BC manufacturers must be Raking it in...

[Hank49]

Given that even the most bargain BC is engineered to take extreme pressures, salt water and hard use that is hardly surprising. Equipment manufacturers cannot produce in sufficient numbers to bring costs down. They are essentially hand made at every step of the process. That costs money and they pass it on. Yes, they make a few bucks on the sale, but it is a business not a charity. If you see a BC that you feel is over-priced, then you walk away and look elsewhere. It is the same with car lots, houses, big screen TV's and every other high end consumer good.

I've wondered about this bc. Maybe it was an old model? What do shops do with last years or the year before's stuff when the new models come out and the manufacturer is pushing it?

 

[Jimmer]

One pattern in the bicycle retailing has been the disappearance of the local, small bicycel specialty store, and in many cases the remaining bike shop is the bike section in a diversified sporting goods store.

Sport Chalet is regional example here in SouthWest.

Why? Because these stores can spread the overhead across lots of sports / apparel types. Often the Scuba section or Bike section or Tennis department has no dedicated staff, the store staff rotates in as needed.

In addition chain stores can have better efficiencies in their purchasing functions, and somewhat better pricing leverage.

Is this the best for the diving public? That's a different question. That it happens is a fact.

Tobin

Fortunetly I can say we haven't seen any of that around here. I've worked in the bike industry for 7 years, and the few sporting goods stores that have attempted to stock bikes only seem to drive customers to us because of their ineptitude. Also the Canadian distributors for many of the big name brands won't supply these stores anyway and will only supply dedicated bicycle retailers.

I have yet to see any of the stores such as sport chalet, selling Scuba gear in Canada, and I think I will be a little surprised if I do, seeing as our population is less than 10% of the USA, I don't see what a big box store would benefit from supplying such a tiny industry in Canada.

Jim

 

[amascuba]

I wonder how that is really working out for them.

Phil Ellis

I have no idea. While we have a Gander Mountain where I live, they are currently not offering any scuba equipment, fills, training.

One pattern in the bicycle retailing has been the disappearance of the local, small bicycel specialty store, and in many cases the remaining bike shop is the bike section in a diversified sporting goods store.

Sport Chalet is regional example here in SouthWest.

Why? Because these stores can spread the overhead across lots of sports / apparel types. Often the Scuba section or Bike section or Tennis department has no dedicated staff, the store staff rotates in as needed.

In addition chain stores can have better efficiencies in their purchasing functions, and somewhat better pricing leverage.

Is this the best for the diving public? That's a different question. That it happens is a fact.

Tobin

I've thought about this for the last couple of years and have wondered how much more effective it would be if regional stores created a retail coalition where they legally form a single retail company just so that they can get a better bulk pricing on scuba equipment from vendors.

 

[Otter]

I have no idea. While we have a Gander Mountain where I live, they are currently not offering any scuba equipment, fills, training.



I've thought about this for the last couple of years and have wondered how much more effective it would be if regional stores created a retail coalition where they legally form a single retail company just so that they can get a better bulk pricing on scuba equipment from vendors.

Its possible, only three things have to happen. Regional dive shops have to cooperate, manufacturers have cooperate/compete (logistics, billing, etc..)and the member coaltion can't fix the retail price to the consumer.

Is the presumption that a lower cost would be passed on to the consumer? If so, is this in response to online/internet sales who presumably already have comparable buying power? If so, would this not lead to their formation of an internet coalition to get even lower prices? The consumer wins, the retailers 'might' win a little bit (of extra margin), and the manufacturers get squeezed. So why again would those with the selling power agree?

Heck, if everyone is so comfortable buying a BCD from an online retailer, why doesn't SP, Zeagle, or Aqualung just go direct to the consumer and disintermediate the dive shops completely?

 

[Coalcracker]

Heck, if everyone is so comfortable buying a BCD from an online retailer, why doesn't SP, Zeagle, or Aqualung just go direct to the consumer and disintermediate the dive shops completely?

They will, just a matter of time, next few yrs. @ most.

 

[cool_hardware52]

Fortunetly I can say we haven't seen any of that around here. I've worked in the bike industry for 7 years, and the few sporting goods stores that have attempted to stock bikes only seem to drive customers to us because of their ineptitude.

Yes certainly that can happen.

Also the Canadian distributors for many of the big name brands won't supply these stores anyway and will only supply dedicated bicycle retailers.

Distribution in Canada, and here in the states is a little different. There simply are far fewer distributors in Canada, given the market size.

I have yet to see any of the stores such as sport chalet, selling Scuba gear in Canada, and I think I will be a little surprised if I do, seeing as our population is less than 10% of the USA, I don't see what a big box store would benefit from supplying such a tiny industry in Canada.

Jim

Total market size does impact distribution models.


Tobin

 

[cool_hardware52]

They will, just a matter of time, next few yrs. @ most.

I agree. You will see a number of approaches, including new "sub brands" that will be for direct online sales only. This is how established brands, with traditional distribution via "protected, exclusive territory" brick and mortar retailers often attempt to service both online and "old school" channels.

Tobin

 

[PhilEllis]

Heck, if everyone is so comfortable buying a BCD from an online retailer, why doesn't SP, Zeagle, or Aqualung just go direct to the consumer and disintermediate the dive shops completely?

Actually, I will disagree with others and say that this will never happen with the first tier suppliers. There are a number of reasons for this.....

1. They don't possess the requisite knowledge about internet marketing to create the necessary coverage to sustain or improve sales over their current distribution methods. AquaLung and ScubaPro only have a few thousand unique visitors to their websites each month. Zeagle has even less. None of them demonstrate anything near the internet talent to operate a retail site.

2. Oceanic has ONE regulator technician in thier entire California facility. AquaLung and ScubaPro may each have two or three. They can't service the products without the dealer base.

3. They will NEVER expose themselves to the rapid economic changes that occur in the consumer business. Remember, they are wholesalers. They are accustomed to the gigantic infusion of cash that results from "push" sales to their dealers EXACTLY at the times of year when retail sales at those same dealers is going down.

4. Most important, the large manufacturers have little or no knowledge about retail sales. Making the adjustment to fielding questions from interested buyers and doing the other customer service work necessary to service the retail market would be much too large a jump.

5. They would have exactly the same problem as the local scuba store....they would like brand variety. This, more than anything else, would make them largely unsuccessful in direct market sales, especially when you compare it to their existing distribution method.

6. They would be surrendering their biggest asset....their dealer base....and would put themselves on an equal footing with much smaller, integrated manufacturer-retailers. Having spend millions of dollars to distance themselves from the smaller brands, I can't imagine a distribution system that surrenders that very distance.

Anyway, just my opinion.

Phil Ellis

 

[cool_hardware52]

Actually, I will disagree with others and say that this will never happen with the first tier suppliers. There are a number of reasons for this.....

1. They don't possess the requisite knowledge about internet marketing to create the necessary coverage to sustain or improve sales over their current distribution methods. AquaLung and ScubaPro only have a few thousand unique visitors to their websites each month. Zeagle has even less. None of them demonstrate anything near the internet talent to operate a retail site.

Phil, if you can do it, and I can do it, it's a long way from impossible.

2. Oceanic has ONE regulator technician in thier entire California facility. AquaLung and ScubaPro may each have two or three. They can't service the products without the dealer base.

I see third party reg service centers. It's already happened in LA. Lots of dive shops send their regs out to a service now. No real reason the manufacturers can't contract with this type operation to service there regs. Nothing dictates that regs either be serviced by an employee of the manufacturer or an employee of an authorized dealer.

3. They will NEVER expose themselves to the rapid economic changes that occur in the consumer business. Remember, they are wholesalers. They are accustomed to the gigantic infusion of cash that results from "push" sales to their dealers EXACTLY at the times of year when retail sales at those same dealers is going down.

What will they do when this source of cash had dwindled.

4. Most important, the large manufacturers have little or no knowledge about retail sales. Making the adjustment to fielding questions from interested buyers and doing the other customer service work necessary to service the retail market would be much too large a jump.

It's not easy, wholesale and retail are two different animals, but I do it every day, along with 10,000 other things. Nothing keeps the big boys from hiring few unemployed EX LDS owners to help them understand retail.

5. They would have exactly the same problem as the local scuba store....they would like brand variety. This, more than anything else, would make them largely unsuccessful in direct market sales, especially when you compare it to their existing distribution method.

Consolidation can work wonders for increasing brand variety.

6. They would be surrendering their biggest asset....their dealer base....and would put themselves on an equal footing with much smaller, integrated manufacturer-retailers. Having spend millions of dollars to distance themselves from the smaller brands, I can't imagine a distribution system that surrenders that very distance.

The dealer base is shrinking, how do you surrender an army that's faded away?

Phil, You may be right, and only time will tell. Some will make it, some will fail, some will adapt.

Tobin

 

[PhilEllis]

You are right, some will adapt. The big players in scuba for the future will likely not be the big players we know today. I don't see the top tier adapting. If they could adapt, they would already be making the move in that direction. They have demonstrated everything but the ability to adapt.

The new, big names in scuba may well be the same as some of the current big internet retailers today. I can easily see a Scuba.com brand, a ScubaToys brand, and others taking a big position in the market. That is very possible.

Tobin, you said that if you and I can do this, then they can. While I will admit that you and I may not be the sharpest blades in the box, to leave the impression that the managers and directors of the several largest scuba companies equal us in knowledge of the scuba industry, and what scuba consumers really want.....well, that would be an insult to you and me.

Phil Ellis