December a Sad Month for Many Scuba Retailers

[Wayward Son]

I had planned on buying a semi-dry suit right about now, from my LDS. Reality reared it's ugly head, I can't afford to dive, much less buy gear, so that ain't happening. I'm sure she would be very pleased to make a $400 sale now. If my wife ever finds another job (she got laid off in july, nothing so far. Small town, no jobs) that'll change things, but for the time being we're in a perpetual state of broke.

So, if your business is slower than you like right now, sorry about that, but well, it could be worse.

 

[vondo]

Wal-Mart could be authorized to sell crack if they wanted to.

With the scale that they operate on, all they would have to do is call any manufacturer in the world and say "We want 100 units of each of your products for each of our 5000 stores", and they would have it.

Right, but why would Wal-mart (to pick on them) WANT to get involved in this business. Wal-mart sells low cost, high volume items. Take their AV electronics section: they don't sell much (anything) I'm interested in because I buy stuff a couple of steps above what is available there. If they carried it, they wouldn't move enough of it to make it worth their while. In any sector, the story is the same. If you want the quality gear the mass market is not interested in, Walmart doesn't have it.

Say they bought 100 regs from a few manufacturers (to use your example). How long would they sit on the shelf before they were sold? Does that fit with Wal-mart's business model? No.

 

[redacted]

What was a sore topic was how certain manufactures who have pushed LDSs to carry their products with price controlls, assured them their products would not be available to on-line retailers, then did a u-turn making their products available to on-line retailers, and are now asking why the LDS sales of their products are declining while enforcing the price controlls on the LDS.

For what it is worth, that influenced my decision on a regulator. Why would I buy from a manufacturer that betrayed an agreement with the LDS? What would keep them from decreasing service to me as a customer if their profits could increase?

Do you think that involves any legally binding agreements? I'd be interested in your JUDGEment.

 

[Kevin K]

Hello PhilEllis, Hope you had a nice Thanksgiving. I am a new diver-9 total. I don't know much but I do know that my two LDS's are locked in and it seems to be no good. I did'nt realize it fully until I read your post. I wondered why my LDS -who I like a lot- was so insistent about his 2 brands. I thought he was close minded/narrow minded. Then I found out about another dive shop in the area and he clued me in on his brands and explained how he wasn't able to sell certain brands in his store even though he would if he could. The big companies out to let them sort it out. They will still get their money and no the Internet isn't helping me any. I prefer to buy from the local guy. Plenty of people to support the internet dealers. JM2C

 

[TheRedHead]

Say they bought 100 regs from a few manufacturers (to use your example). How long would they sit on the shelf before they were sold? Does that fit with Wal-mart's business model? No.

I visited a Wal-Mart in Flordia that had an extensive selection of snorkel gear including US Divers, some of which would be perfectly suitable for scuba.

 

[Darnold9999]

Am in the market for a whole new set of gear. Want to shop at my LDS.

I get pissed when my local customers go back east or to the US for the "Name Brand" consultant that frankly knows less than I do about what I do and what my clients need. So I shop locally whenever possible - particularly when service is an issue, by service I mean it in its broadest sense.

One of the things I value is advice, and I am finding that often the advice I am getting is which thing I should choose out of a very limited range of products. It seems that each dive shop carries one maybe two brands and each shop carries different brands.

Would be nice to have a little more choice in each shop so I could go to the shop I like and get the brand I like. Rather than going to the shop to get the brand I like I either go to the shop that carries that brand I like or buy the brand that the shop I like carries.

I really want to give the shop that provides the service I want the business so I may end up buying not quite what I wanted just to create the relationship that I want.

 

[*Floater*]

The scuba industry (most major manufacturers) continues to believe that restrictions on retailers.....ranging from complete bans on price advertising and discounting to bans on the lowest retail price allowed in advertising....will keep the industry "strong" and keep their brand "valuable". What actually happens is that these artificial restrictions simply block the scuba retailer from being able to participate, in any meaningful way, in the sales boom of the season.

(...)

At my store, we made the choice to change our business model almost three years ago. It was a tough decision. We decided to take control of our own future by changing our price policies and expanding our market through the internet. We decided to fight restrictions and restrictive policies and do the basic things WE KNEW were necessary in a free market. I will let you know years from now if it works. What I do know is the old way DOES NOT WORK! In recent months, three rather large and established scuba retailers in my area have decided it's no longer worth the trouble. They didn't change their business model and they are suffering from that decision. I know that businesses come and businesses go....but please let's let it be because they gave it their best shot in changing times. God, the thought that they closed their once successful stores because of the VERY RESTRICTIVE POLICIES DESIGNED TO PROTECT THEM is almost sickening.

As an econ grad I do not see much merit in your argument. It seems to me that the scuba industry has colluded to act collectively as a sort of a hybrid monopoly. In theory this allows them to make a profit instead of just breaking even, and the stores are in theory getting a cut from it.

If all or most restrictions were removed, then the industry would become competitive which is to say that everyone would price products low enough that they would just break even.

It also appears to me that you are a beneficiary of these restrictions because by changing your business model you were able to undercut the competition which has been restricted from responding to your pricing, but if there were no restriction, then everyone would undercut each other and no one would make a profit.

I know this is overly simplistic, and maybe the industry should allow more flexibility during the holiday season, but in general well-placed restrictions are good for shops and industry at the cost of the consumer as long as the major manufacturers have enough market share to act collectively as a monopoly. In the future I presume cheaper imitations will become more readily availbale and they will erode market share of the major manufacturors to the point where the big companies can no longer control the market in any meaningful way.

 

[cowjazz]

Do you think that involves any legally binding agreements? I'd be interested in your JUDGEment.

I'm just a consumer, so I can't really comment on the legality of the price controls set by manufactures. I do know that my LDS was unable to price some manufacture's reglators less than 10% off MSRP. What would happen if he undercut the 10%? I have no idea. No more new stock after existing stock runs out? Public flogging? Forced to watch Oprah or Lifetime for 12 straight hours?

Does anyone in the business end have an answer?

 

[The Horn]

Seems really sad to me.

You have shed some light on why pricing in the scuba industry is so out of wack. I would gladly update some equipment or be tuned into some other purchases if the price on some of the stuff wasn't skewed. My LDS is a pretty good guy and he is always there with the ""best he can do". He actually offered me a strobe for $20 and it was on the shelf for $23.50. I gave hime the $23.50.

Sometimes you can just tell that there is no way this guy can move on the product and make a living. Who cares about the internet and on line shopping. Offer the ability to sell the product for a fair price and away you go.

I bought my drysuit on sale for $1000 Cdn. Same suit on line best price $1200 to $1600 American plus shipping???????????????????????????? what a rip of if I had bought on line.

My regulator from 1990 bought at the LDS for $165 including pressure and depth guages. Now similar rig (can't buy the same as you would have to upgrade) is $400 plus the added $200 for the console and then tax. Makes me think twice about getting new gear even with inflation.

If the companies are dictating prices to the effect that they rule out competition: that just sucks. Its no wonder my LDS gets a tear in his eye if I ask if he can better the price...................

 

[Bob_B]

I'm just a diver but DID own a hobby shop. ( Remote Control cars, Planes and Trucks)The manufactures, at least the biggest ones, used simular MAP pricing schedule that I see in the Scuba Business. ( for those that don't know, you can sell an item for any price you want, you just can't advertise it for less that the Manufactures Advertised Price or they will drop your account) Our problem was not with internet sells of other shops (we had 2 sites as well) but the manufactures themselves. Many of which had the same items listed on their own sites at 5 to 10% more than the shop paid for it. Mainline/hot items items were always on backorder and when you did get a shipment, it may only be 1/2 of your order for the "Hot Item" It's tought to compete with that type of model. There is nothing worse than having somone coe into the shop with a internet Shopping Cart Print out and say, "Can you match this price". So after 3 years we closed the shop and i went back to diving and never ask the shop owners to match an internet price.

It could be worse... believe me..