Thoughts on the 2010 market and Boat Show season

I was at Cabela's today. On display was a 25+ foot Maxim, 2009; original price: $90k... now: $60k. If that's what it takes to sell a new boat, no wonder Brunswick is in trouble. I heard the CEO of Brunswick say that 3 things will see them through their financial woes...
1. Transparent pricing - the customer will know the price, regardless of the dealer.

2. Innovative products.

3. Being "green."

In other words, he has no new ideas, but is trying to say what currently sounds "correct."

This is a tough market... not so different from the general aviation collapse of the last decade... a greatly diminished market and a glut of used product. It takes a while for the supply and demand to stabilize.

Just like the C-Dory isn't a fair weather boat, it attracts a different type of buyer... a good thing in today's market.
 
I read on another forum that Brunswick wasn't producing Maxum for 2010, and visiting the Maxum website shows no 2010 product information. That may be why Cabella's is blowing out 2009 product.

As far as transparant pricing as a strategy- it's an interesting concept, but in talking with a former Carver / Silverton / Cruisers dealer not long before they closed their doors, we were disussing the pressure that manufacturers were putting on dealers with their advertised special pricing on certain models.

The problem was quickly becoming that the margin on these models was less than what the dealership can make on a brokerage boat, and the costs of selling the new boat are much higher, with flooring costs, rigging costs and other expenses. So why be a dealer for new product when you can make more money as a business selling used only?

The problem with "transparent pricing" is that it is usually a manufacturer trying to dictate to dealers what to charge for the product, and often these prices are below what a dealer really needs to make to be a long term success.
 
General aviation collapse

Are you talking about closing of many, if not all “ private non business” class plane builders?

That had more to do with the law suits jacking up the price of a new plane. Manufactures were held liable for a plane for 30 years no matter the modification or current condition of the plane. Every time uncle Billy crashed the lawyers would sue the manufacture first in the hope they would pay them to go way, cheaper then defending yourself, even when innocent of all wrong doing. That liability jacked up the price of every plane being built. No one could afford a new small plane so the market went away.
When a tort reform bill did away with the builder being sued, no matter what happen to the plane, the price dropped and the market came back. In fact just in the last 6 years several smaller planes came on the market, Honda sport jet, and with the new sport pilot classification coming out many semi ultra- lights were coming out. Can you imagine the price of a Honda accord if Honda was held responsible for 30 years?

but as with boats the ability to borrow, or not to , has killed the market again.
 
Matt,

This is way beyond anything I really know anything about, but that's never stopped me from voicing a thought, so here goes:

It appears the benefits (and profits) from selling used boats is better than the dollars realized from selling new products. If that's the case why would any dealer sell New? Flooring costs and hassles, warranty claims, dealing with marginal manufacturers - gee's why would Anyone want those bothers?

Wouldn't it just be easier (and more profitable), to be a first rate used boat dealer? Take-in only the good products, go over them mechanically, get good guy's on the buffing machine, and put the product out the door! Most would be consignments anyway, so pre-sale investments (detailing, repairs, etc) would be repaid at closing (even using a mechanics lien for protection if necessary). ...and no down-the-road repair issues (unless the buyer wanted to spend extra for a separate extended warranty).

Your ideas?

Best,
Casey
 
I would be looking at picking up bare boats at auction and stocking the show room with them at break even prices. then make what you can on rigging and engine sells. you can spend all most as much on the engine , electronics, downriggers etc... then on the 20 ft fishing boat you are putting them on. I will keep the boys in the shop busy at least.
 
Casey , you have a nice boat but didn't buy it new , Some folks want new and the service that comes with new. The warranty, the smell of new fiberglass . The first one to sleep in the Vee Berth, choosing your power and electronics, and getting the first hours in before the break in service and knowing everything about your boat since it was first sold . That matters for a couple of reasons . One is its the only way the industry will stay alive and advance . And its the only way we will get new boaters into the marketplace. Oh and it shouldn't matter if its new or used , you should treat all your customers well . Also every used boat we sell is "perfect" when it arrives ,however in reality almost every one really needs some work. , None of this is easy ,whether you are selling new or used , but it will cease to be an industry if no one supports it and new products are no longer built.
Marc
Tom , BTW can I borrow some money to buy some boats ? Ill split the profits .And can you run, or know someone thats reliable that can operate a buffer for say, minimum wage ?I might be hiring if you can meet those qualifications ......
 
Well thats the old saying " you have to have money to make money" or at least be able to borrow some.

I know that Ordering a boat and not buying one that is in front of me is not some thing I will every do. Works for some but just does not cut it for me. I want to stand in it, sit in it and touch it. I would never buy a car any other way either.
 
We have new ones on the way , are always on the lookout for nice used ones [but not projects]and plan to do "business as unusual" I also have some of the old Fluid Marine boats on consignment that are new but will be sold at or near invoice .
Ill let the handy and industrious individual owners do the projects . There is no way to make it cost effective for us .
Marc
 
Hi,
Buying used or new depends on a lot of different factors. If you can find what you want at a great price that's great. If you enjoy tinkering and fixing what others might have done is your thing thats really great. Rerigging with new electronics and new outboard/motors gets expensive fast. Bank repos with motors and other items removed by a dealer in trouble can have lots of surprises. If you really know your stuff buying used can lead to tremendous savings. For me time is really the big factor. I want the best odds at the least amount of hassle when I have time to take a trip or go fishing. Replacing transoms, chasing down loose connections, bad wiring using non marine grade components is something I'll leave to others. There is enough to worry about when everythings been done right. For me a left over from a dealer who knows the boats and a owners forum like this was my choice.
D.D.
 
Wefings":18kvntrk said:
...
Tom , BTW can I borrow some money to buy some boats ? Ill split the profits .And can you run, or know someone thats reliable that can operate a buffer for say, minimum wage ?I might be hiring if you can meet those qualifications ......
Click to expand...

So, you're saying you're hiring? Figuring what I worked for when we owned our own business, I know there were LOTS of years I didn't make minimum wage, considering the hours I put in. :wink: Maybe we should talk? I'm pretty good with a buffer.

For the record, I happen to one of those that likes the smell of new fiberglass and knowing what kind of care the boat has had from day 1. It would seem to me that selling a "new" boat that has no warranty because the manufacturer has gone out of business could be handled one of two ways: sell it cheap and the buyer is on his own for any work. Get more for it and cover any "warranty" work out of pocket. It would be somewhat like "self insuring," or selling an "extended warrany" on a new boat. What the previous owners of C-Dory covered under warranty was the hull... and fiberglass just isn't that exotic or tough to get repaired... IF any repair is necessary. If I were in the market for a new boat, I would have no problem buying from a dealer who laid it out for me like that.

Best wishes,
Jim

PS I enjoyed your year-end newsletter, Marc. :thup
 
Thanks Jim , We are repairing a 26 V we just recently sold new right now , Found a little hydraulic fluid leaking from the tabs, some water magically appearing under the sink, Fuel guage out of calibration,and this was a boat we bought from another dealer that completley ####ed up the rigging , so we are redoing that as well . The customer is great and appreciative , patient,and will have a nice boat at a great price when all is said and done . We will certianly supply a structural warranty for a customer like this . The bigger the customer's hammer ,the smaller the warranty . We have to know we made something to provide that insurance policy . Peace of mind is worth something !My dad told me if I didnt go to college I would be a ditch digger, turns out I would be making more and have great benefits if I was a city or county ditch digger now........But may not have as much fun or challenges in life . I do love a challenge .
Marc
 
starcrafttom":2qn8i2xp said:
I would be looking at picking up bare boats at auction and stocking the show room with them at break even prices. then make what you can on rigging and engine sells. you can spend all most as much on the engine , electronics, downriggers etc... then on the 20 ft fishing boat you are putting them on. I will keep the boys in the shop busy at least.
Click to expand...

We wouldn't make enough on the rigging job to pay the B and O taxes in this state. :roll:

I guess we sell new boats because it is part of our business plan. If it reaches the point where there isn't enbough profit to justify the expense of selling them (and some years it seems like it), we'll be out of the new boat business.

Until then, we intend to do the very best we can, and support our customers in selection, purchase and maintennace of their boats.
 
Jim,

If Marc doesn't hire you and you're in the PacNW in spring, I'll hire you. My boat will need waxed and the windows on the house will need washed. :wink: :lol: Minimum wage AND ALL THE SEAFOOD YOU CAN EAT! :lol:
 
Then you can come up here and do my 16 and 25. More seafood, my home made crab cakes, wild blackberry liquor, and I'll pay for the ferry ride.
Is that federal minimum wage or state??
 
Back
Top