Is Halcyon price fixing?

[Windknot]

When you going to get your shop on line........

The Road trip from Mid-Michigan probably wont happen, but I'd love to order SOMETHING from you.......


Gotta help our own.....



WK

 

[MikeS]

Mike,

It seems as though your saying price fixing is OK as long as it allows your store to make a profit.

First, I think it is unfair that I should have to subsidize the costs of dealers associated with services that I cannot take advantage of, since there is no Halcyon dealer in my area. Secondly, I think that price fixing in any form is unfair and shortsighted. Whether the manufacturer uses gentle persuasion or strong-arm tactics to achieve price fixing is immaterial to me as a consumer, and upon doing a survey it soon becomes apparent that whatever the motivation price fixing is taking place.

Mike

 

[Genesis]

and the FTC has received a nice letter from me to that exact effect.

I suggest that anyone else who thinks that its ALSO wrong and should be stopped ALSO send such a letter.

 

[MikeFerrara]

Windknot,
We have a web site but no online sales. However we can take care of you by e-mail or over the phone at least for brands that I can sell mail order.

MikeS,
I don't condone price fixing. I also don't condone other practices that I see as unfair. I am forced to play by rules that others are not. That is why I am unable to compete. The prices I offer are based on what the item cost me and what it cost me to keep a shop. Each item I sell must pay part of the rent, insurance and so on and so on. We pay high prices (from the manufacturer and have dive shop type costs.

Someone pointed out to me last night that LP gad the Zeagle Envoy for 189. That reg costs me 179. By time I receive it it costs me more than 189 so I can't compete with that price. But...where did they get it. They are not Zeagle dealers. As a Zeagle dealer I can't sell except over the counter. The rules are different depending on wether you work through the front door or the back door. I suppose I could learn to find merchandise on the street and not being a dealer I wouldn't have to be a part of a dealer agreement. However, I then would also have to get parts and repair info off the street and convince my insurance company that it's a goog idea.

I don't think you guys get the picture. To provide dive shop services we are dependant on the manufacturers. To have their support we must be dealers. To be dealers we must buy the stuff from them and play by their rules. That means our costs are fixed. I have no control over what they charge me for the crap. My mark up must also be adequate to cover other costs. I can't sell a reg at a $10 markup on my cost as this doesn't cover shipping, the phone call to order it, the time it takes me to assemble and test it, the rent on the roof I stand under while I do it, the insurance, the yellow page add or anything else. The math is simple.

 

[MikeS]

Mike,

Well then unless we are operating on the axiom of “two wrongs can make a right,” these are two separate issues.

I understand that as an LDS you are in a tough position as the industry shifts, as it must, from protectionist pricing to an open market. I think that the key is value added. Most of the purchases I have made through my LDS because of value added, the items were there to try on, I received good advice, I knew they would stand behind the product, excreta, excreta. Additionally I understand it is in my own enlightened best interest to ensure that the LDS remains there for air fills, service, etc.

But when it comes to my upcoming purchase of a BB and wings, there is no value added. There is no local LDS where I can get value added. Based on your posts I would love to have you as my LDS and think that the value added would be worth paying extra. But as it turns out I will actually be paying a penalty and someone will make an unjustified profit at my expense as a result of the pricing policy. I will end up paying more because of postage than if I walked into your store, maybe even got to try one first, got your assistance with set up and any problems that arose. How is that fair?

Mike

 

[MikeFerrara]

I don't know what fair is. I do know, however that if I don't pay the rent and the phone bill that you can't order from me. Nobody tells me what to charge but they do tell me what I will pay. You are not being penalized. Aparantly there are those who can get things much cheaper than I can. If the manufacturer would let me be a dealer without a dive shop that is actual retail space with public exposure in an area zoned for business and without a compressor and all the other things that I must have my overhead would be much lower and my prices would also be lower.

Did you folks know that most manufacturer require a dealer to be a full service shop. That means we must offer repair, instruction, gas and all the other things I mentioned above. Did you also know that your store is visite and approved or disaproved. Getting a dealership is sometimes like applying for a job. We invest a ton of money before we can even discuss a dealership. Some manufacturers may even disapprove you based on what other brands you carry or the number of other brands you carry. Obviously not everyone selling scuba equipment is required to meet these requirements. It costs money to meet these requirements and that cost is baked into the price of the goods and services we sell. If it wasn't it would have been way cheaper for me to skip opening a dive shop and just buy a reg and give it to you as a gift. You would have your reg and I would be many thousands of dollars and hours ahead of where I am now.

Hell, some manufacturers even tell you what you can have in rental. These requirements are not in a contract but if they don't like the way your promoting their stuff they do not have to sell to you.

 

[jonnythan]

MikeFerrara once bubbled...
I don't know what fair is. I do know, however that if I don't pay the rent and the phone bill that you can't order from me. Nobody tells me what to charge but they do tell me what I will pay. You are not being penalized. Aparantly there are those who can get things much cheaper than I can. If the manufacturer would let me be a dealer without a dive shop that is actual retail space with public exposure in an area zoned for business and without a compressor and all the other things that I must have my overhead would be much lower and my prices would also be lower.

Did you folks know that most manufacturer require a dealer to be a full service shop. That means we must offer repair, instruction, gas and all the other things I mentioned above. Did you also know that your store is visite and approved or disaproved. Getting a dealership is sometimes like applying for a job. We invest a ton of money before we can even discuss a dealership. Some manufacturers may even disapprove you based on what other brands you carry or the number of other brands you carry. Obviously not everyone selling scuba equipment is required to meet these requirements. It costs money to meet these requirements and that cost is baked into the price of the goods and services we sell. If it wasn't it would have been way cheaper for me to skip opening a dive shop and just buy a reg and give it to you as a gift. You would have your reg and I would be many thousands of dollars and hours ahead of where I am now.

Hell, some manufacturers even tell you what you can have in rental. These requirements are not in a contract but if they don't like the way your promoting their stuff they do not have to sell to you.

That's sad and all, but the online guys *do* do it cheaper, so I'll patronize them. Not you. I understand how tough a position you're in, but... well, I'm sorry.

If I were in your area, I would go to you for instruction though.

 

[jetblast00]

http://www.halcyon.net/ftp/parts-ftp.shtml
http://www.divedorset.com/halcyon.pdf

 

[MikeFerrara]

jonnythan,

You, of course, are free to do business where you please. I only post these facts to help divers understand what is going on. I don't expect you to fix it or pay for it.

You say you would come to us for instruction. How many divers understand the effect all this stuff has on instruction? A simplified version goes like this.

A manufacturer tells me I need to sell x. New divers buy most of the gear. To meet my minimums I must create many new divers. I must do it quickly. I must sell the manufacturers full line even if I would prefer to teach in my class that it is junk. I must move those baby blue poodle jackets with the new style zipper and the 28 D-rings. This is where the $99 30 minute classes come from. Am I going to pay a highly skilled diver to teach this class? will a highly skilled diver even be willing?

Those like me who will not teach like this are hurting ourselves even more than the manufacturers are. When it comes to the price of training I am in competition with the shops who give the class away and have a non-diver teaching it so the can push the poodle coat for the manufacturer. I loose money on OW classes and I am told my price is too high.

The diver buying the reg won't pay for the class but the student won't pay for it either. On one side we have those who give away equipment to get market share and on the other side we have those who give away services to sell equipment.

As the competition from online merchants increases, rather than seeing instruction becomming a profit center that supports itself I see instruction get faster and cheaper because shop sell to a lower percentage of the new divers. The response has been to just increase the numbers of new divers (increase the market) to make up for the reduction in market share.

I'm not trying to justify anything. I am just explaining what I see. I would prefer to own a school that doesn't even sell equipment. But given the market value of training that isn't possible.

IMO, retail sales is a direct conflict of interest with instruction. I teach students not to use most of what the manufacturers want me to sell. If I don't sell it I'm out. If I don't sell it I don't teach. You see, we have cut ourselves out of many markets because we are already not playing by the rules.

Manufacturers do not like me.
Divers don't like me because either the cost of goods must go up or the cost of services must go up.
Everyone hates me I'm going to go eat worms.

 

[JimC]

Everyone hates me I'm going to go eat worms.

Move your fill station into your house.
Get a job doing something you can stomack that lets you be reasonably flexable with your time.
Sell shop.
Charge big(er) bucks for private lessons to people who want quality.


It might taste bad, but if the scuba buisness dousn't work they way you want it to you ether gota change it or move on.