What were they thinking?

Most outboard engine manufacturers have fairly stringent requirements for becoming a dealer. The basic requirements are a good service department: special tools, factory trained technicians, an ample parts inventory, etc. So what was one of the outboard engine manufacturers thinking when it started selling its engines to a southern sporting goods chain without such requirements?
Even though the chain has first-class stores with excellent sporting goods departments, all kinds of fishing tackle and more … it doesn’t have the service department, parts inventory, factory trained technicians or special tools needed to provide service for the outboards and boats that it sells. To make matters worse, the stores are retailing loose outboard engines at prices lower than nearby marine dealers have to pay when they order direct from the factory.
A dealer in a fairly large southern city recently sent me an ad that this large sporting goods store ran in the local newspapers. Included in the ad was a 25 hp outboard engine priced at $2,099. The dealer said his cost from the factory for that same outboard was $2,410. The ad also listed a gallon of the outboard engine brand oil for $9.99. The dealer said his cost for that same gallon of oil is $10.97 if he orders almost 200 gallons.
What were they thinking when they put marine dealers that this industry needs at such a pricing disadvantage?
“To add insult to injury,” the dealer said, “we went to this chain store and they told us that if we bought some outboards in quantity that they might be able to give me an even lower price.”
This industry frequently expresses the need to enhance our consumer’s buying and boating experience. So what kind of signals are we sending to consumers when they can buy engines from inexperienced clerks at chain stores for such low prices … yet can’t get service from the selling retailer?
The recreational boating industry is very service intensive. Boats and motors are operated in a rather harsh environment during short boating seasons. So when service is needed on a boat or engine, consumers don’t expect to have to wait weeks for repairs. They want it fixed now so they can get back on the water before their vacation is over. Nor do they feel they should have to look far and wide for a dealer that will repair an engine that was purchased from a large box store that doesn’t provide any service. Their expectations are based on the level of service that they get from new car dealers. Situations like this don’t help the industry meet those expectations.
The dealer who sent the ad said, “I have been a marine dealer since 1978 and have sold this brand of outboards for 15 years, said the dealer who sent me the ad.” All I want to do is compete on a level playing field, but they are taking food from my table. I don’t see why the chain store should be exempt from all the hoops I have to jump through and the requirements I have to meet to sell that same brand of motors. But this chain store sells engines in the box without checking them out for the customer. And their pricing undermines my entire business. Like when a customer comes into my store for oil and sees how much higher it is than the sporting goods chain store, he is going to go out and tell his friends that we are high priced.
“When we went to the chain store to shop them we asked the clerk about service on the outboards,” he said. “The answer we got was, ‘We don’t have service.’ I asked where we would have to go for service if we needed repairs. The clerk said, ‘Well I have heard that there is a guy over on the west side of the city who could fix them but it wouldn’t be under warranty.”
“At the outboard manufacturer’s dealer meeting,” the dealer went on, “they showed this beautiful video presentation on how service, customer satisfaction and product knowledge was so important. Then they set up a sporting goods chain store with no service and sales clerks who have had no training and don’t have a clue how the motor works.”
What were they thinking? I asked Phil Keeter, President of the Marine Retailers Association of America what his thoughts were about this situation. His response was, “I don’t understand what the logic is behind this. Is it just to sell more outboards at any price? Their approach should be to build loyal dealers which in turn would help build the industry!”
What were they thinking? Beats me. I think what they have done will give them a short-term gain in unit volume while being harmful to the brand, their dealers, boating consumers, and the industry long-term.
Ben Sherwood, a marine industry veteran, was head of sales and marketing for Johnson and Evinrude outboards before retirement. After retirement he owned and operated a Chevrolet dealership, which he later sold. He now operates Sherwood Marine Marketing, a marine industry consulting firm in Pleasant Prairie, Wis.; 262-694-6636. E-mail address is ben@bensherwood.net and Web site is bensherwood.net.

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