Major Industry Change re: Online Scuba Sales....

[Web Monkey]

I actually support my LDS even though they're more expensive than a lot of other places, because I place value on getting great repairs and air fills really fast (same or next day). However I also realize that the once-a-year vacation divers will just go wherever it's cheapest.

That's why I believe that the only shops that will survive are the shops that are competing on Quality of Service, in the high-end market, and that the shops competing on price in the low end are going to get squashed like bugs, leaving the low end of the market to mass-marketers.

Although great for consumers in the short term, competing on price will actually result in the loss of a lot of SCUBA shops, which will make getting instruction and air fills more difficult, and will ultimately hurt the industry.

Again, the die-hard divers won't be hurt. If necessary, myself and a few friends could just buy a compressor. The people who will be hurt are the prospective students who won't be able to find local classes, service and air fills, and will probably not bother.

Terry

I agree in part, disagree in part. With respect to LDSs that are also online, such as Scubatoys and DiveRiteExpress, there are enough dive fanatics out there who truly want to support businesses such as these, even if they don't want to support their local LDS because of bad experiences. If I can't get what I want at my LDS, businesses like Scubatoys or DiveRiteExpress are always my next choice. I only buy from LP or Scuba.com if I can't find what I want elsewhere. The vacation diver might not care where they buy from as long as the get the cheapest price, but my opinion is that the average diver (not people who only dive on vacation) realize the situation the industry is facing. Larry doesn't need to match LP.com price in order to get the sale, only come reasonably close. Myself, and many others, will pay a little extra to support an online LDS. As long as these Online LDS make an effort, I don't see them having a problem with the real mass marketers.

 

[redacted]

The only way to survive is for the top-shelf manufacturers to hold the line on pricing and distribution. Otherwise, at least 3/4 of manufacturers and dealers and pretty much all of the distributors are doomed.

They have already been overrun on that line. The question now is where to draw the next line and how well they can hold it. "Stay the course" just doesn't seem to be working well in this case.

 

[cerich]

They have already been overrun on that line. The question now is where to draw the next line and how well they can hold it. "Stay the course" just doesn't seem to be working well in this case.

The "stay the course" message has and is in the process of putting quite a few shops out of business...

 

[The Chairman]

Chris,

we agree once more!

 

[Thalassamania]

Does anyone see parallels here to how the industry reacted to recreational nitrox use in the '90's? First there was generalized resistance. Then a few innovators came out and offered it. They were "punished" by the industry giants ... but they prospered because they were offering what the divers wanted. Finally one of the "big boys" came onboard ... and within a couple of years, the same folks who were driving the opposition were acting like they invented the idea.

Seems to be how the scuba industry operates ... they get dragged, kicking and screaming, into the present ...

... Bob (Grateful Diver)

I’ve rarely seen PADI try to invent or innovate, it is an organization with a long history of turning about on it’s tail and cannibalizing the efforts of others.

The interesting questions in this thread are not (to my mind) what is dive gear going to cost but rather how will the current mix of training, air fills and equipment sales that current flow out the door of the LDS change? If gear sales move away from the LDS to the internet (and I think that’s inevitable for many products, no just dive gear), what happens to instruction? Does it move to independents that only have to capitalize say six to ten sets of gear? Does a hip manufacturer see that coming and work to put their gear in the hands of such independents at say 50% of current end line price in return for the direct internet sales from students that would be “pre-sold” on and fitted to their gear? Do compressors become individual’s things? Do they move to trailer mounted, at the dive site, services? Do we come to expect them on the dive boat rather than in a shop? Does all this create for-profit dive clubs that support a compressor, training, and dive travel but that link back to a manufacturer in the way that I described earlier? Those are the questions I’m more interested in. Gear is going to cost what it costs, and we’ll all continue to pay about what we do now, in one way or another.

 

[Web Monkey]

The "stay the course" message has and is in the process of putting quite a few shops out of business...

They weren't doomed by "stay the course" they were doomed by being too small and under-capitalized, and unable to obtain the necessary pricing concessions that would have allowed successful competition.

The ability to compete in an internet-based business is almost entirely dependant on the owner's ability to negotiate or demand better pricing from the manufacturer.

The is all pretty much irrelevant anyway, since the places that will get squashed really have no ability to stop the squashing.

The only really interesting part will be whether or not huge marketers get into the act. What would happen, for example, if WalMart bought a couple of mid-range manufacturers and started selling a good quality package (mask, snorkel, fins, reg) for $129?

When was the last time you had your television serviced? Or your microwave?

Terry

 

[jeraldjcook]

The only way to survive is for the top-shelf manufacturers to hold the line on pricing and distribution. Otherwise, at least 3/4 of manufacturers and dealers and pretty much all of the distributors are doomed.
Terry

Isn’t this staying the course?

They weren't doomed by "stay the course" they were doomed by being too small and under-capitalized, and unable to obtain the necessary pricing concessions that would have allowed successful competition.
Terry

By the top-shelf manufacturers holding the line on pricing and distribution it is preventing the LDS from getting the necessary pricing concessions they need. Not trying to argue, just understand your point. It seems as though if the manufactures do what you think they should, you are saying it hurts the LDS and they will go out of business?

 

[cerich]

They weren't doomed by "stay the course" they were doomed by being too small and under-capitalized, and unable to obtain the necessary pricing concessions that would have allowed successful competition.



The ability to compete in an internet-based business is almost entirely dependant on the owner's ability to negotiate or demand better pricing from the manufacturer.

The is all pretty much irrelevant anyway, since the places that will get squashed really have no ability to stop the squashing.

The only really interesting part will be whether or not huge marketers get into the act. What would happen, for example, if WalMart bought a couple of mid-range manufacturers and started selling a good quality package (mask, snorkel, fins, reg) for $129?

When was the last time you had your television serviced? Or your microwave?

Terry

I disagree with the assumption that the LDS can't stop it, in fact the LDS is exactly the place it can be stopped. As a rep we see those that get it and those that simply don't, those that do are profitable, the owner is happy and will continue so. Those that don't will agree with your statements. I have dealers that get it that are located in small towns far from diving, yet manage to carry more than one main brand and purchase enough to get the exact same pricing as my online stores. The pricing level bar is set very low in this industry.

 

[Web Monkey]

By the top-shelf manufacturers holding the line on pricing and distribution it is preventing the LDS from getting the necessary pricing concessions they need. Not trying to argue, just understand your point. It seems as though if the manufactures do what you think they should, you are saying it hurts the LDS and they will go out of business?

Keeping the retail prices consistant allows the dealers to compete on service.

Allowing the retail prices to float makes everybody compete on price, which will put the low-volume dealers out of business.

Terry

 

[jeraldjcook]

Keeping the retail prices consistant allows the dealers to compete on service.

Allowing the retail prices to float makes everybody compete on price, which will put the low-volume dealers out of business.

Terry

So manufacturers should not sell to businesses like LP or Scuba.com who sell below manufacturer pricing guidelines in order to keep pricing level? Are manufacturers creating their own problems by selling these business?