LDS Bashers
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xiSkiGuy
Contributor
REI usually sells gear at MSRP or close. Just because they have a large store doesn't mean they follow the Wal-Mart model.JonAustin:
I hope that didn't hurt your feelings. My point was that less than knowledgeable help at Wal-Mart is pretty standard.JonAustin:
I've never wasted a sales associates time and bought online.JonAustin:
How dramatic.JonAustin:
vondo
Contributor
1fastcat:
Am I the only one that doesn't like asking for discounts? I just don't usually shop that way. When I shopped for a new car, I did it online. If someone advertises a discount (say to people employed by my employer) I will certainly ask about that, but I don't like asking a merchant "So, can you do any better?"
I'd rather just look at the advertised (or posted) prices and make a decision about which vendor I want to buy from (sometimes local, sometimes not).
PerroneFord
Contributor
JeffG:
Welcome to my LDS!
xiSkiGuy
Contributor
I suppose I mixed hyperbole with the opinions those who wondered why they couldn't have Wal-Mart prices and speciality service to come up with that number.PerroneFord:
Well said.PerroneFord:
Perfectly reasonable approach.PerroneFord:
Interesting replies in some of the posts - where to begin:
Automobiles - ok genius, I was the general manager of a Porsche Audi store: Your statement about surviving on 8% margins, why can't the LDS. Well let's compare apples to apples - first of all the car manufacturers bear a large portion of the "flooring cost" for cars i.e. the dealer doesn't have to pay much to keep it in inventory for the first 30-45 days. I highly doubt the local LDS has such generous credit terms. Secondly the manufacturers pay the dealers a "holdback" allowance that can be greater than 5% of the invoice cost. Thirdly, the 8% margin on a $30,000 purchase sure is alot more money in their pocket than an 8% margin on a $200 regulator. Finally, the largest portion of a dealer's profit comes from service and warranty repair. At many dealerships, this is the only profit they make. Kinda hard for the LDS to scratch out a living on service and warranty repair.
What's next - oh yeah, the adapt to the new market or die crowd. Hmmmm...1st point - the ones who are doing it are the ones making the money - everyone should do it. Ok geniuses, let's live in your fantasy world and say that every LDS on the planet a. had the money to build an internet retail site, sales and customer support center and b. had the money to inventory all of the items that would be required to provide adequate product selection and delivery times (warehousing and inventory carrying costs), Your theory is that they would all prosper. Last time I looked the internet has lost the vast majority of e-tailers from the dot-com period, and the vast majority of purchasing is from the mega e-tailers or the portals that control who is on their sites (pricegrabber etc.). We could all hope to buy "manufacturer direct"? Maybe they'll give you a free trial period (you pay for the return shipping)since you can't actually see-touch-feel the product in person, and maybe they'll answer the phone right away when you call with questions/complaints - uh-oh I forgot I was calling the service center in Pakistan, and they can't return calls, so I guess I'll have to wait on hold forever. So I guess that this portion of the "new market" fantasy is a little flawed.
Let's examine the next portion of your fantasy world - one of your professors posted that market forces would prevail - the LDS that doesn't adapt will die, and the remaining LDS will be able to charge more for services, therefore increase profit margins, and survive. So, if I understand your logic, the same guy who will buy a mask on-line to save 15%, will pay me 100% more than I used to charge just because the competition has gone out of business. Gosh Wally, I haven't seen that trick ever work in the real world.
Yet another part of this "new economics" fantasy: They can lower prices on products and make it up by charging more for technical training and services. OK, let's start charging $1000 for OW certification and give away the equipment. Wow, there will be so many new divers signing up, I bet there will be a shortage on registration forms around the world. Oh, I forgot you're already certified, so who cares? How about the same $1000 for your Advanced/Rescue/DM etc training?
Oh- you want to charge me $100 for a regulator overhaul? Maybe you'll also spring for that $250 per person local dive boat that the LDS had to charter? (wow Wally, when the LDS doesn't sell all the spots, they still have to pay the skipper for the full charter fee - but that's not a risk/reward profit motive that we should have to pay for, is it?)
Oh, let's not forget the grand-daddy of them all - GM/FORD getting their butts kicked. Last time I looked, you couldn't buy your new car direct from the factory. The domestics' problems are deep, but failing to sell direct on the internet is not one of them. Oh, by the way Mr. Rocket scientist, in a service-heavy business model i.e. local service centers are REQUIRED, you can't jsut be a virtual retailer. How would you like to have to ship that car back to Tokyo for that warranty work?
All this boils down to the fact that without numerous LDS's, diving is a dying sport. No one is going to be around to fill tanks, answer the questions of beginners or interested parties, provide training and certification (back to one of the other genius' comments that training will be provided on a "ad-hoc" market demand basis - I guess Guido is going to see all the people who are lined up for OW certification based on internet exposure, buy a bunch of wetsuits, BC's, regulators, masks, snorkles, fins, a compressor, tanks, weights ad nauseum, stack them up in his garage, and start training on the weekend - NOT GOING TO HAPPEN) (or maybe, the "new new economic model" is that newbies, before ever diving, will buy all their own equipment from the e-tailers?). Do you really think someone is going to buy a compressor to fill tanks and make a living - based on your demand side economics of course ? And how active will most of our diving be, when you have to drive 250 miles or more to the nearest "I survived by being a Mega LDS e-tailer"? And how many diving boat operators are giong to stay in business by internet marketing? Too many holes in all of the naysayers' arguments.
Finally, for the incredible Mr. Limpett who questioned my economic background and called me a bleeding heart liberal. I happen to be a fairly conservative Republican that received a nomination to West Point, have been a manager of union trucking terminals, specialized in turn-around management during the early to mid nineties (can you say "real world" economics), Founded a fiber-optics technology company in 1998 with the Sr. VP of Technology and Engineering from Qwest Communications, and the Head of Agilent's wireless division, have two pending patents, and currently own a real estate and development company specializing in retail shopping centers.
As for my diving equipment:
Dive-rite Transpac with rec-wing (made in usa)
Steel tank - made in usa
Atomic B2 and SS1 - made in usa
Apollo BC/XT Pro
Old style Dacor mask - made in italy
Pinnacle Polar wetsuit
Mares titanium nemo - made in italy
California Diving Company Dive Box - made in USA
If at all possible, I will buy USA, and will always try to avoid buying "made in China". Why, maybe because my 25+ years of "real world" economics experience has taught me that America cannot thrive in the long term without a strong manufacturing sector.
Those of you who think that the USA will thrive and be prosperous by being a financial services, consumption based economy with offshore manufacturing, customer service, and r&d, just keep spending that home equity line. In the next 20 years, there will not be a buyer for your house that will pay you what you owe.
Automobiles - ok genius, I was the general manager of a Porsche Audi store: Your statement about surviving on 8% margins, why can't the LDS. Well let's compare apples to apples - first of all the car manufacturers bear a large portion of the "flooring cost" for cars i.e. the dealer doesn't have to pay much to keep it in inventory for the first 30-45 days. I highly doubt the local LDS has such generous credit terms. Secondly the manufacturers pay the dealers a "holdback" allowance that can be greater than 5% of the invoice cost. Thirdly, the 8% margin on a $30,000 purchase sure is alot more money in their pocket than an 8% margin on a $200 regulator. Finally, the largest portion of a dealer's profit comes from service and warranty repair. At many dealerships, this is the only profit they make. Kinda hard for the LDS to scratch out a living on service and warranty repair.
What's next - oh yeah, the adapt to the new market or die crowd. Hmmmm...1st point - the ones who are doing it are the ones making the money - everyone should do it. Ok geniuses, let's live in your fantasy world and say that every LDS on the planet a. had the money to build an internet retail site, sales and customer support center and b. had the money to inventory all of the items that would be required to provide adequate product selection and delivery times (warehousing and inventory carrying costs), Your theory is that they would all prosper. Last time I looked the internet has lost the vast majority of e-tailers from the dot-com period, and the vast majority of purchasing is from the mega e-tailers or the portals that control who is on their sites (pricegrabber etc.). We could all hope to buy "manufacturer direct"? Maybe they'll give you a free trial period (you pay for the return shipping)since you can't actually see-touch-feel the product in person, and maybe they'll answer the phone right away when you call with questions/complaints - uh-oh I forgot I was calling the service center in Pakistan, and they can't return calls, so I guess I'll have to wait on hold forever. So I guess that this portion of the "new market" fantasy is a little flawed.
Let's examine the next portion of your fantasy world - one of your professors posted that market forces would prevail - the LDS that doesn't adapt will die, and the remaining LDS will be able to charge more for services, therefore increase profit margins, and survive. So, if I understand your logic, the same guy who will buy a mask on-line to save 15%, will pay me 100% more than I used to charge just because the competition has gone out of business. Gosh Wally, I haven't seen that trick ever work in the real world.
Yet another part of this "new economics" fantasy: They can lower prices on products and make it up by charging more for technical training and services. OK, let's start charging $1000 for OW certification and give away the equipment. Wow, there will be so many new divers signing up, I bet there will be a shortage on registration forms around the world. Oh, I forgot you're already certified, so who cares? How about the same $1000 for your Advanced/Rescue/DM etc training?
Oh- you want to charge me $100 for a regulator overhaul? Maybe you'll also spring for that $250 per person local dive boat that the LDS had to charter? (wow Wally, when the LDS doesn't sell all the spots, they still have to pay the skipper for the full charter fee - but that's not a risk/reward profit motive that we should have to pay for, is it?)
Oh, let's not forget the grand-daddy of them all - GM/FORD getting their butts kicked. Last time I looked, you couldn't buy your new car direct from the factory. The domestics' problems are deep, but failing to sell direct on the internet is not one of them. Oh, by the way Mr. Rocket scientist, in a service-heavy business model i.e. local service centers are REQUIRED, you can't jsut be a virtual retailer. How would you like to have to ship that car back to Tokyo for that warranty work?
All this boils down to the fact that without numerous LDS's, diving is a dying sport. No one is going to be around to fill tanks, answer the questions of beginners or interested parties, provide training and certification (back to one of the other genius' comments that training will be provided on a "ad-hoc" market demand basis - I guess Guido is going to see all the people who are lined up for OW certification based on internet exposure, buy a bunch of wetsuits, BC's, regulators, masks, snorkles, fins, a compressor, tanks, weights ad nauseum, stack them up in his garage, and start training on the weekend - NOT GOING TO HAPPEN) (or maybe, the "new new economic model" is that newbies, before ever diving, will buy all their own equipment from the e-tailers?). Do you really think someone is going to buy a compressor to fill tanks and make a living - based on your demand side economics of course ? And how active will most of our diving be, when you have to drive 250 miles or more to the nearest "I survived by being a Mega LDS e-tailer"? And how many diving boat operators are giong to stay in business by internet marketing? Too many holes in all of the naysayers' arguments.
Finally, for the incredible Mr. Limpett who questioned my economic background and called me a bleeding heart liberal. I happen to be a fairly conservative Republican that received a nomination to West Point, have been a manager of union trucking terminals, specialized in turn-around management during the early to mid nineties (can you say "real world" economics), Founded a fiber-optics technology company in 1998 with the Sr. VP of Technology and Engineering from Qwest Communications, and the Head of Agilent's wireless division, have two pending patents, and currently own a real estate and development company specializing in retail shopping centers.
As for my diving equipment:
Dive-rite Transpac with rec-wing (made in usa)
Steel tank - made in usa
Atomic B2 and SS1 - made in usa
Apollo BC/XT Pro
Old style Dacor mask - made in italy
Pinnacle Polar wetsuit
Mares titanium nemo - made in italy
California Diving Company Dive Box - made in USA
If at all possible, I will buy USA, and will always try to avoid buying "made in China". Why, maybe because my 25+ years of "real world" economics experience has taught me that America cannot thrive in the long term without a strong manufacturing sector.
Those of you who think that the USA will thrive and be prosperous by being a financial services, consumption based economy with offshore manufacturing, customer service, and r&d, just keep spending that home equity line. In the next 20 years, there will not be a buyer for your house that will pay you what you owe.
JRScuba
Contributor
The key for an LDS shop to do is keep prices reasonable. The End.
The prices my old dive shop had were so attractive that for me to buy on
the internet was a waste of time. I wanted it NOW. So, when I calculated
the cost of shipping and how long it would take to get the item NOW,
it was a no brainer. Then I got great service, educated opinions on products
and they got a loyal customer. We both went away happy,isn't that the bottom line??
No, LDS's do not have to take divers to the
cleaners and divers should not use their store as a showroom. When an
LDS and a customer have a mutual understanding, it is a great business
arrangement.
The internet people think they got a great deal at a low price, Right.
The dealer that takes you to the cleaners cries he is losing money.
Go back and look at my post on internet air fills. Sure would be great.
Unfortunately it cannot happen. If your LDS won't meet you half way
( Figure of Speach ), them find another.
So if everyone can get together ( Blue skiy thoughts ), I'm sure both parties
can meet halfway.
The prices my old dive shop had were so attractive that for me to buy on
the internet was a waste of time. I wanted it NOW. So, when I calculated
the cost of shipping and how long it would take to get the item NOW,
it was a no brainer. Then I got great service, educated opinions on products
and they got a loyal customer. We both went away happy,isn't that the bottom line??
No, LDS's do not have to take divers to the
cleaners and divers should not use their store as a showroom. When an
LDS and a customer have a mutual understanding, it is a great business
arrangement.
The internet people think they got a great deal at a low price, Right.
The dealer that takes you to the cleaners cries he is losing money.
Go back and look at my post on internet air fills. Sure would be great.
Unfortunately it cannot happen. If your LDS won't meet you half way
( Figure of Speach ), them find another.
So if everyone can get together ( Blue skiy thoughts ), I'm sure both parties
can meet halfway.
PerroneFord
Contributor
WaterDawg:
Dang, how do I get to be a "good" customer? Do I have to come in and do a $2k order all at once to get a soda?
JeffG
Contributor
No...Your lack of understanding of how marketplaces work is flawed.1fastcat:
Chad hit it on the bullseye..The volume is not there,especially in the northeast,for the small lds to survive if their customers go internet..We try to keep competitive by expanding the business into commercial diving doing boats/inspections/movie-tv work etc..We feel that if you trust us to teach you how to dive and have fun doing it you should trust us to buy the equipment that we recommend for the type of diving you will do..We very rarely,if ever,sell at full msrp, both to compete with internet and to keep our customers happy and show that we appreciate their business..Chad Carney:
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