Does every LDS have to build a mail order business like a Scuba Toys wannabe? Or does LeisurePro gobble up the gear sales, leaving the LDS with classes and maybe quarry fees if they're fortunate enough to have one?
It's almost impossible to get reliable numbers on privately-held companies but it would seem that LeisurePro and Scuba.com have the bulk of the internet business. Most stores that I know of who have tried to set up internet-based sales have found it to be more trouble than it's worth because of the dominance of already-established sites whose primary business is on-line sales, not just doing it as an adjunct to their brick-and-mortar store.
It sounds like you evolved from running a brick and mortar retail dive shop with various associated services (e.g.: offering some trips) to becoming primary an internet-based trip organizer...if I understand and paraphrase correctly.
Yes.
So the question becomes...how did Reef Seekers secure its dedicated travel diving customer pool to make the business model work? Was it mainly local social networking, given that California has such an active local dive scene?
So some clarification is in order.
When we were brick-and-mortar, my biz partner Billy loved doing retail and I loved teaching and taking people diving. At the end of 2006 (we opened in 1988), we lost the lease on our Beverly Hills Wilshire Blvd. store because they wanted to build condos on the property. Billy, who started working for his parents in 1965 when he was a teen when they owned what eventually become Reef Seekers, wanted to get out of the scuba rat race. On top of that - and bear in mind, this was all right before the recession of 2008 - real estate prices had gone up, plus we had a pretty good deal. I estimated for a similar location, not necessarily in Beverly Hills, and not close enough to infringe on the territory of any other stores in our general vicinity (so we wouldn't lose various equipment lines), our rent would double to roughly $10,000/month. That was going to require us to increase our overall revenues by about $165,000/year just to stay even. made no sense.
By the same token, we had a pretty solid customer base and we had long-established a great e-mailing list. The store, and specifically me, were always active and visible in local scuba events, we ran Chamber Day, sI spoke at many clubs, we were at the Scuba Show each year, etc., etc. In other words, a lot of people knew who we were. I thought I could use that level of visibility and awareness to continue to take people diving, even without the benefit of a retail store. So I decided to forge ahead without Billy, kept the name "Reef Seekers" (Billy and I worked our a dissolution agreement so I bought out his share of the company), and off we went.
For a number of years, I was able to keep our local boat charters going. (Reef Seekers was one of the more active dive shop charterers in the area.) And I now had time to do more foreign/vacation trips. I also continued to send our to our e-mail list (roughly 1,000 people - mostly SoCal), the weekly "This Week at Reef Seekers" (aka TWARS) which I also post here, and a monthly newsletter (which also gets posted here. My goal was to let our base know that we were still diving, they were still welcome, and life was good. At the same time, this set me up as a resource for diving info. People feel free to call me and ask questions about local and foreign destinations. Plus I'll throw in news, info, and tidbits into TWARS so it's not just a Reef Seekers promotional piece but also (hopefully) has some meat to it and is worth reading. Same with the newsletter. And the hope is that someday when someone's ready to do a dive vacation, they'll think, "Maybe I'll call Ken and see what he's got going."
Obviously my biggest issue is attrition because, as my customer base gets older, they stop diving for various reasons and I don't have a store that's bringing in new blood. But I dod pick up new people here and there, usually through word-of-mouth, and that seems to be working. On a trip to Socorro I have in March of next year, out of 15 divers signed up, I have 4 people who have never done one of these trips with me before but they've been on my e-mail list for years and years. Plus, I'm generally attracting people with dispensable income and available time so, unlike a traditional store, I have a very high percentage of my smaller customer base that is willing/able to travel with me. I make sure people know I specialize in smaller group trips and I also make sure they know that they'll be able to dive with me and I'm there to fix problems and answers questions when needed. My joke is that you'll have my undivided attention for the entire vacation, but for another extra $500, I'll leave you alone.
My other pitch is that all you need to do is pay for the trip and then show up at the airport and I'll take it from there. I fix the problem and deal with the hassles. When you book a trip with me, one fee covers everything (except airfare) for the trip: the trip itself, crew/staff tips, hotel overnight if needed, taxis or other transfers, etc. I don't want to nickel-and-dime you to death. I basically tell people that you might be able to book the same trip for less, but you won't have a better time because I'll deal with any problems as well as because a lot of people know me and we frequently go back to places we've been before, we're going to get taken care of better than you will if you go there on your own as an unknown quantity.
I also have exactly ZERO interest in becoming a booking agent for other people's trips. I only deal with trips that I am going to lead. I'm happy to refer you to any of the travel wholesalers you mentioned because that's just not what I do.
It's all been working for me for 14 years now but I also think I'm in a rather unique position to make this all happen. What will be most interesting to me is to see how this all works out post-pandemic since obviously I had to curtail for the last 18 months exactly what my business model is designed to do. But I've stayed in touch with people and of the two trips I've got for 2022, they're both full. So we shall see what the future holds.
It's my opinion that the "jam session" approach was far better than the PP I had prepared. 
