how much do shops make on us???

[a22shady]

If your looking to get a good/great deal typically the number is 20-25% off MSRP
That is the percentage I shoot for when purchasing Equipemnt If the dive shop say's no to my price I go on to the next one. I have found a little persistance and you will get your price..

 

[scubafanatic]

WOW i am shocked by what all you are telling me, i guess no matter what we all are still bending over for the dive shops in a big way, no matter how much they tell ya how good of a deal you are getting:depressed:

...it gets worse......there really isn't a Santa Claus either......

 

[cfcstl]

After being on both sides of the counter, I feel I am qualified to answer the question objectively. First most dive equipment is marked up 100% of cost. this is a 50% profit margin. Don't get the two confused. Smaller ticket items may be more. The ability to get a discounted price usually depends on the local competition. A dive shop typically needs at least a 30% profit margin to survive and during the winter season in many areas the sales and business in general falls off a lot. Having said that there are companies who's dealer cost is less than 50% profit margin (cough) ikelite (cough)...you will never see their products sold less that 10% off retail because there is not enough margin for the dealer.
Now as a customer you are probably saying to yourself "what a ripoff, they are making a fortune off me." This is not really true and you have ot remember what kind of retail business you are dealing with. As a general rule, a business with high volume can sell at a lower profit margin and a low volume business must sell at a higher profit margin. The dive business is a very low volume sales market compared to a grocery store volume and very low markup around 1%-3%. (don't hold me to this-these numbers are old but they are still close).
There are other factors to consider. A dive store is not making much if any profit on your scuba class. They are hoping you will buy equipment, hence the need for mask, fins, and snorkel for o/w training. As a side note-instructors make little money teaching scuba but thats another story.
If you think the store is making a killing ask yourself a few questions. How much are they paying a square foot? You would probably be suprised that retail space rent goes for especially in a strip mall or high traffic street.
The classes, trips, and training are all designed to produce potential sales and that is the only real profit the store can rely on.
A smart dive store should treat a regular customer fairly and if you are looking for high ticket items, like a set of gear, you do have room to negotiate with a dive store and it is up to you and the store to come to terms if you want a deal. There is more to it but this should give you an idea and ask your self this, if you don't support the store and it goes out of business, how will it affect your diving?

 

[redacted]

A dive store is not making much if any profit on your scuba class. They are hoping you will buy equipment, hence the need for mask, fins, and snorkel for o/w training. As a side note-instructors make little money teaching scuba but thats another story.

It is my impression that has changed since the days of $99 (plus material) OW classes. Now they are running $250 and up. The instructor get $50 or so, The shop gets a discount off wholesale from the manufacturer for gear (which is sold after a couple years for more than the shop paid). The only reason dive shops struggle in many areas (and most do) is because there are too many of them and they are too small, inefficient, and controlled to dominate their market area.

 

[RJP]

help fill this burning question of mine please..

OK...

But first, please tell everyone here how much you earn...gross and net. If you own your own business please advise as to what your operating costs are, what your profit margin is, and how you determine how much you charge your customers.

 

[TSandM]

I honestly find it fascinating that so many of us volunteer our time to work with classes and get so little in return. The shop through which Peter teaches has an AMAZING dive staff, with a ton of very dedicated divemasters who are essential to the shop's way of running their instruction (which is with tons of time and fantastic ratios for dive shops in this area). But the DMs really get very little (and have to buy their own Nitrox!)

I know dive shops are not highly profitable businesses. They have high overhead costs, and only survive on the periodic high ticket purchases. But they seem to be amazingly dependent on volunteer labor, and volunteers in most activities expect something in return.

 

[vladimir]

The dive business is a very low volume sales market compared to a grocery store volume and very low markup around 1%-3%. (don't hold me to this-these numbers are old but they are still close).

Good analysis cfstl, but it would probably be more accurate to say most dive businesses are very low volume sales. Some others have figured out a better business model and can afford to lower their margin significantly. And that is what has spawned a thousand threads on Scubaboard.

 

[RJP]

LDS survive by selling gear this is true.

They don't SURVIVE by selling gear...they are IN BUSINESS to sell gear.

I understand folks wanting to "get a good deal" but I've never been involved in any other activity where the participants actually resent the fact that someone who "does this for a living" actually want to make a profit in doing so. Much less that they want to maximize that profit.

The markup on a pizza is about 500% over material and labor costs, but no one gives the guy at the pizza place crap or threatens to "go to the pizza place across town" or whatever. Why is that? Mostly because the cost of a pizza is the same over there. Which only means that BOTH of those guys are making about the same profit.

 

[RJP]

But the DMs really get very little (and have to buy their own Nitrox!)

That's unfortunate...and hopefully not the norm.

Or perhaps I'm just lucky to DM with a great, professional shop that values their DM staff.

 

[Meister481]

Typically 100%. Some items/manufacturers don't have the same markup. Search MAP or MARP on the board and read a about it.

Full retail can be 100% with a few manufacturers. Map price is 10 to 15 less than that and most shops discount another 10% or so. But remember that a niche industry like this one has a big purchase quota- up to 15k to remain a dealer of a certain gear manufacturer. There's a huge cash outlay involved. Aqualung hasn't dropped their Quota like most gear manufacturers have due to the economy.

WOW i am shocked by what all you are telling me, i guess no matter what we all are still bending over for the dive shops in a big way, no matter how much they tell ya how good of a deal you are getting:depressed:

If dive shops were making a killing there would be one on every corner. This is not the case. Yes, gear is the highest margin item in a shop. Air/Nitrox is the biggest loser. Service is in the middle depending on how good a job the shop does. Even the dreaded VIP isn't a decent money maker, maybe a 20% margin (4 bucks). Tech training pays OK, Open Water is a losing proposition. If the student buys a mask fins and snorkel the shop breaks even.

You're not going to get rich owning a dive shop unless the water is at your back door and you have a captive audience. Many shops in these types of locations charge a premium price for discover scuba's and any other class. I've seen Discover Scubas advertised at 5 times what the shop I work for charges. Many times they are booked full!

You aren't considering the overhead a shop has to deal with. A 3000 square foot retail space in a decent area is going to run about a buck a foot. $3000 a month.

Heat/Light/Phone/Internet/Insurance.... say $1500 a month or more when the compressor runs every day.

Agency fees vary but lets say 2 grand a year.

Air testing/maint. is another black hole for a shops money. 600 or so a year plus another 900 a year for filters and oil. Another 500 a year for oxygen fills to make nitrox.

repair and replacing rental gear for another 5k a year.

Paying instructors and yourself adds another big hit each week.

The list keeps rolling on....The shop can't live on your $7 air fill 4 times a month, so yes, money has to be made somewhere. If we don't let the shops make a little here and there, you'll be driving a ways for fills or buying your own compressor.

If you want to be a millionaire, marry one. Don't bother trying to become one by owning a dive shop.

If your looking to get a good/great deal typically the number is 20-25% off MSRP
That is the percentage I shoot for when purchasing Equipment If the dive shop say's no to my price I go on to the next one. I have found a little persistence and you will get your price..

That's a fair estimate on some big name gear, but others you really can't keep the doors open at 30% margin.

Most gear will sit longer than most other types of retail shops. Some gear gets outdated quickly and must be blown out at the end of year. Some manufacturers have 30 day satisfaction guarantee that you can bring an item back if you don't like it. I this case the dealer eats the item and has to sell it as used or use it for rental.