Dive Shop Relationships

[divezonescuba]

For those of you without a dive shop. What kind of arrangements do you enter into with the local diveshops.

Some thoughts are for every five bookings the dive shop can send an instructor/divemaster/trip organizer for free.

Or perhaps a commission on the sales. If so, how much is appropriate?

Looking for common practices.

Thanks.

 

[SkipperJohn]

My local shop has a club attached (Broadway divers). They invite speakers to each monthly meeting. Occasionally it's a local dive boat and the talk is an hour long advertisement. Everyone wins. Usually the captains giving the talk offers a discount to the club.

 

[Jon Nellis]

I give them a 10% discount for single spaces or I have a "whole boat" price that's a little better than 10% with 10 day terms on payment.

Most of my business is through shops, which makes accounting easy since I usually only have charters every other weekend or so and didn't get enough transactions to warrant the credit card fees. The problem with customers paying cash on the day of charter here in California is that the divers will wait and see what the weather is and if its bad, they'll just flake last minute without notice. The shop enforces the cancellation policy for me.

I have a four diver minimum and the instructor goes free with four or more students and doesn't count as a "passenger" towards the six, as he is the "individual representative of the charterer". I forget which CFR defines the "charterer" as the having a commercial interest in the performance of the charter, but that way I can still carry six paying passengers.




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[Dr Dive]

I give them a 10% discount for single spaces or I have a "whole boat" price that's a little better than 10% with 10 day terms on payment.

Most of my business is through shops, which makes accounting easy since I usually only have charters every other weekend or so and didn't get enough transactions to warrant the credit card fees. The problem with customers paying cash on the day of charter here in California is that the divers will wait and see what the weather is and if its bad, they'll just flake last minute without notice. The shop enforces the cancellation policy for me.

I have a four diver minimum and the instructor goes free with four or more students and doesn't count as a "passenger" towards the six, as he is the "individual representative of the charterer". I forget which CFR defines the "charterer" as the having a commercial interest in the performance of the charter, but that way I can still carry six paying passengers..

10% is fair, especially if they carry the credit charges and recruit the divers. The minimum is reasonable, but be careful with the representative role. Your instructor MUST participate in a random drug testing program, as he/she is directly responsible for the safety of the passengers, and is considered CREW. If he/she is card carrying, they can take the DM/deckhand slot and you can carry six paying passengers. If not, they are passengers just like everyone else. This is a relatively new emphasis, though the rule has been there all along.

Capt. Jim
Dr Dive
www.drdive.com

 

[Tortuga James]

I love when shops charter my boat. I give them 5/6ths pricing, so they can send an instructor or leader for free. One shop owner is actually on my drug program so he rides as additional crew, and then I don't bring a mate. I hook up and he shoots the hook at the end of their dives. When he has students, I make sure I have a mate to do those things.

 

[Rickelpickel]

I'm somewhat new to the Charter Business. In that, I mean I've been running about a year now. I read threw the comments on this thread hoping to see an answer to my question.. " What percentage is fair to kick back to the dive shop for divers they put on your boat?" "IF anny?" Currently they ask me to give them 25% of what I charge too them as a "commission" I guess. Here's an example: If they put 5 divers on my boat at $80.00 each that's $400.00. They get dive gear rental usually from each diver, this is about $40.00 per diver. So they get a total of $200.00 for the gear rental, and $100.00 as a "commission". I live and work in a popular tourist area where divers don't bring their gear for some reason. We each end up with about $300.00, mind you I don't get a "commission" for divers I send to their shop to buy or rent gear. I kinda feel that this is somewhat one-sided. I need them to book charters, and they need me, to rent gear. We both benefit from our relationship to each other, so why do they need a "commission"? Is this common practice?

 

[Tortuga James]

Price your trips where you make what you need and if the shop wants another 25%, have them mark up the charter fee. I am as lean as I am going to get charging $600 plus fuel and then giving the shop $100 discount for collecting the money and paying me in one check.

 

[Rickelpickel]

Thanks Capt. James,.. I like that idea. I Think I'll try that.

 

[Tortuga James]

Thanks Capt. James,.. I like that idea. I Think I'll try that.

I have a shop that charters me and charges $175 per person, whereas the customers could charter me without the shop for closer to $140 per person. But he sells it as a "value add" (sort of like value added resellers in the IT business) that he organizes the trip and has a instructor/DM as a trip leader. His customers have no problem paying up to dive on that shop's trip.

My point is that without sufficient profit, we are going to give up and quit running. The shops need dive operators to take people diving so they can rent gear and sell equipment. The shops need to understand that and make sure their "cut" is not cutting so deep that we bleed to death. Raise your prices (or eliminate commissions) until they stop using you and let the market establish what your trips are worth, both to the customers who buy the seats and to the shops that sell them.

But I know where you are coming from. This is my 4th season and I am finally getting to the point that I feel like I can turn away business that is not profitable or doesn't make sense. The trick is to set expectations from the outset, not manage them after the fact. I just witnessed that very thing this past weekend. A friend downgraded from a crew boat to a 6 pack. He asked me pick up the 2nd six of his group of 12. Well, he didn't set expectations and when it came time to "settle up" the bill was way more expensive per diver with 2 6 packs than it had been last year on the crew boat. The customer left upset and disappointed.

 

[Rickelpickel]

My point is that without sufficient profit, we are going to give up and quit running. The shops need dive operators to take people diving so they can rent gear and sell equipment. The shops need to understand that and make sure their "cut" is not cutting so deep that we bleed to death. Raise your prices (or eliminate commissions) until they stop using you and let the market establish what your trips are worth, both to the customers who buy the seats and to the shops that sell them.

Thanks for the advise,.. This is my LDS that I have been working with. I've been friends with the owner and his wife for a while now. For this reason it's been tough on me. I don't wanna be a push over, I just wanna be fair. They started a dive club about a week ago and I attended a meeting. While there I met two divers who wanted to go out during the week. So I set it and gave them a break for being a dive club member from the dive shop. After taking them out, a few days later, I hear from the dive shop manager that the owners were upset that I didn't give them a cut also because they were from the shop. :shocked2: I cannot discount the club members and kick back money to the shop on divers. The owners know this, and agreed with me on this when we had spoke about it. If this is not profitable for me I shouldn't be going out. I feel they've been "cutting to deep" and I've brought this up before to them and they tell me this is how all dive shops operate. I think I may need to separate myself from them for a while and let the dust settle. I am currently the only full time charter service they offer. I feel that a lot of the local captains around here are very hush hush on this mater. For this reason I've brought this topic up again.