Seedealercost.com: What do you think?

The recent news that a website providing consumers with dealer invoice pricing on new boats, powersports products and RVs will soon launch, drew a swift response from the Marine Retailers Association of America. MRAA President Phil Keeter said the site has the potential to hurt dealers’ profit margins just as the industry is once again finding its footing in the wake of the recession.

A spokesman for the site, which was founded by former marine executives Jack Malone of Mercury and Dave Taylor of U.S. Marine, told Boating Industry last week that the site was expected to go live in about five days. As this is written, it does not appear to have yet done so.

According to a press release, the site is intended to “provide a clearinghouse of information for consumers researching a purchase.”  Leads generated by the site will reportedly be offered to manufacturers and dealers, and the site will sell advertising space to manufacturers, dealers and other companies.

The industry’s reaction to the news has been largely negative. Keeter said he has heard from 25 boat builders opposed to the site, and many dealers have already voiced their opposition as well.

A quick tour through the boating blogosphere shows that consumer reaction has been mixed. Predictably, some boaters said they would like to have the information and would find it useful during the negotiating process. Others recognized the impact it could have on dealerships.

And one man, who said he had owned a boat dealership for 20 years, had this to say: “I think when the consumer finds out how much most boat dealers are NOT MAKING they'll actually understand/appreciate the dealer's business model better. When the consumer is presented with the numbers and they see that there simply isn't a lot of movement available when the gross profit margin is 20% on most boats and there is no service follow up revenue stream and very little in the way of body work and accident repair which is where most auto dealers make money they will hopefully understand that it is the boat sale itself that the dealer depends on to keep the doors open and pay a salesman. Add on the high overhead marina areas face for real estate and the flooring costs and unsophisticated invoicing system the marine industry uses, it will be clear to anyone with any business sense that there is little or no money in the business of selling boats.”

We would like to hear your thoughts on this new site. Please leave a comment below.

10 comments

  1. I would like to go on record as being vehemently opposed to the publishing of dealer costs for the retail public (PayDealerCost website), whether it factors in hidden year-end rebates or not. I’m sure this week you have heard a barrage of complaints coming from various boat dealers, but I feel that this proposed website could cause such massive injury on an already frail industry that it deserves to have my voice added to the chorus.

    Of course there is the front end damage of this website going public with any dealer costs, let alone the costs on the products that I enjoy retailing. Shrinking of margins in a tough economy is of course a lethal situation with many dealers across this nation that are already struggling to hold on until better times. But also keep in mind that it wouldn’t simply impact 2011 product and years going forward, it will put the heat on retailing stock leftover boats at BELOW dealer cost. A potential customer would walk into any of our dealerships across the country and will have all the bargaining chips on his side. The dealer will simply have to accept their offer or not. I’m sure you have heard stories over and over about eBay and how they have transformed the way many of us do business, PayDealerCost.com would have a MUCH farther and deeper impact.

    Something else to think about is past customers. What if a perfectly satisfied customer realizes that his local, servicing dealer has made thousands and thousands off of him over the years? I would imagine he/she would have a new feeling of distrust and will ultimately seek out a different dealer the next time he buys a boat….IF he even buys a boat!! Because he now thinks that all boat dealers, and even manufacturers must be hogs when it comes to profit! I group manufacturers with dealers because when someone feels that they are wronged, they will immediately group everyone associated together. Kind of a “bird of a feather” sort of thing.

    Also take into consideration the sometimes profitable used boat business. It would have what I would call the “Bass Tracker” effect on the entire blue book system for pricing used boats. Overall it will lower the actual retailing price of boats and in turn will lower the resale value since no customer will pay close to, or as much as a new boat for a used one. This web site will have a horrible ripple effect throughout the entire industry. Especially with dealers in the north who must make as much as possible in season because their off season is long and hard. Clearly those who are in support of this site are those in climates that have consistent sales 12 months a year.

    Like I said, I simply wanted to go on record and let everyone know that I oppose giving these treasonous marine veterans ANY prices besides the published MSRP. In the end it will be bad for an industry that is trying to return to profitability after years of simply staying afloat. We spend millions of dollars every year on the Discover Boating campaign so that we can bring in new blood and shore up our industry. Now one greedy website wants to sabotage our efforts by inciting low-ball pricing, which will in the end lower CSI scores and thus turn off more people to boating than bring them in to the sport. If we all (the marine industry) stick together on this, they will not have anything to publish. Yes, it’s about margins and profits for the dealers, but eventually it will effect manufacturers and what type of dealers they will have left. Does manufacturers want “give away artists” or actual established dealers who care about CSI scores and administering warranties. I think now is an excellent time for some cohesion within this damn industry of ours!

  2. I am curious to know if Mr. Malone and Mr. Taylor are going to publish their financials on the web site as well. It only seem fair that the companies advertising on their website find out how little it costs to run a website vs. how much they have to pay.
    As far as thinking that consumers will suddenly be sympothetic to the retailers plight because they know dealers costs... ARE YOU CRAZY.
    Everyone wants to do business with a successful company, as long as that business doesn't make any money on them! If that dealer of 20 years wants to show his customers his cost, that is his business and right to do so. The rest of us have bills to pay. Leave us alone to do business our selves.

  3. If this were a good idea, dealers would have been showing customers the dealer cost for years. The customer wants you to make a profit and to stay in business, but they want you to make the profit off of everyone else.

    The internet didn't make this a good idea, if it were a great idea we could have mailed it to our prospects for years or just put a display ad in the paper.

    The auto industry doesn't show you "cost" they show you "invoice" they are NOT the same thing.

    I agree with Carol. Every boat company should respond " I need to see your cost, that way I can make an educated buying decision."

  4. Interesting times ahead when cost discrepancies become realized thru-out dealerships with some builders. Let’s not forget the unpublished retail imports models either, dealer cost will be just skewed anyways. Cost knowledge might only affect the first time buyer anyways, the second sale is based on trust and service.

  5. For the guy that "owned a boat dealership for 20 years" and said the customer would understand/appriciate how little dealer actually gets on a boat must live in Good Ol Boy country, USA. There is no such customer. I tried to sell a 20' Ranger bass boat 7 years ago for $2000 over cost (about a 10% mark-up) and showed the cost my invoice. He wanted to know how we could "shave" about $2000 off? I am so glad I don't sell boats any more.
    Good luck to you dealers.

  6. I'm just glad that we don't sell new boats and motors any longer,by selling them it's a sure way to lose lots of money and go broke.
    The real money nowdays is being made in service and selling used boats.

  7. This is a simple entrepreneurial idea that has the wrong vision. These people asked for no input, have anonymous backing, and some agenda I don't understand. We didn't charge what we charge to get rich. I live in a townhouse and I feed my employees. How dare some person tell me how I need to sell my boats and what the consumer needs. My consumers are happy. Perhaps the unhappy consumers are the people that bought product from these two unemployed mooks.

  8. I work in the design end of the boat business and I'll concede that the timing for implementing this idea might not be the best from a dealer standpoint, but the genie is out of bottle now. Unless the SeeDealerCost.com web site is crushed in an exemplary way via the courts, in which case the next guys might be afraid to put up such a site, my feeling is that even if Seedealercost.com fails, another such site will pop up in its place. Consumers want this information, this is a mostly free market we live and work in, and someone is going to give it to them. End of story. Adapt or go out of business. The good news is that information is the lubricant of free markets and in the long haul this should be good for business. Witness the auto industry. It's had it's troubles lately and some dealers (and manufacturers) didn't make it. But are there still car dealers near you? Yes. When the dust settles in the boat business, the weak will be gone, the strong will survive, and there will still be boat dealers.

  9. It seems the dealers are complaining too much about this. That alone gives a warning flag. The website is up and shows a tremendous mark up on boats. Years ago we purchased a boat. We went to the local boat show and were given a quote. There was a dealership that was more local to us and figured we would rather by from them. We walked into the local dealership with our quote and our checkbook figuring we would be putting a down payment on a new boat. After talking to the sales person, he came back with his price. He was 25% higher and said that was the best they could do. Keep in mind that this dealership would have had to order the boat since they did not have that model in stock. Seems like a nice way to make some quick money; boat comes in on Monday and out the door by Friday. They would have made money on the dealer prep plus they would have been the perferred choice when it came time for servicing. Anyway, we parted ways and bought the boat from the dealer at the boat show. In a last ditch effort the local dealer called the manufacture trying to get them involved since we in their 'territory'. The manufacture basically told them if they wanted to sell us the boat, they should have made us a more suitable offer. I'm sure the original dealer was making a decent profit but the local dealer was more or less a 'full MSRP' dealer. About 5 years later they were finally out of business. Boat sales have been off the several years. There are plently of new left over boats. After holding out for close to full list and paying 1-2 years of interset on these boat, the dealer is more inclined to discount it and probably make nothing off it. Over the course of the 1-2 years, they probably had offers on it and turned the buyer away. When it comes to selling the bottom line is 'if it ain't sold' it costing you money to have it on the shelf. On a reasonable offer, take the money!

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