In Response to "a Unified Dive Industry"

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offthewall1

Contributor
Scuba Instructor
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Location
Baltimore, MD
# of dives
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Written in response to a Letter from "A Unified Dive Industry"

As you well know by now I am not the average dive shop owner. I dropped from DEMA after one year because it was obvious to me from the start that the DEMA heirarchy had no interest in making the necessary changes to improve the industry. DEMA and it's manufacturing members as a whole are directly responsible for the degradation of the industry. Let me explain.

For many years the industry has been "price fixed," and for a time that worked fairly well. Before the advent of the internet and internet retailers, from (name deleted) to less successful ventures like (name deleted) etc..., price fixing worked, and by price fixing I'm referring to both MAP and MARP pricing, because everyone played on a level field. With the advent of these online retailers, some with deep pockets, the manufacturers began dumping product annually directly to them and the products became readily available worldwide at discount prices, far below what a local retailer could sell them for, and more recently even less than they can buy them for.

With the recent economic downturn, (name deleted) and a select few others have bought up unprecedented amounts of gear at prices local retailers would have been happy to pay. Of course it would have been too much trouble for the manufacturers to offer these insanely low prices to all of their dealers, so instead they dumped it to a handful of skillfull internet players and are working whether intentionally or not, to close down dive shops across the country.

We need to face the facts. Until Manufacturers reduce their prices to retailers in the same manner they have to the internet sellers, the industry will continue to crash and burn. With less visible dive shops, the industry will continue to shrink. In order for the industry to grow, for training agencies, retailers, manufacturers, and the sport as a whole to flourish, it must be in the public eye. Less dive shops will crush this industry, even with the advent of online training.

In the hey-day of the sport, which I still argue was in the 1970's through the mid 1990's, the reason the sport steadily brought in new members was because it was often in the public eye. From early adventurers with TV shows such as Jaques Cousteau and Sea Hunt , to movies such as 20,000 Leagues Beneath the Sea and a variety of others, diving as an adventure was in the public eye. In the 1990's there were still things keeping the underwater world in the public eye. Movies like the Abyss and shows such as Seaquest DPV were popular. From the year 2000 on, the industry has failed to produce anything related to diving. There are now more people who think it might be cool to work on an Alaskan crab boat or attack a Japanese Whaling vessel then there are thinking about SCUBA diving.

DEMA has failed the industry on every front. The Be A Diver campaign should have been completely paid for by the manufacturers and run in every city across this country. Instead, it produced a nice commercial, but has done little with it, as it placed the cost of advertising on the very retailers it has continued to screw.

The manufacturers have hurt the training agencies, the retailers, the consumers and ultimately the entirety of the sport through their greed and misgivings. Now I'm not one to point out problems without offering solutions, so here you go.

Everyone outside of Manufacturing must withdraw from DEMA. The Resorts, Training Agencies and Retailers should all form their own associations with board members who have the interest of those groups in mind. Unification will not work. DEMA in it's current form represents unification and is a complete failure. It is a failure because the minds of wickedness atop it cannot be changed without a distinct and thorough interruption of their greed. Given that Retailers are the backbone of the sport, in fact, at this moment quite honestly the only thing the sport has left, all possible should be done to right that ship.

This would start with a strong DRA (Dive Retailers Association) negotiating lower pricing across the board for all retailers. By making product more affordable across the nation, more dive shops will be able to open and flourish. More dive shops puts diving in front of more people and ultimately more economic growth will come to the agencies and in the end to the resorts around the world who are struggling to stay alive.

For it's part in lowering pricing, Manufactuers will be awarded with higher sales volumes, a steadier base of purchasers and a bright future. There is so much more I can say and so many points to be offered, but I'm not sure you've even indulged me this far into the letter. I welcome you to share my thoughts with anyone who will listen, but my fear is that we may already be too late.

Sincerely,

Ken Barrick, Owner
Off the Wall Scuba
 
the amount of dollars, regardless of the margin of what you suggest will NOT support local dive retailers across the country. the market is not big enough. Your cure will kill the patient first.
 
How are LDSs to compete against online retailers? I cannot imagine LDS staying in business with air fills and training only. They've got to be competetive on gear sales as well.
 
Everything in the dive industry is way over priced. Why, I don't know. But I always here people asking why this stuff is so dam $$$. The "life support" crap just does not fly. I work in aerospace with similar types of stuff. There is no reason this stuff should cost so dam much. Most of the regulators share the same parts between the bottom end and top end items. But the price difference can be over 100%.

Case in point, battery kit for my dive computer. $20 at the LDS, that is for a $3 battery you can buy at wallgreens, a $0.10 o-ring, and a little pack of silicone lube. Come on, give me a break here. And that's after paying over $1000 for an item that got sent back once and has several software updates because it can randomly lock up, with PC software that still is lack luster.
 
People see new competition where they have not otherwise seen it and they get scared and say "It's not fair". Back in 2002, the steel industry asked the government to step in and curtail imported material. The Government said they would but the the US manufacturers has 2 years to learn how to lower their costs and compete. At the end of the 2 years, they sat around scratching their balls with fat pockets and dwindling business because they failed to learn how to compete.

The same thing will happen to those LDS that simply refuse to change. The train is coming and you are on the tracks. It is entirely up to you if you get off the tracks or get hit.
 
the amount of dollars, regardless of the margin of what you suggest will NOT support local dive retailers across the country. the market is not big enough. Your cure will kill the patient first.

It is a very small market, however small markets can grow... but lets for the sake of argument agree with you.

While the industry is small, it is made smaller still for four basic reasons. Here is why people dont Scuba:

1. They chose it and had a bad experience (either during training or shortly thereafter)
2. They have never been introduced to it
3. They are not "water" people.
4. They believe it is too expensive

1. Only 1.5 out of 10 divers continue to dive beyond Open Water training certs. This must be addressed
2. Better marketing could take the 1% of the population that dives and turn it into 2% thereby creating a 100% increase
3. Some people are not meant to dive... and this is OK
4. This perception has been and is directly attributable to Manufacturer greed and Price fixing
 
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So little you know about the dive industry.

It is a very small market, however small markets can grow... but lets for the sake of argument agree with you.

While the industry is small, it is made smaller still for three basic reasons. It is pretty much industry accepted that diver retention is only about 1.5 out of 10. In other words, only 1.5 out of every 10 newly certified divers actually goes diving once they've completed Open Water.

Lets take a good hard look at those numbers. There are roughly 330,000,000 Americans. Lets remove 230,000,000 of them due to age (too old or too young) and health issues. That would leave roughly 100,000,000 Americans as potential industry customers. Without debating economics etc... we know that only about 1 in 100 may have a genuine interest in becoming a diver. That leaves 1,000,000 people in the USA who may have an interest in diving. Lets say we train all one million. Out of that, only 15,000 Americans may be real divers.... or roughly 300 people per state.

The growth potential is within the other 85,000 people who became certified and never dove again. That adds 1700 more divers per state to the base, not to mention the potential to draw interest from the balance of the population. The other 99 Million Americans.

Most of the other 99 million Americans don't know if they have an interest in the sport. Many don't even know what the sport is or what it entails. It's not in front of them. It is something they may have never seen at all. Quite amazing in this day and age is that many people still have no concept of what SCUBA diving means.

Ask the average person on the street what SCUBA stands for and they'll just look at you funny. While right now only 1 in 100 people has an interest, even so much as a modest increase to 2 or 3 out of 100 would be a mass infusion into the sport.

There are some easy ways to achieve this. Most of them revolve around being pro-active. Ther sport needs new blood from top to bottom. A blood transfusion would work miracles in this sport... maybe a shot of andrenaline. Some excitement. A worthwhile TV show, a truly good national TV campaign... a movie other than Open Water or Into the Blue... a good movie, with good stars and a good story.

It can be done... but the effort must be made...

why be so condensending?

my point was simple, the transition is coming, the trick will be to survive the transition. Simply matching online prices doesn't allow for enough actual dollars for dive shops in the majority of markets to pay the bills, ergo they disappear. They disappear and as you pointed out we NEED them to generate divers.

So if the dollars disappear in sales of gear which traditionally has been the only actual profit center of diving we need to replace those dollars elsewhere. that means higher prices n air fills, rentals, instruction.

Eventually if the sport grows the volume will allow those costs to come down and stores still be profitable.

we actually are in agreement on some issues.
 
So little you know about the dive industry.

Ken, informed and intelligent editing would get you a long way in advancing your ideas. It would be amazing how deleting just 8 little words out of your 500 word treatise could make such a difference! This statement made to Chris Richardson makes reading everything that follows a little difficult. And what a shame, because what follows actually makes sense.

Phil Ellis
www.divesports.com
 
Chris,

It's important to remember that bad attitudes in shops are the direct result of the manufacturers screwing them. For years shop owners bought into the protection afforded them by price fixing - then the manufacturers started to sell to the internet retailers for less, all the while enforcing MAP and MARP pricing structures on the stores.

This has lead to an unknowing public becoming frustrated with local shops and the feeling of customers being screwed by the LDS.

The fact is - if the LDS has to pay more for the item than the internet seller can sell if for - then the LDS's hands are tied by the manufacturer. It makes no sense to stay open if you're forced to compete in a market where the goods cost you more than the competition can sell them for.

Customers think the LDS is trying to rip them off... when in fact it is the manufacturer who ripped off the LDS, stabbed them in the back and hung them out to fail. LDS's across the country right now are being forced to sell items at or below their costs just to meet their monthly bills and try to avoid bankruptcy... and this falls directly on the manufacturers shoulders.

Ken
 
Chris,

It's important to remember that bad attitudes in shops are the direct result of the manufacturers screwing them. For years shop owners bought into the protection afforded them by price fixing - then the manufacturers started to sell to the internet retailers for less, all the while enforcing MAP and MARP pricing structures on the stores.

This has lead to an unknowing public becoming frustrated with local shops and the feeling of customers being screwed by the LDS.

The fact is - if the LDS has to pay more for the item than the internet seller can sell if for - then the LDS's hands are tied by the manufacturer. It makes no sense to stay open if you're forced to compete in a market where the goods cost you more than the competition can sell them for.

Customers think the LDS is trying to rip them off... when in fact it is the manufacturer who ripped off the LDS, stabbed them in the back and hung them out to fail. LDS's across the country right now are being forced to sell items at or below their costs just to meet their monthly bills and try to avoid bankruptcy... and this falls directly on the manufacturers shoulders.

Ken

not going to disagree, broad brush you make great points. However important knowing what went wrong is I'm more interested in fixing it.

all i posted was that what you suggested would kill the patient, NOTHING you have posted changes that, nothing you proposed addresses that.
 
https://www.shearwater.com/products/peregrine/

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