The LDS of the future

I thought I would start this topic in it's own thread since it is one that is touched on in other threads but never really gets fully developed in my opinion. We keep hearing from LDS's with failing business models defending there failing business model with last ditch efforts, usually in the form of threats, ie., "where ever would you go to get your tank filled if we weren't around??" etc., etc., bla bla bla. Arguments like that are rather telling in that their lack of business sense really shines through in that they can't seem to imagine any other way for an LDS to exist in a time when internet commerce, for example, is pretty much here to stay or the business model of selling OW courses at loss leader prices in order to generate gear sales at outrages markups seems not to be fooling the average consumer anymore.

So what will the LDS of the future look like? What is the new business model that will still attract new divers to the sport and still keep gear, training, etc., affordable??

Diversification is the key component along with with a progressive stance on change and adaptation to market needs rather than watching the industry train roll by at 100mph and wondering where it is going so fast.

You don't think diving is affordable?

This "Campaign for Free Diving" never fails to make me chuckle.

If 75% of the diving community didn't insist on demanding training from the McDiver agencies, then a wider range of business models could probably be considered. Agency associated costs (materials, memberships, certification fees) are about the only costs that could effectively be reduced. That's why the 'stack them high and flog them cheap' sausage factory operations always do the best - quality of tuition is a very low consideration for them however.

Equipment, boat & compressor operation/maintenance - they cost what they cost (hint: a lot) - even if the dive operator is lucky enough to have trained staff who can do the leg-work on the kit for a low salary and late into the evenings every night.

Insurance - would you be happy for a dive op to skimp on that? It costs what it costs.

Dive professionals - get paid a disgraceful salary already. Some dive operations do make use of free labour, especially at DM level. Prices are kept artificially low because most professionals love diving to the extent that they'll accept less wages than they'd otherwise earn flipping burgers in McDonalds.

If a dive pro charged for their services on a par with a driving instructor.. you'd be looking at a massive hike in course costs. Want to compare the cost/duration of training and level of responsibility between a diving instructor and a driving instructor? Same is true for equipment/compressor technicians... want to compare their earnings to an equivalent trained mechanic in the auto-industry etc?

It's your choice whether you patronise your LDS, who may charge more than the cheapest internet deal available - but if they close it is ultimately the diving community that suffers.

You could always buy your own boat and compressor... see if that works out cheaper for you in the long run...

DevonDiver:

You don't think diving is affordable?

This "Campaign for Free Diving" never fails to make me chuckle.

If 75% of the diving community didn't insist on demanding training from the McDiver agencies, then a wider range of business models could probably be considered. Agency associated costs (materials, memberships, certification fees) are about the only costs that could effectively be reduced. That's why the 'stack them high and flog them cheap' sausage factory operations always do the best - quality of tuition is a very low consideration for them however.

Equipment, boat & compressor operation/maintenance - they cost what they cost (hint: a lot) - even if the dive operator is lucky enough to have trained staff who can do the leg-work on the kit for a low salary and late into the evenings every night.

Insurance - would you be happy for a dive op to skimp on that? It costs what it costs.

Dive professionals - get paid a disgraceful salary already. Some dive operations do make use of free labour, especially at DM level. Prices are kept artificially low because most professionals love diving to the extent that they'll accept less wages than they'd otherwise earn flipping burgers in McDonalds.

If a dive pro charged for their services on a par with a driving instructor.. you'd be looking at a massive hike in course costs. Want to compare the cost/duration of training and level of responsibility between a diving instructor and a driving instructor? Same is true for equipment/compressor technicians... want to compare their earnings to an equivalent trained mechanic in the auto-industry etc?

It's your choice whether you patronise your LDS, who may charge more than the cheapest internet deal available - but if they close it is ultimately the diving community that suffers.

You could always buy your own boat and compressor... see if that works out cheaper for you in the long run...

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You have posted a good summary of how things are now, which is what makes my original question a challenge.
My question still stands. Given the factors that you have listed, what is the business model that will succeed where the diving community doesn't "suffer" as you put it??

Or maybe the current business model really is working

In my opinion the internet suppliers are going to be the primary dive shops of the future as the LDS is no longer the only source for training, equipment and fills. The smart LDS operator of the future is going to stay more hands on with his customer and their development in the sport. The LDS that stresses more hours in the water and can provide an avenue for the new diver to spend more time in the water before advancing a diver to the next course will create a diver that is a better prepared diver and one that is far more likely to remain with the sport long term. The ones that do not are going to go the way of the dinosaurs. I think that if the shops do not change the way many of them do business in ten years there will be a lot less shops but the ones that are left will be the best there are. There are lots of independent instructors out there now who can provide better instruction then a LDS because they are not trying to push certain product lines during the course. You can get tanks filled at other places then the LDS, PHMSA - Cylinders - Authorized DOT Cylinder Retesters: Domestic . The internet is already cutting deep into their profits and with a company like the one that makes HOG regulators that are made to be easily serviced by the diver there will no longer be a need for a LDS. I believe this company knows where the industry is headed and is positioning itself to be in the forefront in the next decade. The shops and manufactures that are digging in their heels to try and prevent the changes that have already taken place will soon be gone. The LDS operator who understands that they can provide the kind of hands on service for the development of the new diver that he can not get over the internet and plays to that strength will always be here and would likely have the diver they helped from the start as a customer for life.

Unless the equipment manufacturers and wholesalers drop their prices to the dive shop so that they can make a reasonable profit I suspect that the manufacturers and wholesalers will end up owning and operating these shops, as franchises, in the future. They will always need a fresh group of newbie customers to keep them in business. The dive shops which trains new divers create these newbies.

Garrobo:

Unless the equipment manufacturers and wholesalers drop their prices to the dive shop so that they can make a reasonable profit I suspect that the manufacturers and wholesalers will end up owning and operating these shops, as franchises, in the future. They will always need a fresh group of newbie customers to keep them in business. The dive shops which trains new divers create these newbies.

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Indeed. What is a "reasonable profit" in today's scuba retail climate?? a 300% markup from wholesale? A 200% markup?? 50%??

richkeller:

In my opinion the internet suppliers are going to be the primary dive shops of the future as the LDS is no longer the only source for training, equipment and fills. The smart LDS operator of the future is going to stay more hands on with his customer and their development in the sport. The LDS that stresses more hours in the water and can provide an avenue for the new diver to spend more time in the water before advancing a diver to the next course will create a diver that is a better prepared diver and one that is far more likely to remain with the sport long term. The ones that do not are going to go the way of the dinosaurs. I think that if the shops do not change the way many of them do business in ten years there will be a lot less shops but the ones that are left will be the best there are. There are lots of independent instructors out there now who can provide better instruction then a LDS because they are not trying to push certain product lines during the course. You can get tanks filled at other places then the LDS, PHMSA - Cylinders - Authorized DOT Cylinder Retesters: Domestic . The internet is already cutting deep into their profits and with a company like the one that makes HOG regulators that are made to be easily serviced by the diver there will no longer be a need for a LDS. I believe this company knows where the industry is headed and is positioning itself to be in the forefront in the next decade. The shops and manufactures that are digging in their heels to try and prevent the changes that have already taken place will soon be gone. The LDS operator who understands that they can provide the kind of hands on service for the development of the new diver that he can not get over the internet and plays to that strength will always be here and would likely have the diver they helped from the start as a customer for life.

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I agree with your point that perhaps retail and training may be separate in the future.

Devon its attitudes like yours which hurts the sport. Thanks for sacrificing and allowing us to scuba Dive. The discussion about the cost of cards and your rationalization based on one falsehood, either from ignorance or other has hurt your credibility with me. The cost of business is the cost of business, quit whining.

IMHO until the cost is lowered from the top down we'll have to continue to buy used and be selective. I've lucked out and found a LDS that only charges 30% above cost. Hint, this also means I see how much the mark up is. its possible that it will be rare for an LDS to just be an LDS.

I wonder how long before the personal attacks start?

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When your typical non-customer-oriented LDS is killed off by internet and large LDS sellers, I'd expect the cost of a fill and instruction to rise--and that's a good thing if it leads to these loss-leaders becoming core businesses that are taken seriously.