Scuba Schools of America/Rusty Berry

[Eric Sedletzky]

What it boils down to is the shops will sell the gear that makes them the most money period. If they are hooked up with SP or AL for instance, the more of their gear they sell (all combined as aggregate sales) the better wholesale prices they get and the more money they make.
If they take in another line that competes with their sales of their pet brand line then that will dilute sales and they will lose money.
If AL or SP one day said jackets are out and we only manufacture and sell BP/W from now on, then you would see all the shops like the one by me selling nothing but BP/W,. Until then nothing will change. It's pretty much up to the large manufacturers to decide what the direction of dive gear will be, they have the power and the leverage. The dive shops just follow suit.
The shop doesn't give a rats behind what they sell as long as they make money.
There's right (or our perception of it), and then there's making money - two different things, and sometimes if we're lucky the two will overlap, but it doesn't seem to happen too often.
I've had this discussion with many people at many dive shops ad nauseum.
When I was trying to market plates and such this was explained to me in detail.

 

[sigxbill]

Rebuttal to posts 314 -318

@ Boulderjohn:

What you experienced in college was a marketing technique called “loss leader”, which is where you market something at a low price, or low margin, in order to get customers in the store to sell them other higher margin items, and it is not unethical or illegal. Almost every good business does this. Driving home today, I saw a guy standing on the corner advertising $14 / month car insurance. Everyone knows if they go into this insurance agency, they are not coming out with only $14 insurance. My kids ask me all the time, “but it’s free – can I get it?” I always reply that nothing is free, and taking the free item is to get you to buy whatever they are selling. I tell them, “if you are not going to buy what they are selling, don’t take the free item.” And trust me, people wanted to buy the furniture your brother sold – they just didn’t want to pay the price that quality furniture they wanted cost. I absolutely agree with meeting a customer’s needs, but if someone is new to diving, they need a complete system. Why shouldn’t it be you that sells it to them? If you let them walk out the door without it, then someone else will sell it to them, or maybe they will quit diving after class - because they don’t have any gear OR because they haven’t made any ‘investment’ in diving. If they think they want to dive, but are on the fence because of the initial cost, why shouldn’t it be you that pushes them over the fence? They will love you forever for getting them to commit to the diving lifestyle we enjoy. If someone walks into a motorcycle shop, but doesn’t want to pay what it costs for the bike of their dreams, is it bad if the salesman helps them take the plunge? Every weekend that rider slings a leg over that bike, he will think, “thank goodness the salesman talked me into this bike!” My wife loves the new dining room table the salesman talked us into, which we didn’t really need and didn’t quite fit our budget, every time we sit down to it.

@ Jim Lapenta

“What is your budget?” is a great first question, and it is good to try to work within that. But sometimes people’s initial budget is unreasonable – not because they couldn’t find a way to afford it, but because their perception of value in scuba is ignorantly low. I don’t know how many times I went in to get something with one budget in mind, and then came out on a different budget. People find money for what they want.

“I don’t upsell” – so are you saying that if something more expensive would conform to a person’s needs better than the cheap item, you wouldn’t tell them about it?

@ boulderjohn

1. What is wrong with student’s owning their own mouthpieces? I would think there are plenty of student’s who would appreciate this practice.
2. reasonable concern here – deception is unethical – sellers should make sure all aspects of this are fully understood
3. reasonable concern here – I like to get stuff as originally packaged
4. This is good for divers
5. You misunderstand this one somewhat
6. You mean to tell me that you aren’t really doing everything you can to help your clients? Because if you are, you deserve the sale – not another shop or online retailer! Your shop and you made the investment and did all the work of educating them about what they need, and then you are OK with your shop's student rewarding someone else for your effort?
7. I think you are exaggerating what the workshop leader said here.
8. What is wrong with promoting the higher profit margin items – as long as they need those items anyway? The new diver needs a complete system, so how is this “regardless of need”? And what is wrong with trying to take advantage of manufacturer discounts? And if your students opt for a bp and wing like you, what is wrong with that - since your shop sells that too?
9. I too have specific equipment preferences, and this is where I would try to find a happy medium between what I wore teaching / told the students to buy, and what I promoted that was what the owner wants his students should have. After all, they are NOT really “your students” – they are the shop’s students that you have the privilege of teaching. Ethically – you have a safety responsibility to the students AND ALSO a sales responsibility to the shop. Ethically, if you can't promote the shop's gear, maybe you need to find a new shop to teach for. Unfortunately, your preferences may not match those of the next shop either …

I think you misunderstand how the above sales plan can help a sales person meet the needs of the customer and the shop. Remember, it is a shop, and as such, can’t stay in business without sales.

We agree – the customer should not feel duped – we have the same vision of business ethics here.

 

[drrich2]

Ethically, if you can't promote the shop's gear, maybe you need to find a new shop to teach for.

Yet the student believes he's hiring an instructor, not a shop gear salesman. People expect a dive shop to promote its own products. I wonder to what extent most students know how connected a given instructor is to a given shop? It's concerning to me that SSI basically coerces instructors to be shop affiliated as a condition of practicing as an SSI instructor (IIRC).

What is wrong with promoting the higher profit margin items – as long as they need those items anyway?

Perhaps best represented by an example. Say your shop sells Atomic regulators. You carry the Z3 at the low end, and the much more expensive models with some titanium that have a minor weight difference which for many people means next to nothing, but breathe about the same or so I am told. In other words, while the high margin item will meet the customer need, it will not do so substantially better than the Z3, while costing a lot more. So, to what extent is it ethical to hard sell the high-end model to the average OW student who gets negligible added benefit?

One ethical litmus test worth applying is this - if the customer knew what you know, and why you're doing what you're doing, would he/she find it objectionable? Another is whether you would deal differently with a customer who was also a good friend or family member.

Richard.

 

[Jim Lapenta]

IF a higher priced piece of gear is better suited to the student I will let them know that. But unless it is absolutely necessary I will do my best to make what they can afford work. There are times when a few bucks is all the difference between say a reg suited for cold water and one that is not sealed. Rarely is it enough to make a real difference in cost. For the average recreational diver who may only do warm water there is absolutely no need to try and put them in an 800 reg. I sell one for around 250 that the average diver would not be able to tell, performance wise, from that 800 reg.
There are some items however like reels that I only have the better ones of. I'm not going to even try and sell one of the cheap lookalikes of one popular brand that are out there. Lights - not going to go cheap there either. BC's? Most of my customers (like 90%) go for plate and wings anyway.

 

[boulderjohn]

Please note the comments in read within your quote:

Rebuttal to posts 314 -318
What you experienced in college was a marketing technique called “loss leader”, which is where you market something at a low price, or low margin, in order to get customers in the store to sell them other higher margin items, and it is not unethical or illegal. Sorry--try reading what I wrote. He steered me away from what I wanted and pushed me to a higher priced item. That is bait and switch, and it is illegal.

I absolutely agree with meeting a customer’s needs, but if someone is new to diving, they need a complete system. Why shouldn’t it be you that sells it to them? No problem with the idea of selling the diver what he needs. I am against selling them something they either absolutely don't need or are not likely to need. Do you honestly think a new person who has never been diving absolutely needs to take that introductory class with a rebreather? Don't you think a rebreather is a choice someone makes when at a more advanced stage of diving?

1. What is wrong with student’s owning their own mouthpieces? I would think there are plenty of student’s who would appreciate this practice. And for that reason is should be an option. It should not be a requirement with a LIE that you are requiring that purchase for "Obvious" reasons of sanitation.
2. This is good for divers Unless they decide that scuba is not for them as the class ends and have more than $1,000 worth of gear they don't want.
3. You misunderstand this one somewhat I don't think I did at all, but I am glad you said this. It shows that you are familiar with and approve of this overall philosophy.
4. You mean to tell me that you aren’t really doing everything you can to help your clients? Because if you are, you deserve the sale – not another shop or online retailer! Your shop and you made the investment and did all the work of educating them about what they need, and then you are OK with your shop's student rewarding someone else for your effort?I am all for doing all I can for the student, and I believe that when they do they will appreciate it. The methods we were told to use were, IMO, deceptive and manipulative.
5. I think you are exaggerating what the workshop leader said here. It is certainly my interpretation of what he said, but I got that message clearly.
6. What is wrong with promoting the higher profit margin items – as long as they need those items anyway? The new diver needs a complete system, so how is this “regardless of need”? And what is wrong with trying to take advantage of manufacturer discounts? And if your students opt for a bp and wing like you, what is wrong with that - since your shop sells that too? Does a diver need the specific brand and model that is being promoted? Does a student need a specific model of fin when a different model might better fit their needs? Does a student need an Atomic SSI inflator alternate air system if you the employee honestly believe there is a better choice? ? Why are you selling different models if only one model is needed? How will my students be able to opt for a BP and wing if I am not allowed to tell them that I use a BP and Wing and if it is my job to push them away from a BP and Wing and to an item I don't believe in?
7. I too have specific equipment preferences, and this is where I would try to find a happy medium between what I wore teaching / told the students to buy, and what I promoted that was what the owner wants his students should have. After all, they are NOT really “your students” – they are the shop’s students that you have the privilege of teaching. Ethically – you have a safety responsibility to the students AND ALSO a sales responsibility to the shop. Ethically, if you can't promote the shop's gear, maybe you need to find a new shop to teach for. Unfortunately, your preferences may not match those of the next shop either …Once again, the shop did sell the kind of equipment I prefer, but I was not allowed to tell the students about that. I could no longer point at the BP/W on the wall and say, "That's what I dive, and here's why." No, I had to LIE to the students and tell them I preferred the equipment I was required to wear for the class, even though I would not use any of it except the wet suit. My current shop does not require me to lie about anything. They want me to tell students the truth. When I take students around the shop and show them gear, I can speak honestly about every option. The shop sells what I wear, and it is good stuff. I am happy to steer students to it. I am happy to promote those sales without compromising my integrity. It is very obvious that personal integrity is not important to you, so you evidently would not understand why people would feel that way.

– we have the same vision of business ethics here.

Not remotely.

 

[sigxbill]

Yet the student believes he's hiring an instructor, not a shop gear salesman. People expect a dive shop to promote its own products. I wonder to what extent most students know how connected a given instructor is to a given shop? It's concerning to me that SSI basically coerces instructors to be shop affiliated as a condition of practicing as an SSI instructor (IIRC). Richard.

Unless the student was the direct result of the instructor's own completely separate from a dive shop marketing, I have to wholly disagree with this statement. Students who sign up for a class at a dive shop expect that they hired the dive shop, and the instructor works for the dive shop. Even if the instructor doesn't consider himself a W2 employee of the dive shop, if the dive shop is where the instructor got the students from, and the instructor gets paid by the shop - then the instructor is a representative and employee of the shop - period. And since educating students about necessary gear is part of the instructor's job, students expect instructors to promote scuba gear - which is conveniently located in the shop they hired to teach them about scuba. Could you please explain in further detail what you mean by people expect the shop to promote it's own products and not knowing how connected a given instructor is to a shop? This doesn't make sense to me because the instructor IS part of the shop and should be proud to be. The only reason that students might think the shop and instructor are two completely separate entities is if the instructor chooses to make that differentiation, in which case I would ask why is he an instructor there. Even if the instructor isn't that close, if he gets students and a paycheck from a shop, ethically he is required to wholeheartedly support the promotion of that shop. AND since this ethical responsibility exists regardless of agency, I don't see why SSI's instructor affiliation condition concerns you.

Regarding your Atomic example, is this really a problem? I can't imagine there are gear salesman duping unknowing poor newbie students into $1500 solid titanium regulators when the already high performance Z3 costs 1/3 as much and is still a great sale, AND there poor students out there stupid enough to pay it! This has got to be the exception and absolutely NOT the rule.

GREAT LITMUS TESTS - for all sales professionals!

 

[divin'dog]

When you have to try too hard to defend someone's business practices, something's wrong...

 

[sigxbill]

Please note my responses to your comments (in red):

Do you honestly think a new person who has never been diving absolutely needs to take that introductory class with a rebreather? Don't you think a rebreather is a choice someone makes when at a more advanced stage of diving?
Absolutely not

on #2 - we will have to agree to disagree on this one, and would be happy to debate this further if you like

3. You misunderstand this one somewhat I don't think I did at all, but I am glad you said this. It shows that you are familiar with and approve of this overall philosophy.
Your statement in red proves to me that you misunderstand this one. I am familiar with many different philosophies in scuba, but you will have to define your use of the word "this" for me to confirm or deny which philosophy I approve of - because I don't approve of the philosophy I think you think I approve of ...

Does a diver need the specific brand and model that is being promoted? Does a student need a specific model of fin when a different model might better fit their needs? Does a student need an Atomic SSI inflator alternate air system if you the employee honestly believe there is a better choice? ? Why are you selling different models if only one model is needed? How will my students be able to opt for a BP and wing if I am not allowed to tell them that I use a BP and Wing and if it is my job to push them away from a BP and Wing and to an item I don't believe in?
I absolutely agree with you here - time for a new shop affiliation ...

Once again, the shop did sell the kind of equipment I prefer, but I was not allowed to tell the students about that. I could no longer point at the BP/W on the wall and say, "That's what I dive, and here's why." No, I had to LIE to the students and tell them I preferred the equipment I was required to wear for the class, even though I would not use any of it except the wet suit. My current shop does not require me to lie about anything. They want me to tell students the truth. When I take students around the shop and show them gear, I can speak honestly about every option. The shop sells what I wear, and it is good stuff. I am happy to steer students to it. I am happy to promote those sales without compromising my integrity.
I am with you here too ...

It is very obvious that personal integrity is not important to you, so you evidently would not understand why people would feel that way.
This is offensive to me! Was that your intent? For the record, personal integrity is of utmost importance to me ...

Not remotely.
whatever ...

 

[drrich2]

Could you please explain in further detail what you mean by people expect the shop to promote it's own products and not knowing how connected a given instructor is to a shop? This doesn't make sense to me because the instructor IS part of the shop and should be proud to be. The only reason that students might think the shop and instructor are two completely separate entities is if the instructor chooses to make that differentiation, in which case I would ask why is he an instructor there. Even if the instructor isn't that close, if he gets students and a paycheck from a shop, ethically he is required to wholeheartedly support the promotion of that shop. AND since this ethical responsibility exists regardless of agency, I don't see why SSI's instructor affiliation condition concerns you.

I was trained by an independent PADI instructor. He has trained a lot of students at a local quarry that has its own dive shop, and charges for admittance. So I didn't get trained by 'shop staff.' Someone hiring on an instructor at the shop, which is an SSI shop, might indeed have a different experience. How well the average OW student knows and understands these relationships is difficult to determine.

It would be fascinating to give a questionnaire to a bunch of OW students and ask whether they believe their instructor's greater interest in gear recommendations is A.) The student's best interest or B.) The shop's best interest.

Now if by 'ethically required to wholeheartedly support the promotion of the dive shop' you mean ethnically obligated to wholeheartedly endorse the shop's gear as the best fit for the diver's needs, and upselling wherever possible so the shop can make more money by taking advantage of ignorant, gullible newbies, well, if that's what you mean, then inclusion of the word 'ethically' in that discussion kind of has me scratching my head.

Richard.

 

[sigxbill]

Richard - now your perspective makes more sense - thanks. For the record, taking advantage of ignorant gullible newbies is NEVER ethical ...

---------- Post added July 15th, 2014 at 05:46 PM ----------

Rebuttal to posts 328 +

Like many of you, I too have a romantic idea of what it would be like to own / run a scuba shop. And then I snap myself back to reality while remembering the advice of many shop owners: “you want to make a million dollars in scuba? Start with two million …” From what I have seen over the years, it seems to be pretty sound advice.

What I would really like to know, from those who claim that LDS owners, who actually have a sales strategy, are the scum that give the dive industry a bad name, like Eric Sedletzky and Jim Lapenta is how much do you make at your main job? Feel free to report this by the hour, day or year. I’m pretty sure that if you aren’t making at least $25 / hour - $200 / day - $50,000 / year, and especially if you live in Southern California, and have a family, you are looking for a job that will pay you at least that!

For any private business to pay it’s owner that, it has to net at least that, plus also net that again to pay it’s own bills. So for any shop, let’s say a dive shop, to pay it’s owner $50,000 AND make $50,000 / year to pay it’s own bills, requires that the shop gross $800 / day in sales!!!

Let’s think about how to achieve this. Should the dive shop owner not advertise a loss leader (like all good businesses do) AND have a “Self Serve” sales strategy for when a customer walks through the door? OR, should the business employ an active sales strategy to capitalize on the extremely limited target market that occasionally walks through the door?

You are right Eric Sedletzky, diving is still a very small niche activity, so LDS need to treat the few customers they get right and not lose them to the ‘evil empire.’ You admittedly write that the evil empire has their faults, like not having the most knowledgeable employees (in scuba), and maybe have someone from skiing filling in in the dive center – and excuse this behavior as “doing what they have to”. Why is ‘doing what they have to’ OK for evil empire and not for the LDS? If the evil empire is who I think it is, they are completely useless to me. Their only knowledge is basic open water, and no mixed gasses. Is this your vision for scuba – with only abbreviated basic open water classes, and basic open water instructor classes (which simply teaches experienced basic open water divers how to teach more basic open water divers)? And by the way, as per manufacturer agreement for being a dealer – the evil empire can’t discount dive gear any more than the LDS. Finally, I think it is unreasonable to try to make the terms sleazy, ripping off, and dishonesty synonymous with someone selling dive gear.

Drrich2 – you make some of my points very well in posts 331 and 335. I would just add one point – I was traveling last week and needed to borrow a regulator for a stage that I breathed from the surface to about 60’ and back in calm, warm fresh water. It breathed so poorly that I could feel the carbon dioxide buildup I was getting, which was making me very nervous, and I couldn’t wait until we got deep enough to switch to my Atomic back-gas regulator! What a difference! I have said it before – even a beginner can tell the difference between and benefit from a better regulator. And if they buy a high quality one the first time, they don’t need to replace it with another one later – they can just add to it.

What I would really like to read is a book by Jim Lapenta called, “A Practical Guide for Making Local Dive Shops Profitable.” And although I write this with a bit of cynicism, I would buy it if you did (as long as you don’t make any money off it though ;-) ).

@ RE Eric’s post #341 – So you actually think that shops opt to become SP or AL dealers without actually preferring that brand? Simply because they think that brand will make them more money than the brand they actually prefer? Maybe, but I doubt it. It is difficult to sell something that you don’t like – which makes making money harder. Also, many industries give discounts to dealers that are exclusive, as well as volume discounts – I don’t see the problem with this. PADI does this too. That is why it is hard to find a PADI shop these days that also offers other brands of certifications, but I don’t read anyone complaining about PADI for this – you only complain about gear choices here. When a diver is new, how do you know if they will ever develop a preference for another brand of gear. If they don’t, what difference does it make what brand their first kit is? I can understand your wanting to promote bp/w as first kits – I prefer that too, but that is a matter of finding the right shop / instructor. If you find a SP shop, SP offers that in their product line now – would that work for you? One thing is for sure – you probably won’t find bp / w expertise in the sporting goods chain scuba department …

What this thread is really about is what are fair wages. It is almost like a congressional debate where Democrats characterize diligent shop owners (who make plans to stay in business) as “scum sucking low life bottom feeders giving the industry a bad name”. Clearly the many who have written in this thread have no idea what it takes to stay in business, and how staying in business ultimately can benefit the clients as well as the owners. The idea that LDS owners should not have a sales strategy is absurd.