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What is competitive? Adhering to manufactor's pricing limits reputable dive shops from competing with the internet, not to mention inferior products that are sold on line that we see all the time. It's easy to sell something cheaper that's inferior and bet that the customer won't return it than it is to sell a good product that can be examined before you buy.
Your operation sounds exactly like the type of shop that needs to go away so a good operation can make a go of it
All the others have gone already. I'm the last in this area (the UK business). When I've gone there will be nothing. If smart businessmen thought they could make a killing in this business they would already have bought up one of the other businesses when they were going under. But they didn't - I wonder why?
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No longer running a dive centre in San Pedro, but still teaching ad-hoc.
There is VERY little profit in servicing, and it is provided as a service to people who bought new. The profit is in the original sale and that subsidises any subsequent service. Take away that initial profit and the business collapses.
Then your business model is broken, and needs to change. Nobody should "sell" anything that doesn't cover the expenses involved in providing those goods or services.
I hear all the time about how training, service, and air fills don't bring in enough money to keep a shop open, only 200% margins on Vendor-enforced inventory levels keep the doors open. Raise the margins on training and service, and provide your clients with more than vitriol.
"I can't" you'll say. "I'll be undercut by the competition." This is the type of businessman that the MAP enforcing Manufacturers have produced. They say they'll support you, but they only hand you worn-out crutch (price-fixing).
You are in a unique position, being in a Dive travel destination out of the U.S., and also being a retailer.
When my corrugated Hose on my BC was torn in transit to Provo, I was pretty much at the mercy of the LDS, there. They rented me a (well-used) BC for the rest of my trip. I really had no choice, as there was no Sherwood Dealer on the island and no one stocked Corrugated hoses.
Obviously, the buyer and the seller (in any transaction) have slightly different interests. Just as you said, the seller makes a living doing so and has to protect his/her interests. The buyer has the objective of getting what he/she wants at the best possible value. In MOST buyer/seller relationships, each have found a way to serve their own interests while helping the other.
Speaking as a brick-and-mortar store and an online reseller, I can tell you that this is getting more difficult each day. There is massive change taking place in the scuba industry, driven by MANY factors that make it difficult for both the buyer and the seller to achieve their objectives while helping the other. It is often very popular to tout the success of one of the several seeming successful online sellers, as an example of the "new" business model that will return our industry to health. It is equally popular to tout the success of several of the local scuba stores that have not been affected by market shift. Both examples are right and wrong. Unfortunately, in a market that has been basically static (measured in $$) over the past 5-7 years, we can't expect ALL stores to be able to move to this new business model. The success of the "new" business model folks is based upon ever increasing dollar volume, year after year. In a zero-sum industry like the dive industry (over the past 5-7 years), when one of them increases dollar volume, someone else's volume must go down. For the vast plurality of dive stores, already surviving on sales of under $250,000 per year, losing ANY dollar volume is the beginning of failure.
All the others have gone already. I'm the last in this area (the UK business). When I've gone there will be nothing. If smart businessmen thought they could make a killing in this business they would already have bought up one of the other businesses when they were going under. But they didn't - I wonder why?
"All the others" are gone and you are still having a hard time!!!! Damn those customers.
Divers will not quit diving just because the last bad dive shop closes.
The bottom line is that if you are only going to sell one brand of clunky overpriced gear (read scubapro) and spread fud like a true microshaft, then you deserve to go out of business.
:no
What is competitive? Adhering to manufactor's pricing limits reputable dive shops from competing with the internet, not to mention inferior products that are sold on line that we see all the time. It's easy to sell something cheaper that's inferior and bet that the customer won't return it than it is to sell a good product that can be examined before you buy.
Nonsense. Any shop that wants to compete can. In most cases, a retailer can sell his products for any price he chooses. MAP deals with advertising prices, not selling prices. As far as the few mfgrs who try to regulate selling prices, the retailer is still free to offer other sales incentive (free or reduced price service, for example) that will allow him to compete with the only notorious "unauthorized" dealer. If a shop really does not want to deal with such price restriction, they can always move away from that mfgrs line. There are many manufacturers of excellent scuba gear. Shops who sell Aqualung or Scubapro as their main line do so because they choose to.
Examined before you buy!!!! Right. You can examine it all you want so long as you don't get it wet.
If you cost the time of a technician, the cost of his on-going training, his tools and accommodation, you'll see that many "quick" jobs will incur a heavy charge. No more "quickly swapping out a hose" for no cost other than for the hose itself - how does $30 labour sound?
If I stock a particular model, then I also carry spares and special tools for that model, and I or a technician go on a technician course for that model. These costs need to be covered, before a single customer has purchased the product. I then need to keep lots of sizes/variants in stock so the customer can take away what he wants. This stock is not loaned to me but I have to buy it. Then if a new model comes out that supersedes the models I have in stock then I have to discount them to sell them. The manufacturer doesn't help me in any way.
Without question, the current trend will continue and ALL small dive shops will vanish. The ones that remain will be in large centers of population where there is enough business for them. They will stock far fewer different items. And of course, only at one of these few remaining LDSs or a resort will you be able to buy anything at all, including air. That'll be the only place to rent tanks. If this is how you want it to be then fine, but it'll be this way regardless.
I'm not wingeing, nor do I give my clients "vitriol". I'm trying to contribute to an impartial discussion on what is happening and where it's going. There is a reason why LDS's have been going out of business all over the place at a rate of knots. Maybe this doesn't matter to you, but it's still definitely happening. Many of these businesses were excellent, run by enthusiasts who just wanted to make enough to get by because they loved the sport. I can think of several like that in the Seattle area. I'm sure the same's true for many more of the failed businesses.
It used to be the case that if you wanted to dive in a superb inland dive site in north Wales you had a choice of fairly local dive shops to get air/essential spares/support & information. Now they've all gone. The only air is three hours' drive away. Oh, and they don't rent tanks, so you have to buy your own. But hey, this is progress, this is how things have to be.
Other types of business are equally affected. When I was younger there were several superb hifi shops near home, whose staff knew a lot about the business and the equipment and could give really good advice. One by one they vanished, and now all you can do is buy on-line or go to a "hifi supermarket", whose staff know no more than it says on the box. You must do all your research elsewhere because they won't be able to answer a single question. Often you'll be unable to glean enough from whatever's on the web and you'll end up guessing. This is progress? In England the only places with stores with staff who have any idea what they're doing are in the major cities, such as London, and they'll be so busy they won't be able to help you anyway unless you go in when everybody else is at work (and probably you should be as well). Getting to London can be a major and very costly business in itself.
As to the structuring of a business model, there are several other businesses that bias their profit to the front. The motor industry is a case in point. They have to invest a hell of a lot of money in special tools and model-specific training, and they have to ensure that these costs are covered.
Look, think what you want, believe what you want. The trend is very clear and it's nothing to do with quality or poor business models. It's simply hard economics. But there'll be a price to pay.
and
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No longer running a dive centre in San Pedro, but still teaching ad-hoc.
