Regulator service: acceptable treatment?

[Hickdive]

Normal service (for me) involves stripping the regulator down to component parts, US cleaning and de-greasing until pristine, discarding all service parts and replacing them with new from the service kit, rebuilding, re-lubing and adjusting per manufacturer's guide. That comes at a standard price. Some regulators need more cleaning than others, so what? What you gain in some you lose in others - no need to charge extra for a process that can be as complex as adding another 15 minutes onto the US bath timer.

If it doesn't come in a service kit, it doesn't get replaced. If it needs replaced then I contact the customer and let them know the extra cost and ask if they want me to proceed. Minor items that won't necessarily affect the operation on the regulator get noted on the service report form that accompanies every regulator back to the customer along with the replaced parts.

My biggest problem is making sure customers are contactable. The number of times I'm given wrong phone numbers and/or email addresses is incredible. I'm actually on the verge of dialling the number given on the service booking form before the customer leaves the shop, just to check. Otherwise I end up sitting on my thumb waiting for someone to phone or come in to ask about a reg I haven't been able to finish because I couldn't get their authority to put a non-service part in.

 

[halocline]

Normal service (for me) involves stripping the regulator down to component parts, US cleaning and de-greasing until pristine, discarding all service parts and replacing them with new from the service kit, rebuilding, re-lubing and adjusting per manufacturer's guide. That comes at a standard price. Some regulators need more cleaning than others, so what? What you gain in some you lose in others - no need to charge extra for a process that can be as complex as adding another 15 minutes onto the US bath timer.

Exactly.

 

[redacted]

That's a %50 markup, since half the final price is the markup.

I did find that definition on one site that actually provided two definition. Other references define markup as the price increase over cost, so cost is the denominator rather than retail price. I find your minority definition deceptive but am not surprised that scuba retailers might prefer it over the much more common definition which would put scuba gear markups at the retail level at 100% and more. In relation to manufacturing cost, I would not be surprised to see markups on the order of 1000%.

I am not just blaming scuba retailers for their marketing problems. There are, obviously, some very good scuba retailers and we often see them here on this board. But, it is not very hard to fine the others also. It seems to me that many of the problems are simply ingrained into the business model and come from the top (manufacturer) down.

 

[dmoore19]

a 50% margin on a product would be 2 X cost of goods. This is also referred to as gross margin.

a 100% markup would be the same amount as a 50% margin.

At least that is how it is done in my business.

 

[redacted]

Normal service (for me) involves stripping the regulator down to component parts, US cleaning and de-greasing until pristine, discarding all service parts and replacing them with new from the service kit, rebuilding, re-lubing and adjusting per manufacturer's guide. That comes at a standard price. Some regulators need more cleaning than others, so what? What you gain in some you lose in others - no need to charge extra for a process that can be as complex as adding another 15 minutes onto the US bath timer.

If it doesn't come in a service kit, it doesn't get replaced. If it needs replaced then I contact the customer and let them know the extra cost and ask if they want me to proceed. Minor items that won't necessarily affect the operation on the regulator get noted on the service report form that accompanies every regulator back to the customer along with the replaced parts.

My biggest problem is making sure customers are contactable. The number of times I'm given wrong phone numbers and/or email addresses is incredible. I'm actually on the verge of dialling the number given on the service booking form before the customer leaves the shop, just to check. Otherwise I end up sitting on my thumb waiting for someone to phone or come in to ask about a reg I haven't been able to finish because I couldn't get their authority to put a non-service part in.

From what I have seen, the better shops will replace a few components that are not part of the normal regulator repair kit (usually only includes regulator dynamic o-rings), such as HP spool o-rings and dynamic hose o-rings which are rarely part of the service kit. All other o-rings should be inspected and replaced if a problem. Most of these are static o-rings which may last quite a ling time. (I am still using some that are over 20 years in service.) If the shop wants to charge a fair price for these additional o-rings we would be talking about $.05 per; but no extra charge would probably be a better business move. I have seen shops charge for Christolube used to lubricate o-rings. That can't be good for business.

 

[The Chairman]

Quite honestly, if a salesman tried to tell me that their merchandise was marked up 50% when it fact it was doubled in price from wholesale, I would consider that deceptive.

Quite honestly, if a salesman tells you how much an item is marked up, he's not much of a sales person. Take tires... that $3.00 valve stem costs the shop $0.11. Wow! Are they ripping you off or trying to actually make a little money on that tire that they just matched the price on? How would you know what they make their money on? "Mark up" is an accounting term. You're not supposed to realize it even occurs or that it's negotiable. A good sales person sells you on features and benefits: not on price. A great sales person believes their own schtick and yet translates it to their customer's desires and expectations.

 

[dmoore19]

I hear a lot on this board about mark ups etc. If you think the dive industry is bad, you should see what goes on in the clothing industry and the electronics industry. 50% margin in those industries would be laughed at. In other retail stores, the margins may be as thin as 10%. You have to sell a ton of sh!t to keep afloat on a 10% margin. In fact most businesses with margins that thin fail, and do so rapidly. Go to a stockholders meeting with a report saying you made a 10% margin and see how long the management will remain in place, not long I assure you. The 10% I am talking about in this case is net margin.

 

[redacted]

Quite honestly, if a salesman tells you how much an item is marked up, he's not much of a sales person. Take tires... that $3.00 valve stem costs the shop $0.11. Wow! Are they ripping you off or trying to actually make a little money on that tire that they just matched the price on? How would you know what they make their money on? "Mark up" is an accounting term. You're not supposed to realize it even occurs or that it's negotiable. A good sales person sells you on features and benefits: not on price. A great sales person believes their own schtick and yet translates it to their customer's desires and expectations.

My tire dealer provides new valve stems as well as mounting and balancing in the base price. He thinks it is a better way to do business. And he is price competitive with other tire dealers.

Sure, businesses might like to keep their markup secret but it does not always work. It is fairly easy to find quite detailed cost info on something like a new car. In many other cases, such information is not really necessary as free market dynamics and a little shopping will usually find the best value. In scuba, free market dynamics are suppressed by many manufactures so finding good value can be a bit more difficult.

Don't get get me wrong. It is not that there is anything inherently wrong with high markups if they are competitive and that is what it takes to survive. (But don't think that a $3 bottle of mask cleaner makes a $120 price tag on a mask OK.) Just don't tell me you just can't be price competitive at the same time you are telling me you won't carry HOG/Edge products or other brands that provide better values.

I probably spend over $10k per year on scuba. And very little of that goes to an LDS either because they don't sell what I want o because someone else provides much better value. I would be more than happy to spend more of that at an LDS, but....

 

[The Chairman]

In fact most businesses with margins that thin fail, and do so rapidly.

Most businesses with margins that thin are run out of garages and homes all the time. They claim to be superior in their motives than the traditional brick and mortar stores, but are they? I see them as equals. They both want to do the best job possible and be paid fairly for what they do. Those without overhead can do it a lot cheaper than those with a dedicated brick and mortar premise.

Lest I be misunderstood: clear communication should be defacto in every transaction. As an instructor, I want to be sure that I am what my students are expecting. If I am not, I would rather direct them to an instructor that will fulfill their needs and expectations. The only way to do that is to talk with them before hand and be up front about what MY expectations are. You see, it's a two way street. Many of my students don't even think about this, so I make sure we have that conversation to remove any doubt. It's not rocket science, it's just a commitment to clear communication. Unfortunately, there are a lot of businesses out that under perform in this area. Some have some really great attributes that makes them redeemable in my eyes. Some, not so much. Look at this nightmare I went through: http://www.scubaboard.com/forums/advanced-scuba-discussions/400590-does-peggy-work-your-lds.html

I would be more than happy to spend more of that at an LDS, but....

Quite frankly, you'd be a nightmare customer for most LDSes. They're quite happy you buy online.

 

[dmoore19]

That may be true in your part of the world, not so much around here, at least that I am aware of. The shop I use was started out of a garage. But that was 50+ years ago. I am sure the business model needed to succeed at anything other than a hobby status has changed dramatically. Making a living and a garage based business are 2 different animals.

Most businesses with margins that thin are run out of garages and homes all the time. They claim to be superior in their motives than the traditional brick and mortar stores, but are they? I see them as equals. They both want to do the best job possible and be paid fairly for what they do. Those without overhead can do it a lot cheaper than those with a dedicated brick and mortar premise.

Lest I be misunderstood: clear communication should be defacto in every transaction. As an instructor, I want to be sure that I am what my students are expecting. If I am not, I would rather direct them to an instructor that will fulfill their needs and expectations. The only way to do that is to talk with them before hand and be up front about what MY expectations are. You see, it's a two way street. Many of my students don't even think about this, so I make sure we have that conversation to remove any doubt. It's not rocket science, it's just a commitment to clear communication. Unfortunately, there are a lot of businesses out that under perform in this area. Some have some really great attributes that makes them redeemable in my eyes. Some, not so much. Look at this nightmare I went through: http://www.scubaboard.com/forums/advanced-scuba-discussions/400590-does-peggy-work-your-lds.html

Quite frankly, you'd be a nightmare customer for most LDSes. They're quite happy you buy online.