Im done supporting my LDS (my money and I are gone)

[ChillyWaters]

However, in the real world there is not enough "air fill" demand to justify the cost of the business model (equipment, overhead, labor and insurance costs).

I didn't just say air fills. I said air fills, rentals, and accessories. Basically everything but relying on all the big purchases. Included teaching, etc. (which I know they often don't make money on), and you have a little business. You may need to up the price a bit, and tailor better for your new crowd, but it would work if required.

Otherwise you, being such an astute entrepreneur would have a passle of them and living the high life.

If all the LDSs in my area closed down, perhaps I would start up a business with the model I described. Of course, if the Internet stores do reign supreme, I'm sure a few of the local stores will understand what's happening and adjust appropriately. It's not rocket science.

Everybody screamed when Costco started opening up too. Ohhh... all the local stores will have to close down... wah wah wah... But nope, Costco tailors towards one need, and the local stores adapt and tailor to other needs. Go figure. Life changes, we adapt, and we move on.

- ChillyWaters

 

[The Kraken]

It can be expressed no better than as expressed by ChillyWaters:

"Don't worry, it will all work out."

Quod, erat, demonstratum

the K

 

[ChillyWaters]

1fastcat,

You were probably one of those people who thought the innovation of the computer would put half the country's people out of work... oh no... but imagine, it has done quite the opposite.

If you put of the Internet LDSs in a positive light, think of it like this. With cheaper equipment, more people can afford to dive. With more people diving, the local LDS have more opportunity to sell their other services and smaller retail items.

This could actually be a big changing point for the dive industry. Most people don't really get into diving because "it costs too much." Well, we now have an opportunity to start changing this! Perhaps we should intentionally support Internet dive shops?

- ChillyWaters

 

[1fastcat]

Hey Chilly,

Afraid of computers, let's see at the time I was working for Skyway Frieght Systems and was integrally involved with the massive airlift of parts to IBM Boca Raton for the initial manufacturing runs for the PC XT. I probably have had a computer longer than most, and considering I founded a high tech fiber optic convergence delivery system in 2000 I doubt that I am too adverse to technology and innovation.

I also got to witness first hand all of you morons in 1998 - 2002 talking about the "new market" economic principles, that "brick and mortar" was dead, that P/E ratios meant nothing ad nauseum. I watch those same idiots closing down their operations in mass after the free money from the VC's dried up.

So, I would say that my resume probably qualifies me to speak with at least a small modicum of knowledge on the costs of running a business, and simple break even analysis.

Afraid of "Costco", has no relevance to overall LDS health and survival. Costco, Walmart, Target, Best Buy, Home Depot, Lowes etc. all provided alernative mega "brick and mortar" shopping centers. But unlike LDS they sell products that people buy everyday and run the spectrum from groceries to furniture. Additionally, they do not offer prices that come close to the "lowest" internet pricing. In fact Best Buy's electronics and appliance prices are generally full retail. Every one of these mega retailers has high profit margins combined with volume - the best of both worlds. None of them strive to be the "lowest price retailer" on anything other than a few lost leaders. That is because the know (from general economic principles) that you cannot ever survive long term selling at the lowest price. Reason is economic cycles necessitate that over time you have capital in excess of operating expenditures, otherwise you go bankrupt the first recession or slowdown that hits as you can no longer pay back you current capital loans and lines of credit and thus not able to obtain new capital infusion.

There is not one substantial internet etailer who sells for the lowest price on every item, nor even comes close to that suicide economic model.

Now all that being said, an LDS must make a substantial level of profit off the majority of their items. That is because, no matter how myopic your visions of diving dominance, diving is a niche activity that will never in the near term appeal to even high single digit portion of the adult population. Add to that the fact that most divers keep their diving equipment for years and years (lack of product cycling and that "volume" you so proudly speak of), and the LDS must somehow pay the bills and their "fiduciary responsibility to their family". Lessons don't pay the bills, nor do air fills. Lessons are a lost leader to generate equipment sales. Sales that are a 5 to 10 year replacement cycle ( and that is if you are able to provide enough local incentive i.e. charter boats, diving trips, club meetings etc.to keep people interested in diving). I can't tell you how many (the majority) of my friends, employees and acquaintances that tried diving (generally on vacation) that really have no interest in regular or even occasional local diving. That necessitates that in order to survive, your LDS has to sell at a price that will achieve break-even based on average monthly sales volumes. That price will always be more than the "lowest internet price".

Scubatoys, Scuba.com are the exception, not the rule. Most of the LDS around the country are mom and pops. They are not in a major metropolitan market to substain their brick & mortar via any sense of "volume". Note - Minnesota is not their home base.

I am not bashing internet sellers. I applaud their efforts in addressing a market demand. However, the same truism holds true for their survivability - If overall market LDS cease to exist or decline greatly in number they will lose new and existing customer base and see dwindling returns to the point of abandoning the market due to lack of a minimum level of purchasing activity.

LDS market health is the single most important factor in the health and growth of the scuba diving market. My ***** is with you cheap jack***** who buy everything on-line because you are too cheap to pay even a few bucks more to support a local shop. Hey if you have a bad LDS, by all means don't support his business. But stop your ignorant misleading statements that just because the guy can't sell for the lowest price that makes him a "bad LDS".

 

[ChillyWaters]

Afraid of computers, let's see ...

I said that to illustrate an example. We can compare resumes later.

I also got to witness first hand all of you morons in 1998 - 2002...

Was I a moron in that period? Perhaps, I invested, made some money, got out, and laughed all the way to the bank.

So, I would say that my resume probably qualifies me to speak with at least a small modicum of knowledge on the costs of running a business, and simple break even analysis.

And mine doesn't?

Costco, Walmart, Target, Best Buy, Home Depot, Lowes etc. ... sell products that people buy everyday and run the spectrum from groceries to furniture. Additionally, they do not offer prices that come close to the "lowest" internet pricing.

Have you been to Walmart lately??

None of them strive to be the "lowest price retailer" on anything other than a few lost leaders.

Have you been to Walmart lately??

There is not one substantial internet etailer who sells for the lowest price on every item, nor even comes close to that suicide economic model.

Nobody said they have to sell at the lowest price. It's just that IDSs (Internet Dive Shops) can sell at a major discount to LDSs. The reasons are obvious. Do I think you can sell such big products in volume, at a lower markup than LDSs? Duh... of course. Doesn't mean they have to sell at the LOWEST price. Customer service can still come into play with a IDS. Everybody keeps mentioning ScubaToys and DiveTank for having lower (not the lowest) prices and good service.

That is because, no matter how myopic your visions of diving dominance

It was simply an example of how IDSs may benefit our activity. No matter what happens, LDSs will adapt, you will get air fills, and you will be able to continue diving.

most divers keep their diving equipment for years and years

Isn't that just more of a reason for the LDSs to perhaps change their business model. It'll just takes one or two to be innovative. Imagine that... being INNOVATIVE.

LDS market health is the single most important factor in the health and growth of the scuba diving market.

Yup, but perhaps they need to reinvent themselves with the realization that online retailers are better at selling the high priced stuff.

My ***** is with you cheap jack***** who buy everything on-line because you are too cheap to pay even a few bucks more to support a local shop.

A few bucks? No, for big ticket items we're talking $100s of dollars.

- ChillyWaters

 

[nyprrthd]

Well, when someone goes into a rant, and calls others "morons" and "idiots," I can't blame anyone for going on to the next post, or hitting the delete button. I usually stop and ask myself, "what set this person off?" So, in my semi-informed opinion, here's what I get from this thread, and 1fastcat's post.

First some background: I've been exposed to computers since 1976. My first personal computer, circa 1985, had a 20 MB (yes you read that right) hard drive, that I was told would be the most I would ever need. I started shopping online approximately 12 years ago (and have never been burned), using a verrrry sloooooow connection. I went on my first dive (DSD) about 26 years ago, did several DSD dives through the years, and finally got certified last year. I've been in and around the retail/wholesale business since 1971, and was part of a merchant advisory staff during the development of the first Sabre retail reporting system.

IMHO, for the LDS to survive they need to become service oriented "destinations," and bring diving to the public. Some do I suppose, but, in my limited experience, most don't. The ways to accomplish this feat?
1. Promote diving in the community. Volunteer to speak at weekly/monthly meetings of Rotary Clubs, Lions, Power Squadrons, etc. Arrange to have a display at Career Days at schools, and show how enjoyable and exciting a career in diving can be (and how you can help them become pros). Yes, it costs money to become a diving pro, but so does college. Who knows, maybe they could get some co-op or materials from PADI and/or their vendors to create interesting presentations. "Set the hook" by offering free pool DSD dives. How about an advertised "open house?"
2. Establish clubs, and have regular meetings, outings, and trips. Invite the general public to some of the meetings, so folks can see what fun people divers are. Invite speakers to the meetings to keep members involved and interested.
3. Publish periodic newsletters (email and/or snail mail) to keep customers informed, and involved. In other words, keep your name in front of their faces. Hardly a day goes by that I don't get an email from one of the online retailers, and most of the time I open and read it.
4. Develop a follow-up system to stay in touch with customers who you haven't heard from in a while. Keep them interested in diving, and your LDS. My LDS hasn't contacted me once where I didn't initiate the contact.
5. Send reminders to customers who have purchased regs, BC's, etc that it's time to bring them in for service.
6. How about a phone call like, "Hey Joe, Brand-X has just come out with an updated version of that gizmatron you bought 2 years ago. Why not come in and take a look at one?" It couldn't hurt. Just as you can't get an air fill through the computer, no one has ever been shot through a phone either.
7. Don't make customers feel like they have to buy something everytime they walk through the door. Pressure and used-car-salesman type hawking will only chase people away (apologies to any used car salesmen out there). Don't nickel-and-dime your customers.

In other words, it's a business, not a hobby. Take appropriate action to build a presense, a reputation, and a following. Remember, Macys started as a Mom-and-Pop business.

Why do I buy from my LDS? I want to be able to bring survival gear to a trusted source for maintenance and service. I also want the manufacturer's warranty. Our regs and BC's were purchased at local dive shops. Other items have been purchased at LDS and online. However, if my LDS wants the lion's share of my business, they need to refer to item 1 thru 7 above.

Why do I buy from online stores? Convenience, price, service, availability. The shipping charges (if there are any) are usually offset by them "including" the sales tax in the price. There have been several times that I've gone to a LDS, only to find that what I need is not in stock. Or, he doesn't carry the brand that I want. Sure he can order an out-of-stock item for me, but that would require that I make another trip to come get it. Why would I want to make another trip to his shop? Refer to item 1 thru 7 above. If I tell a sales associate at Nordstrom that I need an item for an upcoming trip, they offer to drop it off at my house, or have it shipped from another store with no charge for shipping! As I have said before, I can name at least two online retailers who will spend as much time talking about a potential purchase as you need. They have overcome the impersonal aspect of the internet. Scubatoys even has a webcam, so they can show you something online while you're on the phone!

I'll end this post with a paraphrased quote from my favorite rant expert.................

This is only my opinion ........ and I may be wrong.

 

[1fastcat]

Hey Chilly,

Wal-mart is not even close to the lowest prices - Didn't you happen to read their national class action settlement two years ago with most state attorney generals - summation, they were required to change the "Lowest Price" to "Low Prices Always" or a similar derivation. They were also required to pay a monetary settlement. Lawsit was brought because they discovered that Walmart's prices averaged no better than other area retailers such as Target and K-mart. Deceptive advertising.

Hey Nrprthd,

It's great that you buy everything online and have a great experience. I buy online and generally have a good experience. It still doesn't change the basic argument about diving needing a viable body of LDS' throughout the US. You make great points about the LDS marketing efforts. But the reality is that he still has to pay the bills, and diving is not a universal or even close to 1% of the adult population activity. No amount of marketing (and where is all that marketing money coming from) is going to substantially change the "take rate" of newbies trying the sport out. Most of my local LDS' students come from friends of theirs who dive and encouraged them to dive. Networking and marketing can only create so much buzz and results. Hey soccer is the #1 sport in the world and #1 kids sport in the US, but 10 years of MLS $100's of millions in investment still relegates it to a very stagnant sport with US adults. Diving interest is far short of soccer, and diving has no national body promoting the heck out of it.

 

[nyprrthd]

1fastcat,

I didn't say that I buy everything online. I actually prefer to support my local shops. Price is never my only incentive for making ANY purchase. "Penny wise, and pound foolish" is another old expression that's still valid, and applies to buying dive gear.

Your points are valid, and remind me of the old chicken-before-the-egg theory. Yes, marketing costs lots of $$, and you have to have it to spend it. When people tell me that they get to write-off their home mortgage interest, I remind them that they have to have it first, and they need to pay a lot to save a little. However, many of the ideas that I presented can be done at little or no cost. Why not join a Rotary club (or club of your choice)? Networking clubs are another way to "spread the word."

I didn't want to go on forever, but it also seems to me (from what I've heard and read)that the manufacturers, whose life blood depends on the retailer (LDS), tend to put themselves in an adversarial position when dealing with dive shops. If they don't concentrate more on a symbiotic relationship, they're writing their own epitaths. More divers equal more revenue. More revenue will allow them to charge less per unit. Lower cost of equipment might get more people interested in diving, and so on.....

Will it happen tomorrow? No. Will soccer ever be as important to the American adult as it is in the rest of the world? Maybe, when the kids playing today become tomorrow's adults. Nothing is guaranteed, except that nothing will happen if no one makes an attempt.

Now, off my soap box and back to what I was doing.

 

[bperrybap]

This thread needs to be moved to Whine and Cheese! or even removed.
It has turned into nothing more than personal attacks and chest thumping.

Just my .02

--- bill

 

[cerich]

This thread needs to be moved to Whine and Cheese! or even removed.
It has turned into nothing more than personal attacks and chest thumping.

Just my .02

--- bill

actually it started to but then they stopped and started to actually state their views in a civil manner.

I for one wants the LDS to do well and unfortunatly a changing market has affected all aspects of the industry. The simple truth is that the market will adapt. The more LDS the more divers we will see and overall a more healthy dive industry. This means the manf., training agencies and LDS will be in change mode for the next year or two, by then the flux we are/have been going thru the last 5 years or so will be pretty much resolved with a somewhat different face to the industry. Then as with all cycles we will enjoy a period of growth and stability followed by the next great market shift.