awap:
I am not particularly a fan of LeisurePro and it is not my intension to defend them. But The problem with Scubapro and other brands that demand minimum prices is not LP but the US distributor that is mandating this. They are who is hurting the low volume shops that have a hard time benefitting from large volume wholesale buys.
But even those shops could compete with LP and abide by dealer agreements. They can market packages and/or throw in service and airfill perks that can reduce the cost difference to a point where it is no longer important while still maintaining Mfgr warrenties and the related free parts programs. It would also adds customers to their customer base rather than to LPs. But they are going to have to give up some profit on the initial sale to do this.
Weak shops that can not adapt are probably going under. That will leave more market foer the surviving shops. Good shops will do OK. Some shops will continue to survive while they hide behind the deceptions they often try to perpetuate. But new scuba shoppers have ever increasing sources of information from the internet and the number who can be fooled or coersed into paying uncompetativly high price is dwindling.
Weak shops will become even weaker if they are expected to make no money off high ticket items. The fewer shops there are, the worse off many of us as hobbyists will be.
Not every location in this country has 5-6 dive shops to choose from, in the vast majority of the country any dive shop going under will affect a lot of people, in many areas everyone living there could lose thier only local source for dive services.
To have a dive shop, you generally need a compressor, rental gear availble and retail gear on the sales floor. LP, from reports of those who have been there, has little to none of these. It would be extrememly easy for even a small dive shop to have 60-100K invested just to open it's doors. Once they open the doors, they have rent (retail space rent are higher than awrehouse, also retail requires more floorspace for display and traffic purposes), utilities, marketing expenses, staff to pay, the orginal debt to service and somehow need to make enough to pay their families. Small businesses have got to charge a markup or they will die.
In order to sell gear, you pretty much have to stock it. Some retailers ocasionally get some special order business, but in general, to sell 1 Zeagle Ranger, you need to stock all 4 sizes as you never know what size the person walking in the door will be. That's roughly 1600 hundred bucks wholesale sitting on the sales floor (already paid for out of the shop owners wallet) to get a sale for an item that LP charges only $449 for. Nobody can guarantee the sale of that BCD will also bring in other money in the form of services or sales, so it has to have a price that on it's own justifies even stocking it. Most dealers I've talked with, shopped at or worked for DO offer packages and other perks that can bring down the price to compare with say Scubatoys or Diversdirect, but LP is in a league of it's own.
Manufacturers dropping their minimum price agreements would not help the vast majority of small shops, and oftentimes when there are price wars, nobody in the business wins, everyone actually makes less. I've seen a small operator try going the discount route. He messed up the sales for everyone else in town, got real busy and took up a bigger share of the market, his sales gross went way up, but his business partners were complaining because they were working twice as hard and making less money, because their margins were so low, than when they played it straight retail. This operator was not service oriented at all, no charters, training, airfills, gear repair, etc ... and made it tougher on the others who actually serviced their customers.
Industries can underprice themselves to the point where there are few or no healthy businesses left. It would be sad to see that happen to this hobby.
later,
