Aqualung's stance on e commerce

[friscuba]

Well, why do you think I don't teach anymore? There's no money in it.

We don't know what people are willing to spend on an entry level class. No ones ever tested it. LOL I know that my former students had money. They would pay several thousand on a single dive trip but only a cople hundred on a long resource intensive training course to learn how to dive? They were doctors lawyers, ovners of construction firms, accounting firms and other professionals of all sorts.

Gas fills can be the same way in some locations. If you looked at the numbers around here, you couldn't make a business case for investing in a fill station at all. Here's how that works. In order to even get a dealership with most manufacturers you are required to be a full service dive shop. That means that you MUST provide air fills and you MUST offer classes. I never sold enough air to even come close to paying for the initial cost of the compressor. The compressor was convenient for teaching but both were a loss. If you aren't near a dive site and all the dive sites have a fill station, who needs to go out of their way to buy gas? Besides, at the price I was charging for a fill, I prefered people did buy their gas somplace else and put the hours on somene elses compressor. I couldn't afford to pump any more gas then I had to. There has to be a profit someplace.

Right now, it's equipment sales that are subsidizing the other services, at least in some places. In a local market where you need to make someone a diver before you can sell him equipment they are tied together. If I can tap into a non-local retail market why would I teach? I would sit at the computer where I could make real money.

Does LP teach or pump gas? Why or why not?

Mike,

I'm trying to figure out exactly where you are coming from on this discussion. In an earlier post you said something to the effect that dive ops feeling the sting on their retail should raise prices on services, yet here you seem to outline why it might not work. At one point you stated something to the effect that local shops aren't necessary because there are fill stations at dive sites, yet you make the argument that fill stations aren't a self supporting business.

From what I saw early in this thread, you seemed to be somewhat against the LDS and more on the side of the big internet suppliers such as LP, maybe that's because you have your own gear, and the knowledge base to procure gear for yourself without the help of a local shop.

In a thread that was basically a LDS vs. Internet supplier, you early on basically seemed to pooh-pooh the local shops. You seemingly just stated above that the local shops need to subsidise their incomes with retail sales to stay afloat, and in that alone I'd think you'd come down on the side of AquaLung supporting local dive shops over the internet industry.

Just curious.

 

[redacted]

Yep, adapt or die. Some are adapting and others are dying. Of course most companies are selling direct to the so called "gray market" they just deny it so the LDS is somewhat pacified. It seems that a clean price list and an honest policy would benefit all. In our case the local dive store can buy at exactly the same price as our largest dealer. We don't play any "inside" games. It seems to work for us. Diving is such a great sport that we all hope for more new divers and a healthly industry.

Perhaps that is why Leisurepro does not sell your regulators. Without the advantage gained by wholesale quantiy discounts and in the absense of artificial price controls, Leisurepro really can't compete as effectively with smaller dive shops.

 

[JungleJoe]

WELL SAID.......................


too bad other companies don't follow Apollo's lead.... but its a thing called GREED !!!!!!!!!!!!

 

[Penopolypants]

I doubt that anybody actively wants their LDS to fail. However, we now know what else is out there, and what our experience could be. Why vilify people for asking for it? There are so many shops that have a poor selection of overpriced gear, that bash other gear because they don’t carry it, all the while treating their customers like their doing them a favor by being in business….it’s a wonder why any gear gets sold at all!

If the manufacturers were truly interested in leveling the field and keeping the LDS in business, they would have one price – and one price only – for their gear. MDB says that Apollo does this – great! No more discounts for volume. Treat everybody the same.

I'm all for people and companies making money - I'm rather fond of it myself. Finding ways to increase profit margins is just business. It's just hipcracy to say that you really care about the industry when you're only looking at the bottom line.

Dive gear and automobile sales are the only two situations that I can think of where the retailer regularly charges over MSRP and you have to haggle to do any better, and you walk out still wondering if you got screwed. I hate shopping for cars, and I don't want to start hate shopping for dive gear.

 

[mdb]

MDB says that Apollo does this – great! No more discounts for volume. Treat everybody the same.

Penopolypants; We do have discounts for volume. The difference is that all our discounts are modest and all prices are available to all our Dealers. We have no inside price list for "extra" volume. For instance we offer a discount to the LDS who buys an unbroken box of six bio-fins, same color, same size, this means we do not have to repack in a difference box. We can use the same box that we receive from Japan, just put a UPS sticker on and out it goes. We pass this savings on to our Dealers.


I hate shopping for cars, and I don't want to start hate shopping for dive gear.

Me too. I just got T-boned by a driver who ran a red light. My car was totaled. I shopped the net and went to my closest dealer and just told him I had been buying cars since the day after I turned 16-I'm now 60-and I did not want the usual "are you ready to buy today?", "Make me an offfer and let me see what the sales manager says" etc. I showed him the price I was willing to pay and he turned out to be ok with that. I think things are turning and the internet and boards such as this are a big part of the change.

 

[ams511]

There just isn't any reason for a dive shop to exist in the middle of the corn belt. LOL

Mike, as you pointed out so well, your shop did not add value. Your clients could get more convenent airfills at the dive site. They could get certified someplace else with better conditions. They could buy equipment cheaper online. So how could you expect to make any money? What made you think that you could build a profitable business in the first place?

In business there is a rule of thumb called the 80/20 rule that 80% of your customers generate 20% of your profits and vice-versa. The key would have been to concentrate on the profitable clients. When I was in grad school in PA, there was a local shop in the farm belt where I lived. The owner concentrated mostly on tech divers, which were much more profitable from a business standpoint. I think he only carried, Sherwood, Dive Rite, and Zeagle.

The shop was in back of his house and he had his own pool enclosed in a metal building. I am sure he is not making millions but is probably doing ok financially. It may not be a good comparision with your situation because Pa is closer to the ocean than Indiana but the distance to tropical dive sites it the same.

 

[ams511]

For those who are interested, the dive shop where I was certified used the following system for training. They offered the intro to scuba / scuba refresher for $49. Where they tried to sell you mask, fins, and snorkle when you signed up. This was the coursework and pool work part. Then you paid I think another $ 100 or so for the checkout dives plus the gear rental. If you bought the gear from them then you could use it and save the rental fees (If you bought from someone else you couldn't, even if it was the same gear the shop sold. The reason was all gear is different and the instructors did not have time to figure out the problem. lol). Books and the cert fees were additional. Also this was 1990 so the prices are not relevant any more but maybe someone might find the structure interesting.

My big gripe with them, which soured me towards LDS for a long time was they would send you out a circular with deals and when you would try to buy it they would then tell you it is junk and steer you towards something more expensive. I wanted a simple conshelf 21 reg and octo setup with Parkway gauges for $249. What I wound up with is a conshelf 21 reg, a delta octo and Oceanic gauges. Using the Delta octo was supposed to give me Class A Navy performance of my unbalanced US Divers first. lol Also Parkway gauges are junk so I needed to purchase the twice as expensive Oceanic ones. I also was given the hard sell on why I should have a dive computer. I could tell you more stories however I am off topic, but I do feel better. LOL

 

[MikeFerrara]

Mike,

I'm trying to figure out exactly where you are coming from on this discussion. In an earlier post you said something to the effect that dive ops feeling the sting on their retail should raise prices on services, yet here you seem to outline why it might not work. At one point you stated something to the effect that local shops aren't necessary because there are fill stations at dive sites, yet you make the argument that fill stations aren't a self supporting business.

From what I saw early in this thread, you seemed to be somewhat against the LDS and more on the side of the big internet suppliers such as LP, maybe that's because you have your own gear, and the knowledge base to procure gear for yourself without the help of a local shop.

In a thread that was basically a LDS vs. Internet supplier, you early on basically seemed to pooh-pooh the local shops. You seemingly just stated above that the local shops need to subsidise their incomes with retail sales to stay afloat, and in that alone I'd think you'd come down on the side of AquaLung supporting local dive shops over the internet industry.

Just curious.

I'm not sure I know how to answer. I understand the problems that some shops have but as a consumer they just aren't may problems.

Training is one of the things that a shop or instructor has a unique ability to provide locally. It isn't worth any money though. Everyone gets the same card an nobodies class is worth any more than another. It's Mctraining and you can get the same thing anyplace. If you want a really good burger...I mean class, you need to go someplace else.

Away from dive sites there just isn't enough demand for air to make a business out of it. You would have to charge more but no one will pay it. I'd turn the compressor off and leave it off. When a manufacturer or agency told me that I had to have one, I'd ask them what kind they were sending over. I want the same kind that LP has. LOL

So...the inland shops have a limited market for a few services that they have a unique ability to provide locally but those services aren't worth much money. They're going to have a hard time competing with big retailers even if the manufacturers let them play. Where does that leave the shop as a business?

I think I understand the problems pretty well but I don't know that I have a solution other than to let the market work it out. I think the small dive shops that some of us are used to seeing are just about obsolete.

 

[shark.byte.usa]

I understand the problems that some shops have but as a consumer they just aren't my problems.

That pretty muchs sums up my view.

 

[roakey]

...I showed him the price I was willing to pay and he turned out to be ok with that. I think things are turning and the internet and boards such as this are a big part of the change.

If you haven't bought yet, I'd suggest:

http://www.carbuyingtips.com/
http://www.fightingchance.com/

Roak