Unacknowledged subtext in fill pricing

[freewillie]

It might just depend on the LDS. It also depends on how loyal a customer you are for the LDS as well. If we are talking tank fills, they are not that expensive to begin with. Purchase a fill card at my LDS and you prepay for 10 fills and get the 11th fill free. Cost a whopping $50 for the card which makes the fills only $5. Cant imagine that being a huge profit for my LDS.

But, my favorite LDS give me "perks" other LDS don't, which is why I give them most of my business. If I check out a tank for the weekend but thumb the dive I'm likely to get a store credit for the tank. I'll just pick up a new tank the next time I go diving. Other stores in town don't give me the same courtesy. So whenever possible I buy almost all my gear from them. That's a lot since I promised to buy my regulator from them and it's an Atomic T3. I'm sure they enjoyed my loyalty since the reg is a high ticket item. How many $5 air fills would cover my single purchase? Not only purchases but anyone who asks me what store to use in town they have my recommendation too, so they get lots of business off my referrals as well.

To use an analogy the OP should appreciate is the custom of drug representatives in the medical profession. Free pens and lunch are fine, but if its not a good drug you're not using it. Period. It is the same with LDS. If its a good store with good customer service then you use them. If they don't treat you well you go somewhere else. I suspect you really mourn the loss of a shop you really liked.

 

[clownfishsydney]

Dive shops who say they lose money on fills are either lying or charging less than AUS$3 a fill. I have small compressor and the cost of a fill since I have had it (12 years) is $1.98 (this is based on various tanks sizes I use - but I do not use that much air - if you are an air pig then the cost will be higher). This is made up of $1.45 capital cost (that is the cost of the compressor) and $0.53 for recurrent (filter material, electricity, repairs). The economics on a larger compressor should be even lower.

The main cost is always the running cost of the compressor. A bigger tank will need more air which will require more running of the compressor. The cost of someone to actually fill the tanks is minimal in most cases as the dive shop owner is not doing anything else and is there anyway.

Your prices in the USA are a lot cheaper than in Australia. Our fill prices are more like AUS$12 a tank for air (say US$11), although buying a car of 10 makes it cheaper. I have only seen one place that sells by the size of the tank, that was in Melbourne area. It make sense to me that if you have a 150 cf tank you should pay more than someone with a 80 cf tank.

 

[spectrum]

I think it comes down to what market the shop is serving and it gets complex from there.

If a shop is in the mixed gas business then there are materials in play beyond air and they need to be accounted for. Selling "metered" product becomes a competitive advantage and equitable thing to do. If for no reason other than consistency it makes sense to extend this practice to compressed air fills.

However, if all I am doing is pumping plain air all day I have a hard time seeing why a shop would go there. In retail a common metric is the Average Unit Price (AUP). If I'm getting $7, or more dollars every time I hook up a fill whip why would I want to start doing some of those fills at a discount?

The only reason I can see is competitive pressure but until that happens, forget it. A 50% fill has the same labor as 80% and the 50% premium more highly compressed air. If you really want to get into cost accounting then you need to hedge the $/CF price for the high pressure bias you are cultivating or have some sort of staged or sliding scale pricing.

My average dive burns 50 CF so with 80 & 100 CF cylinders I have bought my share of 1/2 fills at full price. I have skimmed with my trans-fill whip to top off the pony too. I don't dive doubles but I can see that frustration, especially if you dabble in curiosities like double 40's.

I'll guess that the prevalence of mixed gas and doubles are closely linked and it is in those markets where metered fills make sense.

I use the term "metered" but I am assuming shops doing this measure start/end pressures and have tables or formulas based-on the cylinder size? The very notion of adding those steps may explain why it is not common.

Pete

 

[FinnMom]

In Finland most dive clubs have their own compressor. As one who pays the bills for a club I'd like to say that it's not so cheap & it's not so easy.

A compressor uses filters that add up to a significant (darn near painful) ongoing cost. And even with guys in the club who know how to maintain it (and reliably do so in a timely fashion), the parts for maintenance and the occasional repair are not cheap.

BTW it's often not worthwhile to keep an old compressor (the one you could have bought for less) for regular use because once that model gets old & less common you pay more for parts.

A compressor takes up space, needs a reliable source of fresh air (not exhaust from your neighbor's car idling in his driveway), it's dangerous in case of an explosion (that's probably the deal breaker right there in a litigation-prone society) and it's fairly loud. You also have to arrange how the other club members will have access to it, preferably during hours when anyone nearby may not appreciate hearing the compressor. If you are going to offer even nitrox, let alone trimix, (I suspect most of our clubs can mix nitrox) you need to stock oxygen/helium/both and figure out a safe setup, also in the name of safety (possibly legal requirements) you need to now reconsider your construction, emergency shutoffs, liability, training requirements, etc. Sorry to repeat a point but now that you need a big O2 tank on site, this is a whole new level of trouble in a (forementioned) litigation-happy society.

Just 2 more things. (1) mixing either nitrox or trimix may invalidate the warranty and (2) look carefully at the fill times: a compressor you can more easliy afford is probably incredibly slow.

******************

The idea of charging based on the size of the fill sounds like a really neat advertising point, a good way for a shop to set themselves apart. It could be part of a much wider image campaign.

 

[Hawkwood]

That's a serious bargain. I pay $100 per month for unlimited nitrox fills. Over the course of a year it factors out to between $5 & $6 per fill ...

... Bob (Grateful Diver)

---------- Post added July 4th, 2014 at 08:02 PM ----------

... for those who haven't seen it, this is the loss that TSandM is mourning ... Scott's garage as it appeared before he closed up Sound Aquatics and moved to California ...

... a whole bunch of really good memories started there ...

... Bob (Grateful Diver)

Presumably you guys lost a big social aspect as well.

 

[beanojones]

Dive shops who say they lose money on fills are either lying or charging less than AUS$3 a fill. I have small compressor and the cost of a fill since I have had it (12 years) is $1.98 (this is based on various tanks sizes I use - but I do not use that much air - if you are an air pig then the cost will be higher). This is made up of $1.45 capital cost (that is the cost of the compressor) and $0.53 for recurrent (filter material, electricity, repairs). The economics on a larger compressor should be even lower.

The main cost is always the running cost of the compressor. A bigger tank will need more air which will require more running of the compressor. The cost of someone to actually fill the tanks is minimal in most cases as the dive shop owner is not doing anything else and is there anyway.

Insurance (liability, unemplyment, Social security)? Air Quality checks? Banks? OSHA certification? Health inspection? CGA licensing? Rent? Noise abatement zoning restrictions/exceptions? Fire Department Inspections?

Full sized compressors are not even slightly the same thing as the thing a private individual runs in their garage, and given an investment of $40,000 to get one running (ignoring running costs, and financing fees for the time being) it takes doing 20000 fills with a "profit" of two dollars a fill just to recoup only the setup costs at the time of setup, and that ignores all the ongoing costs.

20000 fills. That's a lot of fills.

 

[The Kraken]

It's all about the money . . .

Tell you what hacked me off . . .

Just had some tanks hydroed, so I tumbled them, flash-rust treated them and dried them; I am certificied to O2 clean tanks and regulators, etc., and then put my VTI sticker on them.

Took them to a dive shop in the north Atlanta area to get filled. Dropped them off and went on my merry way. Got a call shortly thereafter informing me that the tanks "are bone dry!" I said, "Of course they are. They've just been hydroed and cleaned."

The shop associate then informed me that they would not fill the tanks because THEY had not performed the VTI.

I replied, "Well, then I'll just come back over, get my tanks and have them filled somewhere else."

And I did.

Money grubbin sods . . . .

 

[oldschoolto]

It's all about the money . . .

Tell you what hacked me off . . .

Just had some tanks hydroed, so I tumbled them, flash-rust treated them and dried them; I am certificied to O2 clean tanks and regulators, etc., and then put my VTI sticker on them.

Took them to a dive shop in the north Atlanta area to get filled. Dropped them off and went on my merry way. Got a call shortly thereafter informing me that the tanks "are bone dry!" I said, "Of course they are. They've just been hydroed and cleaned."

The shop associate then informed me that they would not fill the tanks because THEY had not performed the VTI.

I replied, "Well, then I'll just come back over, get my tanks and have them filled somewhere else."

And I did.

Money grubbin sods . . . .

I had the guy at penn camp dive shop tell me that he was going to charge me for a " VIP " because the tank only had 200psi on return... Told me he had to check for water in the tank I just looked at him with a smile and said... " I'd love to see you put water in through the valve of a tank at 10 psi "
Jim...

 

[Bob DBF]

Dive shops who say they lose money on fills are either lying or charging less than AUS$3 a fill. I have small compressor and the cost of a fill since I have had it (12 years) is $1.98 (this is based on various tanks sizes I use - but I do not use that much air - if you are an air pig then the cost will be higher). This is made up of $1.45 capital cost (that is the cost of the compressor) and $0.53 for recurrent (filter material, electricity, repairs). The economics on a larger compressor should be even lower.

The main cost is always the running cost of the compressor. A bigger tank will need more air which will require more running of the compressor. The cost of someone to actually fill the tanks is minimal in most cases as the dive shop owner is not doing anything else and is there anyway.

In business, most of the cost of running is employees, a cost not factored into your fill cost. Also the store space for the compressor and fill station have to be included and in a high rent area, like Monterey, CA, that can be considerable. The compressor has to be able to fill at peak times, which means an air bank may well be necessary. And don't forget permits. And this would not include Nitrox, which would be necessary if your competitors had it.

The way you figure capital cost is fine if you own the compressor, however the shop owner who is paying several hundred bucks a month for the compressor, would not see it that way in the slow months. Even if they own the compressor, repairs are not cheap, although more frequent, and the the repair bill can not be paid by the fill.

In home or club fills you can avoid most, if not all, of the business costs which bring the cost of a shop fill up.

Shops should be able to make money on a fill, but they could have a very large nut to crack. It would depend on the traffic through the store and the spending habits of the customers if the fills, or even the shop was making money.


See benojones above for more. Post#36




Bob
------------------------------------
I was self employed, but I'll never work for another a**hole like that again.

 

[redacted]

I had the guy at penn camp dive shop tell me that he was going to charge me for a " VIP " because the tank only had 200psi on return... Told me he had to check for water in the tank I just looked at him with a smile and said... " I'd love to see you put water in through the valve of a tank at 10 psi "
Jim...

Actually, he could do that quite easily; with a bit of water in his fill connector (or elsewhere in his system).

I try to tell myself that it is not a scam they are running, just stupidity. But sometime I just can't believe anybody could be that stupid.

I find myself doing less and less local diving just because of the crap involved in getting my tanks filled.