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crgjpg
08-07-2008, 09:49
Ok, Byte Me's post about buying a tank at LDS and receiving free fills for life got me thinking. How much of a profit is there for a LDS when they sell a tank? How does it cost to have the compressor to do air fills? What does it cost the LDS per fill to operate the compressor? It is still slightly cheaper for me to buy a tank from ST even with shipping. It would be much cheaper to get the Faber tank from other places on the internet. I am thinking of asking LDS about getting a deal with air fills.

ReefHound
08-07-2008, 10:07
I think the general consensus is that air fills are not a profit center, certainly not a high profit center for the typical dive shop. Maybe at resorts where hundreds of tanks are filled per day.

Exact costs will vary based on local expenses and type of equipment and volume of business but most ballpark figures I've seen for shop cost run from $3 to $5 for a plain air fill. Nitrox is significantly higher.

Shops have to provide air fills even if they lose money because agencies like PADI require them to be "full service" shops and because they need air fills for their own needs like classes and tank rentals. They also bring divers physically into the shop where they may buy other things.

h2odragon1
08-07-2008, 10:13
Air fills are not a money maker. Air fills are the liability generator. Service, and sales are the money makers. $7 for airfills, $40/hr for service. Classes are another money generator, but also an expense, because liability, and renting pool time and the equiptment mainenance.

jbres1
08-07-2008, 10:22
I can't see air fills as abig profit item. You have the start up cost of the system, the maintenance of the system ( Oil and filters ) and all of the unknown costs. I can see it as a money maker if you are doing alot of Nitrox fills.
Jim Breslin

mike_s
08-07-2008, 10:54
Unless you do a huge quanity of air fills per month in bulk, like Keys charter boats might, then air fills are the "loss leader" of the scuba industry. If you add on liability, then even the bulk fillers are most likely not making a profit.

If most shops charged the "real cost" of an airfill then we'd all whine.

They charge a subsidised fee to keep the whine down and to keep customers from going elsewhere for fills. Because if they go elsewhere for fills, they'll go elsewhere for other purchases also.


As for profit on the tank, if I posted the 'dealer cost' of the tank it might seem like they are making a lot of money on a tank. but once they pay shipping, employee cost, shop cost/overhead, insurance, etc, then its easy to see that tanks aren't a profit center really either. especially since most shops do a visual, a free initial air fill and maybe an o2 clean with a lot of new tanks.

BouzoukiJoe A.K.A. wrecker130 AKA Chuck Norris AKA joeforbroke (banned)
08-07-2008, 11:31
For a low volume shop, even high-priced nitrox fills are usually a money loser. They do it to keep divers coming into the shop

NC has very high prices for fills compared to many other areas, so perhaps the better run shops might break even, but I am quite sure the owners don't go home and count all the money they made filling tanks today.

CompuDude
08-07-2008, 12:46
Yup, fills are intended to bring people into the store. They definitely don't make money on them.

A lot of people think they can save a fortune on fills by buying their own compressor, until the maintenance costs start adding up. The only way you stay ahead of the curve is if you are blending your own trimix, where wholesale Helium costs vs. retail costs start working a lot more in your favor.

awap
08-07-2008, 13:04
I do not believe for a minute that a shop is losing money by filling your tank. Since they do not charge themselves for filling their own tanks (training & rentals), their accounting may make it look like the costs of operating their fill station is greater than the money they take in from paying customers like most of us. But I'm sure they are not charging me $5 to fill my tank if that fill just cost them more than $5.

CompuDude
08-07-2008, 13:26
I do not believe for a minute that a shop is losing money by filling your tank. Since they do not charge themselves for filling their own tanks (training & rentals), their accounting may make it look like the costs of operating their fill station is greater than the money they take in from paying customers like most of us. But I'm sure they are not charging me $5 to fill my tank if that fill just cost them more than $5.

Run the numbers yourself. It's a loss leader, considered an advertising expense and part of the cost of doing business.

This has been discussed many, many times in great detail on other sites. The numbers aren't that difficult to figure out. How many fills do you think it takes to make a profit on a $60,000 compressor setup at $5 per fill? Add in maintenance costs (oil changes, filter changes, inspections, belts, installation costs, FILL OPERATOR TIME, etc.) and it's not hard to see that there's no profit there. Even with a $10k setup (pretty small for an LDS) the costs add up, especially because smaller setups need MORE upkeep.

crgjpg
08-07-2008, 13:56
Ok, so air fills do not generate a profit. Would it be worth me asking for a free fill deal if I purchase a tank from the LDS?

awap
08-07-2008, 14:09
I do not believe for a minute that a shop is losing money by filling your tank. Since they do not charge themselves for filling their own tanks (training & rentals), their accounting may make it look like the costs of operating their fill station is greater than the money they take in from paying customers like most of us. But I'm sure they are not charging me $5 to fill my tank if that fill just cost them more than $5.

Run the numbers yourself. It's a loss leader, considered an advertising expense and part of the cost of doing business.

This has been discussed many, many times in great detail on other sites. The numbers aren't that difficult to figure out. How many fills do you think it takes to make a profit on a $60,000 compressor setup at $5 per fill? Add in maintenance costs (oil changes, filter changes, inspections, belts, installation costs, FILL OPERATOR TIME, etc.) and it's not hard to see that there's no profit there. Even with a $10k setup (pretty small for an LDS) the costs add up, especially because smaller setups need MORE upkeep.

The smart LDS payed about 20k for a compressor in order to qualify as a sucba equipment and training retailer. So any of that cost that is offset by the charge for an airfill is gravy. If a shop is selling fills for $5 and the O&M costs for that fill are higher than that, then he is either just plain stupid or he is getting his ass kicked by a competitor. There is absolutely no reason for a shop to lose money by filling a customer's tank for a reasonable price. How much of that "profit" the shop chooses to count towards capital expenses (the compressor and bank system), rent, or other overhead (heat, lights, help) is up to him. But anyone who believes that each fill is incurring a loss would probably pay full MSRP for a complete set of scuba gear.

I go into my shop often to get fills. Like so many gas customers, it is rare I buy anything else.

in_cavediver
08-07-2008, 16:52
I do not believe for a minute that a shop is losing money by filling your tank. Since they do not charge themselves for filling their own tanks (training & rentals), their accounting may make it look like the costs of operating their fill station is greater than the money they take in from paying customers like most of us. But I'm sure they are not charging me $5 to fill my tank if that fill just cost them more than $5.

Run the numbers yourself. It's a loss leader, considered an advertising expense and part of the cost of doing business.

This has been discussed many, many times in great detail on other sites. The numbers aren't that difficult to figure out. How many fills do you think it takes to make a profit on a $60,000 compressor setup at $5 per fill? Add in maintenance costs (oil changes, filter changes, inspections, belts, installation costs, FILL OPERATOR TIME, etc.) and it's not hard to see that there's no profit there. Even with a $10k setup (pretty small for an LDS) the costs add up, especially because smaller setups need MORE upkeep.

The smart LDS payed about 20k for a compressor in order to qualify as a sucba equipment and training retailer. So any of that cost that is offset by the charge for an airfill is gravy. If a shop is selling fills for $5 and the O&M costs for that fill are higher than that, then he is either just plain stupid or he is getting his ass kicked by a competitor. There is absolutely no reason for a shop to lose money by filling a customer's tank for a reasonable price. How much of that "profit" the shop chooses to count towards capital expenses (the compressor and bank system), rent, or other overhead (heat, lights, help) is up to him. But anyone who believes that each fill is incurring a loss would probably pay full MSRP for a complete set of scuba gear.

I go into my shop often to get fills. Like so many gas customers, it is rare I buy anything else.

The question for most shops is volume. If you can fill lots of tanks, you can get the more economical filters and larger compressor. If you fill low numbers of tanks, you have to go to the smaller system with smaller filters that cost more per fill. I've seen the numbers for a small shop who does mostly training fills. Air is a loss leader. They have to have it to be a dive shop, they have to have it to teach and around where I am at, local divers don't need it since there isn't a 'resort' trade. Dive sites generally have tanks/fill stations. The capital expense and upkeep is huge per fill. The shop I recall did around 50 fills per month. (training and customers). Hard to make money with that.

rawalker
08-07-2008, 17:42
It's a loss leader!
Simply it's a small loss to generate traffic and other sales.
How many visual inspections does it generate for the shop? Those are great profits! How many people walk through the door and see a display of a new piece of gear and decide to make a purchase they didn't intend to make on the other side of the door?

marchand
08-07-2008, 19:06
According to the manager at one of the local LDS he's making 90% profit on nitrox at $0.09 a cf.

CompuDude
08-07-2008, 19:19
According to the manager at one of the local LDS he's making 90% profit on nitrox at $0.09 a cf.

I believe that's looking at his cost for gas vs. his price for gas. Does not take compressor costs into account.

brandon
08-07-2008, 19:23
No shop out here, but have made do with a personal compressor or two and a commercial dive op that will fill for $15 a tank.

We figure it's about $10 a tank to fill off the little MaxAir 3.5 (but our electric rates are INSANE - .55/kwh), and it takes a half hour.

Much of the time it's worth it to me to just pay $15 for a fill and not have to worry about making time to stand around watching the compressor. Plus, the commercial guy will come pick up your tanks and drop them off when done!

-B

cajunfla
08-07-2008, 20:01
Ok, so air fills do not generate a profit. Would it be worth me asking for a free fill deal if I purchase a tank from the LDS?


Heck yeah it's worth it!! If they say NO, what have you lost??

mike_s
08-07-2008, 21:33
Ok, so air fills do not generate a profit. Would it be worth me asking for a free fill deal if I purchase a tank from the LDS?

I'd be surprised if you didn't get a free fill from a local shop if you bought a tank.

New tanks typically come with a VIS, which requires some air afterwards. Usually it's a full fill as it's kinda pointless just to fill it to a few hundred psi.



According to the manager at one of the local LDS he's making 90% profit on nitrox at $0.09 a cf.

yeah... and like no one in the dive business has ever lied before to their customers.

.09/cf * 77cf for a AL80 fill = $6.93.

at $6.93 per tank and a 90% profit, he's saying his cost to fill an AL80 is way under $1 buck.

He's either lying and knows it, or he really sucks at his math and doesn't know he's lying. :smilie39:

ReefHound
08-07-2008, 22:10
By "free fill deal" I think he means a fill card or free fills for a year or for life as mentioned earlier, not a single free fill.

brandon
08-07-2008, 22:41
at $6.93 per tank and a 90% profit, he's saying his cost to fill an AL80 is way under $1 buck.

He's either lying and knows it, or he really sucks at his math and doesn't know he's lying. :smilie39:

You'd be hard pressed to fill an AL80 with air for under a buck!

-B

awap
08-08-2008, 10:50
Ok, so air fills do not generate a profit. Would it be worth me asking for a free fill deal if I purchase a tank from the LDS?

I'd be surprised if you didn't get a free fill from a local shop if you bought a tank.

New tanks typically come with a VIS, which requires some air afterwards. Usually it's a full fill as it's kinda pointless just to fill it to a few hundred psi.



According to the manager at one of the local LDS he's making 90% profit on nitrox at $0.09 a cf.

yeah... and like no one in the dive business has ever lied before to their customers.

.09/cf * 77cf for a AL80 fill = $6.93.

at $6.93 per tank and a 90% profit, he's saying his cost to fill an AL80 is way under $1 buck.

He's either lying and knows it, or he really sucks at his math and doesn't know he's lying. :smilie39:

And perhaps he means 90% markup which would produce more believable numbers. Maybe he just remembered it was 90% something and it was producing a profit.

I'm not saying that gas is a major profit center for most shops. They pump gas because they must be able to do that to qualify as a scuba shop. They used to make their main profits from gear sales to new divers. Now they are probably making more from training and only getting the large profits on gear wsales to those new divers that fail to locate the internet in time or are successfully scared away from the internet in their training. All I'm saying is that the idea that each fill sold to a customer is putting the shop further in the red is BS.

BouzoukiJoe A.K.A. wrecker130 AKA Chuck Norris AKA joeforbroke (banned)
08-08-2008, 11:01
All I'm saying is that the idea that each fill sold to a customer is putting the shop further in the red is BS.

I think we can all be right on this one. The reason that its not profitable for low volume shops is the fixed costs. The "variable" cost of each additional fill is small, so it doesn't hurt the shop to sell more air- in fact it helps them get closer to the break even point. So you are right that each additional fill puts the shop closer to the black (or further in the black if they are already profitable) as long as they charge more than their variable cost.

cummings66
08-08-2008, 12:21
The loss leader concept is well established and the dive shops I am sure are well aware of it. That's what is being discussed here, take a small hit for this and make big profit on that and the end result is you made money.

I know a guy who services compressors, big ones that some have hinted cost upwards of $60k. They are more efficient than the smaller ones, but they are not free to operate and to be honest selling a $5 fill isn't making money, nor is it losing a lot of money. Consider how many divers get air, then look at the group as an average. Even if a couple of them buy something that money the air fills are covered by the new sale.

If they only did air fills they would go out of business.

crgjpg
08-08-2008, 12:28
Exactly

ScubaToys Larry
08-08-2008, 13:10
We are more efficient than a lot of other shops. We make $27.85 per tank fill that we charge 5 bucks for. That extra profit lets us drop our prices on the other gear sales, and offer the gift certificates on the forum. :smiley36:

Realistically, a tank fill costs a shop right near the $5.00 mark when you take in capital investment, floor space you are using, electricity, filters, synthetic oils, testing, labor, etc. If doing a lot of fills, and very stream lined operation with a big compressor - might get that down to 4 bucks. But if you factor it all in... that's probably the cost. But shops do it with the hope that while the guy waits the 10 minutes to get the tank filled - he'll buy a t-shirt or a mouthpiece... that's it folks!

ReefHound
08-08-2008, 13:15
A good accountant can do that kind of thing for you.

in_cavediver
08-08-2008, 17:27
I do want to add one thing - it is possible for a dive shop to make money on air. It just takes pumping a LOT of air to do it.

My preferred shop - Cave Excursions - pumps a LOT of air. (Its my favorite because it means I am cave diving!). At one time, they banked something like 10,000 or 20,000 cubic feet of 32% and went through it each week. They bank air, 50/50 and trimix 21/35 as well. Bill has a rotation of Haskels and compressors just to keep up. Then again he sells by the cubic foot and was a founding member of cave fills in LP tanks so a single diver may buy 120-200cft of gas in a single fill. Its all about volume.

georoc01
08-08-2008, 18:06
I'd say, if they are taking a loss on fills, they must get killed on tank rentals. The shops around here rent them for a dollar more than the fill, and given the cost of keeping them in hydro and vis, it must be a real loss leader.

in_cavediver
08-09-2008, 15:53
I'd say, if they are taking a loss on fills, they must get killed on tank rentals. The shops around here rent them for a dollar more than the fill, and given the cost of keeping them in hydro and vis, it must be a real loss leader.

You'd think but really, once a tank is paid for, it only costs money every five years and even then, its only 10-15 dollars. VIP's are in house so its just time on that. Take an AL80 and assume its cost to the shop is $100. 100 rentals at $1 profit paid for that tank. In 5 years, if you do 115 rentals, its paid for.

Compressors though, they have periodic costs whether you use them or not. Each quarter, you have the gas testing done (required for selling breathing air). With usage, based on hours, you have compressor oil, filters and scheduled maintenance.

mike_s
08-14-2008, 15:04
All I'm saying is that the idea that each fill sold to a customer is putting the shop further in the red is BS.

Each fill doesn't put the shop further in the Red.... but in most cases fills are a loss. But they are a "loss leader". You have to have them. Like Larry said, he hopes while they're filling your tank that you're buying other stuff. Or will make them your main shop for purchases.


The cheap oil-change-place near where I live does a "loss leader" on oil changes on your car. they charge $12 bucks (as a loss leader) and when you get in there they try to "upcharge" you on ohter services, like alignment, brakes, or anything else they can find in their "20 point inspection process". The $12 is just to get you in the door, then once your car is on the rack, they give you the "bad news". THAT is how some loss leader shops run. Luckily most dive shops just sell air at a cheaper price to get you to buy other stuff.



I'd say, if they are taking a loss on fills, they must get killed on tank rentals. The shops around here rent them for a dollar more than the fill, and given the cost of keeping them in hydro and vis, it must be a real loss leader.

Well that depends on how you factor the cost of the rental tank. Most rental tanks aren't paid for entirely out of the capital purchase budget just for being rental tanks. They also use them for student tanks for open water classes, etc.

I wouldn't call them a big profit center, but around here a rental tank runs about $4 more than a fill. 20-25 rentals and it's paid for. In the FL keys, that could be done in less than a month. Inland shops, maybe done in one diving season. Every year after that isn't a loss, but I wouldn't call it "gravy" either. But the extra income on a rental tank on top of air helps offset other costs.


If we could get super rich running a dive shop, then we'd all be doing it instead of trying to play "monday morning quarterback" on here....

JahJahwarrior
08-21-2008, 00:06
After hearing years of talk about how air fills are a loss leader, I asked one local shop owner if this was true or not.

He said it kind of depends on how often they have to overhaul the Haskels, but that he was not only making profit, but a good profit on each fill.

Might not be true for each store, but it bugs me to hear play backseat shop manager and proclaim that tank fills are most definitely a loss leader. :)

stairman
08-21-2008, 06:54
some make money through volume.Most break even.Small mom and pop shops lose money on fills.That is directly from DS owner/friends.

JahJahwarrior
08-21-2008, 08:10
some make money through volume.Most break even.Small mom and pop shops lose money on fills.That is directly from DS owner/friends.

That is a much more honest and balanced approach to the whole matter.

mike_s
08-21-2008, 09:11
After hearing years of talk about how air fills are a loss leader, I asked one local shop owner if this was true or not.

He said it kind of depends on how often they have to overhaul the Haskels, but that he was not only making profit, but a good profit on each fill.

Might not be true for each store, but it bugs me to hear play backseat shop manager and proclaim that tank fills are most definitely a loss leader. :)


some make money through volume.Most break even.Small mom and pop shops lose money on fills.That is directly from DS owner/friends.


A lot of that has to do with not only volume, but initial (and ongoing) capital expense of their compressor system.

Of the past two shops we've had in town, one of them had a $1500 (guessimated value) used compressor that had all kinds of problems.

The other newer shop has prob a $25k to $40k compressor system with filter systems that produces o2 clean fills, a nice fill panel, bank systems, etc.

There is a HUGE difference in the systems. It's not easy to compare the differences in shops and air fill costs unless you consider all the factors.

CompuDude
08-21-2008, 14:19
After hearing years of talk about how air fills are a loss leader, I asked one local shop owner if this was true or not.

He said it kind of depends on how often they have to overhaul the Haskels, but that he was not only making profit, but a good profit on each fill.

Might not be true for each store, but it bugs me to hear play backseat shop manager and proclaim that tank fills are most definitely a loss leader. :)

I have no doubt that there are shops out there that have managed, through volume and equipment cost savings, to make a profit. I would strongly suggest, however, that they are the exception rather than the rule. Finding a couple of high volume shops in each state, ignoring the loss/break even status of every other shop in the state, is not really a good sample.

If you get quality, used fill setups for a good price, and get lucky with maintenance costs, and have a reasonably high volume, there should definitely be a small profit involved. But anyone who invests in a good, expensive system is going to take quite a bit of time to break even on their investment, let alone start generating a profit. And even then, how much profit is possible on $5 fill, after accounting for fixed costs such as oil changes, filter changes, rent (square footage taken that could otherwise hold merchandise) and manpower to man the fill station? Certainly not $5. Even best case, I'm guessing more like a couple of bucks per fill. That's not going to make you rich until your volume gets insanely high.

cummings66
08-21-2008, 16:07
Might not be true for each store, but it bugs me to hear play backseat shop manager and proclaim that tank fills are most definitely a loss leader. :)


What model compressor and what kind of filter system does he have, plus how many fills does he do? All of that matters.

shovelhead91701
08-21-2008, 16:15
As a small business owner myself I actually do find a lot of people seem to think that we SHOULDN'T make any money...... last time I checked that was why we went into business for ourselves. That being said I do hate the fact that out here in rural america where I am from a lot of business owners take advantage of the fact that we are "out here" and rip a lot of local people off on items that they can't get elsewhere or through the net due to freight costs etc.

I personally don't mind paying a little more to help a local business who is trying to do the "right" thing and offers great service!

in_cavediver
08-22-2008, 05:11
After hearing years of talk about how air fills are a loss leader, I asked one local shop owner if this was true or not.

He said it kind of depends on how often they have to overhaul the Haskels, but that he was not only making profit, but a good profit on each fill.

Might not be true for each store, but it bugs me to hear play backseat shop manager and proclaim that tank fills are most definitely a loss leader. :)

This is for Florida - perhaps even in cave country. There is LOT more demand for fills in that neck of the woods than say - Kansas.

Most of the shops I have been to in Indiana don't even have a single haskel.

Profitability is all about volume served. The more you use it, the more likely you are to make money with it.

ianr33
08-22-2008, 09:37
After hearing years of talk about how air fills are a loss leader, I asked one local shop owner if this was true or not.

He said it kind of depends on how often they have to overhaul the Haskels,

Why do you need a Haskel for an air fill ??

mike_s
08-24-2008, 21:22
Haskel's are often used for pumping nitrox out of a nitrox bank that is below the rated pressure of a tank it's filling. (or should I say used for boosting the pressure of nitrox out of a bank of lower pressure to the rated cylinder to be filled).

I guess you could use it for air, but seems odd.... but I think that when the poster said that, I think he was using the term 'air fill' as a generic when talking about using a haskel.

JahJahwarrior
08-24-2008, 22:15
I was using it as a generic term. The places I go for fills, when you tell them you need an "air fill" they give you 32% :D It's not that they are stupid, it's that most everyone down here breathes 32%, so when you say an "air fill" they assume you don't mean it literally. If you tell them "I need them filled with air" then they'll fill them with air.

marchand
08-24-2008, 23:37
Ok, so air fills do not generate a profit. Would it be worth me asking for a free fill deal if I purchase a tank from the LDS?

I'd be surprised if you didn't get a free fill from a local shop if you bought a tank.

New tanks typically come with a VIS, which requires some air afterwards. Usually it's a full fill as it's kinda pointless just to fill it to a few hundred psi.



According to the manager at one of the local LDS he's making 90% profit on nitrox at $0.09 a cf.

yeah... and like no one in the dive business has ever lied before to their customers.

.09/cf * 77cf for a AL80 fill = $6.93.

at $6.93 per tank and a 90% profit, he's saying his cost to fill an AL80 is way under $1 buck.

He's either lying and knows it, or he really sucks at his math and doesn't know he's lying. :smilie39:

Before you run around calling people liars you may want to make sure you have all the information necessary to make such a claim.

He did say that the 90% figure did not factor in compressor maintenance. Anyways, this shop, cave east for those who know it, has a very high volume of gas sales.

in_cavediver
08-25-2008, 11:06
Ok, so air fills do not generate a profit. Would it be worth me asking for a free fill deal if I purchase a tank from the LDS?

I'd be surprised if you didn't get a free fill from a local shop if you bought a tank.

New tanks typically come with a VIS, which requires some air afterwards. Usually it's a full fill as it's kinda pointless just to fill it to a few hundred psi.



According to the manager at one of the local LDS he's making 90% profit on nitrox at $0.09 a cf.

yeah... and like no one in the dive business has ever lied before to their customers.

.09/cf * 77cf for a AL80 fill = $6.93.

at $6.93 per tank and a 90% profit, he's saying his cost to fill an AL80 is way under $1 buck.

He's either lying and knows it, or he really sucks at his math and doesn't know he's lying. :smilie39:

Before you run around calling people liars you may want to make sure you have all the information necessary to make such a claim.

He did say that the 90% figure did not factor in compressor maintenance. Anyways, this shop, cave east for those who know it, has a very high volume of gas sales.

I personally bet a more objective/complete analysis of costs would put the profit in the 35% range for cave east. This is coming from discussion with Bill at Cave Excursions in Luraville. Still, if you pump enough gas volume, you can make money doing it.

Warren
08-25-2008, 15:34
I was using it as a generic term. The places I go for fills, when you tell them you need an "air fill" they give you 32% :D It's not that they are stupid, it's that most everyone down here breathes 32%, so when you say an "air fill" they assume you don't mean it literally. If you tell them "I need them filled with air" then they'll fill them with air.

Seriously?

That's pretty reckless, there should be no 'default' fill...

mike_s
08-25-2008, 16:30
Ok, so air fills do not generate a profit. Would it be worth me asking for a free fill deal if I purchase a tank from the LDS?

I'd be surprised if you didn't get a free fill from a local shop if you bought a tank.

New tanks typically come with a VIS, which requires some air afterwards. Usually it's a full fill as it's kinda pointless just to fill it to a few hundred psi.



According to the manager at one of the local LDS he's making 90% profit on nitrox at $0.09 a cf.

yeah... and like no one in the dive business has ever lied before to their customers.

.09/cf * 77cf for a AL80 fill = $6.93.

at $6.93 per tank and a 90% profit, he's saying his cost to fill an AL80 is way under $1 buck.

He's either lying and knows it, or he really sucks at his math and doesn't know he's lying. :smilie39:

Before you run around calling people liars you may want to make sure you have all the information necessary to make such a claim.

He did say that the 90% figure did not factor in compressor maintenance. Anyways, this shop, cave east for those who know it, has a very high volume of gas sales.


If anyone/everyone could make a 90% profit off of air/gas fills, then we'd all be doing it....

Like I said, either he's lying or doesn't know it. Either way he's got you drinking that kool-aid and believing it.

Rcontrera
09-05-2008, 22:28
Man ... I like this thread!! Lots of opinions on air costs! :smiley20:

I actually did a cost chart for some of my customers of the little Coltri MCH6 machines (what MaxAir sells as their 35) and just the cost of oil and filters over a year averaged out to $2.41 per fill on 80's starting with 500 psi. That didn't figure in the capital outlay of $3200 for the compressor itself nor the fuel to operate (gas or electricity).

If we DO figure in the cost of the machine along with expected maintenance costs, that adds about $1.03 per fill.

Electricity and gas is all over the board, though. The little 110 VAC draws an enormous 29 amps while the 220 just sips power at 14 amps at full pressure. I was never able to get an accurate figure for that but you can add at least another $.30-80 depending on energy costs in your neck of the woods (according to an electrician friend of mine).

Now, all that said, many dive shops have been selling air at the prevailing rate for years without actually figuring out what it costs. Back in the early 80s when my wife had a shop, she regularly plugged in the numbers to the "magic formula" and the costs back then were almost $3 per fill. She only charged $3.50. Yeah ... it was a lot of work to figure out, but she was a business person and not just a follower of the pack. She did give an air card (10 fills) with every tank, regulator or $1000 purchase. THAT was definately just marketing and a loss leader. But it did insure that the customers came back to the same shop regularly.

What I found interesting was that I had looked at an old SkinDiver magazine article from the late 60s or early 70s (can't remember when) but it featured early Northwest shops. And at that time air was anywhere between $1.99 and $5. Fast forward to the late 90s and air in the same area was anywhere between ... $1.49 and $5.

Hmmm ... doesn't look like everyone is doing his/her homework!

mike_s
09-06-2008, 17:32
Man ... I like this thread!! Lots of opinions on air costs! :smiley20:

I actually did a cost chart for some of my customers of the little Coltri MCH6 machines (what MaxAir sells as their 35) and just the cost of oil and filters over a year averaged out to $2.41 per fill on 80's starting with 500 psi. That didn't figure in the capital outlay of $3200 for the compressor itself nor the fuel to operate (gas or electricity).

If we DO figure in the cost of the machine along with expected maintenance costs, that adds about $1.03 per fill.

that's a lot of fills to get the cost down though (over a full life of the compressor). For the average diver, that could easily take 30 years or longer. (In reference to your $1.03 added cost to include the cost of the machine. ). But I don't doubt your numbers as you'd know this if anyone would.


Electricity and gas is all over the board, though. The little 110 VAC draws an enormous 29 amps while the 220 just sips power at 14 amps at full pressure.

Actually that's about the same power usage, just different voltages.... The 220v is a little more economical, but not much. 220v is nothing more than 2 hot lines (110v) plus neutral and ground.

So 30amps 110v about equals 15 amps @ 220v.

The benefit of the 220v motor is that it is a little more economical and it also doesn't have to work as hard. If you want to see your cost usage go down, you'll see that with 3-phase. (however your overhead/capital/install costs will be higher). You'll also hvae a hard time finding 3 phase already installed in most smaller retail locatoins that might house a dive shop. They might have it on the pole behind the shop, but if you've never installed 3 phase power before, get ready for sticker shock.




Now, all that said, many dive shops have been selling air at the prevailing rate for years without actually figuring out what it costs. Back in the early 80s when my wife had a shop, she regularly plugged in the numbers to the "magic formula" and the costs back then were almost $3 per fill. She only charged $3.50. Yeah ... it was a lot of work to figure out, but she was a business person and not just a follower of the pack. She did give an air card (10 fills) with every tank, regulator or $1000 purchase. THAT was definately just marketing and a loss leader. But it did insure that the customers came back to the same shop regularly.


I'm sure you can price air/gas/nitrox costs in many different ways depending on what you're including in the cost.

Also, most shops have a higher capacity compressor now days that is nitrox capable in some way (partial pressure/o2 clean air, stick blending, etc)..... so you can definately spend more.

A lot of shops used old surplus military compressors compared to ones that have just spent $40k on a compressor/nitrox system. So it's a hard comparison.


I think the airfill-card is a great marketing idea. It might be a loss leader, but it gets folks back in your shop for several repeat visits to get airfills and that will result in other sales.

trekkindave
09-06-2008, 18:23
Talk about "profit"

the LDS here by me makes fills of tanks with either air ($8), hyperfiltered air ($10) or Nitrox (IDK the price, i dont dive it)

My buddy has to dive with hyper filtered air because he is nitrox and some mumbo jumbo about the oxygen cleaning stuff... well not to start a hijack about that.. but my grip is.....

we both went for fills.. three tanks total my two air and his one hyperfiltered. the guy hooked up all three tanks to the same bank of whips.. and watched the same gauge as he filled the tanks... then charged me for air and him for hyper filtered... out of what seemed to be the same stuff... now did he charge me less for the hyperfiltered air ?

did he no fill his with hyperfiltered air?

is it all hyperfiltered and i got a price break because i wasnt nitrox?


who knows.

in_cavediver
09-06-2008, 18:51
Talk about "profit"

the LDS here by me makes fills of tanks with either air ($8), hyperfiltered air ($10) or Nitrox (IDK the price, i dont dive it)

My buddy has to dive with hyper filtered air because he is nitrox and some mumbo jumbo about the oxygen cleaning stuff... well not to start a hijack about that.. but my grip is.....

we both went for fills.. three tanks total my two air and his one hyperfiltered. the guy hooked up all three tanks to the same bank of whips.. and watched the same gauge as he filled the tanks... then charged me for air and him for hyper filtered... out of what seemed to be the same stuff... now did he charge me less for the hyperfiltered air ?

did he no fill his with hyperfiltered air?

is it all hyperfiltered and i got a price break because i wasnt nitrox?


who knows.

As a simple point of reference - just because the whips looked the same doesn't mean they are from the same source. Did he open one valve or two/three. If it was a single valve to fill all three tanks, then is BS pricing. If it was different valves, they might have a hyperfiltered bank and a standard bank.

Lastly - just to throw fuel on the fire, a few grade E or non-hyperfiltered air fills doesn't automatically invalidate o2 clean tanks. The process is the slow buildup of contaminants that occurs with each fill. Its possible to have a cleaner tank after 1 'dirty' grade E fill than with 10 Mod Grade E fills. Actually, I bet that was the case for most well maintained compressors. My point is simple - understand the process so you can make informed decisions about when to re-clean the tanks.

trekkindave
09-06-2008, 20:15
Cool, learned alittle about clean tanks just then,

From what I saw it was one valve in the building and one gauge he was looking at to fill all three tanks

i could be wrong....ask my girlfriend.. she tells me all the time

Rcontrera
09-07-2008, 03:25
Actually, teh larger compressors haven't changed THAT much over the years in cost. The technology has improved and the market for high pressure equipment has grown exponentially so it has drive the pricing down. When I set up my first system in the late 70s, it ran about $20,000. I just finished setting up a dive shop with a similar sized compressor AND Nitrox generator for about $25,000. Of course oil and filtration costs a ton more now, but the initial outlay hasn't.

I was in Monterey quite a few years back and saw a shop that had a whole row of fill hoses and customers lined up at least six deep behind every one. Not THEY made money on their air. Another shop a couple of miles up the road, away from the water had a typical two hose fill station and hadn't fired up his compressor all day. HE never made money on fills.

Hopefully shops can charge what it costs plus some for backup so that they can pay me when their system fails (and almost all eventually do).:smiley2:

Black-Gorrilla
09-07-2008, 05:16
We are more efficient than a lot of other shops. We make $27.85 per tank fill that we charge 5 bucks for. That extra profit lets us drop our prices on the other gear sales, and offer the gift certificates on the forum. :smiley36:


i think this gift cert. for forum members was a great deal for the members... and im pretty sure it worked ok for you too... when people spend a 50$ gift cert... im sure most end up spending well over just the 50 bux, and it also brought alot of return customers...
but this thread is about Air and Tanks... so on with the show.

mike_s
09-07-2008, 13:56
well my local shop doesn't do that many air fills, compared to ones at the beach for example. I think over 50% of their fills are for "in house" use. Meaning for classes, dive staff, dive masters (who get free fills), etc.

so they only get to charge for about half of their fills. so basically it means their cost verses net profit is whacked a little.

Now compare that to a shop down at the beach that rents tanks and owns a charter boat that runs 4+ trips a weekend, then they'll do a lot more fills and be more likely to return a profit, or come closer to it.


I think all of us would LOVE to have our own compressor system and do our fills at home. I mean who wouldn't love to have a cool compressor setup in the garage?

but 99% of us don't. Mostly because of the initial cost and the time it would take to recover the initial cost, not to include operating/maintenance costs.....

Yeah you could have a "compressor/air-fill fund" jar for donations for when/if you let friends come over for fills, but that opens up a whole other bucket of liability for doing fills for others when you don't have insurance. Someone has an accident and dies and chances are their spouse will include you in the lawsuit saying you're mixing voodoo home-brew gas in the garage and lay some of the blame on you, regardless of what happened.