One Step Back

I love visiting our local Bass Pro Shop.
It’s everything the company claims it is, delivering a family-friendly entertainment and retail experience that would make even the most hardened urbanite dream of outdoor fun.
During a recent visit, my 18-month-old got his first glance of a live fish in the store’s huge aquarium. As my husband and I shopped for holiday gifts, we were serenaded by kids showing off their duck calls for prizes amongst the excited buzz of dozens of young families.
Yep, that’s right. This sporting goods store was filled with exactly the people targeted by the Grow Boating campaign – young families with discretionary income.
After that first-hand experience, it’s not hard to believe Tracker Marine Group’s claim that not only is Bass Pro Shops, its sister company, key to growing its boat sales, it also increases interest in fishing and boating, thus driving up demand for new boat sales industrywide.
I don’t need convincing. After prying my son’s hands off the steering wheel of a new Tracker boat when it was time to leave, I listened to desperate cries of “my boat, my boat, MY boat” all the way to the car.
The question is at what cost is this experience being delivered. Tracker Marine Group appears to have an unusually high percentage of disgruntled independent dealers, largely due to a lack of territory protection in its dealer agreements as well as its widespread distribution through Bass Pro Shops and other manufacturer-owned retail locations. We found this out when we sent an informal and anonymous e-mail survey to more than 180 Tracker dealers. Of the 33 that responded, 67 percent had complaints or concerns about the manufacturer’s policies, 6 percent were neutral and 27 percent were supportive of Tracker. While Boating Industry prefers to attribute the comments of those it quotes in its articles, most dealers who questioned Tracker’s policies told us they would only share their comments under the condition of anonymity.
Even if you assume all of those who didn’t reply support the manufacturer’s policies, more than 10 percent seem to feel the manufacturer is treating its independent dealers unfairly. Strained dealer-manufacturer relationships inevitably trickle down to the customer, and therefore can temper the positive impact Tracker Marine Group and Bass Pro Shops is having on the industry.
Bubba Perrilloux, the owner of Boat City USA, is just one example. This Tracker dealer, which has been rated one of the builders Top 25 dealers for several years in a row, is suing the company for what it alleges is a violation of a Louisiana state law that makes it illegal for a manufacturer to compete with its dealers without their permission. The legal argument appears to be over whether, by signing his dealer agreement, Perrilloux gave Tracker his consent to compete with him.
Perrilloux says it all started when Tracker Marine Group acquired struggling dealership chain Travis Boats & Motors in 2004. Initially, the boat builder’s management told him these stores would only carry the Procraft and Fisher brands. But a year later, the manufacturer asked for his permission – a procedure required by state law – to put Tracker-branded boats in the two Travis Boating Centers within 30 miles of his two stores. His response was a firm no.

Marking your territory
That 30-mile radius is the size of a Louisiana dealer’s territory, as mandated by the state. Tracker’s dealer agreements don’t typically provide territory protection.
“Tracker is the only boat manufacturer that I know that doesn’t honor a dealer’s territory,” wrote one dealer in response to Boating Industry’s survey. “It states in their dealer agreement that they have the right to set up a dealer anywhere they desire.”
“I think that the manufacturers can have their own retail stores to sell their own products, but … they must respect the territory,” commented one dealer. “Imagine an independent dealer makes an investment (property, showroom, etc.) and without notice they open a big store close to yours. That will hurt your business.”
While Tracker’s agreements are admittedly tough for many dealers to swallow, the company did begin as a retailer in 1972. Bass Pro Shops originally designed and founded Tracker boats, selling the first model in 1977. It wasn’t until several years later that Bass Pro made Tracker products available to independent dealers and Tracker Marine was formed.
“In keeping with those origins, our standard dealer agreement does not provide exclusive territories, nor has it ever,” the company said in a prepared statement for this article. “The agreement has always granted only non-exclusive territories, allowing Tracker to open dealerships in Bass Pro Shops retail outlets. We do offer an Elite program for dealers, which grants a limited exclusive territory in exchange for exclusive representation, but even in those agreements, Tracker retains the right to open dealerships in Bass Pro stores.”
Certainly, the Bass Pro Shops/Tracker relationship is not a new dynamic or one it has been hiding from its dealers. And neither is the lack of territory protection.
“It is my opinion that any dealer entering in a contract with Tracker Marine Group is fully aware that they are also the owners of Bass Pro Shops,” said one dealer survey respondent.
What is relatively new, however, is Bass Pro Shops’ aggressive expansion track. Added to that is Tracker’s recent strategy to place Tracker-brand boats in its Travis Boating Centers.
Since 2003, Bass Pro Shops has been opening several new locations per year practically next door to current dealers. And the impact of the stores radiates far from their locations. On its Web site, Bass Pro Shops says 40 to 45 percent of its customers come from more than 50 miles away. With 33 U.S. stores today and 22 future stores being planned, many independent dealers are feeling the impact, and more will likely soon join them.
That ability to draw from far beyond its geographical base is behind Tracker dealers’ other main struggle with Bass Pro Shops. While several dealer respondents said it wasn’t always the case, the manufacturer has recently had a tendency to make warranty reimbursement difficult. One dealer surveyed said that while the nearest Bass Pro Shop is more than 700 miles away, customers in his area expect him to perform warranty work on their boats – and Tracker says he can’t deny them warranty service. While he admits that Tracker pays shop rate, he says they often don’t allow enough time to get the job done.
“Where I see a lack of fairness day-to-day is in factory support, such as warranty,” commented another dealer survey respondent. “They are really tough to deal with on getting them to cover issues that are clearly warranty problems – manufacturing defects – yet they don’t want to pay for the repairs or they just drag it out forever. My guess is they are more responsive with their own dealerships. Mercury is a big company too, you know, and so is US Marine, but both of them are very, very responsive on warranty and customer service issues with all their dealers.”
The company’s free-standing Travis and Tracker Boating Centers appear to be less a long-term strategy on the part of Tracker to compete with its independent dealers than a one-time decision to preserve an important piece of its network that had been struggling for years. But the reasoning behind the decision doesn’t do much to help those independent dealers now forced to compete with them in their own backyard.

Helping or hurting?
Tracker has always claimed Bass Pro Shops actually benefit surrounding dealers.
Understandably, dealers – especially those facing the opening of a new store – are skeptical. Bubba Perrilloux is one such dealer.
While he says Tracker seems to have given up trying to place competitive boats in the Travis stores within his territory, a Bass Pro Shop is now expected to open about 28 miles away. In addition, the boat builder has placed Tracker-branded product within its Tracker Boating Center in Baton Rouge, a city that is slightly beyond Perrilloux’ state-mandated 30-mile territory but one that he has served in the past. This prompted his lawsuit.
Tracker says it expects local dealers to benefit from the new Bass Pro Shop. It shared its position in a separate statement prepared for this article: “The positive impact that a new Bass Pro Shops retail store can generate for Tracker brands and dealers is greatest in markets that are currently underserved. In the portions of South Louisiana referenced in your questions, for example, Tracker market share in our core fishing boats is well below our national average.
“Our dealers have told us for years that the Bass Pro Shops relationship has been and continues to be the most important factor in building customer traffic for boat sales, as well as generating profitable service business, for their dealerships.”
There’s no denying that Bass Pro Shops’ marketing and promotions efforts are powerful, driving growth for the manufacturer, but dealers debate whether they truly benefit.
“Tracker’s unique presence in the industry through their controversial distribution and marketing process does create a brand awareness unlike any other aluminum boat brand in the industry,” one dealer commented. While he admitted the company’s strategy “works for me,” he also said that if a Tracker Boat Center moved into his neighborhood, “I’m sure my sales and opinion would change.”
Another dealer facing the opening of a new Bass Pro store wanted to find out for himself what to expect, so he conducted his own survey of six Tracker dealers who have Bass Pro Shops within 15 miles of them, and he shared the results with Boating Industry.
“We commonly got their explanation that the first two years of a Bass Pro Shop opening is horrible,” the dealer wrote. “While Tracker claims no loss of market share for the existing Tracker dealer, all dealers in the region lose market share – about 15 percent was what I saw across the board, especially the first two years. On a good note, several dealers explained that after about two years the public settles down. It is at this stage the dealers tell me life is manageable.”
Two years ago, another Tracker dealer had a Bass Pro Shop open about 40 minutes away. Its sales went from double-digit increases to double-digit decreases for a total decline of 53 percent. During this time, the dealer says its other brands have continued to grow.
“The Tracker people keep telling us that we have hit bottom and it should only get better from here,” the dealer said. “When I presented all of my figures at the dealer meeting this year, my salesman’s initial response was for us to think about opening a new store about an hour from our existing location. My thought was, ‘Yeah, that’s a great idea. I’ll build up another market for you guys and then in five years you can build another Bass Pro in the new location.’”
Many dealers feel intimidated by the company’s marketing power. Several, for example, mentioned that they were pushed out of local boat shows that had once been a major annual source of revenue for them. Others mention the money the company spends to advertise, amounts with which a one- or two-location dealership can’t compete.
“The huge backing of Bass Pro for sponsorships and promotions is slowly pushing the dealer out of the large boat shows he was in and leaving him the small local shows Bass Pro doesn’t aim for,” one dealer said.
Another dealer cited a Tracker promotion in which the dealer’s customers were provided with Bass Pro Shop coupons, the expense for which came out of the dealer’s co-op funds. Several other dealers also speculated that the manufacturer was giving Travis and Tracker Boating Centers and Bass Pro Shops preferential treatment when it came to inventory.
But an area where most Tracker dealers agree that the manufacturer has been fair is in pricing. Tracker has long held a No Hassle, No Haggle Pricing policy, similar to that of Saturn. The company publishes its prices, which it says are honored at all of its retail establishments, including Bass Pro Shops. Some dealers believe that as long as the manufacturer continues to do so, its strategies are fair play.
“As long as Bass Pro Shops/Tracker Marine obeys their own pricing structure, then there should not be any issues with them selling and promoting their own boat lines in conjunction with independent dealers,” stated one respondent, who admitted he didn’t have a Bass Pro Shop in his region. “Once they stray from their own company morals, then I can see where there may be issues.”
Another dealer pointed out that independent dealers can compete with Bass Pro Shops by varying the price and taking trade-ins.
A third respondent concurred: “I do think it is a conflict of interest, but if everyone buys at the same rate, who cares? Furthermore, if you are a Tracker dealer and do not like it, you can switch brands.”

Moving forward
Despite the number of dealers who feel Tracker’s strategy is unfair, it’s unlikely many will voluntarily end their contracts any time soon.
“With the huge investment each dealer has made into Tracker and with its phenomenal growth, none want to take a risk of leaving …,” explained one dealer.
Bubba Perrilloux agrees. He says he’s pursuing his lawsuit against the company because of his commitment to the brand. Switching to a competing boat brand would be like going from Coke to Pepsi.
“I was here first, and I’m not going to let [Bass Pro Shops or Tracker Boating Centers] drive me out of town,” he says. “I’ve been telling people for years this is the right product, the best product. This is my investment.”
But whether he wins or loses, the bigger question remains: What effect will this, or other manufacturer-dealer conflicts like it, have on the consumer and ultimately the industry?
“We are seeing that Tracker Marine thinks of Tracker Marine before the dealer. It is a shame that Tracker management is operating the company that way because they offer a good product and have great marketing,” said one 30-year industry veteran, who is also a Tracker dealer. “Tracker Boats has been the most difficult for myself and other dealers to work with that I have seen in all of my marine career.”
The industry, with a few exceptions, seems to have learned that the time and focus manufacturers and dealers spend managing bad relationships is better spent working together to improve the customer’s experience. All it takes is a willingness to compromise, which the industry seems to be striving for – at least on the surface.
Those manufacturers that don’t embrace compromise might make it more difficult for everyone, increasing the perceived need for state legislation (Please read Threats, Lies & Audiotape) and sending the wrong message to customers who have many more recreational choices than they do discretionary dollars.
“For all the increased interest and boat sales that Bass Pro creates, I think it is negated by their lack of customer service after the sale,” said one dealer. “Most local Tracker dealers are way too busy servicing their own customers and don’t have the time or people to take care of Bass Pro customers as well. Many of these customers are the ones who are not getting the right attention, and they are driven out of boating because they cannot get good service from their selling dealer.”
In addition, those manufacturers and dealers who continue to struggle with issues of territory and warranty might as well hand over a piece of their market share. You can bet those companies focused on creating and maintaining good dealer relationships are gaining ground.
As one dealer put it: “I think we must work as a family helping each other because in the customers’ eyes, we are the same.”