MARP Price Fixing Update - Consumers Win!

[friscuba]

My business model has worked. It can work for anyone. By lowering prices we have brought more people into the sport - many who otherwise could not have afforded it in our area. Everyone loves a bargain... and top notch training at fair prices and big savings on equipment is a winning combination for any scuba retailer in the country.

I really wonder about the "it can work for anyone" statement. My guess is that you strive to be the "value" dive center in your area and it's working for you... likely because you are one of the few in your area pursuing that strategy... what happens if EVERY dive center in your region goes the same route? Are you all going to see a flood of new divers wanting suddenly to scuba dive because it's a bargain compared to what it was?

Lower price doesn't always mean more customers. Airfares to Hawaii are 50-60% lower than they were last August, hotel rates are down 20% or more... what a bargain, but where are the people?

My guess if every dive company in your region was to go to your business model, many divers would save money, but the sport wouldn't necessarily develop revenues enough to offset the lower pricing structure, and few or none would be prospering.

 

[DA Aquamaster]

So, less restrictive business models do work in markets where the laws prohibit practices that occur in the USA. Should we conclude therefore that scuba, in the USA, will not undergo some cataclysmic upheaval should MARP be ended?

I wish it was that simple.

The EU has numerous rules and standards regading the products that can be sold and the restrictions that pertain to them have a significant impact on the market over all. Ever notice how many older regs breathe better than newer ones? You can thank the EU standards for much of that as many regs had to be detuned to meet them - and in effect when implemented it leveled the playing field for the home team's regs. What's worse is that companies comply to be able to sell in the eurpoean market, but then sell the same detuned regs in the US.

In short, I am not a big fan of adopting EU policies here, because they seem to work there. Beyond the general principle, the environment, conditons, government controls and subsidies that exist on either side of the atlantic are entirely different and taking part of the system and transplanting it is just not going to work.

There is a difference between seeing the need to enforce existing government controls and seeing any value at all in expanding government control into areas in which it does not belong, and telling a company that they cannot engage in minimum pricing policies is exapanding government control not reducing it under some wackadoo argument that expanding government control will in some way result in greater free enterprise.

 

[shoredivr]

Ken, I have a question for you. I have looked at your website and reviewed the product lines you carry. Since you are not an Aqua Lung or ScubaPro dealer, exactly WHICH SPECIFIC manufacturers are telling you that you must sell for a certain price at your cash register?

Phil Ellis

Oddly, still no answer to that, Phil....


I, for one, am impressed at the amount of free advertising/promotion the OP has obtained out of this now 6 page thread. Which may have been the real point of it in the first place.

 

[offthewall1]

Oddly, still no answer to that, Phil....


I, for one, am impressed at the amount of free advertising/promotion the OP has obtained out of this now 6 page thread. Which may have been the real point of it in the first place.

For those that know me and have followed my store since it's inception... you know the answer to this question... but for those feigning ignorance and those who truly don't know, the answer is this. Scubapro and Apeks/Aqualung are not the only companies with these policies.

Another major line we carried is one of the central characters being looked at by the FTC based on information provided to them (as sent to me) via emails from both the President of that company and our area representative. Emails expressing grave concern over the fact that we were "violating" their price fixing program.

Now I'm not going to rehash the entire story... but to make a long story short - we threw those bastards out of our store and proceeded to initiate contact with our state authorities and the FTC.

We've also thrown out Apollo for similar reasons and and another un-named brand... although under an agreement with the latter, we have accepted them back into our family of products.

We battle constantly on the issue of MAP and MARP pricing with all those who try to enforce it upon us. To date, no one has pulled their product out of our store for violations... but we have thrown a few of them out for calling us or emailing us to complain about our pricing.

Someone asked me the other day what I would do if I threw them all out... the answer is simple. I'll start my own product line and put them all out of business with superior products at lower prices. It's the American way...

I for one will be glad to see consumers able to purchases SP and AP/AQ products for less money in Maryland. The alternative will be SP & AP?AQ pull out of Maryland altogether... which I don't see them doing. There are more than 30 states lining up similar legislation and I expect many of them will pass it.

 

[Rainer]

Bump.

Seriously, Off, any response here? You're a bit hard to take until you address Phil's most reasonable question.

Ken, I have a question for you. I have looked at your website and reviewed the product lines you carry. Since you are not an Aqua Lung or ScubaPro dealer, exactly WHICH SPECIFIC manufacturers are telling you that you must sell for a certain price at your cash register?

Neither the Maryland (I don't think) legislation nor any legislation currently working through the federal system impacts Minimum ADVERTISING Price, which is the REAL issue that seems to concern divers. While I could be wrong, the Maryland legislation does not overturn the right for a manufacturer to determine WHERE a product can be advertised, so this will not impact the internet/no internet issue.

Again, tell us which manufacturers are telling you what price you MUST sell for in your store?

Phil Ellis
Discount Scuba Gear at DiveSports.com - Buy Scuba Diving Equipment & Snorkeling Equipment

 

[shoredivr]

Cheap gear price is not the only thing to look for in a dive shop, Off.

Once you've bought your gear, there's gear servicing, clean gas fills, knowledgable staff and quality training.

we threw those bastards out of our store

That's some business model. Unfortunately the tone of that post doesn't come across as very level headed, and now SBers eveywhere can evaluate that.

 

[offthewall1]

Bump.

Seriously, Off, any response here? You're a bit hard to take until you address Phil's most reasonable question.

Here is a post from Phils own website... not too long ago.

Retail Restrictions in the Scuba Industry - Scuba Industry Price Controls

I have to seriously wonder what has changed Phil's mind? Who did Phil sell out too?
Hey Phil, Why the change of heart? Please explain it to us all....

Perhaps Phil doesn't appreciate me as competition?

The only thing I do know is that you can't play both sides of the fence...

 

[offthewall1]

Cheap gear price is not the only thing to look for in a dive shop, Off.

Once you've bought your gear, there's gear servicing, clean gas fills, knowledgable staff and quality training.



That's some business model. Unfortunately the tone of that post doesn't come across as very level headed, and now SBers eveywhere can evaluate that.

They've been evaluating this thread... and it sways heavily in our favor. Look, even the ones trying make arguments against us are being called out.

We have no problem providing gear service, clean gas fills, have the best and most knowledgeable staff in the state and offer training of such high quality, people from as far as Florida and New York have come to train with us. That says enough. Combine all of that with low prices... it doesn't get any better for consumers.

I'm thinking of franchising in all 50 states... I think it's time for some radical change in the industry...

One final point, then I'll let the dogs run loose... So far, 16 people have thanked me for my original post... the most I see on a post in opposition is 5... and of those 5... some ar ethe old guard dealers... so I'd say 76% favor the new law... and 24% oppose it. In any vote that's called a landslide margin of victory... it also coincides with the roughly 80% of the general public who disagreed with the direction government was taking leading up to the election.

This indicates to me that an overwhelming number of people want change in the industry. They don't all know what they want that change to be... but they know they are sick and tired of the old way of doing business...

 

[DA Aquamaster]

I for one am all in favor of free beer and pizza for everyone and I suspect a majority of beer and pizza lovers would favor that as well. But that does not make it a good idea, or a realistic one.

Franchising in all 50 states is a geat idea, but you might want to wait until you get your current store stabilized and show that you actually have a business model that works, a solid customer base and some realistic numbers before you look at exporting it to 49 other states.

 

[deco_martini]

The marp system has turned scuba into an economic phenomenon called "conspicuous consumption". The downside to this is that land locked scuba shops suffer worse than a typical business during a recession.

During a recession, people buy hamburger instead of steak. They give up conspicuous consumption altogether.

I am not necessarly pro-marp or anti-marp, but regulation preventing these sorts of practices may keep more shops open since they can lower their prices to adjust for economic conditions.

The idea that this is necessarily the death of the LDS is naive at best. Where I live, Scuba is basically a wealthy persons hobby.