Early this week, I was talking with a friend who happened to mention that a dive store wasn’t doing very well and was trying to sell off a part of their business. We started discussing our current national economic situation and the impact on the scuba diving industry. How can dive centers survive in this very tough economy? How can scuba equipment manufacturers help the dive stores?
One thing I think I would eliminate would be MAP or MSRP. For those of you who do not know what MAP or MSRP is. MAP stands for Manufacturer Advertised Price. Basically, the manufacturer tells the dive store the minimum price that their products must be advertised at. MSRP stands for Manufacturer Suggested Retail Price. MSRP is basically what the manufacturer tells the dive centers what they can sell their products at. Why is this hurting the dive industry? Because when consumers research what products they want to buy, they see it listed on eBay, Leisure Pro or what ever. Then they go into their local dive store and see the same product listed for a higher price. Guess where they are going to buy it? By lifting MAP, MSRP, or online selling restrictions, dive stores can start to compete equally in a free market environment. There are many ways scuba manufacturers can protect their brand/reputation without forcing dive stores to sell at higher prices. By trying to scare consumers with terms like black market products, or no free regulator parts.
Dive stores can take advantage of traditional advertising. Print advertising is dirt cheap right now. Think about alternative customer bases and advertise towards that market niche. Perfect example. I talked to a local dive store owner about advertising in a popular gay and lesbian magazine. He had a look of horror on his face. He didn’t feel that that was the clientele he wanted to target. I doubt he was homophobic, but was nervous what others may think. I thought this was ridiculous. After all, the money used by the gay community is the same color used by us heteros. But you can see how getting your name out to other population niches can help you survive this tough economy. By utilizing the cheap advertising rates for traditional media can help you bring in new customers.
Are these just my opinions? Yes. However, I do have a MBA, have consulted for small businesses, and teach business classes at the college level. So I do have a little bit of credibility. 
These were just a couple ways that dive stores can use to help survive till the economy starts to turn around. I welcome your suggestions and comments.
Dive Safe,
Duane Johnson
Precision Diving
Technorati Tags: MAP, MSRP, dive store, dive centers, dive industry, Leisure Pro, free market, scuba manufacturers, traditional advertising, MBA, small businesses
About Duane Johnson
Great article, and honestly I really hate most dive stores, at least in the Chicago area. They are more concerned with a single sale than a repeat customer and because of this their prices are crazy high. If something isn’t done soon, all dive stores are going to be are fill stations, and when that happens, I’ll be opening up Tom’s Fill station in a shed in the back big enough to hold a few tanks at a time. They really need to kill the MAP and MSRP bull, the few companies I really do like and buy, don’t practice this. The ones that do, I buy on LP or ebay.
Duane and Tom you provide excellent points for all to think about. Managing a dive shop I hear the arguments made here repeatedly from our customers. Let’s look at it from a dive shops perspective as well as the consumer. For example, you say dive shops are concerned with a single sale and not repeat customers (at least most of the ones you have dealt with). How is online shopping geared for repeat customers? At the dive shop I manage, we see time and time again people who research online, buy their products, then have no idea what to do with them once they get them, or they need to be properly setup or they are not satisfied with them because they didn’t get to play around with them. On the other hand we have customers who come in over and over to buy gear or take classes because they are satisfied with the service and trust the advice we give them. How concerned is Leisure Pro with who your gear will work for you or whether it is suitable for the type of diving you will be doing? You do most your research online, then find the cheapest place to get it.
As for the MSRP and MAP pricing, I don’t know. I get why they do it, but unless manufacturers are going to crack down on online resellers adhering to pricing policy, then they shroud get it rid of for brick and mortar retailers. The truth is it is no different than any industry. Online resellers have limited overheard, relative to shops, and can afford to have cheaper prices. That is why people by cars online, they buy electronics online and so on. You walk into a store to buy a camera and it is more than at buy.com.
Shops need to successfully deliver value to their customers, while competing with online prices, but they do not necessarily need to match online prices. The offer, or they should offer, a much better service for their customer to justify the higher cost. But hey, soon we will be learning how to use rebreathers via an online simulator because shops charge too much!
Hi Rami,
Thanks for the comment. One could argue that many people do continue to buy from the LP’s more than just one time. I know I have purchased from every major online reseller there is more than once. I do think that the LP’s of the world are concerned with people being happy and coming back to buy from them again. If they are not, then that would be a pretty bad business model. The problem that dive stores have when competing with the online retailers is that they do not properly convey their “higher” quality of service. Certainly, a dive store has an opportunity to wow the customer when they are in the store and can play around with gear. But many times they do not have the ability and or knowledge to do just that. Just regurgitating what is in the product literature is not a way to wow a customer. Pushing the latest/greatest product isn’t a way to wow a customer either. It comes down to what added value a dive store can give to a customer that the consumer can’t read on their own. Real value and not perceived value that is.
I’m sure someone will come up with that online rebreather course soon.
Great article. I concur with you that the gay and lesbian niche market. It is an excellent target for scuba retailers. Double income household frequently with no children = excess spendable income. In addition, that market holds loyal buyers, frequent travelers and adventure seekers.
On another note, if retailers want to retain their customer base they need to provide the best possible service at a fair price and to educate their base. I bought a suitcase from LP – the one and only time I’ve strayed from my local shop. I thought I was being a smart consumer. What I learned about was the ‘grey’ market and that even though my product may have the Oceanic logo, it may not even be their authentic product. The bag was coming apart after one overseas trip, and my local shop educated me and explained to me why it was important to have local shops. I’ve never strayed since and have become a loyal customer and advocate.
Best of luck to all,
Great Point of view. I would take it one step further and band together to get stores who all carry the same brand to call and tell the manufacturer – come and get it. I am selling for this price and will not be carrying your brand any more due to…
Let them come up with a solution and put a time limit on it. In 30 days, if you have not given us something we will be liquidating and going with XYZ.
Also, as you said, economy’s can be shown. Are the repair centers coming in with questionable items and ordering parts? Are the manufacturers countering with 200% costs to NON dealers? I mean selling an item is one thing.
They are protecting themselves, why can’t you protect yourself? I would love to hear some other strategies.
As a small business owner I feel that MAP pricing is only protecting me. Without MAP or MSRP the dive industry would be even more of a “WHORE” Market Place. A land where he who has the capital will be king.
I ask you how can a dive store that does $5000 in sales with Manufacture “A” compete with a larger retailer that does $60,000 Manufacture “A”. The larger dive center that does $60,000 with Manufacture “A” has a price level that is much better than the dive center that does $5000. The larger retailer can now sell the products for whatever they want. And in many cases the smaller dive centers wholesale cost is more then what the large guys can sell the items for on their web site.
If MAP pricing was in affect then it’s a fair ball game for everyone. No matter where the consumer shops the price will be the same. This is what will help dive centers.
As for gray/black market products that is because a few scuba manufactures hate the internet. It’s their fault this market exists. They need to embrace the internet to help their brick and mortar retailers. After all the internet is not going anywhere. I’ll put a bet on it that within the next 2 years you will see manufactures like Scuba Pro and Aqualung allowing dealers to sell online at a MAP pricing.
Duane, what a salient and timely article and I also appreciate what has been written here. I am K2 Scuba Online and we are succeeding in this market while 10, count em 10 diveshops have gone out of business since October of 2008. . .and it had nothing to do with MAP.
Im a strong proponent of MAP and have added to Duane’s article that I have seeded from his blog. You can find it in its entirety at http://www.k2scuba.com/blog
Here is an excerpt:
As a relatively new player, MAP allows a more level playing field for the dive shop as well as K2 as an internet presence. If we were to go to battle with the massive war chest of the market makers mentioned above, they could keep dropping prices until they put the competition out of business. . . .
Dive Safe Y’all,
Tevis