The Great local dive shop vs. online debate

[MikeFerrara]

As everybody knows, you can get SCUBA equipment on the Internet a lot cheaper than at your local dive shop. I personally feel like I am cheating my local dive shop out of business and money. I want to support the LDS but some of the times there is a huge difference in the price. I feel like I am using him because I have a different customer business relationship than I have with other retail businesses. Most people are friends with their LDS owner. I feel bad when I go diving with a new “toy” and he sees it and knows I did not get it from him.

From my limited understanding of being a dive shop owner I assume/think they have to sell at a certain price. Take a “SPARE AIR” you can buy it on the Internet for $200 but a LDS can only sell it for $299. I just purchased a regulator online for $197 and my LDS sells it for $350. That is $150 bucks difference!

My questions.
Do LDS have a minimum price they can sell at?

With many manufacturers yes there's a minimum

Are “these” Internet shops/sites doing anything wrong?

Right or wrong is a value judgement. In many cases they certainly aren't playing by the rules set forth by the manufacturers and agencies.

Are there regulations and agreements between dive shops and Companies (DACOR,SHERWOOD, etc)?

Yes there are dealer agreements.

What are you views? (Shop owners and patrons)

I want to support my LDS! I feel bad not buying from there! But… money is money!

You don't owe any one your business. Dive shops set up trips and in general spend their non-teaching time diving with customers. While friendships do develop it is business and the business model does in fact rely on those associations to foster sales. They may like you but that's not the only reason they dive with you. People who dive buy dive equipment and they need to keep you diving. They want you to see the new gear their sporting and so on.

With reference to this friendship you mentioned you might ask just who is taking advantage of who.

 

[justleesa]

I didn't have a LDS, but at one time I did own a store.
The store owners have the greater overhead, they are trained to answer your questions, usually have more staff, shelving costs money and advertisment, the store has it all on stock (the internet place might order it when you oder it.....he's just passing it on)....the list goes on and on and since they have to pay for all of that it gets passed on.
Many times a person would come into the store and ask a ton of questions or look at an item for a long time and then use that info to buy on the net because the net usually doesn't offer that kind of customer service. You just see what you get and no help.

 

[jhelmuth]

You don't owe any one your business.
...
They may like you but that's not the only reason they dive with you. People who dive buy dive equipment and they need to keep you diving. They want you to see the new gear their sporting and so on.

With reference to this friendship you mentioned you might ask just who is taking advantage of who.

Mike has this one nailed. Still, your guilt won't go away until you feel comfortable about seperating this relationship. I had the same issue when I first started diving. I got over it once I saw the reality of the business relationship. When I want service and need on-going support for my gear, I feel safer in doing business dealing with real people locally. If I don't need these things, I shop the net - it pays off for me to follow this logic, and that is how I get value for me!

 

[The Kraken]

rcain1 posted:

"I want to support the LDS but some of the times there is a huge difference in the price."

I want to support my family ALL the time.
I daresay the owner of the LDS does not go to the new car dealer and write a check for the sticker price of the car.

Mike wrote:
"With many manufacturers yes there's a minimum"

Once purchased from the manufacturer, a retail business has the legal right to resell the product at whatever price it determines.
The manufacturer CAN NOT FORCE A RETAIL BUSINESS TO SELL AT FIXED PRICE. The manufacturer can establish a "manufacturer's suggested retail price" (MSRP). The operative word here is "suggested".
That's why companies end up in court for "price fixing". "restraint of trade" and a host of other no-no's.

This is what usually happens in the case of a retailer or distributor selling the product at a discounted price:

The area/regional/national :: rep/manager/vice president or other grand pubah will set up what is puported to be a nice little warm-fuzzy feeling meeting with the offending store.
He'll show up at the door a couple of days later and the meeting will begin rather pleasantly.
About halfway through the meeting he will drop the bomb that, because of this and that and the other, yadda, yadda, yadda, the distribution in the area is being "realigned" and that he's sorry, but the store no longer has authority to purchase directly from the manufacturer. The grand pubah will then tell the owner that he has a 30 day period, if he so chooses, to return any unsold merchandise for credit less a X% restocking fee.
The grand pubah cordiall thanks the doe eyed store keeper for his past support and wishes him continued success in the future, walks out the door, walks down the street, or across the block, whatever the case may be, to the other dive shop that has wanted the line for a while and tell him that he can, with the purchase of X amount of inventory, become the newest ACME scuba gear distributor in the area. Now the new distributor just happens to be the shop the manufacturer just "happened to stop into" shortly after he found out that the ex-distributor was discounting the product.

Realignment of distribution is NOT against the law.

Guess how I know this?

 

[justleesa]

Guess how I know this?

you got burned?

 

[The Kraken]

Nope, I was the pubah . . .

 

[jhelmuth]

Nope, I was the pubah . . .

Sweet! But why does it work this way? Wouldn't the whole industry be better off with "free trade"? The mfgr's get their cut either way - right? So the only one "protected" seems to be the dealers/LDS - wrong?

 

[zboss]

Ditto on the unethical. Don't take up a bricks-and-mortar store's time when you've got no intention of buying there. They have enough overheads without catering to people using them as a free fitting service.

This is coming from an online store owner.

When that diver comes into your store to try something on, regardless of if you know it or not, you have an opportunity to convert that sale. Sales is very difficult, I know it because I do it. I sell computer services in the Washington DC area, and I often have companies approach me even though they have already decided on another vendor. I still go and I still demo our capabilities because sometimes I end up changing their minds. At the very least I learn a little about their industry and other companies that might need our services.

At the very least, its unusual for a company to complete one and only one purchase. I can often split the deal by being a subcontractor. Yes - it's always the best to be the prime contractor but you can't laugh at getting part of the pie [instead of none].

BTW - the amount of money it takes to support our enterprise would make the average retail scuba store feel very small. I see companies use this as an excuse all the time, it just doesn't cut the mustard - I can't say to MY customers "but we charge more because it costs us more" they simply don't care. That's pretty much the lamest excuse. HOWEVER, in the case of a change order, in which the customer signed a service agreement and then wants to change it, then that's open for a wide range of cost discussions.

The long and short of all business in the US right now is the ability for companies to be agile and adjust to changing economics very quickly, and be innovative about it. Frankly - I don't see much innovation coming out of the average LDS.

 

[zboss]

I agree with Genesis on this issue

But..... would add that in all fairness, the LDS should get a small premium for having the item in stock (or able to get it with out a major hassle) and assisting with the fit and set-up. This amount would vary by item and the amount of LDS help actually received but I would have no problem paying 10% to 15% more depending on the item.

Scott

1. the product sale
2. a setup cost
3. an extended service cost
4. an upgrade cost
5. advertised packaging discounts
6. service/product packaging

etc, etc, etc... I see none of that from most LDS

 

[The Kraken]

If distribution is limited the selling price is relatively fixed by the laws of supply and demand.
If a distributor A starts selling a product at a discount then the remaining members of the manufacturers distribution chain must approach, equal or go below the price at which distributor A sells the product just to stay competitive. After a while the discounting gets to the point that the retailer is not making enough of a profit margin for it to be economically feasible to sell the product. He doesn't push the product, the manufacturer doens't make any sales to distribution. This can also lead to a loss of market share for the manufacturer.