Future of DiveShops?

[Jim Lapenta]

I run an online business, teach locally, sell some gear locally. I also have a day job that pays the bills of daily living. This frees me to teach the classes I want to teach in the way I want to teach them. Right now I am sitting in the showroom of a local shop waiting for a private ow student. Some would view this shop as my competition. I don't. I come down and open up for him once a week and on other occasions when the owner is tied up at his main job. In exchange I get unlimited use of the pool, air fills, and access to all his rental gear. I don't want to carry a huge inventory of masks, fins, snorkels, etc. So in addition to opening the shop, cleaning the pool, and other day to day tasks I send my students to him for their gear. Unless they specifically want the brands I carry. Then I sell to them and give the owner of the shop a cut. There are several other independent instructors that have a similar arrangement except for the gear sales. They don't sell gear. What this does is bring customers that the shop would not normally get in the door. Thinking an independent takes students away from a shop is naive. Many of those students would never come to a shop if it was not for the instructor going out and finding them. I don't get any students yet through the shop and he doesn't take mine. But we now have the means to offer classes from ow through technical wreck (me) and cave (the owner) and I can teach up through assistant instructor with sei. This shop has instructors now from 5 different agencies foe a student to choose from. All the other locals are one or maybe two because they see independents as competition instead of being able to increase their business. This shop sees how shortsighted that is and cooperates with me. As a result they may not get my students but they will get sales to them.

 

[Eric Sedletzky]

Most people don't realize it, but the purchaser who buys anything on the internet still owes a "use tax" on their internet purchases, which is equal to the sales tax they would have paid if they purchased the item in their state. For instance in California:

You must pay California use tax when you purchase out-of-state items by telephone, Internet, mail, or in person and both of the following apply:

• The seller does not collect California sales or use tax.
• You use, give away, store, or consume the item in this state.

https://www.ftb.ca.gov/individuals/usetax.shtml

Now, of course everyone will say "yeah, but I never pay that" which is fine. Just know that if that's you, when you buy gear online you're not only saving money, but committing a crime!

YIKES!

Yes I am aware of that law...after you reminded me about it.
The only way they could enforce that would be to require sellers to report out of state sales to the state where the goods were sold. But then they would have to go after the individual who bought the goods.
I don't think they have the resources to be able to enforce that law so it's kind of a loophole and a bonus for now.

 

[KeithG]

Yes I am aware of that law...after you reminded me about it.
The only way they could enforce that would be to require sellers to report out of state sales to the state where the goods were sold. But then they would have to go after the individual who bought the goods.
I don't think they have the resources to be able to enforce that law so it's kind of a loophole and a bonus for now.

I believe the tax collection burden is legally on the seller, not the buyer. So as a buyer, relax & ignore it...

this was a huge issue about 7 years ago, with amazon actually moving warehouses to different states so that they as SELLERS could escape the tax burden that certain states where putting in place. If the seller does not collect the tax, as the buyer, not your problem.

The tax guys are making lots of noise trying to frighten buyers into fessin up and donating money, but they have no legal recourse to force the buyer. I hate US ebay sellers who use the ebay global shipping crap as they proactively skim a tax (even if it is not legal) as part of the shipment into Canada. Please stop using the Ebay Global shipment crap.

This is kind of like alcohol tax laws in Canada. Each province declares that all out of province booze purchases MUST pay duty / taxes. Regardless of the origin of the booze. But Canada has no legal collection mechanism for inter-provincial purchases. NONE! There is legal out of country tax collection mechanisms enforced by the customs peeps at the border (US booze costs more). So transferring alcohol across provincial boundaries breaks a tax collection law. Is cross province transport of booze illegal? NO. Is it illegal to not pay tax? YES. Is there a mechanism to collect the tax? NO! Right hand, please meet left hand.

This is a great example of the government not having a clue.

 

[RJP]

So, if you have your scuba tank filled with EAN in FL for $15 and bring a third of it back to NJ, how much tax do you pay NJ?

None, assuming I paid tax on it in Florida.

---------- Post added November 14th, 2014 at 10:50 AM ----------

I believe the tax collection burden is legally on the seller, not the buyer. So as a buyer, relax & ignore it...

That may be the case in Canada. I have no idea.

In the US, you'd be correct for SALES tax. In the case of USE tax (which is what's at issue here) the burden is on the BUYER to pay the tax.

Does the state have the time, resources, or inclination to go after everyone who buys a reg online? No. Does that absolve the buyer of their legal obligation to PAY it? Nope.

 

[MrCultureJammer]

I've only bought gear online: reg/bc/mask/computer...everything. I get it serviced by sending it back or dropping it off in person at the manufacturer HQ (in SoCal it's easy here b/c everyone has a SCUBA HQ here somewhere.)

I've not bought a thing at a LDS, except air, in 8-10 years of diving. For instruction/classes I just wait till I find a small group of people who are hiring a private/group instructor not affiliated with a shop, and join in the group.

LDS prices are way off the mark and usually the service is condescending. Same thing when I lived in South FL and the shops there.

If my dive club got together and bought a compressor, or I knew someone with one, I would have no need to go in and spend the measly $5 a tank on air fills at all.

 

[SeaCobra]

The true cost of an air fill is more than $5.

 

[markmud]

The true cost of an air fill is more than $5.

Hey SeaCobra,

I think you are correct; air fills have to be a loss-leader. I work in big-retail and don't see how an LDS can make much gross profit at $5 per fill and no way are they clearing net profit.

As for my buying habits:
I purchase stuff online all the time; however, I don't buy SCUBA equipment online.

My LDS is Dolphin in Sacramento CA. They are a professionally run organization.

I gladly pay their prices as I want Michael and Rick to succeed. They maintain my equipment and bend over backwards to be helpful.

Dolphin has evolved as the sales paradigm in the diving industry has shifted. They have an internet presence that is competitive with the big online SCUBA equipment sales sites, and they match prices on many items.

I cherish their service and the convenience that they provide me. Their instructors are top notch.

markm

 

[drrich2]

My LDS is Dolphin in Sacramento CA. They are a professionally run organization.

Another example that one man's LDS is another man's online vendor. I, too, have bought at Dolphin...via online purchase from southwestern KY.

Richard.

 

[MrCultureJammer]

While you fill, repair etc... you have a captive audience to make your sale and a friend. If you think about it, that is a distinct advantage that the LDS has over online retail.

What about those of us who aren't interested in the "friendship" if it costs us more $?

---------- Post added November 14th, 2014 at 10:50 PM ----------

The true cost of an air fill is more than $5.

Not to me it's not.

 

[widget]

Interesting so far, but...

What "we" can not see is that "we" are decreasing in numbers and total spending.

The LDS began with "the basement model" in the 1960's.

Of course, back then, divers drove pick-up trucks. Not the $90k ones, the ones with ladders and tools in the back. The SUV crowd now has other diversions: video games, medical insurance, children, food, iPads, 70" TV's, motorcycles, implants for the GF, all that other competition for the discretionary dollar.

We will be going underground, returning to our roots. (underground basements and root cellars)

Yup, ...and there in a nutshell is the entire problem.

Diving courses and scuba equipment purchases are for most a decidedly planned purchase, few folk drive down the road, see a shop, stop in sign on a course and buy a set of gear. They plan, discuss it with friends, consider the options, prepare a budget, save and only then make the decision, by then mostly, they know exactly what they want, an average price and they buy where they feel they get the best value, and thats often on-line.

Sadly from my experience the industry is not getting sufficient feet through the basic course, the retention is atrocious and apart from a small hardcore diving public, most folk only dive on vacation and, to make matters worse, often just rent equipment. To keep a full time, local, operating business afloat under these conditions is very difficult, air, servicing, spares etc is just not enough, if you do not have sufficient new students coming in at the bottom and you are not selling them gear on a regular basis you are going to find it very hard to compete and survive the on line market.

---------- Post added November 15th, 2014 at 04:17 PM ----------

What about those of us who aren't interested in the "friendship" if it costs us more $?
---------- Post added November 14th, 2014 at 10:50 PM ----------

Indeed, its an old theory and not relevant anymore, discretionary spend today is just far too tight.

People who pop in to fill their tank are there to do exactly that, fill their tank, few will buy something meaningful while they wait, as, mostly, they haven't planned for it. They may buy a mask strap or a few spare o-ring's but the profit on that's hardly going to pay the bill on your morning coffee ....!