PST Resurrects

[fweber]

Oh~~ You never know..

At the begining, Worthington also got into the market with a competively lower price to PST....
And, even 10% lower price worked very well....

At the point Worthington entered the equation, PST was having difficulty supplying any tanks, much less meeting demand. Worthington could have priced their product at a 10% premium and still had similiar success. The decision being faced by most was between Worthington's, only Hot Dipped tanks on the market, and Faber's painted tanks.

 

[PhilEllis]

The spread in steel scuba cylinders between the cost of manufacture and the final consumer price is a small percentage of the final price.....especially for a limited volume commodity like a steel cylinder. The annual U.S. demand for steel cylinders is slightly over 10,000 cylinders at the current time. Regardless of the manufacturer (Faber, Worthington, PST?) The distribution channel is the same.....

manufacturer to distributor to dealer to consumer

These four entities are sharing a very limited number of dollars per cylinder. That is why you don't see "sales" on steel cylinders, unless they come from one of the manufacturers who end up with lots of "dated" cylinders. We saw that from some of the Faber dealers just this year.

If any new entry into the steel cylinder market (and PST would be a brand new entry) attempts to gain market share through stiff price competition, they would need to have a method of funding that attempt. I can't imagine that XS Scuba and Sea Pearls, who funded the Worthington entry into the market, or Worthington themselves, would sit back and watch a newcomer take significant market share with such a strategy. In any price war, I would almost always bet on the one with the bigger bank account (hard to see Worthington losing such a battle).

For consumers, a steel cylinder price war would be a VERY bad thing. Remember for Worthington, scuba cylinders are a very small part of their revenue picture. That doesn't mean they are not committed to this market; just that it is a small piece of their bigger picture. We would NOT want them to give up on the market because it is not profitable. After all, do we really want PST being the only supplier of galvanized steel scuba cylinders? We have already seen that movie, and most don't want to see it again.

Maybe we should all write PST a letter and beg them to go after the automotive market for their new venture and leave scuba to the current suppliers.

Phil Ellis


Phil Ellis

 

[Mo2vation]

One of the things that I'm confident is hurting the steel cylinder market for Scuba is the secondary market for these things.

I have purchased over 20 steel cylinders in the last 6 years, and only two have I purchased new from a dive shop (you guessed it - the first two.) Some I've kept personally, some I've purchased and re-sold to friends, many I've flipped for a profit. The secondary market for steel cylinders is very, very strong. It remain strong because of four factors:

1) Diver turnover is high - new divers leaving the sport and selling off, older divers going into gardening and golf

2) Demand for used galv steel cylinders is high. Try to find a used HP100, or a used E8-130 in the major dive markets (California, Florida) and you know what I mean. When one becomes available, there is a line. Demand for used steel tanks is incredibly fierce

3) They last virtually forever - a galv steel tank will last 30 years or more if cared for properly

4) Accessibility of used gear is brainless - eBay, DiveMatrix, DecoStop, ScubaBoard, Dive Clubs, Craig's List and more. Used Steel tanks are easy to list, find, easy to move


If the NEW market for steel cylinders is, as Phil mentioned, only 10,000 per year, surely the number of used tanks changing hands is many, many times that.

That does not make a good marketplace for any manufacturer to enter. A soft primary market and a robust secondary market is bad news for a manufacturer, as they get no love from the latter.

The thing is this: these tanks hold their price. I'm always amazed at how well steel tanks hold their price. Most of my PST 130's I paid between $250 and $275 for. I've passed on dozens of them and watched them sell for $300+. This SHOULD be good news for a manufacturer, as a small discount on a new tank is likely all that's required to move buyers from this secondary market back to their primary market.

---
Ken

 

[dsteding]

One of the things that I'm confident is hurting the steel cylinder market for Scuba is the secondary market for these things.

I have purchased over 20 steel cylinders in the last 6 years, and only two have I purchased new from a dive shop (you guessed it - the first two.)

Interesting points Ken. When it comes to buying used versus new, my LDS (NWSD, you've met Matt) pretty much makes the decision for me by including two VIPs and O2 cleanings with the purchase-so you get some cylinder service for the first couple of years for free. Even though I own a bunch of cylinders, I have no interest at the present time in doing a PSI class, just not enough room in my condo entry way for a tank tumbler and associated stuff.

Because steel tanks hold their value so well, I only buy one if it is ~$100-$150 off of new, and that rarely happens. Aluminum tanks are another story, I would rarely buy one of those new.

 

[rjack321]

If NEW PST tank is 10% cheaper and is in stock, I will prefer PST to Worthington.

Well both companies have never actually been in the market at the same time.

PST was failing to deliver ordered tanks for a good 6 or more months before Worthington stepped into the market ~3 years ago and started actually supplying tanks. So I'm not sure why you think that: 1) PST will actually build a new scuba tank, 2) get that tank to a dealer who actually wants to work with their history of false promises 3) sell it cheaper.

Norris is already in the steel scuba tank business (again). They have been making and selling the occasional hp80,100,130 for a couple years now. They aren't undercutting Worthington by 10% to try and grab market share. And Norris has already demonstrated their business ineptness already by temporarily allowing their exemption to expire last year. So if I were a dealer there's no way I'd go to Norris over Sea Pearls/Xscuba/Worthington.

So we have a decent company, distrubuted by a good importer, selling a product at a fair price. In order for a dealer to patronize one of these stupid companies (PST, Norris), they will need to discount their product to a level equal to their service. Which is far more than -10%.

 

[Hoosier]

At the point Worthington entered the equation, PST was having difficulty supplying any tanks, much less meeting demand. Worthington could have priced their product at a 10% premium and still had similiar success. The decision being faced by most was between Worthington's, only Hot Dipped tanks on the market, and Faber's painted tanks.

Yeah..

I don't care what marketing strategy PST will take. My hope is truly based on the pure customer's viewpoint.

If PST wants to survive, they should find out how to take back their old market. Price war is one of ways that PST can take. Otherwise, it is their own business, either backrupt or survival.

I don't have any stock share with PST or Worthington companies....


In addition, like Phil said, there won't be that much room for price reduction. However, it is their job to find out in the market. For example, Toyota is trying to reduce the manufacturing cost even though their manufacturing cost is the lowest in the market at this moment.

 

[Hoosier]

Well both companies have never actually been in the market at the same time.

Not exactly. I chose my PST tanks (two 130cfs and two 119cfs) when Worthington Tanks were on sale. Worthington tanks were cheaper....


As for PST's way of business to the dealer, there is nothing I can say. I can't trust PST in that point, either.

Like I said, it is their job and we are just customers who are holding the money. If PST can't meet our expectation, they won't see any pennies from us. It is a simple shopping rule...

 

[Mo2vation]

I prefer PST only because all my Galv steels are PST's. And because its fun to poke at my buddies and their stubby Worthingtons.

My buddy dives Worthingtons as she started diving 130s several years later than I did. No two of her tanks look the same... that is a big issue with Worthington, IMO.

I'm still looking for one more PST 130, but I'm not going to pay $350 or $395 for it. I'll keep circling the divers that are leaving the sport like the vulture that I am. One will come up in my price before long.

---
Ken

 

[8251reefer]

I just purchased a brand new in the box PST E7- 80 at South East Dive Adventures at Navy Station Mayport for $219 out the door (we don't pay tax on base). You have to be military to get it at that price as the shop is ran out of the MWR department on base. I thought it was a great deal though and I can't wait to try it out this weekend in Venice, FL. They recieved 20 of the tanks and THEY ONLY HAVE 4 LEFT. They said they are getting the 100's in sometime around June. We'll see but for $220 I just couldn't pass that price up...

 

[Hoosier]

$180 to your door.

===============
PST has some older cylinders sitting around their warehouse. NOTICE that these have old hydro dates stamped on them. Remember that a hydro is required every 5 years, so you may need to get a hydro on them sooner than if you purchase a new cylinder from your LDS.


200 each E7-80, with valve and boot 3442 psi, convertible din/yoke thread,
11/05 dates, $180 and FREE FREIGHT (within the USA).

If you're interested you can call Steve at 414-431-0275. Please mention that you saw this on ScubaBoard.

I just purchased a brand new in the box PST E7- 80 at South East Dive Adventures at Navy Station Mayport for $219 out the door (we don't pay tax on base). You have to be military to get it at that price as the shop is ran out of the MWR department on base. I thought it was a great deal though and I can't wait to try it out this weekend in Venice, FL. They recieved 20 of the tanks and THEY ONLY HAVE 4 LEFT. They said they are getting the 100's in sometime around June. We'll see but for $220 I just couldn't pass that price up...