Eric Sedletzky
Contributor
We can sit here all day and be arm chair philosophers all we want, but who really knows?
My LDS just recently changed ownership, the GM bought the business from the old owner and totally revamped the shop and business model.
The new owner saw what the trend was and also saw that the old model wasn't working, so he made several changes. He looked through the receipts and saw that 50% of the store sales were non scuba diving related (and this is a dedicated scuba LDS), meaning that many other people were coming in like paint ballers, vacation snorkellers, kayakers, surfers, rafters, and other water sports activities. Also people after clothing that would be used for activities other than diving.
So with this information the new owner expanded the store to include all those other activities including a surf shop with a line of nice surf boards, kayaks, and an expanded watersports pro shop with all kinds of various things. His idea is to cater to everything watersports and do it better than anybody else in town.
He also changed the name appropriately so people glancing down from the freeway would see the sign saying "Water Sports" after the store name.
I haven't been in there since the opening yet, but as far as I know he's doing better than ever.
The other problem I see is how manufacturers price their goods with volume pricing discounts. An LDS will never be able to sell near the volume of goods of an internet seller, but the internet sellers get huge discounts on volume. This is good for the manufacturer in the here and now but undermines the small seller because they can't compete. I think tier pricing and minimum sales requirements are ill fated. When I was an airbrush paint color rep and tester, the owner of the campany (Vince) came out with a new line of auto color that the big internet sellers immediately wanted in volume at rediculous discounts. I was sitting right there at the SEMA show in Las Vegas when Vince told a few reps (putting it politely) to beat it. His idea was that the product in the long run would do much better placed in as many small local auto body supply stores and fine art shops and be seen by more people than having a few big behemoth internet sellers price cutting the small guy out of business. Vince refused to sell in volume discount and he told them "If you drop your margin below MSRP I won't sell to you". Not only that but the product was brand new so production wasn't up to full swing yet and there wasn't a lot of volume at that time.
The internet sellers were furious to start and initially refused to carry it, which had no affect on Vince. They finally caved in and started carrying it realizing that their bluff didn't work. Popularity had risen very fast because of local exposure to the end user. I was the guy going to all the mom and pop supply stores and doing demos introducing the product all over the west coast. If internet sellers had gotten the product first popularity would have risen slow because not all painters hang out on the internet, in fact very few do, so a cheap price would have been moot.
To apply this to diving, I could see manufacturers of scuba gear doing a lot more to support the small dive shop.
If internet pricing was the same as LDS pricing, I would just buy everything at the LDS. The only savings at that point buying from the internet would be possibly sales tax if it was purchased out of state and gas to drive to the dive shop.
At that point the price would be the price and it wouldn't matter.
Another way to look at it is the LDS price is the real price and the internet price is them giving it away.
But most people see the internet price and think it's the real price and the LDS is ripping them off.
I think it some of both.
I also think there are too many internet stores now and them giving stuff away isn't sustainable, but infortunately not after a lot of damage has been done to the LDS.
My LDS just recently changed ownership, the GM bought the business from the old owner and totally revamped the shop and business model.
The new owner saw what the trend was and also saw that the old model wasn't working, so he made several changes. He looked through the receipts and saw that 50% of the store sales were non scuba diving related (and this is a dedicated scuba LDS), meaning that many other people were coming in like paint ballers, vacation snorkellers, kayakers, surfers, rafters, and other water sports activities. Also people after clothing that would be used for activities other than diving.
So with this information the new owner expanded the store to include all those other activities including a surf shop with a line of nice surf boards, kayaks, and an expanded watersports pro shop with all kinds of various things. His idea is to cater to everything watersports and do it better than anybody else in town.
He also changed the name appropriately so people glancing down from the freeway would see the sign saying "Water Sports" after the store name.
I haven't been in there since the opening yet, but as far as I know he's doing better than ever.
The other problem I see is how manufacturers price their goods with volume pricing discounts. An LDS will never be able to sell near the volume of goods of an internet seller, but the internet sellers get huge discounts on volume. This is good for the manufacturer in the here and now but undermines the small seller because they can't compete. I think tier pricing and minimum sales requirements are ill fated. When I was an airbrush paint color rep and tester, the owner of the campany (Vince) came out with a new line of auto color that the big internet sellers immediately wanted in volume at rediculous discounts. I was sitting right there at the SEMA show in Las Vegas when Vince told a few reps (putting it politely) to beat it. His idea was that the product in the long run would do much better placed in as many small local auto body supply stores and fine art shops and be seen by more people than having a few big behemoth internet sellers price cutting the small guy out of business. Vince refused to sell in volume discount and he told them "If you drop your margin below MSRP I won't sell to you". Not only that but the product was brand new so production wasn't up to full swing yet and there wasn't a lot of volume at that time.
The internet sellers were furious to start and initially refused to carry it, which had no affect on Vince. They finally caved in and started carrying it realizing that their bluff didn't work. Popularity had risen very fast because of local exposure to the end user. I was the guy going to all the mom and pop supply stores and doing demos introducing the product all over the west coast. If internet sellers had gotten the product first popularity would have risen slow because not all painters hang out on the internet, in fact very few do, so a cheap price would have been moot.
To apply this to diving, I could see manufacturers of scuba gear doing a lot more to support the small dive shop.
If internet pricing was the same as LDS pricing, I would just buy everything at the LDS. The only savings at that point buying from the internet would be possibly sales tax if it was purchased out of state and gas to drive to the dive shop.
At that point the price would be the price and it wouldn't matter.
Another way to look at it is the LDS price is the real price and the internet price is them giving it away.
But most people see the internet price and think it's the real price and the LDS is ripping them off.
I think it some of both.
I also think there are too many internet stores now and them giving stuff away isn't sustainable, but infortunately not after a lot of damage has been done to the LDS.
