Jarrod is advocating that price be controlled and determined only by the manufacturer. (he will adjust it according to the marketplace) Denying the retail business the opportunity to freely compete and set his price as he deems fit.
It may appear easy to compete in price - but to successfully do so is a very difficult business feat to accomplish, excluding large differences in capitalization. Prices are directly linked to a business bottom line and may be the purest form of competition. How efficiently a business is operated will determine how much of the price income it can keep as profits. A complex and difficult balancing act.
The shop that provides what consumers want at the lowest price is rewarded with greater profits. For example: assume most consumers want air fills, X type of gear, and good repair facilities -the shop that provides this best at the lowest price will attract the most customers and make more money. Not the shop that has the lowest price on air fills, but not the other two categories, or on X type of gear, but not the other two and so on It may well be that different businesses excell in each category, as the example above where shops excell in only one, or perhaps provide only one service. This is not a bad thing, as more consumers with different interests will find specifically what they need at the best price. This is also beneficial for a greater variety of businesses. This is a general simplification of it..
Consider two shops, both provide essentially the same service, sell the same equipment, and are located in the same area with similar overhead costs. One shop is better managed than the other and thus realizes a greater profit per item than the other through greater efficiency. This more efficiently operated shop may wish to use this competitive edge to compete with the other less efficient shop by lowering his prices in order to increase his sales over the less efficient shop. Since the more efficient shop is able to make more (or loose less) money per item than the less efficient shop at any given price, one shop has a competitive advantage in this category over the other. The result is the consumer will benefit by competition, in this case in the form of a lower price, and so can businesses by striving for efficiency in meeting customer needs. Better service at a lower cost and price to the consumer. Succesful businesses can realize and keep greater profits, increase sales through lower prices, or use the extra profits over the competition to invest it in whatever way they gauge will be most useful to them. Possibly adding more and better services to the benefit of consumers.
This could and will result in some of the less efficient shops going out of business. Whose place will eventually be taken by an even more efficient shop able to compete.
If retail shops are unable to compete in price due to price controls by the manufacturers, we have ANTI COMPETITIVE practices in effect, which do not permit retail PRICE COMPETITION due to PRICE CONTROL. Prices have been FIXED for the retail shops. Regardless of its legality or the manner which makes its application possible, this is what is taking place in actual practice from an economic stand point. A key form of business competition amongst retail shops has been repressed. This is not a healthy business climate, and its likely to lead to greater problems down the road.
Competition results in businesses succeeding who posses a greater understanding of the consumers needs, and have the talent to meet these needs more efficiently. Internet shops today specialize in product sales providing the consumer with greater selection and lower prices than most shops clinging to the protected, less competitive business model, while providing warranties and service for the goods sold equal to or better than
many LDSs. GUE provides quality instruction that is not necessarily affiliated with a local shop, and is superior to what many LDSs provide. Current protectionist policies and practices such as price restraints, and brand protection, (some manufacturers will not allow dealers to carry a competitors goods) have resulted in an industry today with many shops offering poor quality of instruction, small product selection, highly variable customer and warranty service, along with high prices. They have come to rely on a steady stream of new students, who lack the knowledge to know any better, for their survival and prosperity. How many of you shop owners can say you are successful without the steady stream of new students and your sales to them.
Protectionism and restricted competition leads to stagnation and the survival of those businesses that are inefficient and thus not very receptive to customers needs, since they dont have to be. You cant go somewhere else and buy it for less. Going somewhere else is an additional inconvenience and you may recieve the same treatment. And they all know this. Competition leads to greater innovation and efficiency for all. This is not a painless or flawless process, but its usually better than the alternative, especially in the long run.
The dive industry is not unique in limiting free enterprise, to some degree or other all industries have some type of protectionist policies, some of which help to curve excess in market cycles. It is the degree of application that can be helpful or harmful.
