sheck33
Contributor
you GOT to be joking 
The Great local dive shop vs. online debate
- Thread starter Scuba Sal
- Start date
Please register or login
Welcome to ScubaBoard, the world's largest scuba diving community. Registration is not required to read the forums, but we encourage you to join. Joining has its benefits and enables you to participate in the discussions.
Benefits of registering include
- Ability to post and comment on topics and discussions.
- A Free photo gallery to share your dive photos with the world.
- You can make this box go away
Scuba
Contributor
It seems to me that the high mark-up on scuba gear in traditional LDS's lies somewhere in the gray area between greed and subsidy. ( subsidising training, air, etc. as some have noted ) The reason this has not changed until now is because of the nature of this business: a very small local market generally ( I will ignore the tourist business for this example )
Whenever there is a large gap in the marketplace between production cost and sale price, there is the opportunity for entrepreneurs to step in and make a profit. This results in business readjustments and a closure of the large profit opportunity. I suspect this had not occured in this business earlier due to the relatively small nature of the local markets. With the advent of the internet this equation changed. All the small markets have essentially been consolidated into one much larger global marketplace. Thus now we have the emergence of the entrepreneurs stepping in to close the price gap, which was largely not feasible on the small scale existing before the internet.
The business re-adjustment is now starting to occur, some will adjust and survive, others will fail, some prices will come down, other prices may go up.
The problem with the subsidy model is that when I go buy a piece of gear at the store, the last thing I want to do is pay for someone elses training or air. This is essentially a hidden tax. If the price of training and air has to go up some then that is fine as the price will be determined by the marketplace. A better instructor will be able to charge more just as doctors, lawyers and other do. A shop which does a large quantity of air fills will be able to have a lower price than one which does'nt. Service is valued by some and not others, a business can try a combination of both or target one type of consumer.
In the end its a win - win situation for the wise consumer as well the business able to adapt to the new environment. As the rules of the game change, the old business model becomes increasingly difficult to sustain. Nothing new here, its called progress, as systems adapt to changing environments.
Peter
Whenever there is a large gap in the marketplace between production cost and sale price, there is the opportunity for entrepreneurs to step in and make a profit. This results in business readjustments and a closure of the large profit opportunity. I suspect this had not occured in this business earlier due to the relatively small nature of the local markets. With the advent of the internet this equation changed. All the small markets have essentially been consolidated into one much larger global marketplace. Thus now we have the emergence of the entrepreneurs stepping in to close the price gap, which was largely not feasible on the small scale existing before the internet.
The business re-adjustment is now starting to occur, some will adjust and survive, others will fail, some prices will come down, other prices may go up.
The problem with the subsidy model is that when I go buy a piece of gear at the store, the last thing I want to do is pay for someone elses training or air. This is essentially a hidden tax. If the price of training and air has to go up some then that is fine as the price will be determined by the marketplace. A better instructor will be able to charge more just as doctors, lawyers and other do. A shop which does a large quantity of air fills will be able to have a lower price than one which does'nt. Service is valued by some and not others, a business can try a combination of both or target one type of consumer.
In the end its a win - win situation for the wise consumer as well the business able to adapt to the new environment. As the rules of the game change, the old business model becomes increasingly difficult to sustain. Nothing new here, its called progress, as systems adapt to changing environments.
Peter
LDS to band together would be about as successful as getting farmers to organize and demand a better deal than they are getting now. In other words its not going to happen.
"I don't know about you, but when I tell someone that I'm walking in with brand new Cressi-sub and TUSA gear, and they tell me that they still might reject it, I don't get a warm fuzzy."
I just went through this scenario back in April 2002. I was enrolling to take my BOW course, and so it went:
I already owned all my own gear, Halcyon wings, Koplin BP, Halcyon harness, AquaLung regs, Catalina AL80 tank, Ocean Master snorkel, OMS mask, etc. My LDS told me that gear for their BOW course had to meet their requirements." Thing was, 'their' requirements meant, and I quote, "a twin purge valve snorkel and a purge valve mask." Funny thing was, Scubapro (yup, you guessed it - THEIR main line) was the only scuba manuf that makes a twin purge valve snorkel - so what they did, was 'spec-d' their own goods in for the course.
When I brought my Halcyon rig in for 'inspection' and approval to use for my OW dives, I was told by their salesman "You really ought to think about getting rid of those wings and get some good OMS wings." That right there, showed my their ignorance in knowing what is good gear and not. After some hemming and hawing, they let me use my gear...
I happily explained that I was an avid DIR fan (working towards that goal still) and that I believed I had made the correct purchase choices - for myself, and the type of diving I'd like to do - or work towards.
I too do not like anyone making MY purchasing decisions for me - I decided I'd 'play the game' long enough to obtain my C-card - and then make my future purchases from shops that acted professionally and buy as much of my gear online as I could.
I wasn't impressed then and I'm still not by their behavior. Its like telling a guy his girlfriend is ugly. What did they think my response would be?
I vowed to make my future training thru GUE - even though GUE does not officially issue C-cards (unfortunately).
I refuse to accept the mentality that you must buy the gear THEY sell, if you want to take their courses, etc. Now I'm not saying that a student should be allowed to walk into a course with a $10 K-Mart mask. Thats not what I am implying. But a student should not be penalized for his choice of brands of gear, as long as it is a quality, reputable and a safe design.
Personally, I think purge valve masks are OK, but I don't think a student should learn their OW skills with one and become reliant on it for clearing. I think ALL students should know how to clear a regular mask first and foremost. And telling a guy (or gal) they HAVE to have a purge valve mask is BS. ESPECIALLY if you set up the 'wording' in the course outline that specifically calls out ONE manufacturer.
I lost all respect for that shop and now take my business elsewhere. Also, I might add, that this particular LDS was selling their gear at FULL MSRP. Example? SP jet fins - $89. Leisure Pro sells them for $65, I believe. They screwed up - I could have taken additional courses - AOW, Nitrox, Wreck, etc. Not now, at least from them...
MORAL of the story: Dont be telling people WHOM they have to buy their gear from. If a guy likes Apeks better than Mares or Aqua Lung, then by all means, let him buy it! You certainly can make recommendations (tactfully), but one should refrain from TELLING anyone they HAVE to do anything. That was ethical Rule #1 I learned in sales 16 years ago. NEVER criticize a customers choice of brands. You may tactfully educate him and explain why you think YOUR brand is better - but NEVER tell someone their gear is crap, etc.
Enough said...you did the right thing. take your business elsewhere.
I just went through this scenario back in April 2002. I was enrolling to take my BOW course, and so it went:
I already owned all my own gear, Halcyon wings, Koplin BP, Halcyon harness, AquaLung regs, Catalina AL80 tank, Ocean Master snorkel, OMS mask, etc. My LDS told me that gear for their BOW course had to meet their requirements." Thing was, 'their' requirements meant, and I quote, "a twin purge valve snorkel and a purge valve mask." Funny thing was, Scubapro (yup, you guessed it - THEIR main line) was the only scuba manuf that makes a twin purge valve snorkel - so what they did, was 'spec-d' their own goods in for the course.
When I brought my Halcyon rig in for 'inspection' and approval to use for my OW dives, I was told by their salesman "You really ought to think about getting rid of those wings and get some good OMS wings." That right there, showed my their ignorance in knowing what is good gear and not. After some hemming and hawing, they let me use my gear...
I happily explained that I was an avid DIR fan (working towards that goal still) and that I believed I had made the correct purchase choices - for myself, and the type of diving I'd like to do - or work towards.
I too do not like anyone making MY purchasing decisions for me - I decided I'd 'play the game' long enough to obtain my C-card - and then make my future purchases from shops that acted professionally and buy as much of my gear online as I could.
I wasn't impressed then and I'm still not by their behavior. Its like telling a guy his girlfriend is ugly. What did they think my response would be?
I vowed to make my future training thru GUE - even though GUE does not officially issue C-cards (unfortunately).
I refuse to accept the mentality that you must buy the gear THEY sell, if you want to take their courses, etc. Now I'm not saying that a student should be allowed to walk into a course with a $10 K-Mart mask. Thats not what I am implying. But a student should not be penalized for his choice of brands of gear, as long as it is a quality, reputable and a safe design.
Personally, I think purge valve masks are OK, but I don't think a student should learn their OW skills with one and become reliant on it for clearing. I think ALL students should know how to clear a regular mask first and foremost. And telling a guy (or gal) they HAVE to have a purge valve mask is BS. ESPECIALLY if you set up the 'wording' in the course outline that specifically calls out ONE manufacturer.
I lost all respect for that shop and now take my business elsewhere. Also, I might add, that this particular LDS was selling their gear at FULL MSRP. Example? SP jet fins - $89. Leisure Pro sells them for $65, I believe. They screwed up - I could have taken additional courses - AOW, Nitrox, Wreck, etc. Not now, at least from them...
MORAL of the story: Dont be telling people WHOM they have to buy their gear from. If a guy likes Apeks better than Mares or Aqua Lung, then by all means, let him buy it! You certainly can make recommendations (tactfully), but one should refrain from TELLING anyone they HAVE to do anything. That was ethical Rule #1 I learned in sales 16 years ago. NEVER criticize a customers choice of brands. You may tactfully educate him and explain why you think YOUR brand is better - but NEVER tell someone their gear is crap, etc.
Enough said...you did the right thing. take your business elsewhere.
I guess this <rant> is for me. Maybe my wording was confusing.
What I was referring to is the fact that some people (ie not me) may sometimes imply that LP and others like them can afford to sell at a discount because they are selling "grey market" gear. I was actually trying to make an argument against this, and point to the manufacturer's double standards.
I've been to LP a number of times. I've spent a total of +- $800 there.
Mark.
I have been in a somewhat unique position as I ran across a confidential price list for one of the manufacturers of SCUBA equipment. While I won't say where or how I managed to find this particular item, I did take the time to browse through it. If any of you have ever seen one of these (and I am assuming not many outside of LDS owners/employees have) let me tell you a little about it.
First of, there is an item description. Then there were several (3 I think) columns of dealer cost. The fourth column was the suggested retail price of the item. The dealer prices fluctuated quite a bit for any given item. One in particular caught my attention as costing the LDS anywhere from just under $50 to just over $60 depending on their 'dealer level status.' The suggested price for this item was right at $100. The shipping for this item cost just about $10.
Taking this little scenario into account, Joe Diver walks into LDS wanting a SCUBA Widget. This particular shop doesnt sell many widgets, so they are a level 3 dealer and it costs them $60. Then the LDS had to pay $10 buck in shipping to get it there and since they dont sell a lot of Widgets, they only ordered one. Why have a bunch of merchandise that isn't selling laying around?
So, the LDS now has about $70 tied up in this widget, which they are selling for $100. Joe Diver points out that he can buy it for $75 online, so the LDS conceeds to sell it to him at that price in the hope of making it up in future sales to a satisfied customer. So the LDS just made $5 for all their trouble. It probably cost them more than that just to pay that employee to wait on Joe.
The OLS however moves about 20 widgets a week. So they buy them for less than $50 bucks each, the manufacturer pays for the shipping to them because they are such good customers and they make YOU pay for the shipping when you order it. So for the same item, the OLS clears about $25.
But there is a problem... You see, in the front of that catalog that the LDS orders from is a disclaimer. If they discount an item more than 15% off of the MSRP, then they face the possibility of having the line pulled from their store. And because they are an authorized dealer who just violated that clause by selling Joe a Widget for 25% off, they lost the whole widget line.
On the other hand, the OLS never was an authorized dealer, and they are moving a lot more widgets anyway, so the manufacturer doesnt care what they do with them.
Sound like a fairy tale? Well it isn't. Fairy tales have happy endings.
Do I personally buy things from an OLS? Yes, I have and yes I will. But before I do, I check with my LDS to see if they carry it or if they can get it for me and at what cost. If it is life support or something that will require servicing such as a regulator, then I am going to do my damndest to buy it at a LDS, even if it means paying more for it. If it is an accessory or something trivial and the price differential is great, then I am going to consider the OLS.
I have been fortunate that my LDS is willing to work with me on pricing. I have also found they are willing to give me better pricing on special order items that I want, because they know they dont have to stock it. When they order it for me, they tell me how much it is going to cost. If I am agreeable, they order it, and when it comes in they call me and I come in, pay for the item + shipping and I go home happy. They are happy as well because they made a sale, made a little bit of money on the deal, and didnt have to sit on merchandise wondering if they would ever turn it over.
Those of you that are really concerned over pricing at your LDS might consider inquiring into whether or not they will give you better pricing in that scenario.
Just another of many suggestions on this topic so far...
First of, there is an item description. Then there were several (3 I think) columns of dealer cost. The fourth column was the suggested retail price of the item. The dealer prices fluctuated quite a bit for any given item. One in particular caught my attention as costing the LDS anywhere from just under $50 to just over $60 depending on their 'dealer level status.' The suggested price for this item was right at $100. The shipping for this item cost just about $10.
Taking this little scenario into account, Joe Diver walks into LDS wanting a SCUBA Widget. This particular shop doesnt sell many widgets, so they are a level 3 dealer and it costs them $60. Then the LDS had to pay $10 buck in shipping to get it there and since they dont sell a lot of Widgets, they only ordered one. Why have a bunch of merchandise that isn't selling laying around?
So, the LDS now has about $70 tied up in this widget, which they are selling for $100. Joe Diver points out that he can buy it for $75 online, so the LDS conceeds to sell it to him at that price in the hope of making it up in future sales to a satisfied customer. So the LDS just made $5 for all their trouble. It probably cost them more than that just to pay that employee to wait on Joe.
The OLS however moves about 20 widgets a week. So they buy them for less than $50 bucks each, the manufacturer pays for the shipping to them because they are such good customers and they make YOU pay for the shipping when you order it. So for the same item, the OLS clears about $25.
But there is a problem... You see, in the front of that catalog that the LDS orders from is a disclaimer. If they discount an item more than 15% off of the MSRP, then they face the possibility of having the line pulled from their store. And because they are an authorized dealer who just violated that clause by selling Joe a Widget for 25% off, they lost the whole widget line.
On the other hand, the OLS never was an authorized dealer, and they are moving a lot more widgets anyway, so the manufacturer doesnt care what they do with them.
Sound like a fairy tale? Well it isn't. Fairy tales have happy endings.
Do I personally buy things from an OLS? Yes, I have and yes I will. But before I do, I check with my LDS to see if they carry it or if they can get it for me and at what cost. If it is life support or something that will require servicing such as a regulator, then I am going to do my damndest to buy it at a LDS, even if it means paying more for it. If it is an accessory or something trivial and the price differential is great, then I am going to consider the OLS.
I have been fortunate that my LDS is willing to work with me on pricing. I have also found they are willing to give me better pricing on special order items that I want, because they know they dont have to stock it. When they order it for me, they tell me how much it is going to cost. If I am agreeable, they order it, and when it comes in they call me and I come in, pay for the item + shipping and I go home happy. They are happy as well because they made a sale, made a little bit of money on the deal, and didnt have to sit on merchandise wondering if they would ever turn it over.
Those of you that are really concerned over pricing at your LDS might consider inquiring into whether or not they will give you better pricing in that scenario.
Just another of many suggestions on this topic so far...
along with some others in this thread make me wonder why would a LDS want to be an authorized dealer for anybody. It seems to me that all dive shops should operate in the same way as Leisure Pro or whoever it is we are talking about. That would certainly seem to level the playing field.
jbd,
That is what they all would do, I believe, if they could. The problem comes from the fact that in order to do that they would have to have the capital to stand behind everything they sell instead of relying on the manufacturer to do it. (i.e. if the reg is bad they have to be able to afford to fix it or to totally replace it because since they aren't a dealer the manufacture won't do it.)
They would also have to have the capital to order in mass so that they could get the lower prices. This has several risks involved. If there is a recall, guess what... not a dealer... the warrenty isn't any good, they have to get them all fixed themselves or eat the loss. Or what if it doesn't sell they are stuck with alot of the product instead of the one or two that a typical shop may have.
In order to get this type of operation started you have to have a large amount of capital.
Chad
That is what they all would do, I believe, if they could. The problem comes from the fact that in order to do that they would have to have the capital to stand behind everything they sell instead of relying on the manufacturer to do it. (i.e. if the reg is bad they have to be able to afford to fix it or to totally replace it because since they aren't a dealer the manufacture won't do it.)
They would also have to have the capital to order in mass so that they could get the lower prices. This has several risks involved. If there is a recall, guess what... not a dealer... the warrenty isn't any good, they have to get them all fixed themselves or eat the loss. Or what if it doesn't sell they are stuck with alot of the product instead of the one or two that a typical shop may have.
In order to get this type of operation started you have to have a large amount of capital.
Chad
Similar threads
