Aqua-Lung Online

[RonFrank]

You guys can rag on AL all you want, but in the end, their online policy protects their dealers by not undercutting them. Dealers that can sell a product, make a profit and stay in business, lets the manufacturer also make a profit and stay in business.

Having seen this before (four separate times) in major appliances, electronics, furniture and kitchen cabinets, I can tell you that when the dust settles, AL & SCUBAPro will still be in business and a lot of the manufacturers that are letting everybody slit their own throats will be gone.

Terry

So price fixing is good, and free market is bad?

I don't agree with that at all....

 

[stargost]

You are correct about that.....SCUBA manufacturers and SCUBA dive stores are certainly trying to make money on SCUBA divers "backs". Of course, other ideas are welcome if you have them.

Phil Ellis
Discount Scuba Gear at DiveSports.com - Buy Scuba Diving Equipment & Snorkeling Equipment

I understand everyone has to make money. You can decide to go for high margin, and somehow restrict your business potential, or find ways to expand the business finding for example different ways to distribute your product and reducing your cost passing on the benefit of lower ASP to end customers.

My comment and disappointment was mostly on the AL webpages statement when you see that the divers are not mentioned in their customers list.

I'm not saying it is easy for this business, and found this AL move on internet to be very interesting, as it can be either a stupid meaningless try with no future, or some sign of future good moves to shake the industry model (and their own approach in particular).

 

[PhilEllis]

Actually, in the aggregate, I applaud Aqua Lung for the action they have taken. Expanding market opportunities in this climate is always better, and I expect that the management at Aqua Lung feels this is an appropriate expansion effort. Clearly, they have moved online with a strategy designed to avoid "distribution channel conflict", and we will just need to sit and watch to determine the success of such a strategy.

Success with online sales does require that you use all of the tools available to you. I expect that one day, Aqua Lung will allow the existing dealer base to include Aqua Lung products in their online offerings. This will allow online consumers to purchase from who they choose and at the business conditions they choose. This is likely the REAL avenue to success if the objective is to expand the penetration of the product.

Phil Ellis
www.divesports.com

 

[Web Monkey]

So price fixing is good, and free market is bad?

I don't agree with that at all....

I like price fixing quite a bit for very small markets, especially where the retailers would slit each other's throats for a nickle.

Terry

 

[RonFrank]

Yeah price fixing is where the diving industry is at.. in 1990!

I like the model ScubaToys, LP, and many other retailers are using. It works very well.

If you want top quality service (well maybe) visit the LDS where you can touch and feel, and try stuff out, but you will pay. Online is generally more reserved for those that want bottom line pricing or bargins. But LP, ST's and others are even trying to offer premium service at mail order prices with things like guaranteed fit.

IMO Aqualung is missing the boat here, and it is ONE BIG BOAT!

I disagree Terry, Aqualung may sink unless they start making some changes. In a bad economy, customer perception is big. Maybe they are doing great as a LOT of new divers have no clue how bad LDS pricing is.. but more are catching on in this tight market.

 

[Web Monkey]

Yeah price fixing is where the diving industry is at.. in 1990!

History has a habit of repeating itself.

I guess we'll see.

I like the model ScubaToys, LP, and many other retailers are using. It works very well.

Actually, it only works well for whoever has the best price at the moment. And FWIW, people shopping for the cheapest price aren't actually desirable customers, since they generate little or no profit and will only return to buy something else if you're cheaper than your competitors.

Just for another example, Wegman's Groceries is doing a land-office business based on selling really excellent products. They're typically not anywhere near the least expensive and in fact don't even attempt to compete on price on a lot of items. They don't have to. If you want sashimi-grade fish that was swimming in the ocean yesterday, they're more than happy to sell it and the customers are more than happy to buy it. If you want fresh basil that looks like it's ready for a photo-shoot they have it regardless of whether it's June or January. Same thing with no-hormone no-antibiotic local beef, local sausage, local produce and all sorts of other stuff.

While all the "we're cheaper" grocery stores in Central NY are beating each other's brains out, losing money like it was a race and filing for bankruptcy, Wegmans is packed with shoppers every single day and was busy expanding all down the east coast.

IMO Aqualung is missing the boat here, and it is ONE BIG BOAT!

I disagree Terry, Aqualung may sink unless they start making some changes. In a bad economy, customer perception is big. Maybe they are doing great as a LOT of new divers have no clue how bad LDS pricing is.. but more are catching on in this tight market.

Unlikely. Historically, manufacturers that have maintained pricing and properly managed their dealer network have done much better (profit and survivability) than those that didn't.

Wood-mode kitchen cabinets are another example. They're not discounted and they're selective about their dealers, pricing and service levels and while a bunch of cabinet manufacturers have gone out of business, they're still here and still making money.

I just hate to see companies making the same mistakes over and over.

Terry

 

[PhilEllis]

Historically, manufacturers that have maintained pricing and properly managed their dealer network have done much better (profit and survivability) than those that didn't.

Terry, I agree completely with you on this issue, with the exception of a couple of facts.

The company in question has apparently been unable to stem the flow of products to a major "unauthorized" distribution source, so consumers have easy access to a source at a MUCH LOWER price than the authorized sources authorized by the company. In addition, they have no control (for legal reasons) on the online distribution of the equipment by sources in Europe, again exposing U.S customers to price discounted outside of what was intended by the model.

There is another gigantic factor. The examples you quoted are examples where companies were charging higher prices for a uniquely different product from the market segment. That does not appear to the the case with scuba diving equipment. Consumers, in the aggregate, seem to feel that a top of the line regulator from one brand is just as good as another. This makes it more difficult for a dealer of the brand that is maintaining a price much higher than the "prevailing" market.

Now, if this WORKS for a particular dive shop in a particular place, I say good job. Unfortunately, it is not working for a very large number of retailers.

Don't get me wrong....I KNOW that throat-cutting happens with abandon in the scuba market. That is largely because there is not enough demand to support the current supply, and the guys who run the larger, more expensive operations struggle to increase the slice of a rapidly decreasing pie size.

Phil Ellis
Discount Scuba Gear at DiveSports.com - Buy Scuba Diving Equipment & Snorkeling Equipment

 

[Web Monkey]

Terry, I agree completely with you on this issue, with the exception of a couple of facts.

The company in question has apparently been unable to stem the flow of products to a major "unauthorized" distribution source, so consumers have easy access to a source at a MUCH LOWER price than the authorized sources authorized by the company.

If they can't maintain their distribution and dealer network without prostituting themselves, they're doomed.

I can name a bunch of manufacturers that did that too.

Terry

 

[fireflock]

You guys can rag on AL all you want, but in the end, their online policy protects their dealers by not undercutting them. Dealers that can sell a product, make a profit and stay in business, lets the manufacturer also make a profit and stay in business.

Companies that worry about protecting their dealers end up with a bunch of dealers.

Companies that worry about offering something great to their customers end up with all the customers.

What does this offer the actual customer? Not much, as I see it.

Suppliers don't keep dealers in business. Customers do.

 

[mike_s]

well......

DEMA has come and gone, and Aqualung "online sales" has generated very few responses in this thread....

Ironic? Weird?

or is it that people just don't give a crap if they are sold online ?