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

[aleave]

PADI has already broutht the price of instruction down to where all a LDS can do is use instruction as a way to create new customers, the equipment manufacurers make a product that last's forever so the LDS has to create a new customer every time they sell a package of gear. That leaves trips which barely cover the credit card fees, service which has never done much more than cover labor, and the one thing all divers need, air. Shops only manufacture air because they have to. If you had to pay what a fill costs them it would be about $20.00 a tank, not $4.50. Why does everybody in America think that everybody else owes them something for nothing?

 

[redacted]

PADI has already broutht the price of instruction down to where all a LDS can do is use instruction as a way to create new customers, the equipment manufacurers make a product that last's forever so the LDS has to create a new customer every time they sell a package of gear. That leaves trips which barely cover the credit card fees, service which has never done much more than cover labor, and the one thing all divers need, air. Shops only manufacture air because they have to. If you had to pay what a fill costs them it would be about $20.00 a tank, not $4.50. Why does everybody in America think that everybody else owes them something for nothing?

How does PADI control the price an LDS charges for instruction?

If an air fill costs $20, why would you charge only $4.50?

Why would any American want to pay more than a competetive price for goods or services?

Would you like to tell us the name and location of your shop?

 

[ReefHound]

Shops only manufacture air because they have to. If you had to pay what a fill costs them it would be about $20.00 a tank, not $4.50. Why does everybody in America think that everybody else owes them something for nothing?

That flies in the face of all the scuba parks charging $10 admission and $5 - $6 air fills. By your number, they would be losing money. It might cost a shop $20/fill if they are in BFE or chased off all their customers, and now must amortize their overhead across just a few dozen fills per month.

Nobody owes me anything, but if somebody offers me a good deal and somebody else does not, why should I not give my business to the former and tell the latter to take a hike? Patronizing the latter because of fear and intimdation tactics certainly isn't the American way.

 

[Web Monkey]

That flies in the face of all the scuba parks charging $10 admission and $5 - $6 air fills. By your number, they would be losing money. It might cost a shop $20/fill if they are in BFE or chased off all their customers, and now must amortize their overhead across just a few dozen fills per month.

Nobody owes me anything, but if somebody offers me a good deal and somebody else does not, why should I not give my business to the former and tell the latter to take a hike? Patronizing the latter because of fear and intimdation tactics certainly isn't the American way.

I don't know what park you go to, but Dutch Springs is $25/day, plus air (not sure how much that is, since their compressor-in-the-shed-run-by-kids scares me).

Do we have any engineers around here that know how to calculate the energy (KWh) required to make a cubic foot of air at 3000PSI? I'd be willing to bet that if you took the energy cost and the compressor maintenance cost, that the cost of a fill a fill is much closer to $10 than $5.

Terry

 

[redacted]

I don't know what park you go to, but Dutch Springs is $25/day, plus air (not sure how much that is, since their compressor-in-the-shed-run-by-kids scares me).

Do we have any engineers around here that know how to calculate the energy (KWh) required to make a cubic foot of air at 3000PSI? I'd be willing to bet that if you took the energy cost and the compressor maintenance cost, that the cost of a fill a fill is much closer to $10 than $5.

Terry

I'd be more than happy to take that bet. I know the shop selling me air is not losing $1 per tank when no one is underselling him. They have to throw in the cost of floor space, shop monkey, and short term amoritization of assets to get those kind of figures.

 

[cerich]

for a shop that needs to do a higher volume than a garage setup

Compressor and cascade ~15 K (low end for a shop)
Monthly energy bill ~$100
Filter cost per year ~ $500
Air quality lab a year ~$300

amortize the compressor over 5 years and you are looking at 5K a year to have that. I'm not including labor, unexpected(or any maintenance), rent of the space the unit take or any of a dozen other "incidentals.

That is 1000 fills a year at $5 to break even (actually still lose some money if all expenses are taken into account)

$10 a fill for air is a price that starts to make sense. $5 is just losing money so you don't lose costumers that have been spoiled by cheap air.

awap, sorry friend, you are well off on this.

In very few locations will the volume of air be enough to make a $5 fill a profitable experience for the LDS.

 

[ReefHound]

Do we have any engineers around here that know how to calculate the energy (KWh) required to make a cubic foot of air at 3000PSI?

Terry

Here is a detailed analysis of four guys in Australia who bought a compressor to save money because they were fed up with paying for fills. They appear to have included everything but allocate labor and floor space. Operating costs less than $1 per fill and capital costs currently around $3 per fill, and decreasing.

I would think a LDS system designed for a greater volume should yield a lower cost per fill. If you use the capacity. Of course, if you spend the money to run a system that handles 1000 fills per week and only do 50, your cost per fill will be outrageous.


******************************************************

COSTS

Running Costs

Item Cost per fill
Filter $0.49
Electricity $0.07
Spares/repairs $0.20
TOTAL $0.76

1. NOTES: After way through filter 23 with 1,569 fills completed
2. The nipples and valves purchased have been amortised over a number of filters
3. The oil has been amortised over a number of filters and not all the cost has yet been reflected in the fill cost but the above represents a realistic situation.
4. Repackable cartridge will be amortised over fills 14 to 66 and included in Filter cost.

Fixed Costs

At the same time as above the purchase cost of the compressor is $3.30 per fill.

Total Cost

The total cost as I write this is $4.06 a fill. Therefore, based on $9 a fill (or even $5) we are already ahead and of course this will get even better over the coming years.

 

[ReefHound]

That is 1000 fills a year at $5 to break even (actually still lose some money if all expenses are taken into account)

Must be a busy LDS to be doing 3 fills a day. What happens if both of their customers can't dive that week?

If I were to track my mileage and allocate a cost to my time, it probably costs me $50 just to visit my LDS.

 

[Web Monkey]

Filter $0.49
Electricity $0.07

Around these parts, 7 cents will get you a little less than 0.5 KWh. I don't think you can fill a tank with that.

Terry

 

[cool_hardware52]

Here is a detailed analysis of four guys in Australia who bought a compressor to save money because they were fed up with paying for fills. They appear to have included everything but allocate labor and floor space. Operating costs less than $1 per fill and capital costs currently around $3 per fill, and decreasing.

I would think a LDS system designed for a greater volume should yield a lower cost per fill. If you use the capacity. Of course, if you spend the money to run a system that handles 1000 fills per week and only do 50, your cost per fill will be outrageous.


******************************************************

COSTS

Running Costs

Item Cost per fill
Filter $0.49
Electricity $0.07
Spares/repairs $0.20
TOTAL $0.76

1. NOTES: After way through filter 23 with 1,569 fills completed
2. The nipples and valves purchased have been amortised over a number of filters
3. The oil has been amortised over a number of filters and not all the cost has yet been reflected in the fill cost but the above represents a realistic situation.
4. Repackable cartridge will be amortised over fills 14 to 66 and included in Filter cost.

Fixed Costs

At the same time as above the purchase cost of the compressor is $3.30 per fill.

Total Cost

The total cost as I write this is $4.06 a fill. Therefore, based on $9 a fill (or even $5) we are already ahead and of course this will get even better over the coming years.

That's an interesting article, thanks for the link.

What I find missing from the analysis is:

The cost of insurance (maybe different in Australia, but in the land of litigation it's a significant expense)

The Cost of the Square Footage to house the beast, and the spares, and the fill panel, tank storage etc. Might be able to do it in 100 sq ft.

The cost of Labor to operate the fill Station.

The cost of labor to process the sales transaction, i.e. take the money.

These costs are of course highly variable depending on the operation, but they are not zero.

What does that do to your $4 / fill?


Tobin