Recession on the diving market?

[backyard diver]

As A financial Advisor and Instructor I can tell you that we are in a recession but not as bad as it could be. the feds lower rates has helped. this one will be short lived, by election time we will be pulling out. I see people using LDS in there abbreviations, what does that mean?

 

[JahJahwarrior]

As A financial Advisor and Instructor I can tell you that we are in a recession but not as bad as it could be. the feds lower rates has helped. this one will be short lived, by election time we will be pulling out. I see people using LDS in there abbreviations, what does that mean?

Can I just point out that no one here has mentioned the official definition of a recession, or the fact that the official start of a recession isn't usually figured out until the thing is well and over with. It could be that we are in a recession right now but no one will really know until we see numbers at the end of the quarter. And all numbers, as accurate as they might be, don't always portray the exact picture of the economy. You must remember that in macro, it's all a little relative and conceptual, hence we have a price basket, a basket which hasn't really changed in a long time, we haven't redone the CPI survey to redo the chaining process in a long time, because it's really expensive. Even a financial advisor and instructor cannot say for certain if we are in a recession or not, because you can't go out and figure out GDP right away, can you? The information has come out and will be coming out, and then we'll figure out if we are really in a recession or just a momentary dip. Also, to predict that it'll be over by election time....I don't know about that. The last recession was, I think, as I said before, 8 or 9 months, in 2001. The last expansion was about 10 years. This last expansion has been going on for about 7 years. We are just about to that point in the business cycle that we should go through a recession, but depending on when it started....I'd like to say that the recession in 2001 was one of the shortest ever. To predict a recession shorter than that, in my opinion, is a bit odd. It could happen, but I'd say you might be sticking the cart before the horse to make such a precise prediction, rather than just aying "it'll be short." I'm not saying you are wrong on any of your points, I just think you are extrapolating a little too much and stretching the facts just a little too far to come up with a prediction that is far too precise to be believable.

LDS: local dive shop

 

[offthewall1]

In order for dive shops to survive... we're all going to have to stand up to price fixing (MAP pricing) from the manuifacturers. JUST SAY NO to MAP Pricing. It is killing the local dive shops - not helping them - especially in this economy - which will drag on for at least 1 1/2- 2 years. Here is why.

First and foremost there is going to be a flood of gray market goods on the internet and Ebay coming from all of the dive shops that will close in the next year to year and a half. In addition, people will be unloading used gear in order to pay their bills... this is already happening as energy (electric) and fuel costs rise which is also impacting everything from medicine and insurance to the grocery bill.

Manufacturers use the excuses of a fair playing field and brand integrity as reasons for MAP pricing. The reality is this sytem was built to protect bad businessmen (IE typical dive hobbyist that know nothing about running a business) from good businessmen (those of us that know how to streamline our expenses and operate on lower margins.) The theory is that more shops means more business for the manufacturer... but this theory is dead wrong and mixing it with a bad economy will totally kill most local dive shops.

MAP pricing doesn't level the playing field - it makes it completely uneven. Local ecnomies are different everywhere you go... which is why gas is higher in one place then another and why the price of homes, cars, milk and bread are different too. While they say you can sell for whatever you want - but you have to advertise it for the same price. That is just plain dumb.

If you can't advertise a sale price... how do you get people to come in to buy something. Every other market I know allows the advertising of sales prices. Sports Authority and Dicks advertise baseball bats on sale... Nike shoes on sale etc... but a dive shop can't advertise a regulator??????

If I can sell a regulator for $399 that everyone else is selling for $450... then I should be able to advertise it for that price...

The only way to stimulate interest in Scuba in a down economy is to make it "look" as affordable as possible. No one will walk into a dive shop in a down economy because the perception is that the sport is expensive. Make it as affordable as a baseball bat, glove, uniform and some balls... and maybe we have a chance.

Right now most manufacturers are overloaded with inventory and calling retailers with some special buys... hey buy our stuff... we'll give you a better price they say. I say can I advertise it for a better price? They say no. I say no... I don't want it. All they're trying to do is stick you with inventory. Let me run a sale advertisement and pass the savings on to customers - then sure I'll buy it.

The critical point here is that if you can sell it for whatever price you want - then you sure as hell should be able to advertise it for whatever you want. If other shops aren't as good at running a business and can't compete - that isn't your problem or mine... It's their problem.

As far as brand integrity... that's a crock of crap. I don't think any less of Coke because it's on sale at Walmart. i don't think any less of Easton baseball bats because they're on sale at Dicks.... I think... hey... i got to run out to Dicks and get that bat while it's on sale.

Sale ads with sale prices drive customers to stores. It makes no sense to pay for advertising without sale prices in the ads. Scuba manufacturers with MAP pricing make this nearly impossible. It has hurt the industry for a long time... and I urge you to join me in saying enough is enough.

This is America.. when you as a dive shop owner buy the poduct.. you own it... and you can advertise it for whatever you want. This is the only way to save and grow the sport, save your business and thrive.

Lower prices mean happy customers... happy customers mean happy retailers... and you would think happy retailers would mean happy manufacturers. I can order more goods if I can sell at lower prices... shouldn't that make the manufacturers happy? No it doesn't. why? Because they have brainwashed so many poor hobby dive shop owners into thinking they're protecting them... loading them up with inventory at special prices and teetering them on the edge of bankruptcy until they finally tip over the edge.

I've rambled on too long... but these are the facts... so yes... dive shops everywhere are struggling. The economy is a big piece of the puzzle... but so are the ruthless manufacturers who insist on insanely high MAP pricing that scares customers away from local dive shops and onto the internet in search of a better buy.

 

[Stu S.]

Standard definition of recession is two consecutive quarters of falling real gross national product. Sure, you have to wait for the data to be tallied to get the growth (+ or -) number.

Anyway, the present situation with fuel costs has made me more of an on-line shopper. I recently bought my daughter a dive light. A round trip to the dive store is three gallons of gas. Better to pay the $7 shipping and have one delivered to the house.

 

[offthewall1]

Standard definition of recession is two consecutive quarters of falling real gross national product. Sure, you have to wait for the data to be tallied to get the growth (+ or -) number.

Anyway, the present situation with fuel costs has made me more of an on-line shopper. I recently bought my daughter a dive light. A round trip to the dive store is three gallons of gas. Better to pay the $7 shipping and have one delivered to the house.

Next time you need something - keep us in mind. We'll save you the gas and a buck or two more...

You make a valid point though... Before I opened a store I used to drive 20 miles each way.. thats 40 miles... and at $3.29 a gallon getting 16MPG I'd be spending 2.5 gallons X $3.29 or $8.22... $7.00 bucks shipping is cheaper... and my momma always said a penny saved is a penny earned.

 

[Stu S.]

Was your mom Ben Franklin?

It lowers my carbon footprint to let UPS bring it.

 

[drbill]

Before I opened a store I used to drive 20 miles each way.. thats 40 miles... and at $3.29 a gallon getting 16MPG I'd be spending 2.5 gallons X $3.29 or $8.22... $7.00 bucks shipping is cheaper... and my momma always said a penny saved is a penny earned.

$3.29 a gallon? I just filled my tank at $5.18 a gallon! Good thing I get 70 mpg in the Dr. Bill Mobile!

 

[fisherdvm]

I think for already established divers, we'll probably be traveling less. Less exotic destination, more local dives - Florida, Bahamas, Cancun, etc... Where you still can get good deals - and less than 4 hours away. I think local dive charters in the Great Lakes might actually see more business.

I wonder if on the retail side, you are going to be selling alot less high end brands, and perhaps training alot less new OW students. I can see how the discovery scuba/scuba diver rating might still be wanted.

The economy has not hurt my business, yet. But the number of bad accounts has doubled, if not tripled since two years ago. I am sending so many more folks to collection. And two who has not paid are actually lawyers working in prominent law firms and still earning good money. Go figure.

 

[offthewall1]

The economy has not hurt my business, yet. But the number of bad accounts has doubled, if not tripled since two years ago. I am sending so many more folks to collection. And two who has not paid are actually lawyers working in prominent law firms and still earning good money. Go figure.

I'd say it's hurt your business then... or at least your peace of mind : )

Cheers

 

[FFMDiver]

One way we could address MAP pricing is to establish sweeping oversight of the industry. PADI, NAUI and DEMA could merge as PANEMA that will gain the power to investigate any activities of manufactrures that threaten economic stability of the dive industry, gather information and combat risks to the financial system as a whole!