Scubapro online sales

[redacted]

Thanks,

I'm just waiting, impatiently. I suspect the specific answers to my 2 questions may have some legal ramifications, as Larry suggested, that may delay any response. But I publicly said that I would inquire and didn't want anyone to assume I had not.

Just wanted to let you know, I have not forgotten. But maybe Scubapro has. Well maybe I'll here something Monday.

 

[surfsidedav]

Just how does the grey market get supplied? To keep this simple, I'm going to assume that SP only has one plant that manufactures their regs, another for fins, etc. So when product comes off the production line, is there a split in the line where half goes to legit dealers and the other half to grey market? Or is it all sold to legit dealers and these dealers sell it to LP at a small markup? If so, then all product is sold with warranties up front so why wouldn't a product from LP have a warranty? Or does the warranty only apply to the original buyer? No that can't be right, because the LDS would be original buyer, not the end consumer. So the split in the line needs to be stopped or notice the spikes in the ordering curve from the dealers. Either way, to stop grey market sales doesn't seem an impossible thing to do, but because as previously stated, they make the same amount of $ either way.

 

[DA Aquamaster]

What I heard from our LDS a couple weeks ago was that SP was going to start tracking serial numbers on larger reg orders (20 or more?) to ensure they were being sold at the shops that were originally ordering them.

That seems to be a recognition that grey market regs are getting there from current authorized SP dealers rather than from ex-dealers liquidating stock, etc. and does seem to demonstrate a willingness to try to do something about it.

 

[yknot]

Anyone care to speculate what will happen to SP sales volumes if they do actually shut down the supply to venders like LeisurePro?

 

[DA Aquamaster]

I suspect that is exactly why companies that require over the counter purchases have not shut down the supply to on-line vendors like Leisure Pro. Sales probably total anywhere from 10 to 20% of their total sales for most companies.

I think for most companies with on-line sales restrictions it is a situation where if they get a complaint from a dealer that another dealer is selling things on-line or to on-line retailers, they have to act, but if the offending dealer is discreet, they are likely to look the other way as the sales rep is making money on the increased volume, the company is making money on the increased volume, and the customers are at least buying from that company rather than from the competition. So in their view, if you don't have a dealer complaint, you don't really have any immediate harm.

However I think more dive equipment dealers in general are expressing concern about what they perceive as unfair internet competition and more or less demanding that it either be stopped or that they be allowed to compete on more or less equal terms. The result is more dealers dropping lines that both restrict their ability to engage in mail-order/e-mail/internet/phone sales and refuse to do anything effective about curbing supplies to on-line retailers.

It really is unfair when you consider that companies that do this are still making as much money as ever of the products they make (and in some cases more with the reduced warranty obligations of "unauthorized" sales) but their authorized dealers then take the hit in sales and in having to deal with customers when the on-line product has a problem.

On-line sales do potentially create other markets but these are often also restricted as they would "support" on line sales and are not embraced by dealers. An example is mail order servicing. I know the LDS I work with is not real keen on mail in service. If a local customer has a minor adjustment issue after an annual service, a quick trip to the shop resolves it. If it is a mail order service however, it requires the reg to be shipped back to the shop, customers tend to get crabby, and the owner has to defend the shop's reputation. Even though those situations are very rare, he just does not want to do go to that trouble for a customer base that he cannot even sell merchandise to and whose only business with the shop will be an annual service that by neccesity is heavily discounted to offset the shipping costs the customer has to pay. On top of that there is always the potential for a dealer whose customers ship them elsewhere to complain to the company about the "unfair" mail order competition. Unfortunately the corporate response is more likely to be a request to the mail order servicing dealer to stop doing it than it would be for them to tell the complaining dealer to suck it up and improve their customer service - especially if the complaining dealer does a higher sales volume.

Unfortunately with those companies that restrict on-line sales, service and parts support are usually tied to authorized dealers as a means to support their dealers. This works, but also prevents technicians with no real concerns about equipment sales from operating independently from authorized dealers. In a sense, that is unfair to customers who have purchased a on-line reg - often not knowing the dealer is "unauthorized" - as they may have serious problems getting it serviced.

In the end, I don't think the hot button issue is so much whether a company allows or disallows on-line sales. Rather, one of the major issues is the concerns of dealers relating to the lack of fidelity and veracity of companies that have a policy but then do not enforce it and/or are not willing to accept the sales consequences of that policy. Additionally, the other major issue is that of the customers who feel or discover that a company may not take care of the customers who bought their product regardless of where it was purchased.

If any company is going to restrict on-line sales, or restrict warranties or services to the customers buying on-line prodcts, then in my opinion they do have an ethical obligation to do what is required to prevent or at least sharply limit those sales.

 

[yknot]

In the end, I don't think the hot button issue is so much whether a company allows or disallows on-line sales. Rather, one of the major issues is the concerns of dealers relating to the lack of fidelity and veracity of companies that have a policy but then do not enforce it and/or are not willing to accept the sales consequences of that policy. Additionally, the other major issue is that of the customers who feel or discover that a company may not take care of the customers who bought their product regardless of where it was purchased.

If any company is going to restrict on-line sales, or restrict warranties or services to the customers buying on-line prodcts, then in my opinion they do have an ethical obligation to do what is required to prevent or at least sharply limit those sales.

All good points. What so many LDS's need to realize is that divers aren't all buying into the reasons they continue to use (more like threats) as to why we need to buy from them exclusively. No amount of LDS-vs-online buyer threads is going to change this new reality. While a manufacturer may have an ethical obligation to live up the spirit of their agreements to their dealers, don't they also have an ethical obligation to the real customer? The ones who, if they did any thing "wrong", sought out a product at a discount and didn't buy it from the right place? As a consumer I feel an obligation to common sense to specifically not support brands that feel so little regard for me.

 

[redacted]

As a consumer I feel an obligation to common sense to specifically not support brands that feel so little regard for me.

I believe the problem lies more with the retailers than the wholesalers. No doubt, the dealer agreements pose some limitations. But the shops I do business with know how to work around most of those limitations when they really want to. As long as the bottom line on the sales receipt covers any agreement price restraints, agreement violation is not evidenced. The guy who says he can't negotiate price, or can't sell you parts, or tells you "buy on the internet, die on the internet" and other deceptions is the LDS, not the manufacturer. Shops have lots of good choices now about which gear to sell. Many who are pushing the gear of the manufactures that a "tying their hands" are doing it because they like and even insist on those restrictions. They are quite happy about them until they find that the manufacturer can't or won't fully honor those agreements.

Things are changing. We, the diving consumers, just need to keep steady pressure on to achieve this change at a pace that allows the system to adjust and adapt. I don't want to see LDSs totally disappear and I don't think that is the direction we are headed. But I do believe we are going to see areas with multiple inefficient LDSs trim back. And in some areas that don't have enough divers to support a healthy LDS, we will probably see a return of independent dive clubs that can provide training, gas, and services.

 

[waynne fowler]

Leisure pro gets Scubapro items from grey market sources and then sells them with a leisure pro warranty rather than a Scubapro warranty as they are not an authorized Scubapro dealer.

Alot of the times this comes from shops going out of business so they buy the SP stock up cheap. Makes me wonder why shops are going out of business so fast.

 

[waynne fowler]

We are all to blame for jobs going overseas.

We shop to find the lowest price on everything from Gas to Airline Tickets and even Scuba equipment. The companies that manufacturer these goods that we buy need to find ways to keep the price of their products low so consumers will continue to support their manufacturing facilities. To do this they use differing methods, but the highest cost to business is labor, and no labor is cheaper than that overseas. The companies also have another problem. We, the cheap consumer, are also stock holders and demand that they turn a big profit or we will sell and the stock will decrease in value. To make a big profit they cut costs in any and every area they can including labor. By keeping the cost down the American market will buy the product, and sales will continue.

It's a bad circle that we are in. Please do not blast me as being BIG COMPANY, as the internet has made many LDSs honest and those that were at 400% deserved the fall, but there are many shops that are well below MSRP and still get hosed for trying to make a decent profit.

At my LDS, a guys wife came in and bought $2000 worth of gear for his christmas. I don't know what he said to her, but she called in tears saying they had taken advantage of her. I gave the shop owner a list of the gear if purchased from LP, and they were $235 apart. I told the shop owner to let it go, but he offered fre Nitrox training, a free wetsuit, and a few other things.

I was glad I was at the store when he came in mid conversation about my listing my home. Here is the conversation...
"I would be glad to list you home for you, that's what I do".

"Oh thank you, but I am going to save myself the $21k fee and use the internet"

"You'll never sell your home that way, and the laws are to complicated for the average consumer to understand. Not only do I list your house, but I network with other realtors, use local listings, MLS, and have an agent at your home during any open house. It is also safer for your family using an agent to sell your house."

"I understand and appreciate the offer, but I could use the money I save from this and use it toward upgrades on our new home."

" The people that sell homes on the internet are usually selling property that is in bad shape and are hard to track after the sale."

"I'll let you sell the house if you are willing to do it for 2%, thats still $7k, and I am sure your costs will not exceed $1k."

"I can't stay in business if I sell for 2%. I have fixed costs like my office and support team that get a piece of the pie. Nor would it be fair to the rest of my clients if I took your home for less than the 6% fee."

"Well home team realty here advertises 3%, how do they stay in business?"

" They are a low cost agency, that provide virtually no service and I hear they don't always return calls to perspective buyers."

"Thanks again, but I think I will do it myself and save that money for other things."

"You'll regret not using a licensed realtor as we are always here for you in case there is a problem from the time you start to show your house, till closing. I don't think you understand the issues that can arise when selling your own home, but you'll learn that saving money is not always best in the long run and that is not enough for the trouble instore for you."

"You could be right, but how much should I save to make it worth it? You are back here complaining that you were taken advantage of with the price of your equipment and that will only save you $235. And to add to that your gear purchased from here comes with the full manufacturers warranty. How much do you think that is worth?"

"Well this is different, once I buy the gear the sale is over, your house may take 2 months to sell, and there is a lot that needs to be done. This shop will make plenty of money if the sell at the same price as LP."

At this point I gave up, as I know the LDS owner is just to nice, but I thought it was interesting how defensive he was about his own job, but thought that everyone else should make less....

Off my box now, and gosh i feel better.

I like that story... hit's right at the heart of the matter... most of us wouldn't take a pay cut to do the same job or a lesser job for that matter.

 

[daniel f aleman]

This thread reinforces the perceived good quality of Scubapro equipment at the least.

Scubapro continues to supports LDS's because they see the demise of the LDS as a threat to agency certification of new divers; I agree on that point, at least for the foreseeable future.