When I started diving the LDS model was more service oriented ( heaven-forbid, anecdotally speaking). I bought my gear from my instructor. He offered his own Lifetime Warranty that included labor to go with the Manufacturer's Lifetime Warranty on Parts. He ran weekend trips to Florida and provided the transportation in the form of his van or converted school bus (big deal to a cash-strapped teen). Gear rentals for the first 3 OW trips with him post-certification were free. If you bought your gear from him, even years later, you got a good discount for loyalty. You want to try out the jet fins? He had a set for use in the pool. The new backmounted bc? No problem. Here it is, bring it back tomorrow.
Are you a bored teen? Come by the shop and he'd show you how he serviced the regs or let you look at the latest training films, no charge. Want to go diving this weekend? Help with the trip and pay for the gas and you're in...
Did he make a lot of money? Probably not. He once told me that if he counted all the hours he spent at the shop or teaching or diving with students on trips, he made much less than minimum wage. But, a few years ago, I dropped in to say hello, as I'd heard business had been down due to some new competition and he was feeling blue. I asked if there were "any regrets". "No" he told me, "He stilled loved it and only the tax man or the bill collectors would make him quit."
After 30yrs of good times and bad, he's still in business. His model has changed a little (liability concerns and insurance took away the van and bus.) He no longer offeres lifetime labor, since he's sold so much gear, he needed to hire a tech for service these days. But his commitment to his customers remains.
A few years ago, I decided I wanted to open a dive shop. I sat down, worked through all the numbers and realized that I couldn't afford it, especially if I built a truly customer based, service oriented LDS. I had a good job, making good money. Even if I were willing to take the pay cut, I couldn't feed my family on what I had left after paying the bills."
Am I saying you should do everything through your LDS out of some misguided empathy? Nope. Within 10 miles of my home are at least 4 dive shops. Three of those are as you described. I've walked in the door of several of them and walked out a few minutes later, vowing never to return. I bought several thousand dollars in gear from one of them over the years, yet every time I go back, I feel like I'm intruding on their special little clique. Service? What's that?
As a result, the last time I bought gear for myself, I bought it online. The service was personable, the gear was quality and warranteed. Better yet, I paid nearly HALF of what my old LDS wanted to charge me for the same stuff.
When my son took lessons over the summer, I took him to a new shop. It turned out to be great operation, very similar to the one where I first learned to dive. The owner told me he was an "instructor first" and that "gear salesman" was a very distant second. I believe he's lived up to that statement.
His shop is very active in local events, he runs frequent nearby trips, he focuses on ALL of his customers, many of whom are firemen and paramedics and young teens who don't have a lot of money to spend. He makes them all feel important. His shop is run out of a guest house on his property and it almost like he's always open. On most weekend nights, he opens his Tiki Bar for a social hour. No invites or cash needed.
When it came time to buy my son's gear, I could have beat his price a little online (not a lot), but I felt the extra service he provided was worth a little extra support from me. Funny, when we sat down and want through the gear I wanted to buy, he even directed me to a few less-expensive options that were more appropriate for the kind of diving my son would do. When I had a problem with my own gear, bought from that other shop, he fixed it for free (and this was before I'd decided to buy my son new gear. I had plenty of extra gear already.)
I don't know how he can offer this kind of service, but I'm glad he does. I plan to support him as much as I can....
Btw, I ride bicycles a LOT and I hear similar complaints about Local Bicycle Shops. There are the same stories about buying online due to poor service from the owners and about poor treatment of customers in general (I'm also lucky to have found a good one in that regard.).