Local dive shops are really taking the pi$$!

[MikeFerrara]

Genesis once bubbled...

The truth is somewhere in the middle. Talk to enough people about this and you'll find that many of the manufacturers are doing this because LDSs, as a group, told them that if they wanted them to sell their gear they had to provide "protection" from price competition.

Well, I've talked to enough people and I haven't heard that. If it's true it was thirty years ago.

You'll also find that all the manufacturers who have these "policies" (1) do not make any "agreement" on prices with dealers (that's illegal), but instead impose a "unilateral" policy, taking advantage of a legal loophope, and (2) claim that this is specifically to protect the "quality" that comes with their brand and the "customer support" that is supposed to be sold with their brand.

Actually, in the dealer agreements they don't usually give a reason. They just give a list of rules. I guess it's the wording that makes it legal. They don't tell you what to sell for. They tell you that if you don't follow their pricing guidlines that they won't sell to you. One manufacturer specifically points ouot that since price fixing is illegal they won't do it but they also point out that they have the right to sell to who they wish and that if you don't do things their way they'll no longer wish to sell to you.

Well, ok, where's the support?

See my thread on dry suits in the Exposure Suit topic here. DUI, one of the "heavies" with these policies and a widely-regarded "cadillac" product in the industry, has no better support than I get buying a set of rubbers for my speargun!

So, despite the claimed reason for the "price protection", you don't get what is promised. What you get instead is a lighter wallet.

DUI is exactly like all the other biggies in the business. They place the burden of service on the LDS along with ALL the risk.

If the manufacturers ACTUALLY policed these policies and ACTUALLY monitored the service levels and ACTUALLY yanked dealerships for lack of available product and service INSTEAD of (or even in addition to!) the price complience, there'd be no problem.

But they don't - and the reason they don't is that its not the manufacturers desiring these policies - its the dealers, to protect them from someone who probably doesn't offer any better service (such seems to be impossible in this industry), but will offer a better price.

You're making broad statement based on your experiences and a few phone calls. I had one dealership pulled this year because I purchased to little. I sold a lot of this companies masks and fins (well a lot for us) but not much else. I had a wall full of their stuff and a customer who wanted a mask in a color I didn't have. This company wouldn't sell me the mask unless I placed a $1000.00 order to "get where I should be for the year".

Don't tell me the manufacturers don't desire these policies because I fought with them for almost 4 years. I fought with them so much so that most reps stopped comming to our place and I started to loose dealerships.

They may not inforce the policies uniformly but make NO mistake. They do inforce them. I personally got hit by two companies just this year and I was only open for half the year.

 

[MikeFerrara]

gedunk once bubbled...


Man this sounds like many shops i know.

By the way, i have bought from MikeF and he would never ... ... sell below the recommended manufacturer minimum price.

He feels too strongly about supporting the manufacturers.

that's my story and I'm sticking to it.

 

[Genesis]

Don't tell me the manufacturers don't desire these policies because I fought with them for almost 4 years. I fought with them so much so that most reps stopped comming to our place and I started to loose dealerships.

They may not inforce the policies uniformly but make NO mistake. They do inforce them. I personally got hit by two companies just this year and I was only open for half the year.

They clearly do, otherwise they'd drop them and take their chances.

But DUI, for example, considers that they "need" their dealers.

I just had a nice half-hour conversation with Susan Long from DUI (she called me) - and I pointed out that with the "service" I've received thus far, they'd be FAR ahead of the game to just sell the suits factory direct at their maximum "legitimate" discount - at least this way while I'd still get zero service at least THEY would get to pocket the extra money!

As it stands right now their "dealers", at least those around here, are nothing more than mail-order houses (they carry ZERO stock!) who are, effectively, collecting a 100% margin for doing nothing more than actually costing you time - since you'd actually get the suit SOONER if they just drop-shipped the silly thing from DUI direct to you as a customer. Instead, you wait longer because it goes "through" the dealer, but you've received nothing in terms of actual service on the transaction.

There is no reason for me - or anyone else - to buy from such a "dealer".

 

[OneBrightGator]

cornfed once bubbled...


Has anyone seen Genesis?

Better watch yo' mouth boy!!!

Ben

 

[MikeFerrara]

Genesis once bubbled...


They clearly do, otherwise they'd drop them and take their chances.

But DUI, for example, considers that they "need" their dealers.

I just had a nice half-hour conversation with Susan Long from DUI (she called me) - and I pointed out that with the "service" I've received thus far, they'd be FAR ahead of the game to just sell the suits factory direct at their maximum "legitimate" discount - at least this way while I'd still get zero service at least THEY would get to pocket the extra money!

That's what I told em they should do because I sure couldn't do business with them.

But...then where would they get all the free labor to run their DUI demos?

 

[OneBrightGator]

Genesis once bubbled...
First, the idea that the manufacturer is some evil ugly corporation while the LDS is this lilly-white abused poor small businessperson is pure BUNK.

No, that may not be the exact situation, but remember, those LDS owners/employees you hate so much could just as well be the diver next to you on a boat or on the shore, we were divers before we were dive professionals and we're more on your side than any manufacturer.

And yes, if you are going to drop up to $25,000 for a dealership you would want some kind of agreement from the manufacturer that you'll make that money back, this afterall is your profession, you fail, you don't eat.

Ben

 

[Dive Source]

MikeS once bubbled...


I was thinking more along the lines of would they confront the LDS with the evidence if they had given a bigger discount than allowed by the distribution agreement.

Mike

Pricing is a grey area and all dealers do there best to balance the wishes of the manufacturer with the realities of the market place.

If a dealer has a history of discounting the product (ie blowing regs out for $40-50 over his listed cost) then he will likely lose his dealership eventually ( not to mention his business).

 

[OneBrightGator]

Genesis once bubbled...


They clearly do, otherwise they'd drop them and take their chances.

But DUI, for example, considers that they "need" their dealers.

I just had a nice half-hour conversation with Susan Long from DUI (she called me) - and I pointed out that with the "service" I've received thus far, they'd be FAR ahead of the game to just sell the suits factory direct at their maximum "legitimate" discount - at least this way while I'd still get zero service at least THEY would get to pocket the extra money!

As it stands right now their "dealers", at least those around here, are nothing more than mail-order houses (they carry ZERO stock!) who are, effectively, collecting a 100% margin for doing nothing more than actually costing you time - since you'd actually get the suit SOONER if they just drop-shipped the silly thing from DUI direct to you as a customer. Instead, you wait longer because it goes "through" the dealer, but you've received nothing in terms of actual service on the transaction.

There is no reason for me - or anyone else - to buy from such a "dealer".

There are two things that pop into my mind here.

1. I agree with you, I wouldn't patronize a restaurant that has poor service, I'd go elsewhere or cook myself.

2. In Florida the drysuit market is rather small, if a store was to keep an DUI inventory to fit your needs that would mean S-XL of 3 different suits for a total of 12 suits that would probably not all sell by the end of the year which they would have to liquidate, possibly losing money, and if you went in to pick up a standard size and they had just sold it to the last customer you'd still be B&Ming about it.

Ben

 

[Genesis]

No, that may not be the exact situation, but remember, those LDS owners/employees you hate so much could just as well be the diver next to you on a boat or on the shore, we were divers before we were dive professionals and we're more on your side than any manufacturer.

And yes, if you are going to drop up to $25,000 for a dealership you would want some kind of agreement from the manufacturer that you'll make that money back, this afterall is your profession, you fail, you don't eat.

Thre is no way to get what you're looking for.

I guess this is where the problem comes from.

I used to sell both hard goods and services.

No manufacturer gave me an "agreement" that protected my territory or pricing. In fact, it was well-known that my discount was based entirely on my volume - sell a little, I pay more than the "big box" guy across town. Sell a lot, I might be able to get somewhere competitive with him on cost.

This led to things like cutting a PO for delivery over 12 months, <X> units now, <X> every month for the next 11, all to get to a (from the manufacturer) price that I could live with.

Were we EVER as cheap as the "big box" guys? Not even close. But did we have trouble selling the product? No, because we provided service the big box guys would not.

Those shop owners are "on my side"? Not in my experience you're not.

As someone who has been in business myself I understand that I'm not "owed" anything - not from my customers, nor from my suppliers. All I have a right to expect from suppliers is that the law regarding discriminatory conduct is complied with. From customers, I'm owed exactly nothing - I have to earn every sale.

Th idea that somehow a shop owner is "on my side" is ludicrous. The shops could band together, form buying cooperatives, and refuse to do business with the price-fixers. With no dealers to sell their products who would comply, such "agreements" would collapse overnight.

But those shops won't band together to do this. They will not stand up, collectively, and do something about this.

The only thing the dealers are doing is hiding behind the pricing policies while feeling quite safe in providing essentially zero service, smug in the knowledge that the guy down the street who ALSO provides zero service can't compete with them on price either.

Or at least, that was what they all did - and believed - until places like this, and stores like Leisurepro got going!

Now all they're doing is crying over the mountain of red ink.... a mountain that they created on their own, and could stem tomorrow - but they choose not to.

 

[Genesis]

2. In Florida the drysuit market is rather small, if a store was to keep an DUI inventory to fit your needs that would mean S-XL of 3 different suits for a total of 12 suits that would probably not all sell by the end of the year which they would have to liquidate, possibly losing money, and if you went in to pick up a standard size and they had just sold it to the last customer you'd still be B&Ming about it.

More than one way to skin this cat.

Keep a S-XL of ONE of the suit types (say, the TLS350) and ONE suit of each of the others (in whatever is the most common size needed) and have them available for rental.

After 2 years, sell them (at cost) and buy new ones; the rental fees make a decent profit, and you'd have no problem selling the used ones at cost (which, for DUI, is basically HALF the MSRP) If one or more sizes doesn't get rented much (or at all), then just keep that one around if nobody wants to buy it at that price.

Lose money? You gotta be kidding. Your investment cost is covered by the rental charges, you also get to offer the "suit specialty class" (since now you have the suits, which you can rent for that purpose as well) and at the end of the day your investment is returned to you so you can buy new stock.

If I try one on and it seems to fit, I can then rent it and go try it for a day for a reasonable cost. If I like it, I can have a new one in a few days, or, if its near the end of the cycle, I can buy the rental right now at a significant discount.

How do you lose money under this scenario?

You don't.

You not only make money, you provide the service that these dealers and manufacturers CLAIM as their justification for their 100% mark-ups.