The Dive Shop of the Future

[Ontario Diver]

Originally posted by O-ring
This echoes what was predicted to happen with e-commerce in general. Sounds a lot like Amazon, doesn't it? Put the local bookstores out of business by selling more volume, lower prices, lower profit margin, but the volume makes up for it.

Problem is, people like hanging out in bookstores and they like hanging out in dive shops.

...

Rick, good thread...I hope we can continue with the analysis.

Geeze, you had to bring up bookstores. Amazon had a impact in my area. It used to that there were 3 bookstores in every mall. The two major chains and an independant. Now if you are lucky, there is one (because the two chains merged and the independant went out of business). The "Big Box" booksellers have pretty killed the independant book stores and the small chains. The only ones that are surviving are specialty book stores (and they aren't doing well either).

There are rumours of a number of LDS going under in TO as well.

Once stores go away, it is a long time before they can come back.

Rick - It is a good thread

 

[O-ring]

We haven't looked at where dive shops make their money...someone add to this, because I am not that familiar with dive shop economics.

Retail Sales
Air Fills
Training/Courseware/Referral Certification Dives
Travel
Charters?

 

[O-ring]

Ontario Diver, also a good point...although Amazon hasn't killed the book stores entirely, it certainly has caused them pain and numerous closings.

Maybe a combination of bricks and mortar stores and online retailing would be the answer (like Gateway..oooof bad example, or Barnes and Noble or BestBuy).

Centralize all the inventory of gear to save on costs (put the warehouse in Oklahoma somewhere where real estate is dirt cheap). This not only saves on shop space, but also on having redundant employees at every location that duplicate expertise. This inventory would be accessible by all the dive shops and they would fill orders from the main centralized dive equipment warehouse. This would also allow economies of scale to kick in for the warehouse since larger orders could be placed thereby taking advantage of volume discounts.

Of course, this would only work with a chain of dive shops...unless some enterprising individual crunches the numbers and starts a dive gear supply outsourcing business that dive shops can subscribe to/join to provide this service.

Anyway, do the training, sales, air fills, etc. at a SMALL shop with no inventory other than a few samples to gauge fit, etc. with perhaps one employee who doubles as an instructor.

 

[Ontario Diver]

Centralizing inventory to a single local warehouse has been a comon method of business for auto parts for years now.

It also makes inventory management alot easier because it allows more accurate trending analysis.

 

[O-ring]

Aha! Trending would be great, because we would want to stock up immediately preceding the dive season (lots of people only dive in warm weather) and during those months that we had higher demand for gear - to avoid stockouts.

What we are really talking about here is just in time inventory for dive shops (JIT). The problem is still that all the shops are currently operating in a "mom and pop" framework and are not a chain that could utilize a centralized warehouse model.

Can you envision a "Scuba-Mart" or "K-Dive"?

The less people in the chain the lower the markup percentage (generally)...therefore, if we didn't have just Manufacturers > "Scuba-Mart" warehouse > "Scuba-Mart", we would have (as per my other example) Manufacturers > Scuba Warehouse/Inventory Outsourcing Company > "Scuba-Mart".

The first example would work like your auto parts example... "Scuba-Mart" centralizes the inventory of all its dive gear (for, let's say, 200 stores) in one warehouse in Okmulgee, Oklahoma. This enables them to realize volume discounts on ordering (ordering to support 200 stores) and to JIT deliver the goods to all the individual "Scuba-Marts".

The second example would include a middleman (our enterprising diver turned dive gear warehouse oursourcer) that would then have to charge the individual "Scuba-Marts" with coordinated inventory systems a markup in order to turn a profit on the gear he orders from the manufacturers. I am guessing the gear purchased in this manner would have to be more expensive for us, the diving public, in order to support the manufacturer's profits, the dive gear outsourcer's profits, and then the LDS profits.

Maybe we will see consolidation of the dive shops into "Mega-Lo-Dive-Marts".

Where do dive shops make most of their money? On gear sales, training, travel, or something else??? (I have no idea...).

 

[ckharlan66]

What I am surprised we don't see (at least around here) is gear being sold at outdoor and sporting good stores. Chains like Dick's Sporting Goods sell everything from hunting and fishing to weights to football equipment. I am surprised that they haven't got into scuba. Or on the other hand I am surprised that LDS aren't picking up other sporting good products to help increase profits and attract new people to who might not have other wise thought about diving to the store. (cross selling in essence)

Chad

 

[CincyBengalsFan]

Everything does happen is cycles and the LDS will be just fine. It's all about how they adjust. Bringing in other lines of sporting goods is happening to LDS ALL OVER THE COUNTRY. It's working extremely well. Plus there are MILLIONS again MILLIONS of people across this great Country that refuse to SCREW the little guy. I see customers virtually every day like that. They would much rather spend the money with me rather than support someone they have never met that doesn't even live in the US. LDS will be here for the long haul. Some will come and go just like they always have but the LDS will ALWAYS remain. Dive shops are already teaming up together to get back at the manufacturers. They are simply refusing to buy from some manufacturers and power buying from others. The internet has taken a toll on the LDS but not to the EXTREME that you guys dream. There are millions and millions out there that don't want to buy LIFE support equipment on line from someone they have never met before. And to those companies the LDS really HOOKS up the best they can. Free pool time..Free Servicing..etc. etc. etc. Moral of the story. 5 yrs. 10 yrs. 25 yrs. from now..The LDS will still be around.

 

[gadget]

Considering how much '' fun" running a dive shop is, I am pretty sure my LDS would consider selling it to you for a six pack.

Owning and running any small business is a lot of work and has stresses way beyond any job where you just go cash your check and go home at night.

Yes, dive shops can sell more crap which have nothing to do with diving, but the value of a local dive shop who knows their product and their customers is an invaluable resource that will never be replaced by technology.

I can't guess what the future holds but the vision of the LDS in a consultant role don't impress me much...

 

[CincyBengalsFan]

Good reply. I like it. I would like to sell more crap. I'm a dive shop owner. For the past yr. I've turned pretty much NOTHING into something descent. It's growing everyday. It is tough but it's also extremely rewarding. Owning any small business is tough though. I pay myself every week and the business is still growing everyday even with the internet trying to put me out of business. If I ever had to go back to work for someone it would have to be an extremely SWEET deal. Even with the stress of having my own business I wouldn't trade it for the world.

 

[ckharlan66]

bengelsmgtsucks, (you need a shorter name)

I was thinking why don't you put a bar in the shop and have a daily happy hour. About 5-6 would be a good time.

Chad