Re: Economies of scale?

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Posted by Ken Kurtis on November 24, 2000 at 23:17:53:

In Reply to: Re: Economies of scale? posted by Eins on November 24, 2000 at 12:03:57:

(Eins asked) One question to you: are you saying that Reef Seekers charges $100 per student for this class that you outlined by its cost, and are you saying that there is no extra charge for boat and open water dives or anything else?

No. I have NEVER said that we charge $100 for a basic class. I think you're getting the various parts of this thread mixed up. (I think you and I are the only ones still reading this thread this far down, but here goes.)

Kendall posted the original question. On November 21, Gerry Smith mentioned stores offering classes for $99. I replied how that's economically unfeasible since the classes run around $350 or so to teach when you factor in ALL the costs. In the same post, I showed how you can't make that money back, especially when you're teaching a class of ten.

You then asked how the class could possibly cost $350. I outlined the costs for you, which actually put it in the $500 range. You then questioned how the pool could possibly be $30/student. I explained that cost, which then brings us to your previous post.

So the answer is still no. I have NEVER stated that we, Reef Seekers, charge $100 for a class that costs us more than that. (FTR, we charge around $350 and that covers EVERYTHING outlined in my detailed breakdown of the costs.)

But I have stated, and will continue to maintain, that a dive shop that continually sells their classes as a "loss leader", in addition to giving an impression that our sport is cheaper than it really is, either is throwing inother "hidden" costs to cover the actualcosts of running the course, or they will eventually run into financial problems because the economic model is such that you simply can't make it up.

Ken Kurtis
NAUI Instr. #5936
Co-owner, Reef Seekers Dive Co.
Beverly Hills, Ca.

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