via a secure B2B portal. We were the first with product serialization tracking, a technical information library, product F&B aids and marketing collateral that you can download online 24/7. We certainly believe in the value of technology.

We also need to know and recognize the Internet’s challenges. We were the first diving equipment manufacturer to employ Net Enforcers to assist in reducing “third party” or “grey market” shipments from unauthorized sources.

In terms of e-initiatives such as marketing our business and communicating with customers, the applications are endless. We can all do a better job of promoting diving and the dive industry on the Internet.

Our disagreement lies in how the Internet is used to sell product.

We believe the best opportunity for growth is directing consumers to their local professional dive retailer. That is where diving’s customers are created. It is where we truly have the opportunity to create committed divers, as opposed to teaching people to dive. A committed diver is someone who becomes a competent diver, bonds to diving’s “social scene,” buys equipment, takes additional training and goes diving. No one can argue that there is no better advertisement for diving than enthusiastic and committed divers. Industry stakeholders need to focus and work together to ensure a healthy environment where retailers can prosper.

Let’s not kid ourselves. When companies talk about or endorse e-commerce in the scuba industry it means selling scuba gear on-line, which has not and will not create a level playing field for retailers as some have suggested. You will not compete with Leisure Pro. In fact widespread endorsement of on-line sales may drive more sales to the established Internet players. The single most important objective for our industry should be to get more people into professional dive stores. Offering or promoting on-line equipment sales will not do that.

For this, and all of our previously stated reasons, Aqua Lung will continue to stand by and support its “in-store only” retail sales and service policies.

Dan Badgley
Pro Dive Division Manager
Aqua Lung America, Inc.

 

[MikeFerrara]

It is already sold to the local dive store for the same price it is sold to the grey market (or anyone else). It is the difference in the business models and the business volume that makes it difficult for the local store to compete on price.

Phil Ellis

When we had a shop my wife actually found some products for sale online for LESS that what we paid for them from the manufacturer.

The mask we baught from LP for the customer that I mentioned in my last post was being sold by LP for just $2 or $3 more than what Cressi sold it to us for. I don't know how a shop that is limited to a local walk in market could ever sell enough volume to make it on those kinds of markups.

 

[mike_s]

Interesting that Aqualung makes a statement in the release sent to their dealers that "You will not compete with Leisure Pro".

I personally think that Liesure Pro is their perfect customer. Using them, Aqualung gets to move what, $1 million plus a year in product, and have no warranty responsibilites.

Seems like a sweet deal for Aqualung.

 

[redacted]

It is already sold to the local dive store for the same price it is sold to the grey market (or anyone else). It is the difference in the business models and the business volume that makes it difficult for the local store to compete on price.

Phil Ellis

It is offered at the same price but most LDSs can't afford to buy in the quantities required to get the largest wholesale volume discounts. But the larger LDSs and those that buy for LP are most likely getting that maximum volume discount. So the small shops are probably paying about 25% more for their merchandise than LP is paying.