My Ethical Dilema

Do You Pay More For Your Gear In Order To Support Your LDS?

  • YES! It's worth the extra money to help keep them in business.

    Votes: 36 42.9%
  • NO! I don't like being ripped off by paying more than I have to for something.

    Votes: 15 17.9%
  • Sometimes - I buy odd and ends from the LDS, and buy the higher end stuff online.

    Votes: 33 39.3%

  • Total voters
    84
  • Poll closed .

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I've bought from all three. We did buy masks and fins and snorkels and many other items from the LDS, but soon succumbed to sticker shock on larger items. Also, wanted brands LDS never displayed. On getting back into diving for a third time, I did a lot of research and asking around.

Because I'm buying for three people (wife and daughter and self) I simply found that we had to either get significantly less generally recommended equipment, or *carefully* shop Ebay and places like Leisurepro. Got two mint Apeks ATX200 regs, a compressed neoprene and a neaoprene drysuit, Cobra computers and Ladyhawk BC's and numerous smaller items through Ebay, sometimes indirectly, when seller (mostly closing shops and other resellers, some private individuals) had another of the same, or other items for sale. With the suits, the Ebay sellers were, in most cases, willing to give a money-back guarantee of fit, as long as I paid the shipping both ways. Luckily, two of three tried fit, and the other party courteously and promptly honoured our agreement.

Yes, the LDS owner was and is somewhat miffed, but does concede that it was better to get the three of us out and diving, even with outfits bought elsewhere and/or used, than giving up on the sport as too expensive.

Tip to LDS owners: if you really are able to bring in other products, borrow at least one example from the distributor, or prominently display piictures and prices of same.

If you are willing to negotiate attractive prices, then don't feature ugly ones all over your store.

For example, the LDS lists Suunto Cobras complete with compasses at around $1200 CAD and the Bare XD2 Tech hypercompressed drysuit at over $1800CAD.

When I managed to get a new cobra with compass and quick release for under $500US from a store closeout, I was told that they could have matched that. What am I to think of the $500+CAD difference between the LDS's advertised price and what they claim they could have sold the item for? (Both prices are before sales taxes.)

I got the like new Bare drysuit for about $930CAD *taxes and shipping expenses in*, and was later told that they could have sold me the same suit for around $1300CAD. Aside from the fact that there would have been anothe $169 in taxes, the $500 question arises again.

I doubt that the LDS could have made any *net* profit selling me the complete list of the items I bought elsewhere at prices even ten or fifteen precent higher than what I bought them for.

And frankly, when dealing with aggregate costs in the thousands of dollars, for what are supposed to be high quality, reliable items, that is the most that I would be willing to assess as the true value of a warranty.

In the main, on new or nearly new items bought through Ebay after carefully checking the "feedback" rating, and usually calling by phone or having a significant Email exchange with the seller, the experience has been positive. In a couple of cases, items bought significantly "used" proved the "you get what you..." adage. None were outright rip-offs.

Generally, I am less impressed with Leisurepro. Although occasional sale items, like Apeks T20 auxillary produced a significant saving, they will also, just like their Adorama Camera alter-ego, cheerfully sell you absolute junk (flimsy plastic safety sausages, no-name tools, etc), if you are not careful.

I prefer to buy from people who know something about diving. Dive Inn (Scubastor) in Spain may well be a better source, though Murphy has intervened every time I've tried to buy from them (but friends have had good experiences).

Of course, for anything within 10-25% (depending on the item) of the prices such outlets advertise, I'll gladly buy from the LDS.

Right now, a week before my daughter and I fly off to an LDS charter on the Nautilus Explorer, and four months before a possible Bonaire trip with him in February, I do hope that a reasonable compromise has been reached.

Erich Keser
saskatoon, sk
 
ScottyK once bubbled...
The packaging industry standard is 30%. The only other industry (besides diving) that I know of that marks things up 100% is the aquarium fish industry.

Actually...100% mark-up is the "norm" in most "independent" shops...gift shops, jewelry (if not more), kitchen shops, etc. It's affectionately known as "keystone". I buy it for $5.00 and sell it for $9.99.

Now at big retailers read Costco, Walmart, Home Depot etc. you will find all sorts of pricing margin. Typical general merchandise is around 30-35% margin (there is a difference between margin and mark-up but that's another discussion)...but...some stuff is sold for very small margins to give the "impression" of across the board savings at that retailer...see Home Depot for example. Cordless drills are sold at miniscule profit but...they nail you on the accessories at 100% plus margin. Perception is reality. If the item isn't one you would tend to price shop, you can bet it's being sold at significant profit to the retailer. Costco tends to limit margin by department...some as low as 10% up to around 18-20% in some areas. Lightbulbs at grocery stores are often bought for $.65 and sold for $2.49...major money makers.

Most big retailers also play the "price analysis" game. They take an item and track sales vs. retail to achieve a maximum blend of profit for the company. Here's how. Take an item. Sell it at $39.99. See how many you sell. Then take the price to $41.99 and see how many you sell. Keep increasing the retail until the maximum profit percentage is achieved. Nice huh? Grocery stores are brutal for this. It's all done by computer. So when you walk in and think...hmm...wasn't this cheaper last week...you're right...it was.

Just some background for you.
 
Most people would be shocked at the true mark-up of products they buy every week. The example i like to use is soda fountain drinks. Start adding zeros to the mark up folks .... we are not talking 100% but closer to 1000% mark-up or higher. You don't think about it because your only paying a buck or so for the drink not the hundreds of dollars you do for most scuba equipment.

Is it too much? Depends on what the overhead costs are which directly attributable to providing that fountain drink. Labor, labor taxes, building costs, taxes in general, power, gas, other utilities, advertising, liabilty insurance, general insurance, training, loss from theft, loss from spoilage, ... i could go on.

I don't have the slightest idea if its too much since i'm not in the business of providing fountain drinks and therefore don't have the slightest idea of the true cost of doing so. IMO, your pissing up a rope trying to decide what is fair unless you truly understand what the costs of providing that service are.

I believe the same holds true for the dive industry. Few people, including many former dive store owners, have a clue what the true costs are. That why so many of them are former dive store owners.

With all that said, i try to buy at an LDS as much as possible. If nothing else your paying for conveinence. You will be sorry if your LDS goes out of business. I've seen it happen and it sucks! Driving an hour or two for fills can really put it all into perspective.:wink:
 
Bwerb- Thanks for the background.

This brings me to my next question. If the LDS's in my area are retailing for 100% more than the online shops are "retailing", what kind of mark up from wholesale are they trying to push on me?

I know that a place like LP that is doing a lot of volume, and buying "creatively" is getting better prices, but I don't believe that my LDS is paying the same wholesale prices that a LP is retailing for.

Somehow, my "I'm getting hosed at the LDS" alarm is still ringing.....
 
I was quite recently in the same boat
as the original poster in the poll, LDS or online
retailer.

I decided to go with LDS. My LDS was able
to throw in other accessories to compensate
for their increased price of the reg and computer.
In the end, with everything I bought my price was slightly
more than leisure pro. I received the manufacturers
warranty and the LDS made some money. We were
both happy.

I anticipate they will help me in similiar ways
in the future (I still have BP/wing to buy!!!).
Happy Diving.
 
ScottyK once bubbled...
Bwerb- Thanks for the background.

This brings me to my next question. If the LDS's in my area are retailing for 100% more than the online shops are "retailing", what kind of mark up from wholesale are they trying to push on me?

Welcome to the wonderful world of two-step distribution (or more).

Here's how it works. I'm a manufacturer and want to sell my product. Everytime I send out a shipment it costs me money. Not just the cost of the physical manufacturing but all the background including but not limited to...paperwork, accounting department, carrying the cost (you buy today and pay in 60 days...I'm carrying your "loan"), bad debts (you receive the goods but don't pay me in 60 days, then declare bankrupcy and I'm left holding the bag), advertising costs (both my own and co-op supporting of yours...I pay you $5,000 to put my item in your weekly flyer), volume rebate (I pay you 5% of total yearly purchases as an incentive to buy more), shipping (I agree to ship you the goods and pick-up the shipping charges), fines (your vendor agreement stipulates $1000 fine for missing a delivery date...I miss it by one hour, you refuse my truck and fine me), off-loading of in-store support (I pay a team of service people to call on your store to stock your shelves and build displays...or risk you not carrying my product).

So...at the end of the day, it is easier for me to only deal with large customers. If I had 1000 customers I run the risk of a very high cost per transaction so instead...I set-up minimum orders. You want to buy from me directly, my minimum order is $15,000. You are a small shop and can't afford this...what to do?

Enter the wholesaler or second step of distribution.

Wholesaler agrees to sell to smaller retailers at smaller minimums...now you can buy at $1500 minimum order...but...there is a cost to you.

I sell at a discount to the wholesaler because I no longer have to worry about 100 customers, now I worry about 1. He now has to worry about the 100 customers.

I sell an item to the wholesaler and he takes on average 40% margin himself (to cover costs and profit) and voila...the small store now can buy the same thing but...he pays more for it than the big store who can buy direct. Remember he's not paying 40% MORE because I gave the wholesaler a discount to take some of the costs off of me.

This also happens with "buying groups"...example is Ace Hardware and some "franchise" retailers. Parent company has a warehouse and buys direct from manufacturer. Parent company then sells to individual dealer through the warehouse at an upchage for carrying the books and warehouse inventory. So...same item at local hardware store is now 5-10% more at base level cost than at big chain.

Guys...it's all a giant shell game...moving the costs from one player to another. At the end of the day, most small retailers are not "ripping you off", they are playing with a different playing field to begin with.
 

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