Is Halcyon price fixing?

[Scuba]

Relax Mike, do some bubble therapy

Supply and demand dictate prices. Not "price". Different businesses will individually determine what their best price strategy is based on their analysis and business model. I am aware you are not claiming otherwise.

Halcyon products are a small niche withing a relatively small scuba marketplace. I suspect that if someone offered a large bulk purchase order at a favorable price, they would probably accept.

The manufacturer may not be trying to keep prices high per se, but they are trying to protect a business climate where they can charge more for their products. Nothing wrong with that, if done legally. Ethically, your call.

The LDS's do have control of who they will do business with, and whether they accept or fight fraudalent practices. I realize it is easier to play the game as it stands then to change the rules. This leads to the perception of complicity in the scheme.

Here is an idea. Forget the existing rules. What do your customers want? How can you service their needs while making a profit at it? Your alliagance is to the customer, if they don't perceive this they will leave. You are the suppliers customer, you have stated how you have left those who do not appreciate your business.

The words "authorized dealer" carries certain connotations that I just don't see as being delivered in the scuba industry. From my perspective as a custoemer, this authorized business deal is a laughing stock. From what I've heard from you and others, I can safely say that I would probably feel the same way if I was an LDS. I would also act accordingly and do what I had to do in order to take care of my business and my clients, legally of course.

 

[earl]

Mike,

I can't speak for others but I believe you are getting screwed just as badly as the consumers.

However, for me, the fact is that I don't make enough money to just throw it away. I can see paying up to 20% to a LDS over what LP or DiveINN sells an item for in exchange for service, local pickup, etc. Maybe another 5% to avoid shipping charges. However, I did some more research after purchasing most of my gear and discovered that I paid, at least for my MK20+G250GP, about 220% of LP's price. At that point, as some have said, screw the warranty -- I'll buy two and *still* save money.

I'm writing my own letter to my state AG and the FTC. My proposed remedy is that ScubaPro (and all the other manufacturers) should cut me a check for the difference between what they sold my regs to LeisurePro for and the minimum price that my LDS could sell them to me for within his contractual obligations to ScubaPro.

And the manufacturers are obviously selling to LP and others -- every item has a unique serial number. In the age of computers, tracking this stuff is childs play -- the company I work for manufacturers DNA Sequencers comprised of almost 3000 parts. Our ERP software can tell us a serial number for every single thing in a sequencer, when and from whom it was purchased, and when and to whom it was sold, and every person who touched it in our facility -- and it can go backwards from the parts to the sequencer as well. The point is, if ScubaPro et al cared to stop LP and others, they could. The fact that they don't makes them complicit in my book.

-earl-

 

[Scubaroo]

bengiddins once bubbled...
RRP for a 55lb Explorer wing - $338.

Gary's Underwater Technical Supply - $299.

11.5% discount.

Correction required...

RRP for a 55lb Explorer wing - $338.

Gary's Underwater Technical Supply - $289.

14.5% discount

 

[Munin]

I happen to be employed by an LDS that sells both Halcyon and Scubapro. I also happen to have a copy of Halcyon's Dealer Price list here, and I don't think anybody has said this yet, so..

Nowhere in it does it have ANY language that in any way attempts to restrict the price at which a dealer can sell. Discounted, higher, lower, below cost, free, whatever.

The only thing it does have is an explanation of the fair trade pricing scheme, which, by the way, is actually a sort of "Pre-Discount." While nearly all manufacturers start their dealer cost at 1/2 of MSRP, SP for one, and decrease cost with sales volume, Halcyon starts at 2/3 cost and its highest dealer level reaches 1/2 cost. That means that if I sell a Scubapro BC at full retail, I make a minimum 100% return. As a small dealer, if I sell a Halcyon MC I make a 50% return. That only matters to the dealer, though.

Personally, I think Halcyon should drop the FTP and set MSRP at a full 100% above my cost. Then I can discount it enough to keep all the bargain hunters happy and still have an incentive to sell it.

 

[Genesis]

how about the Scubapro dealer agreement?

Why silent on that one?

The Halcyon note is interesting; given their emphasis on the "fair trade pricing" on the web site, it all but said the restraints were there. If they're not then that explains the issue to some extent with regards to them....

 

[Munin]

Genesis once bubbled...
how about the Scubapro dealer agreement?
Why silent on that one?

SP does very explicitly state in its price list that there is a maximum 10% discount. I can't remember if it is MAP or a max discount.

I agree with Genesis that it may be illegal. I do see the purpose in it, not just as "protectionism," which it is, but to create a diver-LDS relationship that adds value by encouraging people to buy locally. If you pay the same price, why not? Halcyon's FTP seems designed to do that. Its stated purpose is to reduce 'shopping around' by establishing a universal, fair price.

I also think that MSRP should be supported with added value, SP's warranty service included, rather than restrictions on sale price.

 

[Genesis]

(MAP has been tested and is legal. What's not is limiting ACTUAL retail prices)

Scubapro also forces disclosure of the price paid to register your warranty, which gives them enforcement capability and traps those who backdoor sell to other authorized dealers, since they have both the dealer name and serial number...

(Frankly, I don't think the "free parts" deal is worth a hill of beans. Particularly given that regs might not need service on a yearly basis - they also might, but its not assured and much depends on how you take care of them. Consider that an overhaul kit is under $10 from DiveInn for virtually all of the SP regs.... and you STILL pay for labor even with the "free" parts.)

I'd love to see some real value in the LDS equipment sales arena. There are things that the LDSs could do that would be worth their margin, but so far I've not seen 'em...

(BTW, just had a friend bring over a brand new SP reg set bought online. It was just fine out of the box. Cracking, IP, general performance - all spot on..... so much for "required tuning" before being ready to go use!)

 

[seabass]

Just as a counterpoint my Apeks regulator from leisurepro was not breathable when I purchased it, the LDS had to service it. On the other hand even after servicing by the LDS, the octo was not tightly attached and blew the O ring when I was going through my pre dive safety check.

 

[Genesis]

gee, that service was worth paying for, right?

(Could have sent it back to LP and gotten another one - bad samples do happen - and that one might have been tightly attached!)

So much for the "professional service" from the LDS....