The Aqualung Discussion [ Moved ]

[DA Aquamaster]

What would happen if Wal Mart started selling "Scuba Gear" in their sporting goods department? Knowing Wal Mart policies on controlling product and prices who would win ... Wal Mart or the Scuba Manfuctures? Which one of the dive companies would change their practices for a chance to be sold by the worlds largest retailer? You think the LDS have problems with internet sales now ..... what would happen if Cressi , XS , Aeris or Aqualung deceided to sell thru Wal Mart ?

I agree with you...companies "tolerate" internet sales now because of the huge volume of sales it generates for them. Whether an item is sold through the LDS or a grey market internet site, the company makes the same money on it. So they play both ends making big bucks off internet sales while disingenuously assurring their dealers that they are doing everything they can to stop internet sales. Realistically, the only way a company would ever stop internet sales is if they could be assurred that every other company would stop at the same time - ensuring they did not lose out in total units sold or in market share.

Selling through Wal-mart is not a far fetched example. A major country music artist recently cut an exclusive deal to distribute an album exclusively through Wal-mart. This was an industry first and an action that was opposed by both record labels and traditional music outlets. But...sales were exceptionally good so I suspect more of this will occur in the future. The smae weather change could occur in the dive industry if Wal-mart identifies it as a lucrative market. And with the downturn in the economy, Wal-mart over all is trying to develop a more upscale customer base, so anything is possible.

The thing is, Local Dive Shops would still corner the market on dive training. And if equipment sales fell off, I suspect training prices would become even higher (which woudl be a very bad thing that would harm the industry as a whole) and/or students would start seeing significnat price breaks in training costs for buying equipment through the LDS. Of course shops could, and should give those same breaks now as a means to compete with internet outlets.

 

[mike_s]

What would happen if Wal Mart started selling "Scuba Gear" in their sporting goods department? Knowing Wal Mart policies on controlling product and prices who would win ... Wal Mart or the Scuba Manfuctures? Which one of the dive companies would change their practices for a chance to be sold by the worlds largest retailer? You think the LDS have problems with internet sales now ..... what would happen if Cressi , XS , Aeris or Aqualung deceided to sell thru Wal Mart ?

One thing to think about if we went with the "walmart econemy" model is how the product would change.??

With Walmarts "product/price controls", I would expect the quality of the product to change.

Example is Walmart goes to a manufacturer and says "we want you to make this cheaper so we can sell it cheaper". Manufacturer has to come up with a way to make it cheaper, which means cheaper parts, cheaper manufacturering, etc. The result is often a "cheaper" (quality) product.

Back to Aqualung, I think it would be funny to see Aqualung ane Walmart officials in a meeting trying to argue about price control.....

 

[DandyDon]

One thing to think about if we went with the "walmart econemy" model is how the product would change.??

With Walmarts "product/price controls", I would expect the quality of the product to change.

Example is Walmart goes to a manufacturer and says "we want you to make this cheaper so we can sell it cheaper". Manufacturer has to come up with a way to make it cheaper, which means cheaper parts, cheaper manufacturering, etc. The result is often a "cheaper" (quality) product.

Back to Aqualung, I think it would be funny to see Aqualung ane Walmart officials in a meeting trying to argue about price control.....

Love it. I pick up things at Walmart, sure - but if I was going to buy a lawnmowever, I'd get a Snapper. They told Walmart that they couldn't have any more of their mowers.

 

[MikeFerrara]

This is a bit off topic as it really is not addressing AL, or how manufactures treat their retailers, but I always hear how the LDS's don't make a dime on training, and I find that difficult to believe.

All I can tell you is how it worked out for me. If I was making money teaching I'd still be doing it. With pool costs, rental equipment costs, compressor time, travel costs ect, I lost money on every student. I had to sell mask, snorkel and fins to most students or I was in deep trouble. I had to sell at least a couple of full equipment packages to make anything. All that isn't even considering a salery for me or the person getting gear and tanks ready for the class all day...my wife and I ner got a salery. I had 40 hours of my time in the average class and that's not considering travel time to open water sites. I kept classes small because that's what I needed to do to teach the kind of class that I thought I needed to teach and I did all the teaching because I couldn't afford to pay any one else...even if I could find someone who I'd want teaching for me.

To put things in perspective, I would have made more money by just renting equipment for 5 nights in the pool and two days in OW than I could come close to making on an OW class. We rented a full set of equipment for like $50/day. I'd rather just rent you the equipment and let some one else teach the class.

It's interesting what you said about getting materials on e-bay for 45$ because as I recall I paid about 50$ for an open water crew pack. If I sold it seperately (which was rare) I of course marked it up, however it was included in our class price. Once we bumped our class prices above $350 we couldn't compete.

I will add that I do know of shops that make money on training but they run huge classes, station an instructor on a platform and have DM's shuttling groups back and forth to do skills. The tour is the 2 minute trip back to the exit point. So they had barely legal 20 minute dives where we often had dives well in excess of 60 minutes. They spend 5 hours in confined water, where we spent 15 hours.

So, could you make money selling certification? I suppose it's possible but I couldn't.

The realevent point here to the thread is that the only way that I sold much equipment was to create the market by teaching. So...if I spent 40 hours teaching a class and sold one equipment package...sometimes I didn't sell any becuase even new divers know about the internet...the markup on that package was my profit for 40 hours work and everything else I had invested in the class.

The manufacturers know that the classes sell equipment and they know where the shops money comes from. At least some of them want ther dealer to be able to sell equipment for X so that they are willing to sell lots of classes (read as cheap). If shops have to sell equipment for what LP sells it for the cost of the class will go WAY up. The manufacturers don't want that to happen.

 

[RonFrank]

What would happen if Wal Mart started selling "Scuba Gear" in their sporting goods department? Knowing Wal Mart policies on controlling product and prices who would win ... Wal Mart or the Scuba Manfuctures? Which one of the dive companies would change their practices for a chance to be sold by the worlds largest retailer? You think the LDS have problems with internet sales now ..... what would happen if Cressi , XS , Aeris or Aqualung deceided to sell thru Wal Mart ?

Case in point, Tasco scopes and optics were put out of business by WallMart. How did this happen? Well WallMart entered into an agreement with Tasco. The agreement so heavily favored WallMart (Tasco thought the volume would make this worthwhile I suppose) that WallMart could undercut EVERY other Tasco dealer to such a huge extent, that Tasco lost all dealers with the exception of WallMart. Tasco was not making enough profit from just having WallMart sell their scopes, and then went out of business. They have since been purchased, and are manufacturing scopes and optics again. But there is a good example of what WallMart can do to a manufacture.

 

[RonFrank]

All I can tell you is how it worked out for me. If I was making money teaching I'd still be doing it. With pool costs, rental equipment costs, compressor time, travel costs ect, I lost money on every student.

Thanks for the interesting perspective. I really don't know how well our LDS does on trainiing, so I assume they profit, but am not 100% sure. They however do a couple things different than you describe, mainly large classes (8-10 students), and they contract out to Instructors (very few work FT in the industry or in the store).

OW certification involves two days of classes (mostly pool time) and two days of checkout dives. They also combine the CO dives so that I've never really seen much less then 20 students go down to the Hole at a time. During the summer months, they may run smaller local CO dives, but I tend to avoid local dive spots if I know a Shop is doing CO dives.

 

[oly5050user]

Mike F is right about the costs associated with running a class...if it were not for selling equipment you would ask why bother..we survive here in NY by doing some movie/tv work with stunt people we associate with(safety divers when film crew on or near water),some dive jobs in the area,boat deliveries etc..tough paying the rent especially in the winter..all in addition to what a dive facility does to work.

 

[DandyDon]

I can easily see how an Inst has got to make money on equipment sales, too. My TDI/most recent Padi Inst has a great little shop in Lubbock his wife runs, with a great attitude. Always friendly, always ready to match internet prices - after a phone call to the manufacturer explaining why she needs a lower cost to compete. She gets it done!

Before they opened, Amarillo was just too far for me, and I quit the other Lubbock LDS over poor attitude and customer relations. I noticed that they're an ALofAmerica dealer.

 

[mdb]

I can easily see how an Inst has got to make money on equipment sales, too. My TDI/most recent Padi Inst has a great little shop in Lubbock his wife runs, with a great attitude. Always friendly, always ready to match internet prices - after a phone call to the manufacturer explaining why she needs a lower cost to compete. She gets it done!

DandyDon: Good on you for supporting your local dive retailer. We all want the local store to prosper and survive. Maybe that is what this thread is about. Looks to me that you may be a good customer @ www.southwestaquasports.com

 

[havnmonkey]

One of the things that bothers me about shops like LDS that pretty much serve to one sport; is that they usually can not carry most of the brands. This leads to less options for the consumer; and also a hint of bias from there suggestions on what to buy.

However I don't believe it is possible for an LDS to carry all the brands, am I correct?

I purchased most of my equipment online, however I continue to use my LDS for travel tips/planning and advice. I couldn't imagine getting that advice from those who I bought my equipment form online. I don't think I'll do much more major online purchases when it comes to replacing my equipment in the future.