Move It (or Lose It)

Whoever coined the phrase “You can never have too much of a good thing,” obviously never sold boats … or cars, or probably much of anything else.
Too many boats, too few buyers: For marine dealers across the country, that is the crux of the predicament in which they now find themselves. How the problem began and how to make sure it can be avoided in the future are important questions to answer. But if they can’t move their excess inventory, those answers won’t matter to the many boat dealers struggling to make it through the days, weeks and months ahead.
If you’re one of those dealers, you want to know what you can start doing today, right now, to get that inventory off your books. No issue is more important. The survival of your business may hang in the balance.
To help tip that balance in your favor, Boating Industry’s editors have combed the applications from this year’s Top 100 Dealers looking for programs, procedures and best practices that may provide solutions for those drowning in inventory.
Frankly, when executed most effectively, inventory management is a year-round process that’s planned out, monitored and frequently adjusted to respond to changing market conditions. But a 12-month plan may be a luxury many in the industry aren’t able to afford at the moment. The ideas that follow are the bits and pieces chosen from larger plans that can help you jumpstart your inventory management process and begin moving boats now.
Survival 101: Out with the old
Call it prioritizing, call it planning, call it whatever you want, but the first step to reduce inventory in the most effective manner possible is to make sure you know which boats are costing you the most money to have sitting on the lot and concentrate on getting rid of them first.
At the very minimum, your business should have an inventory spreadsheet that lists: the stock number, serial number, make and model, age and days on the books. There should also be a flagging system or some other urgent call to action for inventory that has been on your books for a specific amount of time – typically 90 days for most dealerships.
Other inventory spreadsheets also include information such as: color; options; asking price; maximum discount price allowed; free floor plan end date; cost line pricing levels and any bonuses that exist.
Whatever your spreadsheet lists, it’s important that it be continually updated so that your sales staff always knows what’s in stock. For example, the sales team at JOA Marine, based in Marietta, Ga., receives an inventory list daily and boats that have been on the lot the longest are highlighted to keep everyone aware of them.
“We have always felt that complete monitoring of the inventory on a daily basis is paramount to inventory control, and more importantly, interest control,” says JOA president Darren Matthews. “We have two managers that watch this daily, submitting updates to the sales staff and management via e-mail, which they receive on their phones, so that we are all keenly aware of our inventory and what needs to be sold.”
A computerized inventory tracking system that allows a dealer to keep tabs on inventory in real time is a great way to call on an accurate, up-to-date picture of your inventory situation at the push of a button. Good dealer management systems, used by the majority of our Top 100 Dealers, provide this. You should make sure that you’re using your DMS to help you maximize your inventory control systems.
For example, the DMS used by Strong’s Marine, based in Mattituck, N.Y., provides an Inventory Aging Report that lists the date the boat was received and ranks units by the days they’ve been in inventory. Company president Jeff Strong says the most important components to managing inventory are “constant monitoring and being open to change and new ideas.”
Austin Singleton – owner of the Singleton Marine Group, based in Dadeville, Ala. – says the power to rapidly respond to fluid market conditions has been key for his business. “With multiple sales locations, the ability to constantly evaluate and quickly move inventory as needed to particular dealerships and sales locations is vital to our business growth,” he explains.
In one of the most unique inventory management systems among Top 100 Dealers, Jet Ski of Miami & Fisherman’s Boat Group, headquartered in Miami, Fla., implemented a barcode system to track its inventory. The company has created weatherproof custom stickers that are guaranteed to last 15 years. Each new or in-service unit in inventory is labeled with the year, make, model, condition, date of receipt, price and a bar code.
“We have up to 600 units in inventory and a full inventory check can be performed in about an hour,” the company’s manager and president Garrett Hayim says.
The units are scanned as they are delivered to a customer so the dealership can accurately determine which units are in inventory and which have been sold and delivered. Additionally, the sales team doesn’t need a printed sales book to quote customers a price on the fly because MSRP, options included, and the sales prices are all readily available from the sticker located on each unit.
Finding Your Way: Be bold
South Shore Marine, based in Huron, Ohio, aims to minimize the hold time for the units in its inventory and uses a spreadsheet featuring a bold number next to each unit that updates daily, indicating the number of days it’s been on the books.
“Every 90 days, this number changes color, indicating the need to re-strategize our position,” company owner and president Tom Mack says. “Too much non-current product seems to be a strong sign of weakness to any buyer visiting a dealership – and not having that over your head does a lot for confidence and turning around the perception that it’s a buyer’s market.”
The entire process was highlighted as a best practice in the Feb. 2008 issue of Boating Industry. To access that story, search for “South Shore Marine” at
Tip: Do your homework
While it won’t help you with the inventory you currently have, making sure you don’t buy more boats that won’t sell is obviously the smart move to make – in any economic climate. In an effort to better control its acquisition process, JOA Marine has researched the inventory of all of its competitors, in addition to reviewing its unit sales history. “All mid-range, 21-foot bow riders are essentially created equal,” says president Darren Matthews. “If there are 75 leftover 21-foot units in my market … [it’s] probably not the time to be in the 21-foot bow rider market. So we order a different unit based on availability market wide.”
Survival 101: Staying focused
Next to continually visualizing your inventory status, communication about your position and potential solutions is among the most important tactics you need to focus on. The best way to accomplish this is through regular — read: weekly, if not daily — sales team meetings.
If your dealership isn’t already holding regularly scheduled sales meetings at least once a week, you should begin doing so as soon as possible. Many of the dealers in the best inventory shape begin each day with a short sales meeting to review inventory and discuss sales opportunities. The meetings ensure everyone is on the same page when it comes to inventory management and are also a great time to discuss strategies to spur sales.
For those wondering how to structure an effective sales meeting, the agenda used by Kelly’s Port, based in Osage Beach, Mo., represents a great place to start. You can see an outline of the agenda here.
Another group activity used by many dealerships is for the entire sales team to walk the boat line together and visually check the inventory while discussing it at the same time. Salespeople are also asked for their ideas on how to move aging units.
And meetings can be a great training tool. For example, at Legendary Marine, based in Destin, Fla., the sales manager quizzes team members with questions such as “If a customer comes in looking for a used center console, 23 foot or larger for under $30,000, what boat would you show them?”
The sales meetings are valuable tools for not just communicating about what’s in stock and discussing solutions for minimizing hold time for each unit, but also for training staff and making your entire team better.
Finding Your Way: Kelly’s port sales meeting agenda
Individually review leads (on a scale of 1 to 10, only the leads judged 6 or better are reviewed) for each salesman. The salesman discusses what actions have been taken, what the customer’s interest level is and why they haven’t yet bought. Then the whole staff provides possible solutions or gives advice on what can be done to close the sale.

  • Review of pending contracts
  • Review the new boats in stock and their locations, which also facilitates feedback on inventory management, how boats are ordered, options, etc.
  • Review of the “broker boat” list (this includes broker and trades) and discussion of pricing, condition, location and activity.
  • At each meeting a different salesperson gives a presentation on a particular model and that model’s strongest competitors as well.
    Survival 101: On your mark
    The best dealers, and especially those that succeed with inventory management, operate with more than just visual monitoring and strong communication. They also establish, strive for and meet a series of inventory management-related goals.
    While goal setting can — and should — include sales goals broken down by make, model and salesperson, it’s also important to use overall company goal setting as a crucial component of inventory control. These benchmarks can take a number of different forms and be as general or specific as you would like, but the key is the more successful you are in meeting the goals, the more profitable your company will be.
    One popular method of setting inventory goals is to keep a history of inventory levels on a specific date and then to use that date to benchmark yearly sales progress against. David Parker, president of Parker Business Planning, teaches the members of his 20 Groups to have no more than 20 percent of their current models in stock on July 31 and no more than 10 percent in stock by Labor Day.
    This is a tactic he learned from one of the members of a past 20 Group, and those who have used the strategy have found success. In fact, some of his dealers have set even more stringent goals as they have refined the strategy to better meet their own objectives.
    Woodard Marine, based in Hydeville, Vt., for example, has an end-of-July benchmark to have no more than 10 percent of its model year units in inventory. Operating with that goal as its target, president Robert Woodard says it’s rare that the dealership completes a year with more than 5 percent of its total inventory left in stock.
    At MasterCraft Dealer Services, based in Holloday, Utah, the goal is to have fewer than 10 percent of annual units as carryovers at the start of August and 5 percent by the end of that month.
    But your inventory benchmarks don’t have to mirror the numbers other dealerships set for themselves. If you don’t already have benchmarks in place, you should set a realistic goal for your business based on your market and your standards. The important thing is that you have a number in place that you can measure past, current and future performance against.
    Goal setting can also be much more specific than simply “boat inventory.” Many dealerships set goals per brand or even per unit, and also use individual goals for their salespeople as an important motivational tool. The two top dealers in Boating Industry’s 2008 Top 100 both do this.
    Seattle Boat Co. (No.2) sets annual unit and model goals for each of its sales team members, while Galati Yacht Sales (No. 1), based in Anna Maria, Fla., has brand managers for each of its lines and holds them responsible for meeting inventory turn goals by making those goals part of their compensation packages.
    At Buckeye Marine – based in Bobcaygeon, Ontario, Canada – much the same approach is taken with the company’s “product consultants,” each of whom, with the help of the sales manager, is required to set an annual sales target, further broken down into monthly goals based on seasonal trends and past sales history. To help the consultants keep track of their progress toward these goals, Buckeye compiled what it calls a “Sales Success Log Book” for them this year. The book is filled with two pages for each day of the month that allow the consultants to plan their daily goals, track and plan their activities in 15-minute increments throughout the day, then summarize their progress at day’s end. The book also includes a page for summarizing monthly progress as well as comments and evaluation.
    Quality Boats of Clearwater, based in Clearwater, Fla., assigns each sales rep a block of boats on a rotating basis and says this ensures ongoing accountability for the sale of those boats and that they are always ready to be shown to customers at any time, rather than neglected and forgotten about as salespeople focus on the newer units.
    Finding Your Way: Count down
    In 2007, Quality Boats of Clearwater implemented a program that targets new boat inventory turns. At the beginning of the model year, goals are set within the sales department for targeted models and volume of each boat line. As a specific model is sold, one more is struck off of that particular goal’s number, and the dealership counts down accordingly.
    “Typically, as we have learned from our boat suppliers,” Quality’s owners, Dan and David Bair, explain, “other dealer’s sales departments that set goals for the year actually work up to that level of set goals. Our different type of psychological goal tracking has resulted in not only celebrating group successes and better accomplishment of our team-set goals, but it has also allowed us to better manage our inventory by specifically identifying and tracking sales of each product line by manufacturer.”
    The process – which Quality says allowed it to achieve the “lofty” goals it set for two of the three boat lines it represents in a down market – is now taught to other dealers by Quality’s boat supplier sales representatives.
    Survival 101: Make it worth their while
    Working hand-in-hand with the individual and overall goals a dealership sets are the rewards given for meeting those goals. As inventory ages, many dealerships work to “sweeten the pot” for the salesperson who finally makes that elusive sale.
    As is common practice among many of its peers, MasterCraft Dealers Services, for example, weights its salesmen’s commission structure by the age of each unit. The older the boat, the more money the salesmen make.
    At JOA Marine, the process works like this: A sliding scale is used to determine extra incentives for the sales associates. For units older than 180 days, sales associates receive up to 40 percent of the profit vs. the standard 20 percent; and any unit that reaches 280 days, the commissions increase to 50 percent.
    Galati Yacht Sales uses a slightly different approach. After a unit earns a spot on the company’s Hot Boat List, which a yacht is placed on after it reaches 140 days in cycle, a Richard Petty Driving Experience package is offered to salespeople as a result of the sale of select models.
    “This was very well received,” says general manager Darren Plymale. “Other incentives are offered internally through increasing sales commissions, resulting in a higher level of concentration by our sales team on these designated units. This has also proven to be a successful formula for moving the aged inventories.”
    Finding Your Way: One third
    The Kelly’s Port philosophy for moving aged inventory can be summed up in three words: One-Third Boat. That phrase describes the program owner Randy Kelly came up with to encourage his salespeople to focus on moving aged inventory. Basically, whatever the gross profits are on those older boats, the salesperson gets one third.
    “What I like about it,” Kelly says, “is it creates the team spirit. I keep asking them to dump all this old inventory, and with this program, I’m pitching in with you. I don’t expect you to just dump it and only make $200 commission to ‘help Randy out.’ This way, it’s a two-way street.”
    Boating Industry highlighted this entire process as a best practice in our Feb. 2008 issue. To read it and other best practices on inventory management, visit the Best Practices portal at
    Finding Your Way: Inventory bonuses
    At George’s Marine & Sports – based in Ontario, Canada – a new bonus structure for the sales team was put in place that gives each salesperson an individual monthly goal and the sales managers monthly departmental goals. If those goals are reached, a bonus is paid to each employee who reached the set goal, resulting in some sales staff receiving an additional $500 per month.
    “This new incentive has directly increased our sales and more notably it is a self-motivated push the sales staff initiate on themselves, especially as we come to the end of a month,” says Jeff Wilcox, the company’s president. “Now that all sales staff have received at least one bonus, they can see the financial benefits of working a little bit harder and it has set new standards by raising the personal goals within the department.”
    Survival 101: Create more customers
    An even greater challenge than keeping salespeople interested in selling your full range of inventory is keeping your customers interested in buying it. While many dealers will grit their teeth and sacrifice margins to move a boat that has been on the lot too long, others have come up with alternatives they will at least try before taking that final unpleasant step.
    Dealerships with multiple locations move inventory between stores frequently to keep it fresh. JOA Marine, for example, moves its inventory to an alternate location every 30 to 60 days. Singleton Marine Group, too, has taken advantage of its multiple locations to decrease its stocking levels.
    “We have ordered a diverse array of different colors and options so that we could have a larger overall selection with fewer units at the individual stores,” owner Austin Singleton says.
    But, while Singleton Marine Group is flexible with its new inventory, the company has opened a used boat “SuperCenter” to sell its entire line of pre-owned inventory. Singleton says the SuperCenter “gives its dealers an outlet to sell carryover inventory; attracts new groups of customers, some of whom may also be courted to buy new boats at other Singleton dealerships; and reduces heavy fees for unloading boat deliveries.”
    Pride Marine Group – based in Ontario, Canada – has done the same thing as Singleton and has also achieved positive results. “By separating and amassing all of the used boats from five locations at one central location with highway traffic exposure,” says Paul Nickel, president of Pride, “we have increased our inventory turns and created a one-stop shopping experience with an increased selection.”
    For dealerships without the ability to move inventory between stores, getting boats in front of as many new sets of eyeballs as possible has still proven to be an effective selling tool. Parking lot displays at the local shopping mall, Wal-Mart, Sam’s Club, Costco or Home Depot have been cost effective for a number of dealers, even if they only result in one or two sales. Russo Marine, based in Medford, Mass., has also partnered with West Marine to host off-site boat displays.
    Others use open houses, demo days and other on-site events as solid options for attracting new customers. Some dealerships also allow local boating, fishing or watersports groups to use their facilities as a meeting place, which is an extremely cost-effective way of bringing potential customers through their doors on a regular basis.
    Another effective way to shed inventory is to find another dealer that will take a boat off your hands. Dealerships in 20 Groups often share or trade inventory, but other dealers have created their own networks, and manufacturers such as Cobalt and Regal have proven helpful in facilitating transfers among their dealer networks as well.
    Boating Industry featured a new company last year — Marine Dealer Trader — that specializes in helping dealers trade inventory; search for “Share & Share alike” at to learn more. And search for “Regal Automation” to read about that company’s inventory-sharing program.
    Finding Your Way: Special of the week
    In an effort to avoid dumping inventory, Colorado Boat Center launched a “Special of the Week” incentive program. One or two models are featured on its Web site and in-store with a reduced price.
    When a consumer is looking at a particular model and it isn’t a “Special of the Week,” the company’s sales people are trained to take control of the sale by putting the customer in the weekly price-point boat or, at the very least, will keep them informed of the weekly specials. Conveniently, for both the consumer and the dealership, the boat the customer was originally looking for typically goes on special the next week.
    Tip: Try renting
    Pride Marine Group decided to take advantage of its on-water locations, offer customers another service, generate more revenue and reduce inventory, all at the same time. How? The company began offering a rental fleet.
    As president Paul Nickel explains, “We have added a rental boat fleet to our inventory as a way of turning over aged inventory (new and/or used) at a profit by writing down the value of the unit through renting it for a value that increases faster than depreciation and holding costs accrue.”
    Tip: Make sure the price is right
    Are your boats marked at the proper price point to effectively compete in your market? Quality Boats of Clearwater implemented a system to continuously research used boats in the marketplace, nationwide, and make sure its’ pricing is competitive.
    “For years, we would hold on to inventory too long, based on what we thought it should sell for,” explain owners Dan and David Bair. “Any banker will tell you, inventory is a killer. This system has allowed us to move boats more quickly before they have a birthday each summer.
    “While it may have seemed, initially to us, that we were leaving profits on the table, it has since educated us that moving inventory quickly, even if at prices lower than we thought that it should be sold for, saves us money in the long run.”

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