Aqualung's war with Online Consumers

[Nemrod]

I don't believe the USA scuba grey market is created by lower wholesale prices outside the authorized distribution network. Rather, it is created by USA distributors attempts to implement artificial price controls at the retail level. As I understand it, both Scubapro and Aqualung requires a dealer agreements for authorized USA retailers that stipulate minimum retail prices (MSRP - 10%) which requires quite a high markup. Such a markup and profit margin allow small inefficient shops to survive creating ready access to LDSs and the mfgrs products. In too many cases, it creates more that could survive in an open competitive environment. This creates an opportunity for a retailer whose business model depends on high volume, low margin sales to thrive if they can obtain the products without being encumbered by such restrictive dealer agreements.

In many places around the world, wholesalers are not allowed to exercise such control over retail sales. In fact, in some places the manufacturer can't even stop distributors from selling their gear to places like Leisurepro without being penalized and expelled from the market.

It's not nice to fool mother nature.

Actually it is illegal here to fix prices and stifle competition as well.

N

 

[Twistedarts]

Actually if you don't realize the manufacturers are the ones double dealing, then you are nieve.

 

[mike_s]

Actually it is illegal here to fix prices and stifle competition as well.

N

Price controls are sadly legal in the unitled states.

The US Supreme court verified this a couple years ago

Leegin vs Psks http://www.supremecourtus.gov/opinions/06pdf/06-480.pdf

Actually if you don't realize the manufacturers are the ones double dealing, then you are nieve.

True..... Very True.

 

[keesmon]

Ahhh, thank goodness.
I live 15 minutes from Leisure Pro's brick and mortar shop.
Really, it exists.
You can try gear on, talk to salesmen, and yes, bring your gear to be serviced as well.
Tell me again why I should be paying more somewhere else?

 

[Twistedarts]

Ahhh, thank goodness.
I live 15 minutes from Leisure Pro's brick and mortar shop.
Really, it exists.
You can try gear on, talk to salesmen, and yes, bring your gear to be serviced as well.
Tell me again why I should be paying more somewhere else?

Well said. in fact, they are servicing one of my regs right now.

 

[motohooligan]

It really does make sense for AL and SP to sell directly to LeisurePro. They get their full wholesale price and have none of the free parts for life costs associated with that sale. Does anyone really think that if LeisurePro tells Johnson Outdoors (Scubapro's parent company) that they want to order 500 regulators, that they will be turned down? I think not. I would venture a guess that owners of LeisurePro are on a first name basis with the CEOs of both Aqualung and Scubapro.

 

[redacted]

Actually if you don't realize the manufacturers are the ones double dealing, then you are nieve.

It really does make sense for AL and SP to sell directly to LeisurePro. They get their full wholesale price and have none of the free parts for life costs associated with that sale. Does anyone really think that if LeisurePro tells Johnson Outdoors (Scubapro's parent company) that they want to order 500 regulators, that they will be turned down? I think not. I would venture a guess that owners of LeisurePro are on a first name basis with the CEOs of both Aqualung and Scubapro.

Actually, I really doubt that top executives in either company are dealing directly with Leisurepro. I think they have way to much to lose if Mr Johnson and Brett were ever caught having lunch. But they are big distribution networks and Leisurepro has developed many sources. I also suspect that a good number of the sources are actually protected in their activities by the laws of their countries. I'll bet that there are a number of countries where Scubapro is simply not allowed for fire one of their distributors just because SP does not like who they sell to. Maybe all SP can do is delay or reduce shipments in an attempt to interrupt supplies.

I further believe that Oceanic may have been having some real success interfering with Leisurepro's supplies which is why LP has accepted a dealer agreement to become an authorized dealer thus losing it's lower than MAP pricing advantage. And then there are places like Diveinn that are authorized dealers in an overseas distribution network and simply can not be forced to accept the dictates of Scubapro USA & Aqualung USA. Now, could a distributor in Spain be having gear that is manufactured in the USA or Mexico shipped to an overseas shipping warehouse in NY and, surprise, it never gets on a boat but ends up in a Leisurepro warehouse in NJ? It really would be silly for that "Made in Mexico" BCD to cross the Atlantic twice just to end up back in NY.

 

[Couv]

Thanks to odd tax laws, you can buy gin made in England (like Tanqueray) cheaper in the U.S. than in the U.K.

I wonder if we could get LP to start selling liquor?

c

 

[mike_s]

It really does make sense for AL and SP to sell directly to LeisurePro. They get their full wholesale price and have none of the free parts for life costs associated with that sale. Does anyone really think that if LeisurePro tells Johnson Outdoors (Scubapro's parent company) that they want to order 500 regulators, that they will be turned down? I think not. I would venture a guess that owners of LeisurePro are on a first name basis with the CEOs of both Aqualung and Scubapro.

*DING* *DING* *DING* !!!!!!


We have a Winner!

 

[illFisch]

All these bcd's that you repaired,they had all been purchased from an authorized source,correct?? If purchased via unauthorized means then how is the manufacturer responsible for this?

Excuse me, but this is an absolute load of crap. If the item is manufactured by Aqualung they are responsible for the quality - regardless of where it's purchased. If Aqualung is able to identify where a product has been purchased through a different channel than the bricks and mortar LDS (and they are saying grey import - not counterfeit) they are implying it is an Aqualung product. If on the other hand Aqualung have different levels of quality for the same products for different markets in order to allow for differences in pricing/service they are being criminally negligent (I doubt very much this is the case).


Further to some other arguments on this thread:

The reasoning that a manufacturer of any product should have the ability to deny price discounting by specifying a Minimum Advertised Price is anti-competitive (illegal here in Australia - Oceanic have recently been taken to task over this by the ACCC, and I take it this is what the Sherman act is about in the US). MAP pricing is purely about artificially inflating prices. It doesn't work as people who shop online will still find prices online (like catalogue shopping). It doesn't help the LDS who simply comes up with crap about how the purchaser is going to die due to bad quality, lack of service, etc. A good LDS (who knows how to sell) will let the customer know the benefits of purchasing from them and will actually bother to build customer relationships.

Parts for life for LDS purchased gear is a great start for peace of mind (it's not great value when you compare the part costs over the life of the product) and a totally fair way for manufacturers to differentiate LDS and online sales. On the other hand parts for life only works when the local LDS does not charge customers for these parts after they have purchased the items locally (as has happened here).

Pricing in Australia is bloody ridiculous. I paid A$600.00 (including freight) for a Seaquest Pro BD i3 delivered by LP within one week from the US (given the exchange rate was excellent at the time). To purchase the same in Australia would have been A$1500.00 (2.5x the price) and most likely would have taken as long to get to me. Having been in retail sales I refused to try local and buy online and based my sizing decision on the online data available.