LDS - They have a bad attitude.

[redacted]

When supply goes down price tends to rise. It's just economics. Hope it all works out for you

When prices (profits) rise, competitors are attracted to the market. And then it becomes survival of the fittest. And inefficient dive shops are less likely to survive in a competitive market.

 

[syntaxerrorsix]

I have about 6 LDS in my area and I use 2 of them regularly, and receive very good service from both. I have been to all of them in my area and only one had bad service.

I also buy stuff online, but I found that my main LDS will come within a few dollars of online prices.

Very true. One the first steps we see towards efficiencies is lowering business expenses by turning to online sales that don't require the expense of brick and mortar.

Full circle or end of the evolution?

 

[vladimir]

When supply goes down price tends to rise. It's just economics. Hope it all works out for you

It is just economics. The reason that there were four shops serving a relatively small number of divers was that there was at one time, most likely, an economic profit available in dive retail. It follows that capital was devoted to enter the industry and competition increased. Now you see capital leaving the industry, signifying economic losses (the shops income might still be in excess of costs, theoretically, but the return on capital is lower than alternative investments), and competition decreases to an equilibrium point (perfect competition) where normal profits are achievable.

So yes, the price of gas would be expected to rise. But you have kind of a circular argument, I think, when you suggest that people should pay higher prices at their LDS to keep him in business, otherwise he'll go out of business and prices will rise.

What might happen, as Smurf Doc suggests, is dive retail will split into more efficient components: equipment will be sold by internet retailers like LeisurePro and ScubaToys and gas will be sold by people in the gas business, allowing everybody to benefit from economies of scale.

 

[Eric Sedletzky]

Just an observation and a commentary.

LDS's complain that they lose money on air fills.
Yet I know a shop in Monterey that survives mostly on air fills, and to a lesser degree rentals.

My local LDS charges $8.00 now for an HP fill and $7.00 for an LP fill. A HP 80 costs $8.00 and an LP 95 costs $7.00 ?

They have openly told me that I am not what they consider an A+ customer because I already have all my gear and only come in for air fills, so therefore they lose money on guys like me.

What does it cost to service a compressor and keep it up to snuff?
Lets say a shop sells 1000 fills and in the case of my LDS lets average it to $7.00 a fill, that's $7000 they have collected. Not really a huge amount but it's an amount they would have not had otherwise. So does overall service including hidden costs cost more that $7000 per 1000 fills?.. Really?

I was also told they lose money on fills because for the time spent doing it the employee makes more per hour than what the air fill yields. That might be true, but everytime I go in to get a fill there are no customers in the store and the employee is alone and bored stiff with nothing to do.

I asked them then If they lose money on air fills why don't they just stop doing them altogether, and their reply was because they would go out of business.

 

[syntaxerrorsix]

Just an observation and a commentary.

LDS's complain that they lose money on air fills.
Yet I know a shop in Monterey that survives mostly on air fills, and to a lesser degree rentals.

My local LDS charges $8.00 now for an HP fill and $7.00 for an LP fill. A HP 80 costs $8.00 and an LP 95 costs $7.00 ?

They have openly told me that I am not what they consider an A+ customer because I already have all my gear and only come in for air fills, so therefore they lose money on guys like me.

What does it cost to service a compressor and keep it up to snuff?
Lets say a shop sells 1000 fills and in the case of my LDS lets average it to $7.00 a fill, that's $7000 they have collected. Not really a huge amount but it's an amount they would have not had otherwise. So does overall service including hidden costs cost more that $7000 per 1000 fills?.. Really?

I was also told they lose money on fills because for the time spent doing it the employee makes more per hour than what the air fill yields. That might be true, but everytime I go in to get a fill there are no customers in the store and the employee is alone and bored stiff with nothing to do.

I asked them then If they lose money on air fills why don't they just stop doing them altogether, and their reply was because they would go out of business.

The Bauer we had ran about 20K with two panels running about 3K. Nitrox stick was picked up for 1K. 8 fill whips around 1K and about that much in HP hose that fed off 4 Banks at about 2K. Oil, maintenance purity testing and filters say 250 every 6 months and we were spending about 1K on O2 a year plus bottle rental. The electrical bill for the shop was ~$2000 a month. So say conservatively ~$28,500 with a few ongoing expenses. We charged $5 for air no matter the size, nitrox was $7 up to 130 cu feet and $8 beyond that.

It takes quite some time to start noticing a profit on air fills alone and $5 a pop it isn't exactly a huge money maker. We also did hydros.

Service and training is the only thing that really brings people in when they can likely get cheaper prices on retail gear. Brick and mortar is more costly to operate.

 

[Eric Sedletzky]

The Bauer we had ran about 20K with two panels running about 3K. Nitrox stick was picked up for 1K. 8 fill whips around 1K and about that much in HP hose that fed off 4 Banks at about 2K. Oil, maintenance purity testing and filters say 250 every 6 months and we were spending about 1K on O2 a year plus bottle rental. The electrical bill for the shop was ~$2000 a month. So say conservatively ~$28,500 with a few ongoing expenses. We charged $5 for air no matter the size, nitrox was $7 up to 130 cu feet and $8 beyond that.

It takes quite some time to start noticing a profit on air fills alone and $5 a pop it isn't exactly a huge money maker. We also did hydros.

Service and training is the only thing that really brings people in when they can likely get cheaper prices on retail gear. Brick and mortar is more costly to operate.

OK, so besides the initial cost of the compressor (forget any of the nitrox stuff they don't have any of that) does it cost more than $7.00 per fill to maintain a compressor?
The shop in question paid off their compressor long ago so figuring payments doesn't apply.

 

[redacted]

Just an observation and a commentary.

LDS's complain that they lose money on air fills.
Yet I know a shop in Monterey that survives mostly on air fills, and to a lesser degree rentals.

My local LDS charges $8.00 now for an HP fill and $7.00 for an LP fill. A HP 80 costs $8.00 and an LP 95 costs $7.00 ?

They have openly told me that I am not what they consider an A+ customer because I already have all my gear and only come in for air fills, so therefore they lose money on guys like me.

What does it cost to service a compressor and keep it up to snuff?
Lets say a shop sells 1000 fills and in the case of my LDS lets average it to $7.00 a fill, that's $7000 they have collected. Not really a huge amount but it's an amount they would have not had otherwise. So does overall service including hidden costs cost more that $7000 per 1000 fills?.. Really?

I was also told they lose money on fills because for the time spent doing it the employee makes more per hour than what the air fill yields. That might be true, but everytime I go in to get a fill there are no customers in the store and the employee is alone and bored stiff with nothing to do.

I asked them then If they lose money on air fills why don't they just stop doing them altogether, and their reply was because they would go out of business.

The Bauer we had ran about 20K with two panels running about 3K. Nitrox stick was picked up for 1K. 8 fill whips around 1K and about that much in HP hose that fed off 4 Banks at about 2K. Oil, maintenance purity testing and filters say 250 every 6 months and we were spending about 1K on O2 a year plus bottle rental. The electrical bill for the shop was ~$2000 a month. So say conservatively ~$28,500 with a few ongoing expenses. We charged $5 for air no matter the size, nitrox was $7 up to 130 cu feet and $8 beyond that.

It takes quite some time to start noticing a profit on air fills alone and $5 a pop it isn't exactly a huge money maker. We also did hydros.

Service and training is the only thing that really brings people in when they can likely get cheaper prices on retail gear. Brick and mortar is more costly to operate.

The problem is the smoke and mirrors accounting that shops use when they present the argument that they lose $$ on fill.

They are not including their own use of their compressor to fill their training and rental tanks. For many shops, that is the majority of their compressor usage.

The idea that filling divers tanks for their standard fee results in a lose of money for the shop is BS.

 

[movieflick]

Why would someone offer a service they lose money on? If you do fills to get people in the door then in a way it is an advertising expense. Would you treat people like crap that say they came into your shop because they saw your ad in a magazine then go on to complain how you lose money running all those ads?

 

[MXGratefulDiver]

OK, so besides the initial cost of the compressor (forget any of the notrox stuff they don't have any of that) does it cost more than $7.00 per fill to maintain a compressor?
The shop in question paid off their compressor long ago so figuring payments doesn't apply.

I ran some numbers a couple years back, factoring in purchase price, maintenance costs, and estimated hours I'd spend filling and maintaining my own compressor ... and decided that it was cheaper to pay my local dive shop $100 a month for nitrox fills. I'm filling between 12 and 25 tanks a month ... LP95, HP119 and HP130's ... all with EAN32.

... Bob (Grateful Diver)

 

[syntaxerrorsix]

OK, so besides the initial cost of the compressor (forget any of the notrox stuff they don't have any of that) does it cost more than $7.00 per fill to maintain a compressor?
The shop in question paid off their compressor long ago so figuring payments doesn't apply.

That entails quite a few variables, my first reaction would be to say that all matters of income go into maintaining the compressor and the business. It's tough to line item organize where each cost/expense should rest. I would say if the building was paid for and you didn't count the electricity then yes. $7 is probably enough to maintain the compressor but not enough to be a deciding factor in the over all health of the business.