Dive center vs. certification agency profit from courses

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mstachowsky

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I've wondered this for a while now: when a dive shop sells a course (through PADI, SSI, or NAUI, to keep it simple), how much of the total cost goes to the dive shop and how much goes to the certification agency? Is it different for the OW certifications vs. speciality courses?

Just curious, I think my LDS is very reasonable in price!

MIKE
 
It used to be that the training center bought the course materials and certification card from the training agency, making the training agency little more than a print shop. Now, with the advent of online learning, the training agency takes a bigger cut. I don't know how much....
 
Dive shop buys training materials from the agency, resells them to you.
Dive shop is charged by agency for issuing a certification card.
Dive shop also has to cover staffing and overhead costs (including pool maintenance).
Dive shop gets to decide what to charge for a course.

If you have all of the above for a given shop you can calculate the shop's margin.

Or you could ask your local shop what their margins are on training.





PS. "specialty"
 
Agencies get a fee for processing the card as well as paid for the materials for the course. Shops pay a fee to be affiliated with the agency. That fee varies from agency to agency. And there are different levels. The agency does not set course costs or even tell a shop how much to charge. They get no percentage of the course fee itself.
 
So, I certified a solo diver this weekend. He paid the agency $119 for his class. I only charge a hundred bucks for the class including books and c-card. I couldn't justify charging him any more, so I ate the cost of the c-card. This e-learning is BS.
 
Wookie:

The way PADI's elearning works for us is this...

Student signs up for elearning class and pays their fee. Student must choose their instructor for the practicals. Student chooses us. PADI then sends us $65 dollars. We administer the test, pool dives, ow dives, etc. And we charge the same cost we would have charged had they taken the full class from us skipping the elearning portion.

It works for us. We do it because we DO NOT encourage elearning. But students come to us willing to pay almost double all the time. Oh well.
 
Wookie:

The way PADI's elearning works for us is this...

Student signs up for elearning class and pays their fee. Student must choose their instructor for the practicals. Student chooses us. PADI then sends us $65 dollars. We administer the test, pool dives, ow dives, etc. And we charge the same cost we would have charged had they taken the full class from us skipping the elearning portion.

It works for us. We do it because we DO NOT encourage elearning. But students come to us willing to pay almost double all the time. Oh well.

This is the way most of the shops I've seen work the e-learning courses. They charge the same course price whether the student takes the full class or just the practical application. From the student's perspective, it looks like they're getting charged twice. But from the shop perspective, the lion's share of the costs are in administering the practical application.

I like the e-learning option because it allows a student to do the knowledge portion on their own, well before they get to the training center. It's brilliant for vacation divers who want to spend their vacation time diving, not reading books. The training center's advantages are that they have a reasonable assurance that the student met the knowledge standards for that course, and they can focus on the diving skills. It may not make as much sense for local divers, but I don't think they are the target market for e-learning anyway.
 
when a dive shop sells a course (through PADI, SSI, or NAUI, to keep it simple), how much of the total cost goes to the dive shop and how much goes to the certification agency? Is it different for the OW certifications vs. speciality courses?
The simple answer is that the majority of what a student pays for a course goes to the dive shop, not the agency.

Jim provided a very good response. The agency generates revenue from affiliation fees (shop AND instructor, for that matter), they generate revenue from the educational materials (manuals, DVDs, etc) sold to shops which are then resold to customers, they generate revenues from the sale of (required) instructor materials, they generate revenue from the processing of certifications. (And, they now generate revenue from selling eLearning directly to consumers.)

The fees charged for courses by a particular shop reflect that shop's business practices, and there isn't an agency percentage 'cut', per se. We do pay the agency (PADI in our case) for the certification PICs - either the paper version or an online processing unit - that we use. We buy those in bulk, and use the same PIC envelopes (or online processing unit) for OW, AOW, Enriched Air, Tec, etc., etc. So, the agency cost per student is the same across courses (whether OW certifications or specialty courses), irrespective of the shop fee for the course. And, to answer part of your question, that amount is relatively small. We add that fixed cost per student into the calculation of the fee we charge for the course. We set the course price according to the level of effort involved (including instructor compensation), AND the market. The agency has nothing to do with what we charge. If we wanted to charge $950 per student for a group OW course we could, But, we don't because the market won't support that, given the competing prices from other shops (with the same, or other, agency affiliations).

Our approach to eLearning may be a bit different from that used by other posters. We charge less for an eLearning course compared to a 'traditional' course, although the differential varies across courses. For example, for the OW course, we adjust our fee so that the total amount the student pays for an eLearning OW course - the fee they pay to our shop combined with the fee they pay PADI for the eLearning - is the same as what they would pay the shop for a traditional OW course. Our price structure reflects both the intensity of competition at the OW level, and a desire to promote eLearning at the OW level. For AOW, as a contrasting example, the differential between the 'regular' course fee and the eLearning course fee is much lower than the cost (to the student) of the eLearning. A student who wants to do an eLearning AOW course with us will pay quite a bit more when the combined cost of our fee and the PADI eLearning fee is considered. So, we offer the option but don't encourage it.
 
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Obviiously, this depends on what is charged for the course. A simple browse of the PADI price list would illustrate the proportion of that fee taken by PADI:

PADI Price List - Asia Pacific 2013

In Asia-Pacific, PADI charge $143AUD for an Open Water Manual and certification. The dive center may get a reduction for bulk buying etc...

That still forms quite a large percentage of the total course fee.

Not to mention annual membership fees for the instructor/dive center, along with the cost for instructor manuals, exam papers and other materials needed that have to be offset against course costs over a longer term...
 
So 143$ per ow + a pro rata of the instructor's yearly 360$ membership fee + a pro rata of the dive centre's minimum 500$ yearly membership fee.
Depending on how many courses are taught a year and local pricing (<400$ is normal in Asia), this often means more than 50% of the price paid by the student goes into the agency's pocket. Out of the remaining 50%, the instructor/dive centre has to pay fixed costs, entrance fees, taxes, equipment, boat trips, maintenance, gasoline, food, etc...
Fun dives become a much more profitable product very quickly!
 
https://www.shearwater.com/products/perdix-ai/

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