Would you support an LDS...

[Web Monkey]

The "membership" thing works at Sam's Club and BJs because they have buying power that would melt your brain.

They can demand pretty much whatever price they want from any manufacturer they want. This allows them to reduce the price charged to the consumer (if they wish).

You, on the other hand would be buying at the same price everybody else does and would not be able to offer prices that would offset the "membership" fee.

If in fact, you did start cutting prices and taking away significant business from other dealers, you would suddenly find that your orders are being filled slower and that a lot of items you try to buy are "out of stock".

Terry

Would you support an LDS that is a members only establishment. I'm considering opening one and requiring membership dues to get preferred pricing. Sam's Club, Costco and others do it... but would it work in the dive industry?

If I open a shop and sign up say 300 members at $75 a year annual dues, that would be $22.5K in my pocket right up front. Members would be entitled to discounted airfills, travel and equipment purchases. Non-members would be allowed to shop, get air fills and travel, but they would have to pay non-member pricing. Here is my idea...

Members - Non-Members
Airfills $2.50 ea - $5.00 ea
Nitrox fills $4.50 ea - $9.00 ea
Travel 10% off - none
Repairs 20% off - none
Equipment 20% off - none
Training Classes 20% off - none

So lets say a member fills 20 air tanks a year... they save $50. They go on one trip at $1500... so they go for $1350... They get their regs serviced for $26.25 instead of $35. They buy a new BCD for $320.00 instead of $400 and they take two continuing education courses for $76 instead of $95.

For a $75 membership... they saved $307.75 or a net gain of $232.75.

Would you join a dive shop offering this... or would you walk out saying I'm not paying no stinkin $75 to be able to shop here?"

The benefit to the shop is 1. Capital... 2. guaranteed annual income. 3. Happy customers who buy more and increase sales volume and tell more to come. 4. Higher volume sales means lower costs for items due to volume buying hence increasing profit. Thoughts comments and suggestions welcome...

 

[matt_unique]

One shop I visit does something similar and I have yet to join. The price (in this particular case) did not justify the cost (much more than $75). I use two shops for different needs. One shop happens to be closer to work so I get my air fills there. That is my only regular purchase that would make a membership program worthwhile.

The prices you referenced would make the $75 membership worthwhile for me.

It would ultimately boil down to your prices compared to those available on the internet.

--Matt

 

[colby]

This is the type of thing that makes an LDS as a value-added facility, which is what I think they will have to move towards. Building consumer loyalty and maintaining it through various means. Keep thinking and make it beneficial for the diver to come to your store.

 

[TSandM]

You'd lose money on me just on the air fills.

 

[drbill]

Actually your prices are quite competitive with the two LDS'es here on Catalina (although I'm not suggesting you open your shop here!). One of the things that would sway me is the nature of the service given to your customers. I'm very happy with the LDS (Scuba Luv) I do most of my business with here. They give me fantastic service... above and beyong IMHO. That counts for a lot in my book. They even have a few lovely ladies at the counter (all taken).

Here is a recent example of two shops I won't be frequenting in the future. Took a pony bottle in to one (I bought it there) that was badly corroded. The o-ring would not seat properly and the neck leaked from the 10th month on despite replacing several o-rings. Even the valve itself failed, and the pony filled 2/3rds with salt water. This despite the fact that I soak it in freshwater after each day's dives.

I didn't expect them to replace it, but was not ready for what they did (or didn't do). They told me I must be breathing it down past 200 psi. The fact is that I've never even used the pony while it has been on my primary tank. I never needed it (except for "insurance"). The problems began within a year of purchase and I do intend to contact Luxfer about it.

Their recommendation... buy a new one (I agree and have already done so). The showed me the only 13 cu ft pony they had. It was already 17 months into its first hydro and they wanted full price for it. Not a chance!

I went to another shop and they suggested I buy their only 13 cu ft pony. I took one look at it and there was a small but significant ding in the tank. It had broken not only through the pain, but had dented the aluminium tank itself. They also wanted full price for what I considered damaged merchandise (at best it would need a sealant applied over the ding or repainting).

Neither shop expected more cylinders to come in for 3-4 weeks.

I don't consider either shop gave me customer "service" that was appropriate and will not deal with them in the future. That's where my own LDS is tops. They were willing to order me a new one right away. Their service sells their shop. If yours does, too, it will attract loyal customers... and members at least among the more regular divers. I'll pay extra for good service.

 

[RICHinNC]

I think the discussion of pricing and customer service has been beat to death....but one thing that is key to me is brand. There are some brands I just dont like. If that is what you are selling...then it would be a no-go for me.

I dont think any lds locally could get 300 people to sign up....I dont think there are that many divers around here....if so...they are realllll quiet about it.

 

[BabyDuck]

maybe so, rich, but the ones here are loud, at least!

 

[O2BBubbleFree]

I'd be much more apt to join a non-profit dive club, independant of any LDS, where members could band together and approach retailers for discounts on volume purchases (and yes, it can be done).

Combine that with club dives (for both training and fun), guest speakers, club compressor, social activities, newletters, club pool, mentoring program, club boat, ...

All those can probably be incorporated into your plan, I'd just rather it be immune from any sales pressure.

 

[devolution365]

I'd be much more apt to join a non-profit dive club, independant of any LDS, where members could band together and approach retailers for discounts on volume purchases (and yes, it can be done).

Combine that with club dives (for both training and fun), guest speakers, club compressor, social activities, newletters, club pool, mentoring program, club boat, ...

All those can probably be incorporated into your plan, I'd just rather it be immune from any sales pressure.

The structure of many of the big retailers would probably make this difficult for "big stuff", but with smaller manufacturers... Has anyone tried setting up a group buy on this forum? The 'tuner forum I'm on (for racing imports) does this alot and, as long as it's set up well, it seems to work out nicely for all involved.

 

[MikeFerrara]

Would you support an LDS that is a members only establishment. I'm considering opening one and requiring membership dues to get preferred pricing. Sam's Club, Costco and others do it... but would it work in the dive industry?

If I open a shop and sign up say 300 members at $75 a year annual dues, that would be $22.5K in my pocket right up front. Members would be entitled to discounted airfills, travel and equipment purchases. Non-members would be allowed to shop, get air fills and travel, but they would have to pay non-member pricing. Here is my idea...

Members - Non-Members
Airfills $2.50 ea - $5.00 ea
Nitrox fills $4.50 ea - $9.00 ea
Travel 10% off - none
Repairs 20% off - none
Equipment 20% off - none
Training Classes 20% off - none

So lets say a member fills 20 air tanks a year... they save $50. They go on one trip at $1500... so they go for $1350... They get their regs serviced for $26.25 instead of $35. They buy a new BCD for $320.00 instead of $400 and they take two continuing education courses for $76 instead of $95.

For a $75 membership... they saved $307.75 or a net gain of $232.75.

Would you join a dive shop offering this... or would you walk out saying I'm not paying no stinkin $75 to be able to shop here?"

The benefit to the shop is 1. Capital... 2. guaranteed annual income. 3. Happy customers who buy more and increase sales volume and tell more to come. 4. Higher volume sales means lower costs for items due to volume buying hence increasing profit. Thoughts comments and suggestions welcome...

No. I'll make you a counter proposal though. You give me that estimated savings minus the membership fees in cash up front and I'll consider it.