LDS profit on tanks & air fills?

[crgjpg]

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]

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]

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]

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]

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]

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]

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]

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]

Originally Posted by awap

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]

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?