LDS vs. Online

[MikeFerrara]

. A local store that can do the sales volume that an online store acheives can easily match the online prices.....in fact, they can BEAT them because they don't have the added cost of the online store!

Not if they act within the dealer agreement that most manufactures require them to sign.

When I had my shop and tried to compete with online prices I ended up with manufactures calling and threatening to pull my dealerships because I was selling below the mninimum allowed price. How I got caught was simple. I'd quote some one a price. Then they'd go to some one else and say well, Mike said he'd sell it to me for X. That shop would then put in a call to the manufacturer and complain.

Shops sign these dealer agreements of their own free will and rather than fighting the manufacturer for the right to try to make a go of their business they complain to (or about) the customer. Shops offer classes at rediculousely low prices of their own free will.

You said it costs more to run on online business. Maybe but you don't need dive shop insurance, compressor or to teach classes if you deal strictly online. Here lies another problem. Most manufacturers require you to be a FULL service dive shop in order to get a dealership in the first place which means you MUST offer gas fills and instruction. Then you have to offer those classes for next to nothing to compete with the shop down the street in order to sell the same devalued certification and make up the difference in equipment sales. With larger volume sales you may need more inventory but that's related to volume not the nature of the sale. Even a brick and mortar store needs a phone and some have toll free numbers.

the industry has done this to themselves. Paople are buying access when they get certified rather than buying training. there's no obviouse differnce between a cert offered by one shop and that from another shop except schedule and price. I mean would you believe that you were getting more from a McDonalds if you payed twice as much for a burger? Nope. It's selling the same slop as the McDonalds down the street.

Training is one thing that a real store can offer that on online store can't. It seems to me that would be a good thing to make money on and build a reputation on. the potential for face to face expertise is another. So why do they want to put some no-nothing BSer in front of me to agrivate me before we even get started? Spend a little money and get some one in there that actually knows something about diving. Not to say that you specifically don't but most stores sure don't.

 

[RonFrank]

Happened this week in our shop, yet again. They couldn't believe we'd charge them for a setup to begin with. All our tech did was connect a couple of hoses and guage it for them. Of course the IP and cracking pressures were way off so he adjusted them.

Then of course we wouldn't fill their online purchased tank without a vis.

waaaaa

Was this because it did not have a VIS?

 

[PhilEllis]

Not if they act within the dealer agreement that most manufactures require them to sign.

Actually, in the past couple of years, I have not had a manufacturer that presented me with a dealer agreement that stated a particular selling price for any item. They have all learned that this is a clear violation of anti-trust laws (and recently upheld by several court decisions). Minimum Advertising Price is a different issue, even though I personally believe manufacturers should read the court cases VERY CAREFULLY even on advertising restrictions, else they put themselves in potential jeopardy. We are an Aqua Lung dealer for in-store sales only...Aqua Lung has not distributed dealer agreements for signature in the past three years. They do have unlateral policies that specify what will happen to a dealer that violates their MSP, but they dance very carefully around that entire issue.

Business issues like these are typically clarified in court. Court cases define, refine, and clarify the laws. The manufacturers have openly done things in the past because they knew they were dealing with a basically cash-strapped group in the local dive stores. These stores couldn't challenge the policies in court because of their cash position. I expect the move toward combined instore/online dealers is changing this situation. There are a few dive stores out there that actually now have the money to make such a challenge. We will see what the future brings with that regard. Again, my opinion. Thanks.

Phil Ellis
Dive Sports Online
www.divesports.com
(800) 601-DIVE

 

[RonFrank]

Recent events, and those over time have left me feeling less loyal to our LDS's. While I value them, and continue to use them for training and some retail purchases, I've come to the conclusion that they are in it for the money. I'll list a few reasons I've drawn this conclusion.

Recently a buddy of mine purchase two tanks out of hydro (used). This is a guy that DID purchase ALL his gear from the LDS. Paid at LEAST $1000 over what he could have done online. He tells the LDS he plans on using EANx so he wants a Hydro, Vis, and O2 clean. They call him and saying the tanks are ready. He goes to pick them up, and they are NOT O2 clean, nor filled. He inquires about this and they tell him to come back as their O2 dude is not around. They call him a week later, and tell him that to O2 clean the tanks it's going to run $50-75 per tank (on top of $30 each for Hydro/Vis), and that the guy that does the O2 clean won't be back for a month so call them then.

To put this in perspective, the place that does the DOT Hydro/Vis charge the public $12 for that service, the LDS maybe less, and they PICKUP the tanks from the LDS! The LDS never bothered to tell him that there was an additional charge for the O2 clean, they told him that it would run $30 per tank. Another LDS in town charges $35 per tank for an O2 clean, Hydro, Vis AND Nitrox fill (which he WOULD have used had our LDS TOLD him of their pricing policy). This is how our LDS treats their *Valued* customers? Poor service, misquoted pricing, and slow turnaround? And this from a guy that has spent at LEAST $5000 in training and equipment from them in less that a year? I suggested he pickup the tanks, filled, and worry about the O2 clean later, which he did.

It's no secret that DM's and Instructors are underpayed, however the LDS is making a LOT of money from training. It would be interesting to know the exact numbers, but a typical CO dive weekend at the Hole will often have one instructor doing two classes with 12 students each. At $150 per student (just for the CO dives), that's $3600, and I doubt the Instructor see's more than $600 or $25 per student. In addition the LDS generally does not use DM's but rather DM's in training, who are unpaid. In fact the DM trainees are PAYING the LDS for the priviledge of assisting the instructor.

My AOW instructor says the huge payoff for her being an instructor (she works FT elsewhere) is that she gets to lead trips. Ironic that her biggest payoff is something that cost the LDS little to nothing as when they book a trip, for every X number of divers, one goes free.. and they profit on each customer. If the trip does not sellout, instructors get bumped, or may have to pay for a portion of the trip.

The LDS's prices on personal gear is about %10 ABOVE MSRP. They then give the students (who makeup the majority of personal gear purchases) a 15% discount. So they end up paying 5% under retail and think they are getting a bargin until they see online pricing.

Our LDS does a booming business, and I DO value them. However if people truely believe that these guys will put customers before profit think again. They are shrewd savvy business owners. I personally don't have a problem with any of their practices (with the exception of poor customer service), however I'm NOT going to feel guilty about making purchases anywhere I choose.

 

[Mlody11]

Its funny how its the same damn no logic arguments. Obviously the issue with airfills is dying off... at least something came out of this yapping. I do beleive that local dive shops are very helpful and I do support their buisness by renting gear, buying smaller items (which add up since there alot of smaller items in scuba) but the main equipment is overpriced by alot. In Chicago there are good dive shops (1 right by me) by I still dont buy the main gear from there. Why? Because if I were to do this I think I would be living with my parents for a long damn time. If I dont have the money, I shouldnt dive? Says who?! The people who say this... If you dont have 15,000 to shell for a new car, should you not be driving? If you cant buy a $500 dollar schwin bike, should you be riding a bike? People who think this way should be hide in corners because in my opinion, more divers makes a bigger community and a community to be reckoned with, making it better for all divers. Its like the Ford-T... Make it more affordable and more people will participate.

When I first started with SCUBA, I went to a dive shop for the first part of OW. The instruction was terrible and they did nothing to accomidate my GF so she could feel more comfortable in the pool. She had BCs 3x her size and she was in 5ft of water when she is 4'11. I can only image what she felt like... We found a private instructor and it was the best experience we've had. Since then we go diving more and enjoy ourselves. I've been practically all my gear online and took classes privately. I mean... It seems like each time I gave my old dive shop a chance, they make it worse by walking all over me.

Air fills have also been done at the places I dive... so as you can see, I will not abuse your little dive shops by going sizing and buying online (there is something wrong with that if you dont give them a chance to give you a good prices.... otherwise all is fair in capitalism and the US) but I can sure as hell get along without dive shops if they continue like the 1st dive shop I went to.

To Dive shops... claiming and whining about contracts that you sign is something we as consumers dont care. The manufactures dont care either because we have to get gear from them anyway... so they actaully like the fact that you push higher prices because they can keep their prices up. If we buy the gear from you or buy the gear online, we still buy the same gear and the manufacture will always be in buisness... Not you on the other hand. Its unfair but its the way it is... fight the manufacture on those contracts because the consumer will ALWAYS win.

 

[tedtim]

...but you know, WalMart isn't going to add a SCUBA section anytime soon because it is too technical.

Jeff

Don't count on that being true. The good folks at Costco now offer SCUBA gear at times (Costco is Canada's equivalent to Sam' Club or Price Club in the US). The prices are driven by the manufacturer and are lower than what my LDS charges for the same gear.

The selection is limited, but the intent is creeping into place.

 

[Louie]

The bottom line is, the consumer makes the choice.

Not all LDSs are equal and not all online retailers are equal.

I've dealt with a very good retailer recently who showed me the goods and told me to shop round - in the long run, this is good salesmanship because I feel he's not out to categorically rip me off and I will return to his shop.

I've also dealt with very bad ones - rude, ignorant, acting like they're doing you a massive favour by letting you try things on.

If a potential purchaser goes into a shop, this is the seller's opportunity to convince the shopper that the shop is superior to an online dealer (with the post-purchase service, price, useful information from staff etc). Why would anyone want to pay more when they're not getting more value for their hard-earned money? They will go to another shop or purchase online.

The same principle applies to online retailers as well. There are those with helpful info (website or telephone staff), good return/exchange policies AND price.

I agree wholeheartedly with those who made the reference with car dealers. Why am I obligated to buy the first car I see because a sales person took the time make a sale? It's up to the seller to convince me to part with my - and personally, his/her tale of the difficulties of running a small business isn't going to get me to buy a lemon.

 

[abitton]

How so?

Although It's ethical to test drive a car at one car dealership , and buy the same car somewhere else for a better deal
It's not ethical to "test drive" a BC at a LDS and then buy the same BC somewhere else for a better deal

DB

EDIT: For the record, I've bought all of my gear (except regs), from my LDS.

 

[abitton]

Agreed.

If someone was to say go into a diveshop to try a wetsuit on for the express purpose of finding out the right size so they could go home and buy it online, that is unethical.

 

[PhotoTJ]

Hey, mods, could we start a forum for just this topic? There has got to be 20-30 threads on this subject.