PETE SPOKE!!! (AND WE RECORDED IT)

[lowviz]

...//... lack of focus on the consumer is the cause (if not the source) of the disfunction. ...//...

The "cure" if there could be said to be one, is that the wholesale suppliers must stop thinking of the retailers as their customers. It is the end consumer that is their customer, ...//...

This is the root of my love/hate relationship with SP

Every major dive brand should have a direct-to-consumer sales and fulfilment channel at reasonable retail prices that leave no room for the local retailers to offer so-called "discounts" off of egregious prices. ...//...

And where, exactly, would one put the knife so that retailers would still be profitable?

I don't see any reasonable answer to this zero-sum game.

 

[Ken Kurtis]

And where, exactly, would one put the knife so that retailers would still be profitable?

In overly-broad general terms, we have to re-think our relationship to our customers and what we mean to them. We need to be a partner with them in diving.

I was on some business panel one time (and I've written about this too) and said that if there was a law passed that you could not certify people at all at any level for the next 12 months, most stores would go out of business because their business model depends on them selling gear to customers. And the other problem with that, is that the gear is pretty good and durable. I mean, how many regulators are you going to buy over the lifetime of your diving career? Unlike the camera industry, which churns out new features and abilities all the time, diving gear hasn't really changed all that much over time, certainly not in the last 30 years or so.

When Atomic first came out, I remember having a discussion with Doug & Dean (and for the sake of full disclosure, I dive with an Atomic T1, I think they're FABULOUS regs, and I recommend them regularly) and I told them - somewhat tongue-in-cheek - that I didn't need a $1,500 reg that would last a lifetime and perform flawlessly, because once I made that sale to that customer, there was no more gear money to be made there. I told them what I needed was a $199 regulator, that worked great for a year, but would break down after that, and which couldn't be serviced, so you'd come back and buy another $199 reg.

And, in all seriousness, selling gear is likely one of the WORST things we can do for customer retention, especially if you don't have much of a local/foreign travel program. You sell gear to them (hopefully), maybe they service it once in a blue moon, but you've basically gotten all of your money out of them. Instead . . .

Don't sell them the gear, RENT them the gear every single time they want to go diving. YOU only will have top-of-the-line stuff in your rental department and you'll have plenty of it. YOU will keep the gear cleaned and serviced and in tip-top shape. They come in on Friday to pick it up (you will, of course, have pre-pulled everything and will have it in a bag for them to take - all they need to do is confirm everything;s the right size and works to their satisfaction), then they go do their diving, when they come back, YOU will be the one to clean the gear, fix anything that went wrong, and be ready to rent it again.

One of the methods used by conservationists to discourage people from killing sharks is to explain to them that when they kill the shark, they make money once. But when they take tourists out to see the sharks and leave the sharks alone, they make money over and over again and in the long run, create a healthier environment as well as make more money.

The same principle applies to a retail dive shop. Get away from this idea that EVERYBODY needs to own their own gear. You make money once. Have them rent gear from you. Less of a cost for the customer, keeps them coming back into the store for a better relationship and perhaps some accessory sales, they always get top-of-the-line stuff, you'll make more money in the long run with repeated rentals, and at the end of a year or two, you can sell off the gear to those avid divers who dive every single week and for them, it IS financially better to own stuff. But you've also now cemented in their DNA that you're "their" store.

Think of when you travel to a different city. You land at the airport and do you go to the nearest car deal and BUY a new car because you need to drive around for a few days? Or do you go to a car rental place and RENT a car? Same general principle can be applied to the dive industry.

 

[tursiops]

Think of when you travel to a different city. You land at the airport and do you go to the nearest car deal and BUY a new car because you need to drive around for a few days? Or do you go to a car rental place and RENT a car? Same general principle can be applied to the dive industry.

Although I think your general premise (rent rather than sell) is intriguing, the quoted analogy misses the point: going to a different city is a red herring, because I might want to drive to get there. Better to simply say, I have no car, and I want to explore my environs for a few days; do I buy a car to do it, or rent one? I rent one, but that is because AVIS et al exist, and not just car dealerships. your model seems to say we don't need AVIS...just let the dealers rent out the cars....or maybe you are saying we don't need the car dealerships, just AVIS?

 

[Ken Kurtis]

Your model seems to say we don't need AVIS...just let the dealers rent out the cars....or maybe you are saying we don't need the car dealerships, just AVIS?

In L.A. (as far as I know), dealerships don't rent cars so you need both.

But what would be interesting would be a dive shop that doesn't sell ANY gear, only rents, top of the line stuff, many lines to choose from.

And the REAL question with all of this is that the way our industry is structured right now, you need roughly a $2000-$4000 buy-in after your class is over if you want your own stuff. That's obliviously a barrier to many people. That may keep them from diving. Many stores (again, at least in L.A.) don't have the best rental gear and not necessarily a lot of it. Again, a barrier to continued participation.

But if you had access to great rental gear that you didn't have to maintain or clean, and instead of a multi-thousand buy-in, it cost you $100-150 to rent anytime you wanted to dive, would people dive more often and would we keep them in the sport longer? Would we also attract more of the casual diver who's fine with diving once or twice a year but is put off by the current business model because - let's face it that this is true - we're basically set up like a cult and not everyone wants to join a cult.

 

[mderrick]

But what would be interesting would be a dive shop that doesn't sell ANY gear, only rents, top of the line stuff, many lines to choose from.

This model actually does exist, I've seen it in action and so have others.

DiveSeekers merging with Scubadelphia, Hillsborough NJ location closing

 

[drrich2]

And the REAL question with all of this is that the way our industry is structured right now, you need roughly a $2000-$4000 buy-in after your class is over if you want your own stuff. That's obliviously a barrier to many people.

A barrier indeed. One thing that complicates it is the inconsistentcy of rental gear dealing with distant dive destinations. For local diving coastal California or southeast Florida, this sounds great.

As a customer, you could pitch to me that my dive gear easily takes up a 2nd checked bag each way on flights, so there's around $70 per trip I could save (plus packing and unpacking!), plus regulator servicing, after trip gear rinsing and potential concern about aging gear (e.g.: hoses, connectors).

A lot of 'normal-sized' people could benefit from that business model. Some of us won't - I'm big and chubby with a big head, long fingers and size 15 feet, so I'm not 'off the rack.'

If someone wishes to do this, I'd suggest looking for rental dive computers that easily wirelessly upload dive logs to smart phone app.s, so after the diving's done, customers can take their dive log history with them. A significant added perk. Dive cameras that could upload photos easily and wirelessly could be another perk. If you book group dives, take some shots of the customers diving and post them on your Facebook page where they can share them.

Some gear is fairly interchangeable (e.g.: jacket BCD, paddle fins); some is not (e.g.: camera and dive computer interfaces). Perhaps the dive business could take a supply of dive computers and let the host facility provide the rest of the rental gear?

 

[merxlin]

I think the problem - and I've said this for years - is that we have a fatal flaw in the construct of the industry.
• Why do people want to get certified? So they can dive.
• So they have to go to a dive shop (or independent instructor) to get certified.
• Does the dive shop, post-class, then take them diving? No.
.........................

Does the dive shop, post-class, then take them diving? No. For me- this is a huge flaw in the LDS system. People quit needing gear and needing advanced training when they quit diving. The LDS that expects that once someone has their OW cert suddenly knows how to navigate the ins and outs of the diving culture is grossly mistaken.

I quit diving in the late 70's because I had no one to dive with. I never connected to the diving community. When I was recertified in 2005 the shop I went with had monthly boats for students and as many non-students as the boat would hold. It almost always sold out. I was comfortable with the people on board, and learned to navigate the system. I made new buddies, ventured out on my own more and more and did not need the shop to do so. But that took time.

The shop also set up foreign trips that I joined and know my attitude toward foreign dive travel was greatly enhanced and I made a few trips with them before the shop folded in 2008 or so.

Since then my local LDS have taken a completely different approach to setting up local trips- as most do not want to be saddled with the cost of a boat they don't fill up, costing them $. Rather than figure out why they were not filling the boats was never considered with the blame always on the divers, not the atmosphere and attitude of the shop.

I'll admit, getting people to commit to boats weeks in advance and also pay for them at that time is tougher than it used to be, even pre covid. But it could be done if they were not looked at as a potential liability versus a potential long term benefit.

 

[Marie13]

My tech instructor’s shop in WI does a ton of local diving and will organize fun dives, as well as clean up dives in the local lakes (lot in the area). Free air fills for some of the clean up dives. Occasional weekends away at a spot within a day’s drive. I’ve gotten introduced to so many people.

 

[Ken Kurtis]

. . . as most [dive shops] do not want to be saddled with the cost of a boat they don't fill up, costing them $.

Part of the problem there is the financial structure for local SoCal boats.

When I book people on a foreign trip, I get commission on every spot sold. Let's say the commission is 10%. Let's say I'm sending one of my staff along as trip leader. And if I sell 10 spots, the 11th spot is free. And let's say the trip costs $2,000 to my customers. So if I sell 10 spots, my trip leader goes at no charge, and I've made $2,000. Even if I only sell 6 spots, I still get commission on those ($1,200) and can use that to defer the cost of my trip leader. (I'm ignoring airfare in this model.) The point is, there's a fairly straight-forward way for me to make money as a shop.

Local trips are set up differently. The boat charges me a flat rate with a maximum number of people, usually including my staff. Let's say I can take 30 paying people (plus some staff). Let's say the rate for the full boat (food and airfills included but no gear) for asingle-day trip to Catalina with three dives plus breakfast on the way over, lunch in the middle, and a snack on the way back, is $4,000. Let's make the math easy and say I want to make a shade over 10% on this so I need to take in $4,500 all together. That's $4,000 for the boat and $500 for me. With 30 divers, that's $150/diver. In theory if I fill the entire boat, livable. BUT . . . my profit is not on each diver but ONLY after I've sold 26.7 spots. So I make $50 on spot #27 and $150 each on spots #28, 29, & 30. The boat gets paid no matter what. I only make money on the last spots.

Now let's complicate things further. Most diving in SoCal is either Saturday or Sunday. I booked this boat for Saturday. They didn't get anyone to book for Sunday so they're running an "open" boat which means the boat operator is the charterer. They decide they will also do a single-day Catalina trip. The actual cost of running the boat is $3,000. They'd like to make 20% so they'd like to take in $3,600 all together. They can still only sell 30 spots so they price them at $120 each.

Now you the customer can go with me and my shop on Saturday for $150 or do the same trip on Sunday directly with the boat for $120. Which do you choose and why?

It's not just that shops need to fill boats, but we also end up competing with the boat who ends up selling trips to the general public at wholesale when we have to sell at retail.

Rather than figure out why they were not filling the boats was never considered with the blame always on the divers, not the atmosphere and attitude of the shop.

That definitely factors in and sometimes heavily.

Would you care to disclose who the shop that you liked that closed was and what it was you liked about them?
(And maybe even the shop you're not too fond of and what difference is and what you don't like about them.)

I'll admit, getting people to commit to boats weeks in advance and also pay for them at that time is tougher than it used to be, even pre covid. But it could be done if they were not looked at as a potential liability versus a potential long term benefit.

It's a LOT of work. I spent years telling boat owners that they do NOT want to be in the boat-booking-spot-selling business. But I also realize that they've got to have income to survive. It's a vicious cycle. When Reef Seekers was a brick-and-mortar, as I mentioned previously, we did 50-60 local boats trips (some of which were 2-day or 3-day ones) and we generally were full. But we occasionally weren't. We ran those trips anyhow and lost money. That's called the cost of doing business and it comes with the territory unless you want to be known as a shop that cancels at the last minute due to not enough signups, which means people stop signing up with you for fear of last-minute cancellation, and you create the very issue you're trying to avoid. But it was a LOT of work to fill the boats, collect the money, transfer someone to another boat if they couldn't go, call everyone if we had weather issues and had to change destination or cancel, assign divemasters, choose dive spots on the trip, watch over divers throughout day, do minor repairs, escort divers when needed, and more. Definitely not for the faint-hearted but definitely also not as simple as "We should be doing local trips and booking boats."

 

[merxlin]

Would you care to disclose who the shop that you liked that closed was and what it was you liked about them?
(And maybe even the shop you're not too fond of and what difference is and what you don't like about them.)

First, I agree with the difficulty in booking local boats. With on line booking now available, our group tends to pick a date and just try to get everyone interested to sign up as quickly as possible, then see who made it. Our local boats fill up fast at times, especially May thru Sept. when conditions tend to be best.

The shop that closed was Dolphin Dive in Arcadia. Tim, the owner, had inconsistent hours, and a service area that looked 3rd world. But he had a great group of customers, DM's and Instructors. He was fair on gear pricing (this was between 2005 and 2008 and before heavy internet sales were a thing), and the boat trips were published well in advance.

Fast forward to a shop that will stay unnamed (and also has changed hands), who took students on open boats but wanted nothing to do with the bookings, and in most cases shop customers didn't know there were divers going out. It was all about the OW and sometimes continuing students, but the rest of us were left on our own. They did local liveaboards and foreign travel that I was part of and enjoyed, except the owner was also on those trips and the drama he caused was a definite negative. The foreign trips were rarely a great deal, and typically scheduled in the destination's low season for pricing, but also not the best dive conditions. They basically put any effort for boats etc. on the associated dive club to handle if people wanted a "group dive" set up.

These things set the culture and atmosphere of the shop, and in my opinion has hindered the growth of the shop's success.