Why I have decided to stop shopping for ANYTHING at the LDS

[jonnythan]

Fris, you think you could run the Scubatoys website out of your cable connection for $20/month? Respectfully, you obviously have no clue.

Putting up a web site that will handle the volume of e-commerce traffic of a site like Leisurepro or Scubatoys is big bucks. You either need staff and nontrivial infrastructure to do it in-house, or you need to pay much bigger bucks than $20/month for a professional to do it and do it right.

The point is that this is ON TOP OF all the overhead of running a brick and mortar store, which is what most of these online shops are! Saying that an online shop like Leisurepro, with a storefront and staff in MANHATTAN, has less overhead than your LDS is absurd to the extreme.

 

[jonnythan]

Are you guys kidding? It [can] cost -so- much less to run an online shop than it does a brick and mortar store. You can setup a server over a cable/dsl connection in your basement (which also can double as 'warhouse space' and the 'office space frontend') with open source database software (like MySQL) to handle the backend and either create your own page with online ordering system or pay someone else to host it for you all served under open source web servers (like Apache)

You could have a staff of two people to begin with (which cuts down a LOT on cost) and run it in your spare time while still keeping your day job.

The list of expenses a brick and mortar shop has (staff, electricity, displays, heat, rent/mortgage, etc, etc, etc) is at least twice as long as an online shop and the only thing an online shop can't offer are air fills which don't make you any money anyway. Granted full classes can't be offered online but you can offer those PADI 'half classes' (or whatever they're called) or forget about the hassle entirely.

Regardless if your intention is to have just an online shop, the expenses are much less. All of this is under the assumption that you either A) know how to set this stuff up by yourself or B) will take the time to learn how if you don't.

Read the post above... a moderate-volume e-commerce site is non-trivial in terms of cost, and it's *over and above* the cost of the actual shop that they're running.

 

[friscuba]

Fris, you think you could run the Scubatoys website out of your cable connection for $20/month? Respectfully, you obviously have no clue.

Putting up a web site that will handle the volume of e-commerce traffic of a site like Leisurepro or Scubatoys is big bucks. You either need staff and nontrivial infrastructure to do it in-house, or you need to pay much bigger bucks than $20/month for a professional to do it and do it right.

The point is that this is ON TOP OF all the overhead of running a brick and mortar store, which is what most of these online shops are! Saying that an online shop like Leisurepro, with a storefront and staff in MANHATTAN, has less overhead than your LDS is absurd to the extreme.

It would be curious what a high volume e-commerce site would run, I still don't think it would be all that much. In my earlier post I deleted, I mentioned my website runs me 5.95 and month and $20 a year for the URL renewal. I could get 12000 MB (comparable to 12 pickup trucks loaded with books) of space and unlimited data transfer for 9.95 a month. If I had the know-how, I could run a sizeable e-commerce site for that. The big question is how much some of these e-commerce companies are paying for that know-how. At that point, the more buisness one does, the more help it's going to take, however a warehouse operation will never require the sheer realestate or salesfloor operators that a retail operator of similar volume would ever take.

Scubatoys has done a smart thing with their business, however that model would not work for everyone. They've carved out a good nitch for themselves. If every single operator were able to do the same, we might see the straight catalog guys hurting, but also with increased competion you might see operators such as Scubatoys not having quite the same level of success they now have.

later,

 

[friscuba]

Speaking of Scubatoys... I thought I'd seen this before...

http://www.cisco.com/en/US/netsol/n...lutions_customer_profile09186a008020e6ec.html

It's an interesting read.

Apparently Scubatoys' marketing and advertising budget (I assume this includes his onlne presence since it basicall says his marketing and advertising has gone that direction) as of a couple years after they went online, was no higher than prior to going online. I'm sure his overall costs are up, but I still think it's not anywhere close to where it would be if they were doing that volume strictly by walkin sales.

later

 

[SDAnderson]

Fris, you think you could run the Scubatoys website out of your cable connection for $20/month? Respectfully, you obviously have no clue.

Putting up a web site that will handle the volume of e-commerce traffic of a site like Leisurepro or Scubatoys is big bucks. You either need staff and nontrivial infrastructure to do it in-house, or you need to pay much bigger bucks than $20/month for a professional to do it and do it right.

The point is that this is ON TOP OF all the overhead of running a brick and mortar store, which is what most of these online shops are! Saying that an online shop like Leisurepro, with a storefront and staff in MANHATTAN, has less overhead than your LDS is absurd to the extreme.

Are we talking dollars or are we talking points? If LeisurePro and ScubaToys don't spend less, on a percentage basis, for uncontrollable costs plus labor than most local dive shops, the University of Michigan B-school should give me my money back.

As to a pure "clicks" play, I pay less than $8 per month for 5000MB of disk space and 300GB of data transfers. It costs me another $45 per month for 10Mbps internet access. Somewhere along the way I have to pay registration fees, which are less than $2 per month. That's less than $55 per month for a basic infrastructure that is more than adequate to start an online business with. Success will mean costs increase, but usually not as a percentage of business.

Yes, there are lots of other expenses besides the internet portion that will need to be dealth with. If I'm successful I'm going to need warehouse space (locally, less than $1 per foot, per month, 3Net) and there are organizational and operating costs that every business incurs, not to mention I want to pay myself something, but anybody that doesn't understand that "clicks" is cheaper to run than "bricks" doesn't have a clue.

 

[jonnythan]

http://64.233.161.104/search?q=cach...s+e-commerce+site+cost&hl=en&client=firefox-a

You guys are still missing the fact that Scubatoys and Leisurepro have all the expenses of your typical LDS plus the expense of running an enterprise e-commerce site.

 

[jonnythan]

but anybody that doesn't understand that "clicks" is cheaper to run than "bricks" doesn't have a clue.

I never said anything of the sort. Obviously an online store with the same volume of sales as a brick and mortar store will have significantly less overhead.

However, run a brick and mortar shop AND an online site and the overhead increases, it doesn't magically decrease.

You obviously increase your profit margin at the same time, but the total overhead is significantly MORE.

 

[friscuba]

http://64.233.161.104/search?q=cach...s+e-commerce+site+cost&hl=en&client=firefox-a

You guys are still missing the fact that Scubatoys and Leisurepro have all the expenses of your typical LDS plus the expense of running an enterprise e-commerce site.

There was a post a couple months back by someone who actually walked into the Leisurepro showroom http://www.scubaboard.com/showthread.php?t=1585&page=2&pp=10

Apparently it was tiny and staffed by 5 people at computers. The actual in-showroom inventory was sparse compared to the poster's LDS. Sounds like little more than office space to me rather than a typical full-service shop.

 

[SDAnderson]

I never said anything of the sort. Obviously an online store with the same volume of sales as a brick and mortar store will have significantly less overhead.

However, run a brick and mortar shop AND an online site and the overhead increases, it doesn't magically decrease.

You obviously increase your profit margin at the same time, but the total overhead is significantly MORE.

I'm going to skip the "significantly" because that's an imprecise and relative term and, apparently, inarguable. Suffice that you're talking dollars and a businessman would be talking points. Clicks is cheaper to run than bricks and one of the reasons that the hybrids (bricks-n-clicks) work so well is that it allows the leveraging of existing skills, labor, infrastructure and marketing into a the new model. Costs go up as you layer in an internet modality but nowhere near as fast as revenues, leading to a reduction - in percentage terms - in expenses.

It's not that dollars don't count and it certainly isn't magic, just that the percentages are more important. The only time dollars count is if you don't have enough of them - or if you're cashing your paycheck.

 

[friscuba]

I never said anything of the sort. Obviously an online store with the same volume of sales as a brick and mortar store will have significantly less overhead.

However, run a brick and mortar shop AND an online site and the overhead increases, it doesn't magically decrease.

You obviously increase your profit margin at the same time, but the total overhead is significantly MORE.

I'd be curious as to what you think of as "significantly MORE" might be in actual dollars.

A couple of the shops I know have pretty decent inventories and staffs, they alreadly are computerized for inventory, have websites and have in-shop high-speed accesss. Pay someone several hundred bucks to come in and set up a shopping cart then all's it would take is a few minutes at the end of the day to check and pull orders, and then use some of the slack time after charters go out the next moring to box the orders up and they'd be set. They'd probably want a dedicated computer for the online purchases and might take quite a few more calls, but the upfront costs would seem minimal to me.

I think currently their online stores consist of nothing to t-shirts and that's about it. Somehow I don't think additional overhead is a worry. I think it's more like unfamiliarity with the possibilities of e-commerce that's stopping them. To quote the President of Scubatoys from the article I linked earlier "Says Dague, "The Internet allows a relatively small company to act and operate like a big company. Creativity is the limit.""

later,