LDS Disillusionment

[MikeFerrara]

The bottom line is that knowledge is expected and needed as part of the sales effort. Sharing that knowledge is part of the SALE. It is NOT a condition of the sale.

Not any more it isn't. Dealers like LP do not include the sharing of any knowledge for the price. As a rule you don't even get to talk to a person and if you do they are likely not a diver.

Assuming that the manufacturers even allowed a shop to sell for those prices for that you won't get to talk to any one. you won't get any sales effort at all. You click "add to cart and enter a credit card number". Period.

If that's what you want that's ok but no one will ever be able to affort to invest hours in a sale that nets them $10.

I do support my LDS but I'm not going to throw away money to do so. I went in and explained the gear I wanted, listened to their advice, explained the pricing I could get from ScubaToys (a LDS if your in Dallas) They couldn't come close to the price. The reason I like my LDS is because they didn't care that I bought the gear elsewhere. Why??? because they realize that but treating me well I will probably spend the money I saved in their shop. Which I did on a trip to the Flower Gardens. I also go there for air fills, spare parts, etc. The shop makes money on all of these things.

Actually you're going to the shop for all the things that a shop traditionally doesn't make any money on. Well, they probably make some on the parts but the rest are things that are in large part subsidized by the people who do buy equipment. Just the same I know that when I had a shop that it cost more for me to operate for a single month than the area demand for parts and air could bring in over 20 years.

So in the end by treating me well they do get paid for their time and knowledge because they created a repeat customer.

No. LOL they're hanging on in despiration hoping that someday you'll buy something that they make a buck on.

By the way, IMHO the above applies to authorized online sites like ScubaToys.com and Scuba.com. Why buy from LP when these will match their price and give you a full manufacturers warranty.

At this point I'd rather buy from a non-authorized dealer just to let the manufacturers know that some of us aren't going to lpay their BS games.

 

[outlawaggie]

Not any more it isn't. Dealers like LP do not include the sharing of any knowledge for the price. As a rule you don't even get to talk to a person and if you do they are likely not a diver.

Assuming that the manufacturers even allowed a shop to sell for those prices for that you won't get to talk to any one. you won't get any sales effort at all. You click "add to cart and enter a credit card number". Period.

I find it interesting that your example quotes the one source I specifically excluded (LeisurePro) I bought from ScubaToys.com... I did get expert help over the phone. I did get excellent service. Oh, and I saved over $1000.

No. LOL they're hanging on in despiration hoping that someday you'll buy something that they make a buck on.

That's absurd. Most divers have one major purchase (reg, octo, computer, BC). beyond that it is all air fills, instruction, trips, parts, service and maybe a mask or fins (the items you claim shops LOSE money on). So by your logic you're saying that an LDS makes enough money on that one major purchase to subsidize literally, YEARS of parts, fills etc.

By the way, I still love your quote at the end of your posts.

 

[MikeFerrara]

I find it interesting that your example quotes the one source I specifically excluded (LeisurePro) I bought from ScubaToys.com... I did get expert help over the phone. I did get excellent service. Oh, and I saved over $1000.

Just a slip of the fingers. I naturally associate LP with on-line sales.

That's absurd. Most divers have one major purchase (reg, octo, computer, BC). beyond that it is all air fills, instruction, trips, parts, service and maybe a mask or fins (the items you claim shops LOSE money on). So by your logic you're saying that an LDS makes enough money on that one major purchase to subsidize literally, YEARS of parts, fills etc.

By the way, I still love your quote at the end of your posts.

Sorry. After owning a dive shop for almost 4 years I can tell you for a fact that what I say is completely true. I never made enough money on air to even pay back the initial purchase of my compressor and it certainly never put a single nickle in my pocket.

I can also tell you for a fact that it cost me more to teach each OW class than what I charged (and I was the most expensive around). I needed to sell at least mask, snorkel and fins to most of the class just to break even and that's without me (the instructor) taking a pay check. The only purpose for the class is to sell equipment. If none of those students buy equipment it's best to not teach the class.

Oh, I forgot to mention trips...the best you can usually do is to get your own trip fairly cheap. Trips are another thing that shops do primarily to create the need for equipment and maybe a specialty class or two (which are more profitable than real classes).

Go run a shop for a while and then tell me it's obsurd. Shoot, forget that shop, just set up a fill station, buy insurance and see if you can make a buck selling gas at the volume that the average shop pumps.

I have no love at all for the equipment manufacturers, agencies or the shops either but most of you folks have not the slightest clue about how the dive industry works.

 

[MikeFerrara]

It's true that most divers make one major purchase (if that). That does not, however pay for years of fills. A shop typically has a short time to make what they can off a new diver. you pitch then an AOW (total loss leader) and hopefully an equipment package. Now you've made some money. If they don't buy anything they just help cover the cost of the pool so you can afford to hold the class for the one or two who might buy equipment.

Now if you're lucky you can quickly sell them an AOW and maybe a specialty or two. These classes are less time consuming, usually don't require a pool and are a little more profitable as long as you don't have to travel just to dive with one or two specialty students (you need to cram them in on some one elses OW day). These additional classes also create the need for more equipment which is the main value to the dive shop.

The few who hand in there all the way to DM or instructor are the cheap help that you simply MUST have.

 

[yknot]

It's true that most divers make one major purchase (if that). That does not, however pay for years of fills. A shop typically has a short time to make what they can off a new diver. you pitch then an AOW (total loss leader) and hopefully an equipment package. Now you've made some money. If they don't buy anything they just help cover the cost of the pool so you can afford to hold the class for the one or two who might buy equipment.

Now if you're lucky you can quickly sell them an AOW and maybe a specialty or two. These classes are less time consuming, usually don't require a pool and are a little more profitable as long as you don't have to travel just to dive with one or two specialty students (you need to cram them in on some one elses OW day). These additional classes also create the need for more equipment which is the main value to the dive shop.

The few who hand in there all the way to DM or instructor are the cheap help that you simply MUST have.

Mike-I don't think anyone posting here believes that running a LDS is an instant ticket to Fat City but as to all of the pitfalls and loss leaders you faced: Were you aware of any of these when you opened your business? Do you think (today, anyway) that the area you chose to open your shop is a good one? There are just certain areas of the world that aren't well suited to particular ventures. Do you feel that you were as adaptable to changing market conditions as you could have been?

 

[outlawaggie]

Adapt or die.

ScubaToys was an LDS about to go out of business two years ago. He adapted to the new world. Now he is doing great. While I understand your point I will not accept that I am somehow responsible for the demise of an LDS. Business, any business is about change. Read the book "Who Moved my Cheese" I read it as part of my MBA. It illustrates this point perfectly.

 

[Janko]

Adapt or die.

This is sort of like the music industry refusing to accept that CDs are a thing of the past, and just accepting that cheaper (free, hehe), faster and easier access to music is the essence of what consumers want with the advent of the internet. Rather than try to sue the pants off everyone, the industry should just accept the harsh reality of a changing business world. Just like they did when people started recording their own mix tapes! OH NO! Remember that scare? It was the end of the music industry! Blah.

If the LDS can't convince the consumer to buy from it (with lower prices or significantly enthralling service, or otherwise), then it's got to go online on its own - nothing wrong with this, in fact it's a great COUNTERPART to a physical shop as I'm sure Scubatoys will tell you. If the LDS doesn't adapt, it is asking to become no more than a LeisurePro (or Scubatoys) warehouse and shipping centre in the future.

Such is the reality of the business world, crappy or not.

 

[MikeFerrara]

Mike-I don't think anyone posting here believes that running a LDS is an instant ticket to Fat City but as to all of the pitfalls and loss leaders you faced: Were you aware of any of these when you opened your business?

Absolutely not.

Do you think (today, anyway) that the area you chose to open your shop is a good one?

If I was more willing to play the game I could have done better than I did but it wasn't worth it to me. However, there aren't many shops around here that any one can make a living off of. The shop in town before me was also a camera shop and the one in Kokomo also does a video business. The guy in Elkheart has a wife who's a nurse and supports the family. LOL.

There are just certain areas of the world that aren't well suited to particular ventures. Do you feel that you were as adaptable to changing market conditions as you could have been?

I think we were adaptable enough. However, when I was getting out some of the manufacturers were just starting to allow on-line sales. You can't sell at a low margine unless you increase the size of the market. The price restrictions are a problem though even if you do sell on-line.

We considered selling and servicing equipment for which we weren't authorized but after talking with my lawyer and going over the protection provided by different corp structures I decided that it just wasn't worth it to me.

It's one thing to be willing to change and another to have the recourses to make it work especially with the way some of the manufacturers want to run things.

If I was going to do it again I'd do it like LP if I could find the sources for equipment. Way easier to just run a website and a warehouse. I wouldn't have a compressor and I wouldn't teach. Skip the shop insurance, UW liability insurance, fill station costs and long hours in the water. I'd just maintain a website and pack boxes. That's where the money is. Of course if you're going to do that why sell dive equipment. You could sell something that more than 1% of the population uses. I'll bet there's more money in porn.

 

[redacted]

... The price restrictions are a problem though even if you do sell on-line.

.... That's where the money is. Of course if you're going to do that why sell dive equipment. You could sell something that more than 1% of the population uses. I'll bet there's more money in porn.

Because the Scuba equipment manufacturers and distributers price restrictions on authorized dealers create such a competative advantage for "grey market" dealers. Don't forget, that 1% is about 3,000,000 potential customers just in the US.

 

[MikeFerrara]

Adapt or die.

ScubaToys was an LDS about to go out of business two years ago. He adapted to the new world. Now he is doing great. While I understand your point I will not accept that I am somehow responsible for the demise of an LDS. Business, any business is about change. Read the book "Who Moved my Cheese" I read it as part of my MBA. It illustrates this point perfectly.

I have no idea how well scubatoys is doing.

I never meant to suggest that you are responsible for anything.

I don't even care if the shops do go away. They just silt up the dive sites anyway. Speaking of sites most have gas available near by so who wants to make a special trip to a shop for a air fill. They don't have any information I need. most can't mix any of the gas I use. I wouldn't dream of letting them touch my gear and what gear and they won't sell me parts. What equipment that I will still be buying they either don't sell or I can get it way cheaper someplace else.

The divers who need them are the ones who still need some classes, complain about the prices (so they buy online) and then complain that they're not treated like a valued customer when they go looking for service or advice.