Les Lampman
New member
I, for one, do worry that boating seems to be returning to the days of yachting when it was a rich man's activity.
I've done the math every way I can think of and looked at many alternatives and no matter how I try to work the numbers new boats are just expensive. And that bothers me. I know I can't put a new boat out front for sale that the average skilled worker type person can afford; at least one that's more than a 14' skiff and even they're getting expensive.
The new Honda BF250 is now available and we just got pricing. It's got an MSRP of $25,000. Sheesh, my folks just bought a brand new Subaru Forester with some nice features for the same amount of money. I don't get it. How can you take an engine out of a V-6 MDX or Oddysey, get rid of the body, add a lower unit and cowling and end up asking the same price as a whole car?
And don't get me started on gel coat, resin, foam, and fiberglass supplies. For the Marinaut 215 we're paying more for the 9 fiberglass pieces that make up the hull that I paid (as a dealer) for a new C-Dory 22 10 years ago. And we still have to build the thing.
The cost on the windows alone is about $3,000, then the fuel tank folks want their money along with the water tank folks, and the hand rail folks, and the cabinetmaker, and on and on.
At the current price on the M215 we're working at a lower margin that when we sold the C-Dory, Arima, or Rosborough boats. We badly need to raise the price of the boat to have some profit in it but I'm kicking and screaming "no, no, no". I can't win forever though and it pains me to think of how much folks have to part with and how little we actually end up with out of the deal. I won't even figure it on an income-per-hour basis; McDonald's in town pays better. The reasons I keep going are because: I'm stubborn, I'm stupid, it gives me a creative outlet, and because I'm an optimist and think things will eventually get better. It also gives me great pleasure to turn the keys over to a new owner knowing that they're getting a somewhat rare commodity these days...a product built by hand that the folks who did it cared about. I guess it's my way of bucking the trend of everything we buy being built in a foreign country and set out on the lot with a sign that says "Only $350/mo, hurry...sale ends soon".
I'm with Matt on this one...it's got to be a labor of love or it makes no sense whatsoever.
I don't know how we're ever going to return to the day when an average worker type family can afford a new 21-footer again, or how they can afford to run it if they do buy it. One of the overwhelming reasons I took the Marinaut to being only factory direct was because I could see no way to squeeze enough profit out of the situation to allow a dealer to make any profit at all.
There have been (unsubstantiated) rumors of Arima going to a factory direct sales model and if that happens I wouldn't blame them at all. I think the days of the traditional boat dealer are numbered without a major correction in the economy. There will always be folks that can afford to go buy a new boat and there will be dealers that can afford to stay in business but it will have to be on quite a different model than in the past. Rather that relying on sales of several boats with smaller profits we're going to have to rely on selling fewer more expensive boats (with higher profits) to the fewer folks that can afford them.
Most small dealers can't afford to write checks for the boat inventory they're going to have in stock (just like most car dealers). We rely on floor plan money from a commercial lender to support our inventory purchases. About 4 years ago that cost us about 6% in interest. After the economy debacle the only lender left in the game now wants 14% if you're not a very large dealership using them almost 100% for your floor plan activity. With the low margins these days dealers can't afford to pay that kind of interest and we all know it's the customer that ends up paying it (raising the prices of already expensive boats even more). The customer has to pay it, if the dealership pays it they close unless they started with a large fortune and they're trying to make a small one out of their investment.
So now customers lament the fact that there's no local dealership for purchase or support, but those places can't afford to bring in boats and potential buyers aren't going to be happy with the prices. I'm the perfect example...I've got the Marinaut 215 priced at $46,400 right now and that's really not giving us any profit to speak of. If an east coast dealer wanted to sell them they'd be on the lot for $52,200 (and on a tight margin at that) plus about $4,000 or so in transportation (but that has to be paid whether the boat is purchased out west or in the east). I can't imagine any dealer wanting to bring them in for that kind of money and then pay flooring interest on top of it. Add $10K for a 90 of some sort, another $4K for a basic trailer, and you're up to $66,000 before you've added any electronics or accessories.
At EQ we used to stock the Rosborough RF-246. We simply can't do that any longer, we just can't afford 14% interest on a $100K hull sitting out front on display. That hurts sales because it's a lot harder to sell boats you can't show. The reaction from most builders is that you have to buy boats or you can't be a dealer. A dealer in that position usually says goodbye, not because they don't like the boat but simply because they can't afford to inventory them, there's just not enough sales volume and profit to justify it. It then hurts the builder because they no longer have that dealer talking about the boat and spreading the word so they loose potential sales. Many builders think that everyone will just buy from the factory but I can tell you from our time as a C-Dory dealer with the factory a couple hours down the road also selling the boats that we still had lots of customers buying from us as well; and a lot of those sales would not have gone to the factory if we hadn't been here so it would have been a net loss for them for us to be gone. As a factory you can only do so much if your production schedule gets busy and that doesn't include highly customizing boat for each customer. The answer for us with regard to the Marinaut was just to stay small and do them one at a time. In the future if things get better and there's enough margin in the boats to allow for dealers maybe the Marinaut will go that way too but at that point it will be someone else's decision and concern...I'll be retired by that point.
Triton has a harder row to hoe than we do. There are expectations placed on them due to the history of the C-Dory and largely because of the C-Brats. The C-Brat group is a double-edged sword: on one side it's a great resource and a reason for folks to want a C-Dory but on the other side it's a great place to find out that one can purchase a used C-Dory that (at least physically) does the same thing as the new ones and it also lends voice to hundreds (thousands if they wanted to participate) of folks that have a vision of what C-Dory should be (based on what it used to be). That vision ended in 2000 and it's not coming back until the economy improves and Triton has the opportunity to make a name for itself.
It's easy enough to tell them they need to change their website, do a newsletter, participate in boat shows, and such but someone has to do all that work. You either have to pay someone to do it (expensive) or one of the salaried principals (the "owners" that work for free) has to do it. If someone already at the company does it that means they're giving up that time from doing something else (like getting a boat built) that's probably already behind.
Look how many Marinaut boats we're pumping out, and I'm already beyond my eyeballs in conversations, quotes, putting the boats together, and trying to take care of marketing (which is different thing than sales). If we were doing a boat a month I'd be lucky to find time for anything other than just flat keeping up.
With margins (profits) as low as they are no one can afford to have extra folks hanging around to do the odds and ends. Yes, if you do all the extra things it should result in more sales but it doesn't generate that income instantly and pay for the folks you've got employed. So it doesn't happen. And it's not likely to happen because most folks in the boat building business (small builders) don't have deep pockets; if they did they'd invest their money somewhere else. They're in it for the love and challenge of it and for a hoped for reward down the road.
When you're running on next next to nothing trying to meet payroll and expenses digging in your pocket for another $5,000 (or whatever) to, say, go the Seattle Boat Show is a major expense and not to be taken lightly no matter how much you know you should be there. It's just not that easy. It's easy to sit in the armchair and blast away and say "well, it's just something you've got to do". Fine. Line up at the builder's door and tell them you've got a few thousand dollars you'd like to invest in the company so they can do more shows, run more ads, travel with the boats and show them off, and hire folks to make the website nicer and put out a newsletter ('cause the person doing it now is probably one whose name is on the owner's list).
Sorry if this seems like a diatribe. If it was easy everyone would do it. If you think it's still easy you do it or at least put some money where your mouth is (buy a boat or invest).
Les
I've done the math every way I can think of and looked at many alternatives and no matter how I try to work the numbers new boats are just expensive. And that bothers me. I know I can't put a new boat out front for sale that the average skilled worker type person can afford; at least one that's more than a 14' skiff and even they're getting expensive.
The new Honda BF250 is now available and we just got pricing. It's got an MSRP of $25,000. Sheesh, my folks just bought a brand new Subaru Forester with some nice features for the same amount of money. I don't get it. How can you take an engine out of a V-6 MDX or Oddysey, get rid of the body, add a lower unit and cowling and end up asking the same price as a whole car?
And don't get me started on gel coat, resin, foam, and fiberglass supplies. For the Marinaut 215 we're paying more for the 9 fiberglass pieces that make up the hull that I paid (as a dealer) for a new C-Dory 22 10 years ago. And we still have to build the thing.
The cost on the windows alone is about $3,000, then the fuel tank folks want their money along with the water tank folks, and the hand rail folks, and the cabinetmaker, and on and on.
At the current price on the M215 we're working at a lower margin that when we sold the C-Dory, Arima, or Rosborough boats. We badly need to raise the price of the boat to have some profit in it but I'm kicking and screaming "no, no, no". I can't win forever though and it pains me to think of how much folks have to part with and how little we actually end up with out of the deal. I won't even figure it on an income-per-hour basis; McDonald's in town pays better. The reasons I keep going are because: I'm stubborn, I'm stupid, it gives me a creative outlet, and because I'm an optimist and think things will eventually get better. It also gives me great pleasure to turn the keys over to a new owner knowing that they're getting a somewhat rare commodity these days...a product built by hand that the folks who did it cared about. I guess it's my way of bucking the trend of everything we buy being built in a foreign country and set out on the lot with a sign that says "Only $350/mo, hurry...sale ends soon".
I'm with Matt on this one...it's got to be a labor of love or it makes no sense whatsoever.
I don't know how we're ever going to return to the day when an average worker type family can afford a new 21-footer again, or how they can afford to run it if they do buy it. One of the overwhelming reasons I took the Marinaut to being only factory direct was because I could see no way to squeeze enough profit out of the situation to allow a dealer to make any profit at all.
There have been (unsubstantiated) rumors of Arima going to a factory direct sales model and if that happens I wouldn't blame them at all. I think the days of the traditional boat dealer are numbered without a major correction in the economy. There will always be folks that can afford to go buy a new boat and there will be dealers that can afford to stay in business but it will have to be on quite a different model than in the past. Rather that relying on sales of several boats with smaller profits we're going to have to rely on selling fewer more expensive boats (with higher profits) to the fewer folks that can afford them.
Most small dealers can't afford to write checks for the boat inventory they're going to have in stock (just like most car dealers). We rely on floor plan money from a commercial lender to support our inventory purchases. About 4 years ago that cost us about 6% in interest. After the economy debacle the only lender left in the game now wants 14% if you're not a very large dealership using them almost 100% for your floor plan activity. With the low margins these days dealers can't afford to pay that kind of interest and we all know it's the customer that ends up paying it (raising the prices of already expensive boats even more). The customer has to pay it, if the dealership pays it they close unless they started with a large fortune and they're trying to make a small one out of their investment.
So now customers lament the fact that there's no local dealership for purchase or support, but those places can't afford to bring in boats and potential buyers aren't going to be happy with the prices. I'm the perfect example...I've got the Marinaut 215 priced at $46,400 right now and that's really not giving us any profit to speak of. If an east coast dealer wanted to sell them they'd be on the lot for $52,200 (and on a tight margin at that) plus about $4,000 or so in transportation (but that has to be paid whether the boat is purchased out west or in the east). I can't imagine any dealer wanting to bring them in for that kind of money and then pay flooring interest on top of it. Add $10K for a 90 of some sort, another $4K for a basic trailer, and you're up to $66,000 before you've added any electronics or accessories.
At EQ we used to stock the Rosborough RF-246. We simply can't do that any longer, we just can't afford 14% interest on a $100K hull sitting out front on display. That hurts sales because it's a lot harder to sell boats you can't show. The reaction from most builders is that you have to buy boats or you can't be a dealer. A dealer in that position usually says goodbye, not because they don't like the boat but simply because they can't afford to inventory them, there's just not enough sales volume and profit to justify it. It then hurts the builder because they no longer have that dealer talking about the boat and spreading the word so they loose potential sales. Many builders think that everyone will just buy from the factory but I can tell you from our time as a C-Dory dealer with the factory a couple hours down the road also selling the boats that we still had lots of customers buying from us as well; and a lot of those sales would not have gone to the factory if we hadn't been here so it would have been a net loss for them for us to be gone. As a factory you can only do so much if your production schedule gets busy and that doesn't include highly customizing boat for each customer. The answer for us with regard to the Marinaut was just to stay small and do them one at a time. In the future if things get better and there's enough margin in the boats to allow for dealers maybe the Marinaut will go that way too but at that point it will be someone else's decision and concern...I'll be retired by that point.
Triton has a harder row to hoe than we do. There are expectations placed on them due to the history of the C-Dory and largely because of the C-Brats. The C-Brat group is a double-edged sword: on one side it's a great resource and a reason for folks to want a C-Dory but on the other side it's a great place to find out that one can purchase a used C-Dory that (at least physically) does the same thing as the new ones and it also lends voice to hundreds (thousands if they wanted to participate) of folks that have a vision of what C-Dory should be (based on what it used to be). That vision ended in 2000 and it's not coming back until the economy improves and Triton has the opportunity to make a name for itself.
It's easy enough to tell them they need to change their website, do a newsletter, participate in boat shows, and such but someone has to do all that work. You either have to pay someone to do it (expensive) or one of the salaried principals (the "owners" that work for free) has to do it. If someone already at the company does it that means they're giving up that time from doing something else (like getting a boat built) that's probably already behind.
Look how many Marinaut boats we're pumping out, and I'm already beyond my eyeballs in conversations, quotes, putting the boats together, and trying to take care of marketing (which is different thing than sales). If we were doing a boat a month I'd be lucky to find time for anything other than just flat keeping up.
With margins (profits) as low as they are no one can afford to have extra folks hanging around to do the odds and ends. Yes, if you do all the extra things it should result in more sales but it doesn't generate that income instantly and pay for the folks you've got employed. So it doesn't happen. And it's not likely to happen because most folks in the boat building business (small builders) don't have deep pockets; if they did they'd invest their money somewhere else. They're in it for the love and challenge of it and for a hoped for reward down the road.
When you're running on next next to nothing trying to meet payroll and expenses digging in your pocket for another $5,000 (or whatever) to, say, go the Seattle Boat Show is a major expense and not to be taken lightly no matter how much you know you should be there. It's just not that easy. It's easy to sit in the armchair and blast away and say "well, it's just something you've got to do". Fine. Line up at the builder's door and tell them you've got a few thousand dollars you'd like to invest in the company so they can do more shows, run more ads, travel with the boats and show them off, and hire folks to make the website nicer and put out a newsletter ('cause the person doing it now is probably one whose name is on the owner's list).
Sorry if this seems like a diatribe. If it was easy everyone would do it. If you think it's still easy you do it or at least put some money where your mouth is (buy a boat or invest).
Les
