The future of LDSs? (in America anyway)

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Hank49

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Some heated discussions over an LDS incident yesterday. Interesting. What do you think it will develop into? Can an LDS survive as a specialty shop dealing only in scuba gear and services? Or will the sale of gear be better off absorbed into the bigger sporting good stores which sell golf clubs, guns, fishing gear....and just train a brand rep (ScubaPro, Mares etc etc) to demo the products and at least give good advice and knowledge to customers?
Granted, the sevice of organizing dives for customers will remain a unique niche. But people (like I was) in that aspect of the business do it more for the love of diving. Dive a lot, but don't expect to get rich. I don't know. I would love to operate a dive business but since I have to pay for a few college educations yet, it's not practical. Maybe when I retire from shrimp farming.....Hank
 
Hank49:
Some heated discussions over an LDS incident yesterday. Interesting. What do you think it will develop into? Can an LDS survive as a specialty shop dealing only in scuba gear and services? Or will the sale of gear be better off absorbed into the bigger sporting good stores which sell golf clubs, guns, fushing gear....and just train a brand rep (ScubaPro, Mares etc etc) to demo the products and at least give good advice and knowledge to customers?
Granted, the sevice of organizing dives for customers will remain a unique niche. But people (like I was) in that aspect of the business do it more for the love of diving. Dive a lot, but don't expect to get rich. I don't know. I would love to operate a dive business but since I have to pay for a few college educations yet, it's not practical. Maybe when I retire from shrimp farming.....Hank

This industry is definitely going through some shifting at the moment. Online retailers are getting the sales and the manufacturer's are trying to sink them. (Those who are not authorized dealers.) There is a struggle and we will have to see who is left standing when all is said and done. I am personally rooting for the little guy but I hate how the manufacturer's have the industry set up. We will just have to wait and see.
 
As long as scuba divers virtually all come into the sport through small local dive shops there will be small local dive shops. End of story.

If we see independent instructors start teaching a significant portion of the new population (which won't happen because it would mean more up-front costs) then start to worry.
 
Many dive shops are closing. In our county there were 6 dive shops, now there is one. The main reason is internet sales are killing them. The future doesn't look bright as far as I'm concerned.
 
i think you'll see some fallout among the little stores, for example in the bay area there are are some very small stores and then you have the bigger shops, i think the small stores are going to find it very difficult to fight both online and the bigger stores, and will end up getting eaten up..

this is especially true as some manufactures only let shops stock their equipment if they order a certain amount, or if their sales are over an amount...

so me thinks the stores will have to consolidate in order to get their sales up to where they can challenge the online stores..the little dive shop who sells 4 bcds a week cannot drop their prices enough to fight the online stores while at the same time make a profit
 
jonnythan:
As long as scuba divers virtually all come into the sport through small local dive shops there will be small local dive shops. .

This is true. But what percentage of new divers (from the USA) get certifired through a local shop vs a resort shop where they go on vacation? Is trying to run a dive shop in Oklahoma like trying to sell snow skis and trips from Puerto Rico?
 
I posted this in another thread, but it is even more germane to this one...
Rick

---------

BBP:
Nobody has ever satisfactorily explained to me why there is such a difference in online prices as compared to what brick and mortar shops sell them for.
Let's sell apples, shall we?
I'll sell 'em online, you sell 'em in a store.
You're going to buy your apples and have them shipped to you from the orchards; to have your apples there for the customer to take home - so you'll have inventory, and you'll have to move 'em or throw 'em out. I'm going to "blind" drop ship them from the orchards (the packages will have my company name on 'em even though they're coming directly from the orchards). We're both going to pay the same thing for them from the orchard owners, but I'm going to pay the orchard with the money I have accompanying the orders I get over the internet, while you're going to have to pay the orchard when you buy the apples, so you're going to have to use money you haven't yet collected - which costs you the going rate whether you borrow or use your own that you could otherwise have invested and making the going rate. My shipping cost per apple will be higher than yours, but less than the sales tax your customers have to pay and mine don't.
You have to unpack, display, and sell the apples by having a real person there to wait on your customers. I never even touch an apple.
I let a computer program take the orders, collect the money, check the credit of the customers and in fact *move* the money into my account, then automatically place the drop-ship order with the supplier and transfer the supplier's part of the money I already have *after* I have confirmation that the shipment was delivered. If the shipment doesn't get delivered the supplier and the shipper eat it. I oversee the process and make sure the orders are flowing to the right suppliers who are currently harvesting apples.
You have to collect the occasional hot check.
You have the following fixed monthly costs
Store rental : $1800
Sales person (minimum wage + taxes + workers comp + unemployment insurance + a few dozen other mandatory nits & nats depending on the state you're in ) : $1440
Electricity : $200
Water/Sewer/Garbage collection : $ 50
Business license : $ 50 + 1% of gross sales
Sales tax : 10%
Ad valorem taxes on average inventory : 1% of average inventory
Financing on average inventory : 1% of average inventory
Spoilage : 10% of average inventory
Miscellaneous expenses : $300
Owner (you) compensation : $0
---------
My fixed monthly expenses - I'm using a computer in my house - 10% of my floor space
10% of mortgage payment : $150
Sales person : don't need one : $0
Electricity : 10% of average monthly bill $20
Water/Sewer/Garbage collection (10%): $ 5
Business license : $ 50 + 1% of gross sales
Sales tax : 0% (internet)
Ad valorem taxes on average inventory : $0 - I have no inventory
Financing on average inventory : 1% of average inventory: $0
Spoilage : 10% of average inventory :$0
Miscellaneous expenses : $300
---
Do I need to continue, or has the difference been "satisfactorily explained?"
---
Now, with the above in mind, the Local Dive Shop is doomed unless there is a paradigm shift in the way they do business. The LDS has some things the online place doesn't... Air, pool, equipment tryouts, on-site service, training, expertise, local information. The LDS must figure out a way to charge for these things to make up for the vanishing margins on equipment that the internet will eventually shove down their collective throats. The industry is trying everything they can think of to delay this inevitable erosion of margins on equipment, but the process is underway and irreversible. To survive the LDS will have to charge more for air, charge for pool time, charge for information, and charge more for classes. They will have to abandon equipment margins as rent payers because customers won't tolerate the price difference with the internet.
As an interim measure we'll see more "reimbursible" services. That is, trying out a BC in the pool will cost you $20, but that comes off the price if you buy.
Rick
 
Hank49:
Some heated discussions over an LDS incident yesterday. Interesting. What do you think it will develop into? Can an LDS survive as a specialty shop dealing only in scuba gear and services? Or will the sale of gear be better off absorbed into the bigger sporting good stores which sell golf clubs, guns, fushing gear....and just train a brand rep (ScubaPro, Mares etc etc) to demo the products and at least give good advice and knowledge to customers?
Granted, the sevice of organizing dives for customers will remain a unique niche. But people (like I was) in that aspect of the business do it more for the love of diving. Dive a lot, but don't expect to get rich. I don't know. I would love to operate a dive business but since I have to pay for a few college educations yet, it's not practical. Maybe when I retire from shrimp farming.....Hank

I mountain bike also, and that industry is facing the same challenges as dive shops from the internet, large chain stores, etc. My LDS is surrounded by a certain large chain sporting goods store (SoCal divers will know which one) in 3 directions, a store which can charge significantly less than him because of their large buying power. The only way that he can stay in business is to offer something that the large store cannot. Whether or not he will be able to maintain this or not I dont know. Another LDS's (the closest one to my house) trademark seems to be high pressure sales and bad mouthing every other shop. Its too bad, cuz he has an onsite pool and a well equipped shop. I do not shop there because I do not respond well to pressure tactics, and have chosen my second closest LDS. He offers good, personalized service. I wish that I could spend more money on diving, but what I can is spent in his shop. He has 40 years of diving experience and has lots of stories to tell. He also has a fairly faithful following of customers because of this. Its not unusual to see 3 or 4 people sitting in fold out chairs in his small showroom just shooting the breeze. The bottom line is that I enjoy going into his shop.
 
This has me thinking...my day job is a magazine journalist. I cover the auto parts business, and many of the same problems faced by small LDS are also faced by the small indy auto parts stores. It is becoming increasingly difficult to compete against AutoZone on price alone. One thing that has helped the independently owned parts store survive is group membership. "Program groups" such as NAPA or Carquest, for example, negotiate prices with the mfgs for their large number of member stores (most of which are independently owned locations). They also provide computers, training, unified branding, better negoitiated returns policies, etc. etc.
I wonder if something like that would work for the LDS population...if some grouped together and bought collectively and then provided all the members group insurance, etc?
 
There is a store near me that has been around for 40+ years. They have always sold general hardware, marine supplies and SCUBA equiptment and have always had the best prices around on equiptment. The small shops need to diversify into other sports and even totally unrelated areas to remain competitive. I myself was part owner in a hardware and sporting goods store in the 60,s and 70,s and sold SCUBA equiptment and air fills. We referred those looking for training to the YMCA. I would also like to see the training agencies seperated from the shops.
 
https://www.shearwater.com/products/swift/

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