pasley:
So now the question: Do you think the 100% is pure profit? What would you consider a reasonable mark-up to cover expenses and a reasonable return on investment (profit)?
Of course I don't think that 100% is pure profit. As to what is "reasonable" I cannot answer that. Far too much of that depends on the shop, its staffing, location, etc.
When I see a guy running a dive shop out of his garage, with maybe $5k of stuff on the wall, and has no employees, I expect his overhead to be quite low. And I expect prices to reflect that.
If I step into a shop that is on the beach, they have 2 45ft dive boats, $3M in inventory, a full time manager, 10 full time enployees, employ 4 DMs, have a storefront webpage, offer classes from OW to Tech Trimix, and serve me coffee and cakes while I wait, I have a very different expectation of what I am about to pay for a product.
So here is the thing. Assume a product costs any authorized dealer $100. MSRP for that item is $250. I go online and find 3 authorized dealers selling it for $175 and two unauthorized dealers selling it for $139. I walk into the LDS and he wants $249.99. I ask if he could do any better, and he says he can sacrifice it for $225. When I say I can get it on the internet for $50 less from another authorized dealer, am I being a poor customer? Am I being unfair?
This is a scenario that is repeated over and over again. No one wants to see their LDS go under if they are a decent shop. But at the same time, no one wants to pay 50% more than they would online at another authorized shop. Those people selling online have overhead as well. Maybe not as much, but it's still there.
To make it personal, I wanted to buy a product from my LDS. The product was purchased at a certain price. It was early fall and a new pricing scheme had come out for this product for 2006. I found the item online from a brick and mortar store that had a web presence for $485, which was FULL MSRP. My LDS wanted $555 for the exact same item. After looking around, I discovered that the new 2006 MSRP price for that item as $555. So, my LDS was going to charge me the 2006 price even though THEY paid the 2005 price for the item from the vendor. Is this fair? I called the shop that was going to offer me the $485 price and asked why they were charging less. The response was that the new pricing was for 2006, and he wasn't going to charge customers that price when he didn't have to pay the higher cost himself. I ordered it the next day.
People simply do NOT have sympathy for dive shops who take profits unfairly. We all know they want to make money. That's fine. But there is a limit to how much customers want to be bent over.
