Profitability of fill stations?

[redacted]

you think that most LDS's make money directly on open water courses?

most sell the classes at a loss to get the customer in the door with hopes of follow on sales of gear, etc.

as Phil suggested in an earlier post, if you think there is profit in air fills in your area, maybe you should open a fill station. I'll add to that by saying that if you think that there is profit in Open Water courses directly, perhaps you should open a training facility also?

There is potential profit in both those items if you can manage them to operate efficiently. Unfortunately, in many areas it would not be enough profit to make a living. And so many local shops seem to be designed to maximize inefficiency.

 

[ReefHound]

It's not the revenue fills sold to the public that are the "loss leaders", instead those are "subsidies". It's the non-revenue fills for classes that are the "loss leaders" - the tank fill is provided free in order to teach a class and create a new customer. Thus it's not really fair to say that air fills are unprofitable because the revenue fills do not cover the total costs. That sounds like the revenue fills are not pulling their weight when actually they are more than pulling their own weight.

Besides, most shops don't have the option to stop providing air fills. Not only do agencies require it in order to be a full service dive shop, but classes require it as well. (Outsourcing may work in limited cases.) So you could stop providing fills to the public and your total costs aren't going to significantly decrease.

 

[PhilEllis]

It's not the revenue fills sold to the public that are the "loss leaders", instead those are "subsidies". It's the non-revenue fills for classes that are the "loss leaders" - the tank fill is provided free in order to teach a class and create a new customer. Thus it's not really fair to say that air fills are unprofitable because the revenue fills do not cover the total costs. That sounds like the revenue fills are not pulling their weight when actually they are more than pulling their own weight.

Besides, most shops don't have the option to stop providing air fills. Not only do agencies require it in order to be a full service dive shop, but classes require it as well. (Outsourcing may work in limited cases.) So you could stop providing fills to the public and your total costs aren't going to significantly decrease.

I agree with everything you said. That does not change the economics of it for inland or low-volume air producers.

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

 

[Scuba Duck]

The below link is to a spreadsheet that helps calculate the cost of filling a tank. You will need to fill in pertinent information about your compressor and the cost of maintenance. Most Tanks cost $1-2 to fill, but that does not take into account the costs of labor, or rent, which could substantially drive up the cost per air fill.

http://www.nitroxmadeeasy.com/Documents/TankFillCostSpreadhseet.xls

Most dive shops don't make much money on fills, but providing the service brings in foot traffic which gives the shop owner the opportunity to sell you new merchandise...