Online Sales - The importance of buying from local businesses

[ReefHound]

Lead, I think people have different definitions of "a chance". To some it means the mere presence of the diver at the store. It's your opportunity to talk to him, make him feel comfortable, and close a sale before he gets out the door. For others it means the diver asking for the best deal you can do. (I fall into this camp). Your best is your best, no need to see what others have quoted unless you're afraid of offering a better price than you need to. And yet others define "chance" as "I get the sale no matter what" and if you buy elsewhere for any reason, their battle cry is "you never gave me a fair chance".

The reasons you were given aren't all that amazing. The one about the store being closed on Sunday is legitimate and touches on an issue discussed recently. The store needs to be open when the customer needs it to be open, when the customer has leisure time. Not when it's convenient for the owner to work.

The people who truly never give the store a chance are probably making assumptions about the store based on industry stereotypes and stories they heard. That sucks but that's life. Stereotypes are usually based in truth somewhere along the way, take a long time to get established and take even longer to get dissolved. Not really the fault of the good dive shops out there but not the fault of the customers either.

And finally, how many divers buy gear in a shop without ever going online? Do you hear online retailers whining about not being "given a chance"? The saw cuts both ways.

 

[ReefHound]

Does your shop do anything to let the customer know that such a chance to compete would be welcome? Or does the customer simply have to take the first step? Unfortunately, any such advertisement would compromise the dip'm and rip'm model that many shops are unable to move away from.

Good point. I can often walk into a new store and, without talking to anyone there, sense whether that store offers competitive prices and is willing to make deals.

 

[vshearer]

Markets and consumer demands go in cycles. Perhaps with the current online/LDS war the best thing for the LDS to do is reverse the old model of providing low priced certification classes to get customers in to then buy overpriced packages. Instead sell the gear competitivley with online retailers and then provide truly customized training at a premium price. I believe the LDS can actually benefit from the presence of the web as many new scuba divers realize just how much they are missing from the econo-certs and are looking for excellent training regardless of price.

 

[jimdiverman]

Markets and consumer demands go in cycles. Perhaps with the current online/LDS war the best thing for the LDS to do is reverse the old model of providing low priced certification classes to get customers in to then buy overpriced packages. Instead sell the gear competitivley with online retailers and then provide truly customized training at a premium price. I believe the LDS can actually benefit from the presence of the web as many new scuba divers realize just how much they are missing from the econo-certs and are looking for excellent training regardless of price.

When I was in college, I went to a public university. There were over 16000 students at this university, but most of the classes were remedial math and remedial English. You see, it was a business. Let's lower the admission standards of the university, have these sub par students come to the university to go to school and make them take these remedial courses to see if they can pass that (in the previous 12 years they hadn't proven that), and then they can still get into college. We want to let them in even though they won't get far academically because we want their money to help offset the costs of running the university.

Let me tell you how the statistics hold this up. From freshman to sophomore year, 87% of those students dropped out, either because they failed or quit. Of the remaining 13%, 10% of the original freshman class graduate.

So how does that story relate to the situation in the dive industry? There are always going to be those that "go all the way" in diving, as there are those in any pursuit, such as a degree program at a university. But when you start limiting the enrollment of the freshman class, you start losing money, even when you know that not all of them will go all the way. You still want to get them in the door because you want their money.

So raising the prices for the freshman divers goes against the "hook" principle. I believe you are right that it will make LDS's equipment sales more competitive with the online sellers, but what will it do to the new divers (freshmen) thinking about starting diving when it comes to the price of training AND gear?

Many that would have come in as freshman will not, and those that were going to go all the way anyway, will still be there, and they will pay the price. Still others that could have gotten into diving and gone all the way, but couldn't pay the entry fee will never try and never know.

 

[PhilEllis]

When I was in college, I went to a public university. There were over 16000 students at this university, but most of the classes were remedial math and remedial English. You see, it was a business. Let's lower the admission standards of the university, have these sub par students come to the university to go to school and make them take these remedial courses to see if they can pass that (in the previous 12 years they hadn't proven that), and then they can still get into college. We want to let them in even though they won't get far academically because we want their money to help offset the costs of running the university.

Let me tell you how the statistics hold this up. From freshman to sophomore year, 87% of those students dropped out, either because they failed or quit. Of the remaining 13%, 10% of the original freshman class graduate.

So how does that story relate to the situation in the dive industry? There are always going to be those that "go all the way" in diving, as there are those in any pursuit, such as a degree program at a university. But when you start limiting the enrollment of the freshman class, you start losing money, even when you know that not all of them will go all the way. You still want to get them in the door because you want their money.

So raising the prices for the freshman divers goes against the "hook" principle. I believe you are right that it will make LDS's equipment sales more competitive with the online sellers, but what will it do to the new divers (freshmen) thinking about starting diving when it comes to the price of training AND gear?

Many that would have come in as freshman will not, and those that were going to go all the way anyway, will still be there, and they will pay the price. Still others that could have gotten into diving and gone all the way, but couldn't pay the entry fee will never try and never know.

Jim, I really hate that I didn't make that comparison myself. It it TOO perfect.

Everytime there is a consumer transaction, there must be a matching merchant transaction. Merchants survive on revenue. Big revenue comes from the initial purchase made by scuba students, REGARDLESS of their intention or eventual outcome with regard to becoming "avid divers". It is an ugly fact, but the truth.

For those of us who are avid divers, we need to understand that the low prices now available to us on the internet ARE COMPLETELY MADE POSSIBLE by the 7 out of 10 new divers that spend significant money into our sport, only to quit in a matter of months. Now, it would be better if they didn't quite early, but if AVID divers were the only ones available as customers for scuba merchants, the US scuba industry would be 200 million a year instead of 800 million a year, there would be only 20% of the current number of manufacturers, importers, and suppliers, and ALL of the scuba gear available today online would be twice as expensive.

There is no college, no university, no economics expert that can make a peer-reviewed argument that RAISING the threshold cost for entry into an activity will result in more revenue in the aggregate. It simply does not hold water. For those that make their ONLY income from operating an economically viable scuba business, one that is already depressed by industry and market forces, cannot possibly survive by changing entry level scuba training to the more intensive (and more expensive) class many experienced divers claim to want. It simply will not work.

Want to lower the cost of all of your scuba diving equipment? Encourage everyone you know to take a scuba class; encourage them to purchase their personal gear; encourage them to take a nice check-out dive trip; encourage them to give it a try, no matter how long they last.

Oh well, ugly but the truth. And it applies to EVERY SINGLE ONE of the recreational pursuits available to us, from hunting, skiing, skateboarding, bike riding, calf roping, you name it. Ugly as it is to admit, recreational pursuits SURVIVE on all of the training and gear that sits in the closet.

Phil Ellis

 

[RAWalker]

With the market the way it is today LDS owners must compete with internet sales or go the way of the wind. It was far to easy on the shops of the past to charge whatever they wanted for equipment. Those days are gone. Today there is no reason why a LDS can not form an alliance with a online seller and match prices or set up a web presence of their own. Yes this limits profit from big ticket equipment sales but it also levels the playing field. A LDS that wants to stay in business will soon realize that to do so they will need to offer, Good knowledgeable advice, training, service, travel, quality gear, conveinience and a good selection. These are the things that will keep customers coming back. Low prices will translate to volume sales and better manufacturers discounts. If you want to compete do it! if you want to see your business go away keep giving out the BS about warranty.

In my area half the shops compete, and half give out the BS. I frequent the ones that compete and get my equipment at the right price w/ a full warranty and when I walk in the door they know my name or at least my face. I get treated with respect, I get good advice that maximizes my diving experience and saves my hard earned money. When I buy online it is because of a significant savings and my LDS owner understands and in some cases is thankful I haven't encouraged him to take a loss to maintain our relationship. I make enough purchases from him between equipment, training and travel.

 

[fireflock]

I understand that 'bad' shops behave the way they do largely because the incentives reward them for doing it that way.

A teaching University gets much more revenue from tuition that from books and supplies (ie. gear). That's not quite analogous to dive training, as I understand it.

I wonder what happens when the University freshman goes to the campus bookstore for the first time. Does anyone try to tell them it's a good idea to buy a complete personal learning system, ie. every book they will need for the next 4 years, before they sit in their first lecture.

It's still hard for a regular avid diver who does not work in the industry to look someone in the face and tell them that it's in their own personal best interest to buy a full set of gear right around the time they take OW (before, during, or just after). Very few people are willing to change their behavior to benefit a collective good. People just are not wired to make decisions like that.

Rich

 

[Coalcracker]

--- A LDS that wants to stay in business will soon realize that to do so they will need to offer, Good knowledgeable advice, training, service, travel, quality gear, conveinience and a good selection. These are the things that will keep customers coming back. Low prices will translate to volume sales and better manufacturers discounts. If you want to compete do it! if you want to see your business go away keep giving out the BS about warranty.

In my area half the shops compete, and half give out the BS.---

In my area ALL the LDS types use the warranty issue-they say that LP is not authorized, they have even said that Scuba.com is not authorized, they just lie. My equipment buss. goes to LP almost every time I am in NYC. They always have the latest new models and the best prices.