Color By Numbers

Throughout the United States, economic conditions have made it tough for many dealers to move boats. For states like Michigan and Ohio, the Great Lakes market has been tough, at best.

But out of those states has emerged a growing force along the southern shores of Lake Erie — South Shore Marine Service. This Huron, Ohio-based dealer grew 87 percent from 2005 to 2006. While much of that growth came through acquisition, between 20 and 25 percent of it was organic — and much of that can attributed, according to Tom Mack, president and owner, to its “aim to minimize hold time for each inventory unit.”

To that end, the company uses an inventory spreadsheet, and next to each listed unit is a bold number noting the number of days it has been on the company’s books. In fact, at the company’s Monday sales meetings, the spreadsheet is projected onto a wall for everyone to see and discuss at once. And every 90 days, this number changes colors, indicating the need to re-strategize the sales needs for each unit.

“This is a helpful tool for tracking our top leads, defining what’s in contract, pending, etc.,” Mack explains. “As an inventory unit changes colors, it’s a very important reminder that 90 days of accumulated cost have been applied to that unit, and that awareness typically sparks some interesting team brainstorming.”

Often, it’s greater flexibility and creative thinking that makes the difference. No ideas are ruled out. And sometimes, the company has found, simply moving a boat, launching a new unit and telling a potential buyer that the boat they were considering was launched for a sea trial; taking a nice fishing boat out on for a few customer trips; or changing things up online can spark some buyer curiosity.

As an example, at 90 days or 180 days, the team might determine that it needs to take a closer look at potential trades, lower asking prices, enhance its marketing and advertising, move the boat to a different location, study prospect lists, put a unit on Ebay, or other wholesale options, or link special incentives to the sale of a specific unit.

“What we do not do however is to actually write a boat’s book value down to “change its position” as far as cost basis,” Mack says. “It’s certainly not always just about lowering the price or linking any huge incentive to the deal — it’s just about discussing each unit weekly to keep the awareness of the unit’s age very clear in each person’s mind.”

At South Shore, the sales team’s commissions are typically partly linked to the gross profit on the transaction. But if market value appears to be less than anticipated and a sales person could view this inventory unit as not so fruitful, the company makes it clear to the sales team that its willingness to pay a set amount on a specific unit will happen regardless if gross profit looks tight on the deal.

And when it comes down to it, creatively structuring deals oftentimes is all it takes go get a buyer to move. From the simple things like making the boat “fit” the owner through simple adjustments or even including a free, special optional item all the way up to making the first couple months payments or offering free dockage for the balance of the summer are examples of what South Shore has done.

“We often figure the cost of something like this,” Mack explains, “could be no more than, say, the next few months of floor plan cost.”