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captain
Contributor
Good point. I ran a small volumn shop with a 3.5 cfm compressor and bank that can be had today for under $6000. Some owners think they need a $25,000 20 cfm system to fill 20 tanks a week.
This is a classic fixed vs. variable costs -- although technically compressors have fixed and variable components. The argument is that any revenue collected above the variable cost helps to offset the fixed cost....which is true. The other issue is price elasticity, at what price point does volume drop off so its better to sell fewer at x$ vs. more at y$? IOW, its revenue neutral to sell 100 fills at $15 vs 15 fills at $100, but more likely to be more profitable to sell the 15 fills ( due to less variable costs like labor, maintenance, electricity, etc...).
To do this, you have to know your real variable costs and the price curve, otherwise you find out you actually sell 0 at $100.
To do this, you have to know your real variable costs and the price curve, otherwise you find out you actually sell 0 at $100.
matt_unique
Guest
cool_hardware52
Contributor
In my experience it's not the price of the fill paid to the dive shop that motives most to acquire their own compressor.
The time, the cost of travel to and from the dive shop, the hours of operations, and the choice of gases are usually the driving force behind alternative fill stations.
Even small compressors with simple filtration are very hard to justify based on "saving" $5-10 per air fill.
No doubt there is a some price for an Air Fill that would drive people to buy their own compressors, but I wonder if it's only $10.
Tobin
Pretty simple, if you have paid for all the costs required to have a compressor and fill all the tanks you need internally, what is the additional direct cost of filling one more tank.
I agree but as you mentioned, the cost per fill for the diver includes his cost of getting to and from the shop so he isn't getting a fill for $10.
Some will get compressors but others will just be more selective about diving. Maybe they won't burn a tank to play around in the pool checking out their gear. Or maybe they don't dive local at all.
cool_hardware52
Contributor
That's pretty much what I thought.
Oil changes are a function of the hours of operation of the compressor, so oil changes have to be spread over all the fills, "internal" and otherwise.
Filtration is the same, every fill, internal or otherwise reduces the remaining capacity of the filters.
Might be the same for air analysis, if you test based on compressor hours, and not the calendar.
Same for any PM that's based on hours and not the calendar, my compressor, and many others have a Hobbs meter, and service is largely based on hours of operation.
Power used is directly proportional to cf pumped, so there's no savings for Incremental fills either.
These cost alone can exceed the price of a fill.......
What's left? Amortizing the original investment.
In the end the only measure that matters is what were the total cost of the machine for the year, and what revenue did it generate.
Tobin
I agree that shops often over invest in compressor capacity that they do not really need with higher up front costs and often higher maintenence costs resulting from the desicion to buy excess capacity.
Before I relocated, we had an air club that owned the compressor and airbank in the local dive shop. It worked well for the shop owner as the shop did not have to pay for the aquisition costs of the compressor or the maintenence and kept any funds received from air and nitrox sales to non-club memebers ($4 and $10 per fill respectively). It worked great for the club as the shop housed it, provided the labor to maintain it and proivided the club members with training for the self servcie fill whips. The club was profitable - so much so that after about 15 years when the old compressor (in the 7 cu ft per minute range) wore out to the point that ti was becoming maintenence intensive, it was replaced with a new compressor with twice the capacity.
A major mistake was made at that point, as frankly there was no real need for the larger compressor as the fill volume just did not justify it - and the airbank was doubled in size then as well so peak use did not come close to exceeding capacity. Another mistake was that member ship costs were not increased to cover the costs associated with the new and larger compressor. The club had ran well for years by just leaving the decisions to the shop owner so no one questioned what occurred. Eventually the shop owner sold the shop - and sold the compressor was included as part of the inventory. The new owners had a much more monetary approach and essentially dissolved the air club on the grounds that it was not generating enough money to cover costs... and claimed the compressor was the shop's not the club's anyway. What killed the club was a combination of bad management of the assets by the old owner and the realization by the new owners that if the club could not afford to eventually replace the compressor, they were going to get stuck paying for it and needed to start making more $ on fills to cover that eventual cost.
In my case the issue was not about the costs of fills rising sharply when the air club folded, the issue was the sudden incovenience and unavailability of air when the club's self serve whips disappeared. The shop ran normal 8-5 M-F hours with Saturday hours of 9am -2pm. This essentially made it impossible to get a fill if you worked an 8-5 job outside the immediate area. Plus being open only until 2 pm on Saturday with no Sunday hours left you with empty tanks and no way to fill them after any dive started after about noon on Saturday - ie: gas was not available for 3/4 of the weekend when most of the local diving occurred.
In general the former club members options were to bulk up on tanks - that they could still not get filled during the week as they worked more than a half hour from the shop, or buy their own compressor(s). I chose the latter as I lived and worked an hour from the shop. I invested about $2200 in a portable compressor and filter system, not because it was cheaper per fill (it wasn't) but because it was infinitely more convenient and was the only way I could continue to dive as much as I had in the past.
Had the shop had a modicum of customer service and offerred any other options (Saturday evening or Sunday afternoon hours, evening hours one weekday per week, lockers to drop off tanks for fills, etc) I would not have invested in a compressor and they would have continued to get my business.
Even with the high initial cost of a compressor though, the cost per fill is not all that great compared to what I would pay at the shop. For example, the shop was 30 minutes from where I slipped my boat and an hour from home, so on the average weekend, I had two hours and about $5.00 in gas invested in each trip to the shop for fills. Plus, I'd go out of my way to fill on Sunday evening which cut into the last dive of the day and added to my mileage costs. I the end, having a compressor is not that much more expensive per fill.
Before I relocated, we had an air club that owned the compressor and airbank in the local dive shop. It worked well for the shop owner as the shop did not have to pay for the aquisition costs of the compressor or the maintenence and kept any funds received from air and nitrox sales to non-club memebers ($4 and $10 per fill respectively). It worked great for the club as the shop housed it, provided the labor to maintain it and proivided the club members with training for the self servcie fill whips. The club was profitable - so much so that after about 15 years when the old compressor (in the 7 cu ft per minute range) wore out to the point that ti was becoming maintenence intensive, it was replaced with a new compressor with twice the capacity.
A major mistake was made at that point, as frankly there was no real need for the larger compressor as the fill volume just did not justify it - and the airbank was doubled in size then as well so peak use did not come close to exceeding capacity. Another mistake was that member ship costs were not increased to cover the costs associated with the new and larger compressor. The club had ran well for years by just leaving the decisions to the shop owner so no one questioned what occurred. Eventually the shop owner sold the shop - and sold the compressor was included as part of the inventory. The new owners had a much more monetary approach and essentially dissolved the air club on the grounds that it was not generating enough money to cover costs... and claimed the compressor was the shop's not the club's anyway. What killed the club was a combination of bad management of the assets by the old owner and the realization by the new owners that if the club could not afford to eventually replace the compressor, they were going to get stuck paying for it and needed to start making more $ on fills to cover that eventual cost.
You are exactly right Tobin.
In my case the issue was not about the costs of fills rising sharply when the air club folded, the issue was the sudden incovenience and unavailability of air when the club's self serve whips disappeared. The shop ran normal 8-5 M-F hours with Saturday hours of 9am -2pm. This essentially made it impossible to get a fill if you worked an 8-5 job outside the immediate area. Plus being open only until 2 pm on Saturday with no Sunday hours left you with empty tanks and no way to fill them after any dive started after about noon on Saturday - ie: gas was not available for 3/4 of the weekend when most of the local diving occurred.
In general the former club members options were to bulk up on tanks - that they could still not get filled during the week as they worked more than a half hour from the shop, or buy their own compressor(s). I chose the latter as I lived and worked an hour from the shop. I invested about $2200 in a portable compressor and filter system, not because it was cheaper per fill (it wasn't) but because it was infinitely more convenient and was the only way I could continue to dive as much as I had in the past.
Had the shop had a modicum of customer service and offerred any other options (Saturday evening or Sunday afternoon hours, evening hours one weekday per week, lockers to drop off tanks for fills, etc) I would not have invested in a compressor and they would have continued to get my business.
Even with the high initial cost of a compressor though, the cost per fill is not all that great compared to what I would pay at the shop. For example, the shop was 30 minutes from where I slipped my boat and an hour from home, so on the average weekend, I had two hours and about $5.00 in gas invested in each trip to the shop for fills. Plus, I'd go out of my way to fill on Sunday evening which cut into the last dive of the day and added to my mileage costs. I the end, having a compressor is not that much more expensive per fill.
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