Dive industry BS

[Ron Brandt]

Or the manufactuers will go direct to the consumer and enjoy aportion of the margin that is currently shared with the distributors and LDSs. They can't tell US that, because they still need the LDS....for a while.

There was a time when there were no LDS's. Sporting goods stores and department stores carried the gear.Classes were out of the local "Y",scuba culb, local pool or university.

In a way this was great for instructors.You could work and sell out of these stores without repercussions of working with the compeating dive shop.Your class, your prices and the customer was free to shop around for their gear wherever or instructor got commission for bringing a customer into a "preferred" store.

That would mean no costly compressor to buy,no bank loan for stock ect...Hell I think alot more people would be a head if this were still the case and being in the market I'm in would certainly be all for it.

The manufactures are just FN us over and something has to be done.

Ron

 

[Otter]

ElectricZombie once bubbled...
The LDS here is having the same problems with manufacturers, and will probably be forced to close within the year.

Dive shops get screwed by the manufacturer and pass the costs along to customers...The customers then buy online and the LDS has a bunch of gear they can't sell.

This is crazy, the industry needs to get its act together.

It happens when the supply chain squeezes out inefficient intermediaries. Right now you have
mfg->distr->LDS->Consumer
Utlimately, the most efficient is mfg->consumer.

As consumers we will benefit by lower prices since there are fewer hands along the way taking a piece. On the otherhand, we may get a different level of service. Its the GOOD and BAD of capitalism. If you don't like it, vote with your $$. If enough vote, then the marketplace will respond.

Unfortunately, as the industry "gets its act together", a lot of GOOD people will get hurt in the process. Collateral damage in the war of economics. There have been many who place little value on the service their LDS offers. Often it is cited that the LDS is providing poor service. While there may be many reasons for that, some beyond the LDS' control, others clearly within. It is what it is. As I have stated in the past, I will miss the social interfaction of not having an LDS to "hang out at" every once and awhile. But there is SB, boats, resorts that will [partially] fill that void.

For those will less social needs (or skills), they will focus on $$ only. The best economic analogy is the PC industry. In the "OLD DAYS", ppl would hang out at the local Byte Shop and talk about the latest and greatest boards, games, software, etc...Some 20 years later, its DELL and discussion groups.

The biggest question in my mind is "Are the manufacturers doing this on purpose or are they just watching and waiting to see how it plays out?" Not sure if we will ever know, but it would make an interesting HBS Business Case.

Otter

 

[jviehe]

And as a supporting example, I went to my LDS and bought a reel for $110. The LDS had made a mistake and updated their prices from the "fair pricing" catalog from the mfg. I told my buds about the low prices, and someone called another LDS to see if theyd beat the price. That LDS called the mfg to complain, and the mfg called my LDS to tell em to shape up, and charge more like it says in their contract. Suffice it to say Halcyon (oops) is on my sh*t list, and I won't be buying anythgin from them soon. In fact, I sold off that reel too shortly after. I expect Leisure Pro will be franchising out soon, as they must be raking in the dough.

 

[MikeFerrara]

jviehe once bubbled...
And as a supporting example, I went to my LDS and bought a reel for $110. The LDS had made a mistake and updated their prices from the "fair pricing" catalog from the mfg. I told my buds about the low prices, and someone called another LDS to see if theyd beat the price. That LDS called the mfg to complain, and the mfg called my LDS to tell em to shape up, and charge more like it says in their contract. Suffice it to say Halcyon (oops) is on my sh*t list, and I won't be buying anythgin from them soon. In fact, I sold off that reel too shortly after. I expect Leisure Pro will be franchising out soon, as they must be raking in the dough.

I had that happen also...

I got a phone call after they heard that I offered some one a 5% discount. Shortly after that 5th-D was doin a DIRF class right in my backyard and I heard they were offering a student discount.

 

[HammerNoMore]

jviehe once bubbled...
And as a supporting example, I went to my LDS and bought a reel for $110. The LDS had made a mistake and updated their prices from the "fair pricing" catalog from the mfg. I told my buds about the low prices, and someone called another LDS to see if theyd beat the price. That LDS called the mfg to complain, and the mfg called my LDS to tell em to shape up, and charge more like it says in their contract. Suffice it to say Halcyon (oops) is on my sh*t list, and I won't be buying anythgin from them soon. In fact, I sold off that reel too shortly after. I expect Leisure Pro will be franchising out soon, as they must be raking in the dough.

I recently had the opposite happen. I bought a second stage at the LDS to throw him some support. I then checked and found out I'd been charged $30 over the MSRP. He claimed it was because I'd ordered it with a custom hose length, but I double checked his price on the display model and it was clearly marked over MSRP. A quick call to the manufacturer to fix it.

Needless to say this is one LDS that I will not be supporting anymore.

James

Needless to say

 

[ScoobyDave]

I've been away from diving for about 10 years and now that I'm jumping back in, I have been on a rant about the local prices for all the gear I'm buying. As a consumer, I will not stand by and let a shop owner or manufacturer strong-arm me into paying a premium for my equipment.

Pricing the entire market, there is no way I'm going to pay $700.00 for a reg set when I can get the same set for under $400.00 from other sources. For what the reg set would cost, I also bought the octo, console, and other goodies. Yeah, yeah, warranty issues, returns, etc...sounds like more efforts to strong-arm me. This reminds me of the electronics dealers years ago, and more recently, the camera dealers. Looking over the forum, this has all been discussed before.

I'm sure I'm going to get a ton of flames, but it's high time manufacturers and local shops start paying attention to other business models or they will fail to survive. I would venture that a couple of the online shops sell as much top-end gear as all the local shops combined. I don't have real data to back that, but they are large revenue companies and if they weren't a threat, I wouldn't see letters from manufacturers in the local shops detaling why I shouldn't buy from sources other than the LDS. I will say that the local shops get a significant amount of biz from me on a regular basis, but it's not for high-ticket, manufacturer limited-price items.

Mike, I'm sorry that LDS's don't have the clout to seriously push back (in unison) with the distributors and manufacturers to open up the market and treat the LDS's as valued customer. I'm sad that you are closing shop. The treatment you described when attempting to do a spot order fill is biz-immoral. I see another symptom of a broken sales channel system.

I'm not talking about a sales channel moving from the current model to one of manufacturer sales direct to the consumer - there are way too many examples of how that has failed in other markets. I am talking about providing dealer discounts on volume and letting the dealers sell at whatever their markets dictate.

As a business owner in the tech sector, I constantly have to adjust my business model to fit the market, and it changes fast. If this industry doesn't quickly wake up, it's going to go belly up and become a commodity market despite its best efforts.

 

[Otter]

James Goddard once bubbled...


I recently had the opposite happen. I bought a second stage at the LDS to throw him some support. I then checked and found out I'd been charged $30 over the MSRP. He claimed it was because I'd ordered it with a custom hose length, but I double checked his price on the display model and it was clearly marked over MSRP. A quick call to the manufacturer to fix it.

Needless to say this is one LDS that I will not be supporting anymore.

James

Needless to say

man. Doesn't justify only explains. Seems to be the easiest way to offer discounts if via bundles. No one knows which piece of equipment is getting the discount?

I was under the impression that the mfgs could only control advertised prices.....as independent businesses, LDS sets their own price. It would be against Antitrust laws for them to tell LDS to charge a specific price. I know there are attorneys on the board, is this wrong?

Otter

 

[MikeFerrara]

James Goddard once bubbled...


I recently had the opposite happen. I bought a second stage at the LDS to throw him some support. I then checked and found out I'd been charged $30 over the MSRP. He claimed it was because I'd ordered it with a custom hose length, but I double checked his price on the display model and it was clearly marked over MSRP. A quick call to the manufacturer to fix it.

Needless to say this is one LDS that I will not be supporting anymore.

James

Needless to say

As far as I know, none of the manufacurers I deal with would care if I priced something over MSRP. Even if they did care, there isn't anything in any of the dealer agreements stating that I can't do it that I remember seeing.

 

[Ron Brandt]

Mike,has business been really slow for you ?

I can't help but notice that you have 3000+ messages on here.
I have been on a year longer with 200 and something.

Seems to be alot of time killin on the board.

Business up here is REALLY SLOW.

I have to ask myself as to what has happend to local support from the public.

Ron

 

[diverbrian]

I agree with much of what I have read here about manufacturers. But, I know our plant (I work for a medical products plant) had to take cost-cutting steps a few years ago. One of the first things that we did.....

The people that we used to have to spend an hour or more on the floor to make their order of say 15 pounds of material got told that they would either pay through the nose for specialty materal or not buy from us. Our larger customers wanted their savings from buying in bulk and we were raising our prices to them to make up for the "little guy" who would order some small amount of material. I don't know if this makes any sense, but we spent more money to make that 15 pounds over that one or two two hours than to efficiently spend that same two hours making close to 600 pounds of material where we didn't have the change over to deal with. We were losing our larger customers to service the smaller ones whom we were trying to be a "nice guy" to on price.

The little guy is now serviced by our ability to make anything with a week's lead time instead of two month's as used to be the case. But, they do have to pay extra for the extra service.

This having been said, I have heard the tales of SP and the rest. I know that massive price fixing goes on. The divers here have a good LDS owner (actually two or three, but I only frequent one) who cares about customers, but he is hamstrung by "the rules." He will play by any business model out there to stay in business. For instance, he just recently starting selling a great deal of Dive-Rite because he didn't want to lose out on the tech divers and the other three dive shops in the area sell Dive-Rite. It is a shame that it is this way, but "nature" in the form of the alternative sales sources will take care of the problem as it has for the other industries.