Why do the LDS's take it????

[Old Diver]

Having been in retail a looong time, the #1 requirement is HAVE THE PRODUCT IN STOCK!!! In most cases if you have to order it in, the customer is out the door. This is even more true now in the existance of the world wide web market. I am in a lucky location in that I have one of the giant chains within 15 miles of me, I also have several smaller shops, many of which, I would not be in the area after dark without a large handgun and a backup magazine. I think that with conditions operating on the market like this most of the small shops are doomed; because when Ma + Pa sell out, retire, or die they will not be replaced. Risks, legal requirements, permits, insurance, are all working against the small shop. The startup money vs payoff is too small a margin for any but the most gung-ho to want to get into. I live in a town with a large dive population, as such, and there are only 4 shops wihin 25 miles. There were more than that in 1970, with half the population base. The writing is on the wall.

 

[Hemlon]

Business 101

1. Quality products for sale

2. Quality service

3. Competitive retail pricing

Very few businesses can do all the above. Most have to focus on 2 of the 3...

ScubaToys provides all three. Plus, if you are lucky enough to live within driving distance of their store, you are able to actually touch the items before you buy.

The proof is in the pudding: Do a SB search for ST and see how many happy customers they have verses how many unhappy customers they have.

Case closed for THIS girl!

 

[TravisD]

Having been in retail a looong time, the #1 requirement is HAVE THE PRODUCT IN STOCK!!!

Tell me about it!

We went in and dropped about $3k on the "rest" of our gear - BC's (BP/W for me! ), Reg's, and tanks. Had to explain a couple times that we already have computers (non-AI, Atmos 2's) and that No, we didn't want consoles to put them in thankyouverymuch, and that we just wanted simple, 2" SPG's. Put the order together for everything, but forgot to put the SPG's on there. No problem, called the next day and they said they would be ordering them.

That was on 3/24. Still don't have gear in-hand. Apparently whomever the LDS orders the SPG's from decided to hold the order due to *other* things on their order not being ready to ship. Guess it's not completely the LDS's fault, but it's been nearly a month now and a little annoying. Thankfully(?) we don't have any trips planned yet, so it's only keeping us out of the pool and not off a boat. I think when we pick everything up, and pay for the forgotten SPG's, that we'll be having a discussion on why I don't think I should be paying more than their cost at this point for the SPG's.

If I had known from the beginning that we'd be waiting 3-4 weeks for SPG's, I'd have turned around and ordered from separately from someone like Scubatoys or even Leisurepro who showed them actually being in-stock.

 

[Nudgeroni]

I'm all for the market working this out. However, some of the effects of centralized distribution can be problematic in the long run.

Big Box hardware stores deliver less expensive power tools to the masses, but in the process they pressure manufacturers to produce less expensive tools. The result: lower quality tools. Big Box bookstores can't waste shelf space with weaker selling authors (and big on-line sellers won't promote them). The result: small publishers are dying off.

A small number of distributors and the squeeze on margin can result in less variety of product and a lower quality product. I wouldn't be surprised if over the next 10 years cheap plastic parts creep into most regs and many of the niche manufacturers go out of business.

Of course, I'm a nasty pessimist.:blah:

 

[mdb]

I wouldn't be surprised if over the next 10 years cheap plastic parts creep into most regs and many of the niche manufacturers go out of business.

Of course, I'm a nasty pessimist.:blah:

Nudgeroni: I think the opposite could happen. We are a "niche" manufacturer. Our sales have increased 20+% per annum for the last several years. We sell direct to over 320 SCUBA Retailers, including some of the largest e-commerce folks. We do not play any games, we list all our retailers, we have new products coming that use better materials, etc.

Good e-commerce folks help the overall market, any vain attempt to limit the Retailer is doomed to fail.

 

[Hemlon]

I'm all for the market working this out. However, some of the effects of centralized distribution can be problematic in the long run.

Big Box hardware stores deliver less expensive power tools to the masses, but in the process they pressure manufacturers to produce less expensive tools. The result: lower quality tools. Big Box bookstores can't waste shelf space with weaker selling authors (and big on-line sellers won't promote them). The result: small publishers are dying off.

A small number of distributors and the squeeze on margin can result in less variety of product and a lower quality product. I wouldn't be surprised if over the next 10 years cheap plastic parts creep into most regs and many of the niche manufacturers go out of business.

Of course, I'm a nasty pessimist.:blah:

It's fiscal Darwinism at it's best.

 

[Nudgeroni]

Nudgeroni: I think the opposite could happen. We are a "niche" manufacturer. Our sales have increased 20+% per annum for the last several years. We sell direct to over 320 SCUBA Retailers, including some of the largest e-commerce folks. We do not play any games, we list all our retailers, we have new products coming that use better materials, etc.

Good e-commerce folks help the overall market, any vain attempt to limit the Retailer is doomed to fail.

Well, from what I have heard of your company's rep, there is good reason you have grown.

Centralization won't be bad for everyone, and it will take time for the 'lowest common denominator' to hold sway. By making the sport more affordable, mass distribution will increase the number of divers. BUT, the popular market behaves very differently than the specialized market scuba currently enjoys.

Big grocery stores have lead to the popularization of organic food. At first, organic farmers were thrilled-- now they are watching their market share (the one they tirelessly worked for) go to the big producers.

Not to be overly doom and gloom. It takes more skill and effort to dive than it does to eat organic food, so scuba may never fall victim to the same 'invisible hand.' It's just that in economics, everything is a trade-off. Lower margins are sweet to the pocketbook but also change what is built and how it is marketed.

 

[GSODvr]

Well I recently inquired about "grey market" pricing at an LDS and was treated like a complete ***! I've never been talked down to like that and I'm a cop, so it goes without saying I'm used to it.

Less than a week later I bought what I wanted ONLINE from an authorized dealer, with warranty for less than the LDS was offering.

Quite honestly... After the way I was treated, the LDS couldn't give away their crap to me....There's something to be said for treating a person, customer or not, with respect.

 

[dschulte]

…My question is why do the LDS's allow the Manufacturer to have double standards and punish them if they sell below a preset price, yet they let the online stores run rampant selling at what ever price they choose. ….

I work for an LDS, for most of the lines we carry there is a set price tier base on annual purchase volume. For example a major regulator line has the following price tier:

All based on per calendar year orders:
MSRP: $560
>20: $413
20-50: $369
>50 : $315
Typical Web Price (LP, Scuba.com, Divers-Supply): $389

We are an inland LDS and sell maybe 2-3 a month, average over the year. We get the 2-tier pricing, but you can not make rent and expenses making only $20 on a regulator sale (this does not even account for the shipping cost to the retailer). BC tier pricing is not much better. The only major item that is actually tiered fairly well are wetsuits. There is typically some good room to move on the MSRP, but BCs, regulators, dive computers and fins, not much room to move unless you are doing a high volume. Some of these manufactures require a copy of the sales receipt with the warranty card to prove that the pricing was within their guidelines. It would be great if the manufacture only had a single wholesale price, it would be a different marketplace. Unfortunately volume discounts will not go away and neither will the inflated MSRP’s from the manufactures that drive the pricing models and guidelines they establish for the small business. If Joe’s LDS (30 regulators per year) says that he is not going to comply with the MSRP, do they really care if they drop him if they are getting a 500 regulator per year order from a single Internet vendor? Most likely not. Diving equipment is a world wide marketplace, with a limited number of manufactures. Not a monopoly but pretty darn close if you look at the number of manufactures vs. number of manufacture of socks. Dive equipment has a “high-end” hobby history; it is expensive compared to playing soccer or tennis. With that stigma, the MSRP’s are going to stay up there. Now there are some new players in the market making a name for themselves, but you can even see their top-of-the-line equipment reaching the high prices equivalent to a manufacture emeritus.

Well, we do what we can with the pricing, focus on promoting the sport, training competent divers and most of all, making diving fun for our customers through trips and local events; something an Internet vendor can not do.
:monkeydan

 

[ReefHound]

We are an inland LDS and sell maybe 2-3 a month, average over the year. We get the 2-tier pricing, but you can not make rent and expenses making only $20 on a regulator sale

The mistake you make is seemingly assuming that you would do the same volume if you sold at a lower price and would only bring in less revenue. Maybe you sell 2 or 3 per month at MSRP or a hundred dollars higher than your online competitors but you'd likely sell more at a lower price. You can't put the cart before the horse. Your LDS is going to have to invest the capital to buy 50 or so and then try to move them at a lower price. If they cannot make that investment, they will yield to stronger players that can.