miesemer:
Why stop at the Scuba industry. How much mark-up do you think you're paying on your groceries, beer, clothing, sneakers, etc. What profit margin do you think is fair for these products or for the product or service you provide in your chosen career field?
Before I get flamed for being an LDS owner...
I work in the environmental industry for a company that manufacturers groundwater remediation equipment. Our industry is having a very hard time surviving due to our profit margins being driven down to a point where we're barely making it. Many of the well know companies in our industry have gone belly up and the ones that are still around are operating on 50% of the workforce they had 5 years ago. Competing solely on price is killing our industry, product quality and customer service.
I don't intend to flame; conditions are difficult on any industry undergoing a change from a high margin model to a commodity one. Which is what I see happening. (Before anyone freaks out or posts the indignant "it is your life support gear", look at the market; it is quickly becoming commodity driven. Whether it should or not is immaterial, the trend is inexorable at this point.) I worked at Motorola when the costs of pagers and cell phones went from luxury items to commodity, and it tortured the corporate management. Ultimately, the company survived the job cuts and made the process improvements required to compete. Now, they compete well with the Nokias and Samsungs.
Margins in groceries is just a few points, VCRs is maybe 10, computers maybe that, if you have a brand to sell (Apple notwithstanding). Clothing, beer, and restaurants depend on branding for margins; Levi Strauss is going through the same battle right now, fending off Walmart/Target on the low end and trying to steal market share on the high end jean mfgs. Toys-R-Us, KB, et. al. are in the same boat. My current employer is nearing the 20W light bulb going off and realizing that it is a sunset industry. Survival of the fittest and all that jazz...
It seems inevitable the sturm & drang will probably produce an industry that is markedly different than today’s. Look at photography players being overwhelmed by digital imaging, at record/music storefronts dropping like flies due to digital music, and local bookstores battling Amazon/Barnes & Noble. The winners will be the ones who transform their business models before they are eaten/starve. Whining and trolling won't help...
Personally, I purchase most of my gear online, simply because my local LDS (with one exception) does not provide value to me. So why spend 50-300% more than LP, et. al. for little gain. I could relate the horror stories of asking an LDS to order stuff, repair equipment, etc. but the ultimate problem is the model they use is poor. To echo your final point, the LDSs will not be able to compete on price; you have to add value in some measurable way - service, travel, and information. Something...
BTW, the one LDS that I love going to is larger, brightly lit, has great inventory (what I want when I need it), and is perfectly aware of the online resellers (they aren't acting like vultures or angry about it). They put a lot of time and energy into service and information. So, my wife and I use them. Last month, she bought a mask and fins, there, and we purchased 2 Akona bags. Not a huge purchase, but we could have _saved_ $100 if we purchased from LP. They get it. The others, well...
My two pennies,
jwh
