How do Local dive shops stay afloat?

[Web Monkey]

Your right.
And these shops would rather go out of business than do something like band together with other shops and do competative volume wholesale buys. I understand that may not be as easy as it sounds but we are talking survival. LDSs that are having a hard time and refuse to change their business model should make way for better businessmen.

This is deja vu all over again.

The appliance business went through this about 15 years ago.

Buying groups help the dealers compete against other non-member dealers by driving their wholesale cost down. They pressure the manufacturer to lower their wholesale cost by threatenting to take their large buying capacity elsewhere.

Profitable, sucessful manufacturers who have a good market share usually tell them to get lost. Marginal manufacturers or those who want to take more of the market share ususally take the deal, and make even less profit.

Many eventually go out of business and their brand name is bought up by one of the surviving brands .

In the short term, collective buying makes the members more profitiable, and drives the non-members out of business, or into exclusive brands not available through the group.

However once most of the non-members are out of business, the competition becomes the other members of the group, who are all on equal footing again. Now the manufacturer isn't making enough money because he cut his price for the buying group, then lost the regular dealers, and the buying group members have now cut their prices (and profits) because they're now competing with each other.

The manufacturers cut out any remaining distributors in an attempt to increase profits, however this further reduces dealer service levels, which annoys the customers, subjects the manufacturer to demands that they aren't equipped to handle (like in-depth warehousing of products and parts) and further reduces volume.

The it starts to get ugly. More manufacturers go out of business or consolidate, more dealers go out of business, and in the end only the very largest dealers and the strongest manufacturer's remain, and they beat each other up on pricing and go out of business with great regularity.

It's like watching a 10 year train-wreck that nobody seems able to stop.

Terry

 

[lairdb]

This is deja vu all over again.

The appliance business went through this about 15 years ago.

[...etc. very good precis; soulds like you saw it from the inside, Terry.]

It's like watching a 10 year train-wreck that nobody seems able to stop.

And yet, at the end of all this, I can still choose from several competitive brands of new dishwashers and buy one without difficulty, that costs less, does more, is quieter, lasts longer, is cheaper to have a highly professional and responsive provider repair, and cheaper yet to replace when the time comes.

Hmmm.

 

[Web Monkey]

And yet, at the end of all this, I can still choose from several competitive brands of new dishwashers and buy one without difficulty, that costs less, does more, is quieter, lasts longer, is cheaper to have a highly professional and responsive provider repair, and cheaper yet to replace when the time comes.

Just like the tires I bought from the Goodyear store that still shake after two years and 6 balances?

I can hardly wait.

Terry

 

[bgi]

But a manufacturer saying as a dive shop, I must sell this item for this price - they have that right. Of course, very hard to police, as then what happens when that product is grouped in a package price with other items - where did the discount get applied...

Oh, that's too easy! I'll take that one. The discount was applied to the "other" items.

What did I win?

 

[bgi]

There is such a thing as VALUE. THe LDS I work with is awesome. They do way much more than just sales. They do trips, they do service, they have social get togethers so divers can meet. They do the training.

Like some others here, I dont mind paying a little more to have the service and support of a dealer. Plus, I have become genuine friends with everyone at the shop and I want to support them.

Someone said "Yes, all the "real stores" have unskilled imbeciles working at them!" - what a pile of crap. You're going to the wrong places. While it is true that some stores are clueless and work hard to squeeze every penny out of a customer, not all are that way. Many will try to oversell a customer equipment to make more money, the local shop I work with will talk you out of spending more money on stuff you don't relly need!

One of the results of the internet sales is that training prices for classes seem to be rising. It used to be that shops could do the training for a minimum because they knew they would sell equipment and make a profit. Now, with price pressures so strong, they are forced to charge more for the training.

Don't get me wrong, I am all for lower prices, my diving is a side hobby and I am no where close to being financially able to buy whatever I want, whenever I want.

I dont buy every single thing from them but I do try to make the larger purchases from them and help to keep them afloat. I think it is important.

As I've said before:

Yea. What he said. Every single point. Well... except one. Not everyone is fortunate enough to live in an area with a dive shop NOT stocked with imbeciles.

I'll add:

My LDS can't get or chooses to not carry some items I want, so I either encourage them to carry the item (like spring straps - cool!) or just get them from somewhere else if I think my chances are slim. Take neoprene mask straps, for example. I've seen a few different kinds. One is clearly inferior and overpriced. I'm working on getting my LDS to switch to the superior product.

 

[scubaranger]

I was talking to my boss about this not more then an hour ago. I have bought most of my items thru my LDS and those I didn't he didn't have them. I like it that I have some one in front of me when I ask questions or have problems. I think the biggest problem and it is not right is those that go to a LDS ask 1,000 question get all the info and try out all the gear then the guy goes back and buys the item on the net. Don't waste LDS time and mine because I'm probably behind you to buy something

 

[Mlody11]

1 thing to say... The market will iron out its problems. If a buisness is not running efficently, then the buisness will eventually disappear. This includes customer service, price of the product and operational cost. Sure this is an extremely basic look on things but its the truth.

My LDS showed me the Mares MR12 photon regulator and did only that. I could not try it underwater or see how it breathes from a tank or anything beyond simply touching it. After reasoning with them about how I would give them my buisness if they were within limits (say 10-20%) of the online price or could give me some extra bonuses if I bought with them, the price they quoted was $250 (only the reg) if I bought the guages and octo with it. No extra warrenty, nothing! I went online and bought the Regulator + octo + guages for 340. $90 more and I have the whole set. They assembled the equipment for my GF, while I did it myself (its not exactly rocket science) with no leaks and issues. Now I have the exact same warrent for everything as well as about another 400 - 500 dollars in my pocket. I am sorry but simply touching a regulator is not worth 400 dollars. Good bye LDS. If there are good LDS out there, they will be supported.

 

[RonFrank]

Actually, a manufacturer can set a MARP (minimum advertised & retail price) on their products... that is not price fixing. Price fixing is when 5 scuba manufacturers meet in a smoke filled back room, then agree that since they are all selling about the same kind of snorkel, they should all raise the price by 3 bucks.

Or same thing with dive shops... if they get together and decide to all raise their class prices to $350... that is price fixing.

But a manufacturer saying as a dive shop, I must sell this item for this price - they have that right. Of course, very hard to police, as then what happens when that product is grouped in a package price with other items - where did the discount get applied...

So if they fix the prices in an outdoor park with fresh air, is that still price fixing? I think the smoke filled back room is important here!!

As a retailer, Larry obviously knows what he is talking about.

Camera manufactures have a minimum retail price, and a MAP. They also do a LOT of very backhanded things like refusing to supply a high demand camera unless shops purchase and stock products that the retailer has little demand for or reason to carry.

It's been a long time since I've worked and been involved in retail, so many some of this has changed. But don't be fooled, SOME manufactures play hardball with their authorized dealers, and it makes life difficult for those that try and follow the rules.

This is a main reason that Grey market, and unauthorized large volume dealers have evolved into such a power.

 

[robbcayman]

In my humble opinon, on a limited budget the internet makes sense especially for those who dive 3-4 times a year while vactioning.

 

[Dean810]

My next BIG purchase will probably be a drysuit. I will feel more comfortable, like I do with most clothing I buy, to buy this at a LDS if I can try it on and get the service I will need afterwards. But I will certainly do most of my buying online. Case in point. I currently use analog console gages. I needed to replace my depth gage, since the one I had was fogged over and hard to read. My LDS couldn't help me replacing the gage, but could certianly offer me a great deal on a top line computer for over $600. I said no thank you and bought my depth gage online for about $50 (with shipping). It does what I want it to do and I am perfectly happy.