LDS Closures

[cool_hardware52]

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.

That my point. Let's say the total cost of getting a fill includes travel to / from the shop and the divers time.

If we assume a 40 mile round trip, and figure fuel only that's $6-7. Lets say an hour of the divers time, @ $20 / hour.

Now the diver has spent $5 for a fill, and $27 dollars in time and travel, or $32 for that fill.

If the price charged by the dive shop doubles to $10, the total is now $37. Doubling the price of the fill only increased the "cost" by about 15%. It seems unlikely to me that a 15% increase in cost will motive many to buy a compressor.

Of course my example assumes one trip to fill one tank, and filling more tanks per trip will change the percentages, but of course then you need to buy the extra tanks.......

Tobin

 

[RonFrank]

This discussion has turned interesting! I wonder if any LDS owners are watching.

The problem with these types of discussions is to asses the right cost, or model for a LDS one has to factor in the business model for that LDS. R they primarily a training facility? How many students a year do they handle, etc. All LDS's in our area own compressors, and offer fills.

This is in the Denver market where fill business is small due to a lack of local diving. So why do they all have them? A compressor here is simply part of the cost of running the LDS in this market because this is a training market with little local diving.

Another thing that I don't think has been discussed is loss leaders. The LDS has a compressor, so why not use fills as a way just to get divers in the door. I often buy things at our LDS not because I really went there for those things, but because I see something I want while I am there to get a fill.

If I walk into the LDS, and spend $30 on top of my air fill in impulse buys, that compressor has just generated revenue. Do bean counters attempt to tie that back to the compressor? Unlikely, but many LDS owners understand the value of getting a customer in the door.

We have a big LDS market in Denver with NO local diving! Denver is not a huge city, but we somehow support approximately 12 LDS's.

 

[cool_hardware52]

I thought you folks in the "Mile High City" needed compressed gas just to stay conscious.

Another thing that I don't think has been discussed is loss leaders. The LDS has a compressor, so why not use fills as a way just to get divers in the door. I often buy things at our LDS not because I really went there for those things, but because I see something I want while I am there to get a fill.

Loss Leaders are tried and true method in retail, and work if there is enough opportunity to sell other goods at high margin to make up the loss.


The problem for many shops is that is no longer working. The "loss" part works fine, but the much lower prices for gear available via other retail channels, makes the other half of the equation much less certain.

If I walk into the LDS, and spend $30 on top of my air fill in impulse buys, that compressor has just generated revenue. Do bean counters attempt to tie that back to the compressor? Unlikely, but many LDS owners understand the value of getting a customer in the door.

Some do, many seem intent on driving customers away.

If you have a Local Dive Shop that's doing a good job, it's a treasure, and worth supporting.

Tobin

 

[RonFrank]

I thought you folks in the "Mile High City" needed compressed gas just to stay conscious.

I HOPE I avoid that fate, but it's truer than many realize!

The problem for many shops is that is no longer working. The "loss" part works fine, but the much lower prices for gear available via other retail channels, makes the other half of the equation much less certain.

Very true. I think hard before just buying at the LDS. For small stuff the difference in price sometimes makes spending 100% more vs. the online cost effective when shipping is factored in. Not true for large purchases.

Some do, many seem intent on driving customers away.

If you have a Local Dive Shop that's doing a good job, it's a treasure, and worth supporting. Tobin

I try and support them where I can. Mostly training, and maybe this year some travel.

Unfortunately their model excludes competitive pricing on most retail goods. If need things, I wait, and order online, or I wait until I get into a better market. I often purchase things from outlets like divers direct when I visit FL.

 

[ScubaGiny]

I have been on both sides of the fence for this issue.

I am an employee at a dive shop and the mark up is substantial on all of the products. Most of the employees don't even buy from the shop. We buy off of the internet. Can you blame an informed person. $214 for a bc I just bought, compared to $604 at the shop! $499 for the camera and $499 for the strobe and I just bought them online for $550 total incl shipping, with full warranty!

The risk we all take is that the store owners will give up and close. Then things like fills become impossible, or next to it.

You just can't have it both ways.

The newbies provide our store with enough income to keep going, so we're lucky. I do feel bad selling them goods. But hey my first $15,000 was spent at the shop, until I got smart and went online!

 

[jpsexton]

The newbies provide our store with enough income to keep going, so we're lucky. I do feel bad selling them goods. But hey my first $15,000 was spent at the shop, until I got smart and went online!

I don't even know how to respond to that!

For the life of me I just don't understand how gouging the newbie for as much as you can before they get smart is a good business model. Apparently it works though because many shops are successful using it.

 

[Papa_Bear]

I have been on both sides of the fence for this issue.

I am an employee at a dive shop and the mark up is substantial on all of the products. Most of the employees don't even buy from the shop. We buy off of the internet. Can you blame an informed person. $214 for a bc I just bought, compared to $604 at the shop! $499 for the camera and $499 for the strobe and I just bought them online for $550 total incl shipping, with full warranty!

The risk we all take is that the store owners will give up and close. Then things like fills become impossible, or next to it.

You just can't have it both ways.

The newbies provide our store with enough income to keep going, so we're lucky. I do feel bad selling them goods. But hey my first $15,000 was spent at the shop, until I got smart and went online!

I smell a dead fish! The mark up is not anymore than any other retail store! So retailers should give their products away for free? They DON"T GET RICH! IF they did the Democrats would be taxing SCUBA shops a lot more! They do what they do to stay in business and if they gouge they go out as well, because the word gets around! You people sound like politicians complaining about the the oil companies! If you think it is so easy and you can do it better, well guess what you can open one! And the money will just flow in! You will live in the biggest house on the highest hill in town! So I say go for it! And please post to let us know how it goes! And if all the shops close, can you fill my tank for free? Wouldn't want you to charge your dive buddies for air!:no

 

[ReefHound]

That my point. Let's say the total cost of getting a fill includes travel to / from the shop and the divers time.

If we assume a 40 mile round trip, and figure fuel only that's $6-7. Lets say an hour of the divers time, @ $20 / hour.

Now the diver has spent $5 for a fill, and $27 dollars in time and travel, or $32 for that fill.

If the price charged by the dive shop doubles to $10, the total is now $37. Doubling the price of the fill only increased the "cost" by about 15%. It seems unlikely to me that a 15% increase in cost will motive many to buy a compressor.

Careful what you say, when the diver realizes what his true cost of a fill at the LDS is it suddenly makes a home compressor seem much more economical. Many run the numbers now and see that it would cost them $15 per fill to do it themselves and decide it's not economical when the LDS is only $7. They aren't looking at their true costs.

 

[ReefHound]

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.......

Well I'll disagree. We can itemize each component to make it sound exorbitantly expensive. I can itemize all the costs of owning and maintaining an automobile (fuel, tolls, parking, oil change, periodic service, registration, inspection, insurance) to the point you'd think it costs $50 to drive to the corner store. So let's put some hard numbers to it. Let's start with the number of compressor hours it takes to fill an AL80. I saw a detailed analysis someone did once and it was in the ballpark of $3/fill including capital investment and labor.

If you really think the incremental cost of filling a tank is more than $6 then explain how your previous statement (that some high volume operations can turn a profit at that price) can be true. Also explain how many shops in places like Florida and Socal can charge as low as $3 per fill. Or how shops can issue fill cards (unlimited in some case) that bring the cost per fill to a few dollars.

 

[MXGratefulDiver]

I have been on both sides of the fence for this issue.

I am an employee at a dive shop and the mark up is substantial on all of the products. Most of the employees don't even buy from the shop. We buy off of the internet. Can you blame an informed person. $214 for a bc I just bought, compared to $604 at the shop! $499 for the camera and $499 for the strobe and I just bought them online for $550 total incl shipping, with full warranty!

The risk we all take is that the store owners will give up and close. Then things like fills become impossible, or next to it.

You just can't have it both ways.

The newbies provide our store with enough income to keep going, so we're lucky. I do feel bad selling them goods. But hey my first $15,000 was spent at the shop, until I got smart and went online!

I don't even mind the markups so much as I do watching some new diver walking out of a shop with this massive, $900 BCD that's got a 90 lb bladder and 14 D-rings on the harness ... that's like selling a Hummer to someone who just got their driver's license.

As you say ... the newbies pretty much keep the shop in business. It's a pretty sleazy business model ...

... Bob (Grateful Diver)