How Much Mark Up Really On Scuba Gear???

[mike_s]

I think for some manufactures the wholesale price is based on the volume of the reseller and of course different types of equipment have different margins (BC’s may have greater margins then regs for example) but in general I think it is around a 100% mark up. .

I think that's about right on for some items.

But remember that there are LOTS of variables here. It's not all a clear 100% markup.



I've got some dealer price lists. and some or a lot of items are 100% markup.

However, take this into consideration. (note that almost all businesses/shops work this way. not just the scuba industry).

1.) Shipping costs. dealers have to pay shipping costs. that adds to their cost.
2.) Volume pricing. Some of these cheaper deals are on volume sales. Or buying in the off season.
3.) minimum orders. Most manufacturers have some minimum order. So when you ask for him to order you a mask in pink, he has to order other stuff with it to make up the minimum order.
4.) Not all items are 100% markup. For example tanks. No dealer is making 100% markup on tanks. (shipping is also MUCH higher on tanks because of weight).
5.) shop overhead. LDS"s don't operate for free. they have phone bills and pay commercial rates. they have electrical bills and pay commercial rates. They have to pay employees, pay insurance, pay for lost/damaged products, pay for other inventory,

also... realize there is a difference in MAP and MSRP.

the markup to MSRP might be 100%, but the markup to MAP is much lower.


While the markup might seem high, dive shops aren't out there "getting rich" right now. They are suffering. I expect that every one of us will have a LDS in our area go out of business in the next year. maybe two.


Trust me when I say that not LDS's are not walking away with 100% markup in net profits. I think most of them would be estatic to get 20% net profit.

 

[RJP]

I see from you profile you are a corporate marketing consultant.... how about sharing the plans of your clients with us first?

More on point, I'm assuming he doesn't share his costs and profit margins with his clients prior to establishing what he's gonna charge them.

I always wonder why people care what someone else makes on a sale. Do you ask McDonald's how much profit they make before ordering a burger? Ask Nordstrom's what the markup on a shirt is?

Also, I understand people wanting to pay as little as possible, but why does that all have to come from the retailer's end? Having worked with many manufacturing companies and clients I can assure you that the manufacturer's margin is as high or higher than the retailer's.

 

[cerich]

My LDS told me that he normally has about 100% markup on everything that leaves his store. So unless there is a sale or I find a store with particularly good prices, that is what I assume when I look at LDS prices. I havs seen shops with even higher prices, well over MSRP.

So, 48% off is not unreasonable. Markup is a nice figure to have an estimate of. But I generally shop around for larger purchase to find the best price and work from there.

so you feel if a shop pays $50 and the retail is $100 a 48% discount to sell at $52 is reasonable????? In a going out of business sale maybe.

 

[RonFrank]

Wholesale *prices* vs. retail prices are just ONE tiny factor. What a reseller pays is also based on a number of things, like quantity purchased, the terms of their relationship, and a lot of other variables.

You can bet that there is a LOT of markup. Likely manufactures cost for most masks is in the $15 range. That mask will retail for around $75. It is difficult to put a finger on *THE COST*. It is based on a huge number of variables.

48% off likely means:

Manufacture cost: $20
Wholesale cost: $30
MSRP: $120
48% off = $62

There is generally plenty of room for price reductions with a profit in manufactured goods. Then again gross profit is not net profits, hence the statement *Huge Number of Variables*.

 

[redacted]

so you feel if a shop pays $50 and the retail is $100 a 48% discount to sell at $52 is reasonable????? In a going out of business sale maybe.

Reasonable if the retailer is looking to unload stock. I don't expect a retailer to operate on a 4% markup. I actually don't care if they have a 200% markup. I just shop around for the best buys. I'd rather just be able to go to a local shop and know his prices are about the same as every other shop overall and just do my business their. But those days are long gone.

 

[PhilEllis]

A well known on-line retailer is listing a console, reg, octo, bag package at 48% off the suggested retail of the individual items, all new stuff, no discontinued models, and all with manufacturers warranties.

How much mark up is there on this stuff?

Well, given that the package also includes a bag, I am guessing that the package is a special where a portion of the discount is absorbed by the manufacturer and a portion of it is absorbed by the retailer.

I can tell you this......NO RETAILER can give a 48% off of all scuba items purchased as a normal course of business and survive. While many claim that the mark-up in scuba is "gigantic", I can promise you that a continual program of discounting 48% on scuba gear is a formula for bankruptcy. And not one of those show bankruptcies, but a really, really fast one.

Phil Ellis
www.divesports.com

 

[Michael_Lambert]

Go into a shop expecting to pay MSRP.... And when he charges you his reduced rate... You can come out GLOWING!!!

 

[Michael_Lambert]

I can tell you this......NO RETAILER can give a 48% off of all scuba items purchased as a normal course of business and survive. While many claim that the mark-up in scuba is "gigantic", I can promise you that a continual program of discounting 48% on scuba gear is a formula for bankruptcy. And not one of those show bankruptcies, but a really, really fast one.

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

Not to mention its a fast way for a Supplier to drop you when they get non stop calls from other shops bitching that they are getting there throats cut daily!

 

[mike_s]

Not to mention its a fast way for a Supplier to drop you when they get non stop calls from other shops bitching that they are getting there throats cut daily!

They would never do that..... not to Phil! (those bastages!)

 

[ReefHound]

I always wonder why people care what someone else makes on a sale. Do you ask McDonald's how much profit they make before ordering a burger? Ask Nordstrom's what the markup on a shirt is?

Also, I understand people wanting to pay as little as possible, but why does that all have to come from the retailer's end? Having worked with many manufacturing companies and clients I can assure you that the manufacturer's margin is as high or higher than the retailer's.

You don't need to know with McDonalds because if the menu says the burger meal is $5 then it's $5. No matter who you are, how bad you want it, how much you've searched around, or what Joe's is selling it for. They aren't interested in your offer of $4 or matching Joe's $4 deal.

But knowing a dealer's cost is important when you are haggling because you know what he has to work with. And many dealers seem to want you to make an offer or "let them have a chance to compete" to match other offers. (Like car dealers, they would prefer you just pay list and shut up but would rather you make a lower offer than just walk.)

I agree about the latter point but the end customer has no direct contact with the manufacturer and is not involved in the price the manufacturer charges the dealer.