Future of DiveShops?

[redacted]

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

I doubt it if for no other reason than there is no motivation for shops to deal with gas fills as a loss leader since it is the one area where there is little competition.

Would you care to lay out the numbers?

---------- Post added November 15th, 2014 at 08:27 AM ----------

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 ....!

Spare o-rings are under $.05 each. How much do they cost from an LDS?

 

[jimqh2o]

Tell me MrCultureJammer what would the ideal LDS look like to you? What would they have to do to earn your business if relationships don't carry a lot of weight? I'm honestly asking as a LDS owner in SW Tennessee.

 

[dmoore19]

I wouldn't be so quick to dismiss the LDS. There are quite a few independents who post here on Scubaboard that would prefer to see the LDS tank and go out of business. The LDS I use has the shop and all the things that go with it. They also offer online shopping. Their prices are competitive.

As is so often the case for all things scuba, conditions are not the same in CO as they are in CA or FL or NJ or NY or WA or MI. Like it or not there are people who dive in land locked states who also play a role in the industry. The LDS serves a purpose in these areas.

 

[underwaterservice]

I was wondering what is the future of dive-shops? Please correct me if I am wrong but it appears that internet sales have gone up and LDS sales have shrunk pretty rapidly for the last few years. I have no data to substantiate this but every time I am on the boat and I ask people where did they buy a particular piece of gear and more often than not, people mention an online retailer (DRIS, Leisurepro etc) than a brick and mortar store.

I also see a trend in the rise of instructors teaching from their basements. May be it is a local thing but there are some very good instructors who chose to move away from "shops" so that they could teach on their own. I really do not know if this is a good thing business wise because my understanding is that instruction itself never earned anything in the dive industry. Its purpose was to only create consumers for diving gear. If someone leaves a shop to take over the least profitable part of the industry then there is nothing in it for their own selves other than a sense of accomplishment.

It is also my understanding that diveshops have started to become "repair shops." If you want your regulator serviced than most people are still going to LDS rather than mailing it somewhere. Mail system only works one way when you are ordering stuff. If you have to drive to the post office to mail a regulator for annual service then it might be convenient to just drive to the LDS.

Is it air-fills that is keeping dive-shops alive? Compressors can be had for around 3000 USD and very casually organized dive clubs are capable of having these. In fact if 10 people put money together to buy a small portable compressor than it should serve their purpose better than getting airfills from a shop. With the exception of nitrox and specialized gasses, air-fills seems to a very weak leg for dive businesses to stand on.

Where are we headed? Can anyone please shed some light into this? It seems like different functions that were performed by the "shop" have all become industries by themselves and are moving away from each other. Profit wise, internet retailers are growing to take the bulk of profits, followed by tech oriented shops that provide specialized gasses such as nitrox and helium etc. Third in the line are repair shops that call themselves "dive shops" but survive mostly on servicing gear. Bottom of the food chain is what you call "the instructor" who is going independent.

What is happening folks? Can any of the professionals help me understand where dive-industry is headed and what is the future of LDS?

I think the future of the LDS is important to the growth of the sport.We have become a nation of "phonies" with the ability to look at anything anytime on our phones or computers.This will not replace the personal service that a true honest and caring dive store owner can give-Even training has went on-line and is NO Match for an education that gives you hands-on experience with challenges and skills to complete for confidence building.Without the Local Dive Shops people will be left in the cold and only going by what people tell you (internet based...) will never replace the personal knowledge and skills of a Scuba buisness. In order to continue,LDS's will have to become the "everything" about diving.I go to a local Midwest store (Tom Leaird's Underwater Service in Indiana) for instruction,gear,air,travel questions,updates and dive club functions and am always blown away by the knowledge and helpfulness of the staff because they LOVE SCUBA and think everybody should experience it-not because they see a dollar sign when you walk in.I hope the LDS's never go away as the information can be found anywhere but the transfer of knowledge is priceless!!!!!

 

[Jim Lapenta]

Tell me MrCultureJammer what would the ideal LDS look like to you? What would they have to do to earn your business if relationships don't carry a lot of weight? I'm honestly asking as a LDS owner in SW Tennessee.

You asked this of MCJ but I can tell you what works here for one shop.
1. Fair prices
2. On site pool with the opportunity to try most gear before you buy. There is one of every mask the shop sells in the pool area for use by students/customers
3. Welcome independent instructors with open arms. They bring their own customers they have gone out and found. Some that the shop would never otherwise see
4. Treat the independent instructors with respect and allow them to make a small commission on gear sales to their students
5. Free air fills for the instructors who bring students
6. Rental gear for the students of independent instructors at a fair rate
7. Welcome quality instructors from every agency and allow them to process their own certs. Don't try to make them go through the shop to get your numbers up
8. Don't tell them how to teach or schedule their classes -within reason of course with regards to scheduling. Don't tell your own instructors how much time they have. Let them decide what their students need!
9. Be open to all styles of diving and at least have a working knowledge of it. BPW's and Sidemount are not tech. Long hoses are fine for OW divers
10. Don't try to upsell customers on gear they don't need or training they are not ready for. They can easily find out if you are. When they do, you'll never see them again
11. If they want gear you don't carry suggest what you do, but if they really want XYZ try to get it for them or help them find it. Even if it's from your competitor two blocks down. They'll remember that service and reward you for it.
12. Don't try to sell them junk items that will end up on a shelf in two weeks
13. If they buy a reg you sell on line don't get pissy about it when they bring it to you for service or to assemble. THANK THEM for their business and look at it as an opportunity to get the service business and maybe sell them something else.
14 Treat every customer like they are going to pay your rent for the month. Even if it's by purchasing a $2.00 sticker. Thank them, wish them well, and that you hope to see them again.

---------- Post added November 15th, 2014 at 10:02 AM ----------

Tom's place is unique and fun. It's also the HQ for SEI and PDIC

 

[widget]

I doubt it if for no other reason than there is no motivation for shops to deal with gas fills as a loss leader since it is the one area where there is little competition.

Would you care to lay out the numbers?

---------- Post added November 15th, 2014 at 08:27 AM ----------



Spare o-rings are under $.05 each. How much do they cost from an LDS?

Sure, hardly anything, it was more a bit of semantics I guess, my point been mostly that folk standing around waiting for a tank fill seldom buy anything that makes a meaningful contribution to keeping a local shop afloat. In my opinion they are far from a captive market that a store owner can capitalize on for extra discretionary income, if anything they have all the gear they need, so maybe they will buy a small spare to toss in the dive bag, but its certainly not going to keep a business afloat.

---------- Post added November 15th, 2014 at 05:38 PM ----------

You asked this of MCJ but I can tell you what works here for one shop.
1. Fair prices
2. On site pool with the opportunity to try most gear before you buy. There is one of every mask the shop sells in the pool area for use by students/customers
3. Welcome independent instructors with open arms. They bring their own customers they have gone out and found. Some that the shop would never otherwise see
4. Treat the independent instructors with respect and allow them to make a small commission on gear sales to their students
5. Free air fills for the instructors who bring students
6. Rental gear for the students of independent instructors at a fair rate
7. Welcome quality instructors from every agency and allow them to process their own certs. Don't try to make them go through the shop to get your numbers up
8. Don't tell them how to teach or schedule their classes -within reason of course with regards to scheduling. Don't tell your own instructors how much time they have. Let them decide what their students need!
9. Be open to all styles of diving and at least have a working knowledge of it. BPW's and Sidemount are not tech. Long hoses are fine for OW divers
10. Don't try to upsell customers on gear they don't need or training they are not ready for. They can easily find out if you are. When they do, you'll never see them again
11. If they want gear you don't carry suggest what you do, but if they really want XYZ try to get it for them or help them find it. Even if it's from your competitor two blocks down. They'll remember that service and reward you for it.
12. Don't try to sell them junk items that will end up on a shelf in two weeks
13. If they buy a reg you sell on line don't get pissy about it when they bring it to you for service or to assemble. THANK THEM for their business and look at it as an opportunity to get the service business and maybe sell them something else.
14 Treat every customer like they are going to pay your rent for the month. Even if it's by purchasing a $2.00 sticker. Thank them, wish them well, and that you hope to see them again.

---------- Post added November 15th, 2014 at 10:02 AM ----------

Tom's place is unique and fun. It's also the HQ for SEI and PDIC

Interesting perspective, do you not perhaps think a lot of business owners are doing this anyway and still not surviving.? I think there are just not enough new or active divers anymore to sustain the market as it stands. Personally I think a lot of shops do everything right and still dont survive because they just dont have the through put.

As has been said we (scuba diving) started from a cottage industry and in my opinion thats where we stand, theres nothing wrong with it, we just need to understand it and cut our cloth from there, as an industry we are just not big enough globally to sustain the present equilibrium.

---------- Post added November 15th, 2014 at 05:55 PM ----------

I doubt it if for no other reason than there is no motivation for shops to deal with gas fills as a loss leader since it is the one area where there is little competition.

Would you care to lay out the numbers?

---------- Post added November 15th, 2014 at 08:27 AM ----------

We used to do the numbers on fill costs, but eventually we stopped, in our line it was difficult to track every fill, when theres 100 cylinders standing in your room and 5 boats waiting to load and go the only thing that matters is getting the cylinders out and the boats launched, if a few get filled for free, well thats just the way it is, but those fills cost the shop, so amortizing all costs that go into a tank fill like replacement filters, compressor maintenance, air quality tests, power costs, labour to load, fill and unload, basic consumables like oil and belts plus the odd free fills that slip through or are offered and the costs can mount quickly. Mostly I find shops just look to cover their basic costs with air fills, any profit they MAY make is just a welcome by product.

 

[redacted]

We used to do the numbers on fill costs, but eventually we stopped, in our line it was difficult to track every fill, when theres 100 cylinders standing in your room and 5 boats waiting to load and go the only thing that matters is getting the cylinders out and the boats launched, if a few get filled for free, well thats just the way it is, but those fills cost the shop, so amortizing all costs that go into a tank fill like replacement filters, compressor maintenance, air quality tests, power costs, labour to load, fill and unload, basic consumables like oil and belts plus the odd free fills that slip through or are offered and the costs can mount quickly. Mostly I find shops just look to cover their basic costs with air fills, any profit they MAY make is just a welcome by product.

We need to keep in mind why shops even have compressors. And the primary reason is not so they can fill customers' tanks. It may be a requirement to get mfgr and training agency accreditation. It is also so they can fill their own
tanks to support their training programs and their rentals. When you allocate the cost and benefits across all these reasons and fill users, customer air fills are usually a small piece of the accounting. Most shops are making money at $5 per fill (or at least reducing their cost of owning & operating a compressor). It is simply dishonest/deceptive accounting when they try to balance the cost of their compressor against income from filling customer tanks.

---------- Post added November 15th, 2014 at 10:34 AM ----------

Tell me MrCultureJammer what would the ideal LDS look like to you? What would they have to do to earn your business if relationships don't carry a lot of weight? I'm honestly asking as a LDS owner in SW Tennessee.

It would look like DRIS with smaller franchises or dive club support to maintain more distant diving communities. Most small, independent (inefficient) LDS would probably disappear as "survival of the fittest" would take over.

---------- Post added November 15th, 2014 at 10:42 AM ----------

Sure, hardly anything, it was more a bit of semantics I guess, my point been mostly that folk standing around waiting for a tank fill seldom buy anything that makes a meaningful contribution to keeping a local shop afloat. In my opinion they are far from a captive market that a store owner can capitalize on for extra discretionary income, if anything they have all the gear they need, so maybe they will buy a small spare to toss in the dive bag, but its certainly not going to keep a business afloat.

It definitely does nothing to keep the business afloat. If anything, it weighs them down. When the customer realizes he was charge $1 or more for an O-ring that cost the shop pennies, they begin to understand what is happening to them. If a business can not survive on honest and fair prices, the industry would be better off if they got out of the way of one that can.

 

[Bob DBF]

It definitely does nothing to keep the business afloat. If anything, it weighs them down. When the customer realizes he was charge $1 or more for an O-ring that cost the shop pennies, they begin to understand what is happening to them. If a business can not survive on honest and fair prices, the industry would be better off if they got out of the way of one that can.

You haven't tried buying o-rings from home depot or a hardware store lately. Would you rather any retailer decide, that since it looses money to sell anything under say 10 cents there is no reason to carry the item for sale. At my LDS its a tossup whether they sell an O-ring to me for a buck or toss me one, tell me to get lost, and count it as "shrinkage" later. Everyone has to make a living, no reason that either side of the deal has to be a D**k



Bob
--------------------------------------------
I swear its not hoarding dear, I'm just keeping an adequate stock of equipment and parts. It's life support, you know.

 

[redacted]

You haven't tried buying o-rings from home depot or a hardware store lately. Would you rather any retailer decide, that since it looses money to sell anything under say 10 cents there is no reason to carry the item for sale. At my LDS its a tossup whether they sell an O-ring to me for a buck or toss me one, tell me to get lost, and count it as "shrinkage" later. Everyone has to make a living, no reason that either side of the deal has to be a D**k



Bob
--------------------------------------------
I swear its not hoarding dear, I'm just keeping an adequate stock of equipment and parts. It's life support, you know.

Whether they charge $1 for one o-ring or 5 will make little difference in the books at the end of the month. But it sure says a lot about the business model. Why give away a cup of coffee and then hit the customer with a 2000% markup?

Fair and honest business practices will keep customers coming back.

 

[kelemvor]

You haven't tried buying o-rings from home depot or a hardware store lately. Would you rather any retailer decide, that since it looses money to sell anything under say 10 cents there is no reason to carry the item for sale. At my LDS its a tossup whether they sell an O-ring to me for a buck or toss me one, tell me to get lost, and count it as "shrinkage" later. Everyone has to make a living, no reason that either side of the deal has to be a D**k

I believe the term for that is "Loss Leader".

There are more reasons to have something in a store than simply the profit to be made from that individual sale.