driftwood
Contributor
Shift the business model where gear sales no longer subsidize the training and service.
The economy and diving
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Tigerman
Contributor
Which means what? Much more expensive serviceing of gear and much more expensive classes?
That might seem like a good idea, if you neglect how much more people would start serviceing their own gear and how much less people would get qualified..
Coldwater_Canuck
Contributor
In another topic it was mentioned about buying on the internet the threat that "if you don't give LDS's your business where will you get air?"
In some smaller towns and that sort of thing, this is probably true. However, I assume that air fills and repairs are both fairly high margin for the shops, the problem being there isn't enough traffic to make them a significant part of revenue. So I'm guessing you could see "air and repair" shops survive on current prices, but it would mean the number of dive shops would drastically need to be reduced to increase traffic at those that remain.
Of course, I'd rather not see this happen, but the economy does tend to work itself out in terms of someone filling a need.
This is a little off topic, since it's more about if gear sales at LDSs were to slowly fade into nothing permanently, but slightly relevant.
Air is not a high margin item for shops, repair could be if there were enough of it. Air would have to be 7-9 bucks a fill to be a decent margin item, most of the shops I've seen are charging 3-4 bucks a fill. Even at the higher price, as you mentioned earlier, they'd still have to have a large quantity of fills to pay the bills.
The internet has killed a lot of small town stores, and for those who think Leisure Pro and other primarily mail order companies that don't follow manufacturer's MAP pricing policies and such have no effect on stores in bigger cities, there are several threads here with posters in Orlando (Florida seems like a natural diving area), Houston (the US's 4th largest city) and other populated spots lamenting the loss of several dive stores the last couple of years.
I lived in a town of 50K, 40 miles from the coast, that had 2-3 dive centers and an independent instructor or two for decades, now they've got zip other than the PE program at the local college (I'm only assuming that's still going).
It's not all about gear sales. If you look at it from a "growing the hobby" view, every shop gone is another lost opportunity for training, a lost opportunity for local diver interaction and such. It used to be easy in the town I was in to find other divers to socialize or dive with and you could find a buddy to head to the jetty on the coast relatively easy, those days are gone. You MIGHT see local airstations come and go, but they're going to quickly realize it's a money drain. Repair? If nobody's learning, and few are diving, where are the clients coming from?
Pretty soon, it may well be that the vast majority of all surviving dive businesses are at major dive locations, but even they'll struggle if there are fewer divers coming to them because nobody's being trained at the non-dive destination locations.
The internet has killed a lot of small town stores, and for those who think Leisure Pro and other primarily mail order companies that don't follow manufacturer's MAP pricing policies and such have no effect on stores in bigger cities, there are several threads here with posters in Orlando (Florida seems like a natural diving area), Houston (the US's 4th largest city) and other populated spots lamenting the loss of several dive stores the last couple of years.
I lived in a town of 50K, 40 miles from the coast, that had 2-3 dive centers and an independent instructor or two for decades, now they've got zip other than the PE program at the local college (I'm only assuming that's still going).
It's not all about gear sales. If you look at it from a "growing the hobby" view, every shop gone is another lost opportunity for training, a lost opportunity for local diver interaction and such. It used to be easy in the town I was in to find other divers to socialize or dive with and you could find a buddy to head to the jetty on the coast relatively easy, those days are gone. You MIGHT see local airstations come and go, but they're going to quickly realize it's a money drain. Repair? If nobody's learning, and few are diving, where are the clients coming from?
Pretty soon, it may well be that the vast majority of all surviving dive businesses are at major dive locations, but even they'll struggle if there are fewer divers coming to them because nobody's being trained at the non-dive destination locations.
PacificNWdiver
Guest
The economy will always impact small businesses either positively or negatively. The survival of the business can many times be attributed to the business acumen of the owner. The owners love of the sport of diving will never be enough to make that business successful. So to the owners of the "LDS", I wish you a healthy and prosperous new year.
Kim22
Registered
I think diving isn't a sport for a lot of people. It's an addiction. Addicts find ways to pay for their habits, even when other things like food and shelter have to suffer
So very true!!!! This is not just a regular "hobby" for me, and I will find a way to dive regularly, no matter what!
rstofer
Contributor
Economics is a wonderful equalizer. If the LDSs crash and burn, Internet sales will plummet as well. Why? The LDSs won't be training new divers. Dive gear lasts a LONG time. If the Internet sales plummet, manufacturers will have to reduce prices or go out of business. The entire business model is based on getting more new divers and that is based on the survival of the LDS. Which, in turn, is why the manufacturers try to help with MAP and MSRP. They try to keep the LDSs from killing each other.
When Internet sales plummet because there is a lack of new divers, the LDSs will come back into vogue. They won't be the same shop, of course, but they will reopen nevertheless. If there is a demand for something, there will always be a supply.
It will all balance out. Some areas won't have dive shops, they aren't a large enough market. Dive locations will always have dive shops. Well, maybe not the local quarry! But I don't see the shops in Monterey going out of business any time soon. At least not all of them...
I look forward to the manufacturers making price cuts. When I look at a BC, any BC, I don't see $100. I certainly don't see $600. I'm willing to discuss $200 for a high end regulator; not $600. The prices are insane and until they are adjusted, the industry will suffer. The fit will survive, the rest will crash and burn.
I don't really care how it shakes out! The 4 of us have our gear, we have our certs, the ocean will always be there and, if need be, we will buy a compressor.
Economics is a wonderful equalizer. It just takes time!
Richard
When Internet sales plummet because there is a lack of new divers, the LDSs will come back into vogue. They won't be the same shop, of course, but they will reopen nevertheless. If there is a demand for something, there will always be a supply.
It will all balance out. Some areas won't have dive shops, they aren't a large enough market. Dive locations will always have dive shops. Well, maybe not the local quarry! But I don't see the shops in Monterey going out of business any time soon. At least not all of them...
I look forward to the manufacturers making price cuts. When I look at a BC, any BC, I don't see $100. I certainly don't see $600. I'm willing to discuss $200 for a high end regulator; not $600. The prices are insane and until they are adjusted, the industry will suffer. The fit will survive, the rest will crash and burn.
I don't really care how it shakes out! The 4 of us have our gear, we have our certs, the ocean will always be there and, if need be, we will buy a compressor.
Economics is a wonderful equalizer. It just takes time!
Richard
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All I want for Christmas...
We all have a list right? Well as a dive shop owner who competes daily with internet pricing... I'm taking it on the chin, the arse and everything in between right now... so all I want for Christmas is a few customers with a job and a few dollars to spend.
You see, I own a great shop just outside a major city. We opened one year ago... and had a hugely successful first year - right up until about 2 months ago... when the economic $h1t hit the fan... We were doing close to $25-$30K per month... until November... when sales dropped to $8K... and so far for Christmas... it's the 15th... and sales for the month sit at just 4K.
Now...lets examine this more closely. We're a mid-atlantic business... and it's winter... so sales always drop off in scuba shops between say November and February. It's cold, snowing, local divers are hibernating. it's the holidays etc... so in a normal year... a drop off is to be expected.
It's not what is happening in my shop that gives me cause for concern. It is what is happening all around my shop that gives me cause for concern... and I'd bet that it is giving cause for concern to anyone who ones a dive shop - be it local or internet... because if you haven't noticed - Leisurepro is practically giving stuff away. They're running more 3 day sales than Macy's.
What is going on is that the Restaurant next to me went from doing $2000 a day down to $200 a day. The trucker who stops in my store went from running 210 stops per week to 21. The Grocery store up the street is overstocked on frozen dinners because customers are only buying rice and beans. The car dealer up the street hasn't sold a car in 5 days... and they have literally hundreds if not thousands sitting on their lot. In case you haven't noticed folks... this is a worldwide problem.
Our internet sales plummeted... and we beat Leisurepro on pricing everyday of the year. We've listed some items on Ebay at prices 20-30% lower than the next lowest priced listing of the same item... and we get ZERO bids.
Prediction - this will go on for more than 18 - 24 more months. More than 50% of LDS's across the country will close by year end 2009. About the same percent of internet sellers will also be gone. At least 20% of Scuba Equipment Manufacturers will cease to be in business by the end of 2009... maybe more. We will lose about 30% of the worlds dive resorts by end of 2009.
This is not doom and gloom - pessimism - this is reality... so be prepared. I hope sincerely that all of you reading this still have your jobs by the end of 2009... because odds are at least 10% of you wont.... The housing market is only 50% of the way through it's problem... the financial markets are not being helped by the bailout. The auto makers will fail within 5 years no matter how much money is thrown at them - unless they completely restructure - which means the cutting of hundreds of thousands of jobs.
Take some time to realize that the best thing you have in this world is your health and your family - that material things don't matter much... and that if you have some dive gear and a body of water.. you have a respite.
If you have some time around all the other things there are to do in life... urge manufacturers to do away with MAP and MARP pricing... and to try to make the sport more affordable for the family... to make it something a family of four can afford to do together - even in tough economic times.... you see they can do this... they just don't want to. It is their greed that has been killing this industry for the past decade or so... so while the current economy is dragging it (the industry down,) it has been put in the position to die quickly due to manufacturer greed and back-door dealings with internet retailers.
We do need LDS's for training - and the MAP and MARP policies in combination with the economic downturn is going to be the end of the sport as we know it. LDS's can not survive another 18-24 months of a 50 to 90% drop in revenue... any more than any other business can.
That's the economic truth on diving... so do your best to support your LDS instead of the internet retailers... otherwise the sport dies.
We all have a list right? Well as a dive shop owner who competes daily with internet pricing... I'm taking it on the chin, the arse and everything in between right now... so all I want for Christmas is a few customers with a job and a few dollars to spend.
You see, I own a great shop just outside a major city. We opened one year ago... and had a hugely successful first year - right up until about 2 months ago... when the economic $h1t hit the fan... We were doing close to $25-$30K per month... until November... when sales dropped to $8K... and so far for Christmas... it's the 15th... and sales for the month sit at just 4K.
Now...lets examine this more closely. We're a mid-atlantic business... and it's winter... so sales always drop off in scuba shops between say November and February. It's cold, snowing, local divers are hibernating. it's the holidays etc... so in a normal year... a drop off is to be expected.
It's not what is happening in my shop that gives me cause for concern. It is what is happening all around my shop that gives me cause for concern... and I'd bet that it is giving cause for concern to anyone who ones a dive shop - be it local or internet... because if you haven't noticed - Leisurepro is practically giving stuff away. They're running more 3 day sales than Macy's.
What is going on is that the Restaurant next to me went from doing $2000 a day down to $200 a day. The trucker who stops in my store went from running 210 stops per week to 21. The Grocery store up the street is overstocked on frozen dinners because customers are only buying rice and beans. The car dealer up the street hasn't sold a car in 5 days... and they have literally hundreds if not thousands sitting on their lot. In case you haven't noticed folks... this is a worldwide problem.
Our internet sales plummeted... and we beat Leisurepro on pricing everyday of the year. We've listed some items on Ebay at prices 20-30% lower than the next lowest priced listing of the same item... and we get ZERO bids.
Prediction - this will go on for more than 18 - 24 more months. More than 50% of LDS's across the country will close by year end 2009. About the same percent of internet sellers will also be gone. At least 20% of Scuba Equipment Manufacturers will cease to be in business by the end of 2009... maybe more. We will lose about 30% of the worlds dive resorts by end of 2009.
This is not doom and gloom - pessimism - this is reality... so be prepared. I hope sincerely that all of you reading this still have your jobs by the end of 2009... because odds are at least 10% of you wont.... The housing market is only 50% of the way through it's problem... the financial markets are not being helped by the bailout. The auto makers will fail within 5 years no matter how much money is thrown at them - unless they completely restructure - which means the cutting of hundreds of thousands of jobs.
Take some time to realize that the best thing you have in this world is your health and your family - that material things don't matter much... and that if you have some dive gear and a body of water.. you have a respite.
If you have some time around all the other things there are to do in life... urge manufacturers to do away with MAP and MARP pricing... and to try to make the sport more affordable for the family... to make it something a family of four can afford to do together - even in tough economic times.... you see they can do this... they just don't want to. It is their greed that has been killing this industry for the past decade or so... so while the current economy is dragging it (the industry down,) it has been put in the position to die quickly due to manufacturer greed and back-door dealings with internet retailers.
We do need LDS's for training - and the MAP and MARP policies in combination with the economic downturn is going to be the end of the sport as we know it. LDS's can not survive another 18-24 months of a 50 to 90% drop in revenue... any more than any other business can.
That's the economic truth on diving... so do your best to support your LDS instead of the internet retailers... otherwise the sport dies.
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Coldwater_Canuck
Contributor
Personally I've never seen air for 3-4 bucks, I've seen it from 5-7.5 for a LP air fill, more for HP and Nitrox.
But "increasing the quantity" is exactly my point. I don't argue that were shops to stop selling gear, a good number of them would go out of business. This would increase the quantity to the other shops, and since I'm sure from an accounting point of view, part of the cost of the fill is amortization on the expensive machine, the margin on each fill should increase as well as total revenues from fills. My point is in most places there would still be somewhere to rent gear, repair gear, get air fills, etc. The number of shops would be reduced for sure, and I don't like this, but at the same time I don't think it would be as dire as some let on.
As times change, things can adapt. For example, maybe scuba eventually becomes a "club" type sport. As an example of this, if you want to fly a glider, you don't go and pay some company money, you join a not-for-profit club: they train you for free (you pay the flight fees for your instructor, but instructors are not paid, club fees are used to buy the gliders, etc. In scuba, instead of buying gliders you buy an air fill machine, instead of paying for each flight you pay to rent gear, fill tanks, etc. I don't think it would ever get to this point as I believe in general scuba will be popular enough to warrant commercial operations, but it would be an option.
Never would I say there is no effect, and I do feel sorry for those dive shop owners and their loyal customers.
The word I want to use to describe MAP pricing I'm not sure if it's allowed here, but I'll just say it's absolutely ridiculous. I don't know if it's done LDS's more harm or good, but I don't like manufacturers telling retailers what price to sell a product at: they should just sell it to the retailer and let the retailer do what they want.
But even online stores like scuba.com and scubatoys.com which follow the MAP pricing are doing well. One of the problems is that LDS's haven't fully adapted to the internet (fortunately, most seem to be getting at least basic web pages with courses, etc.). But people my age generally don't shop by going around to different stores and talking to sales people. We don't look up places in the yellow pages. We go on the internet, like to shop by going to different websites, see what they have, see the prices, see reviews, see features, etc. I'd much rather buy in person and locally, even if the cost is a small bit more: but I like to decide what I want before I ever enter a physical store, and a lot of people my age and even many older people shop this way as well. While I understand it isn't free, LDS's need to find a way to get their catalogue on-line, and then they will have a much better chance of attracting my business.
Dtaine
Contributor
This is definitely true - I support my local LDS's as much as I can, but I decide what I want and what a reasonable mark-up is before I go to the store in person. Fortunately for the LDS I'm currently patronizing I saw their store in person before finding the website because their web-page doesn't do them justice at all. A website is fairly cheap for a business to maintain; most often people design their own, but even a professionally setup website only costs a couple hundred for the setup and a few dollars per year to keep online.
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