To buy at auction, boat dealers must register with Auction Access. This gives them entry to all auctions held by National Auto Auction Association members, including Adesa and Manheim. Individual auction entry fees are usually minimal and will vary by location.
Sellers set the floor prices, or the minimum price they will accept for the boats.
Specialized Marine, Kimberling, Mo., which sells its remaining inventory at Manheim Missouri’s annual Indian Point in-water sale, determines its floor price based on its other expenses.
“We took three or four over last fall, which is about average for us,” says Brian McMurdo, Specialized Marine’s manager. “We will set a reserve on all of them. We may have to lift it, but by that time of the year, we want to get rid of the boats instead of wintering them. We still do pretty well.”
After securing the assets for Bank of America, the auction house will prepare detailed condition reports for the lender, according to Steven Piccinati – repossession and remarketing executive officer, Dealer Financial Services, Bank of America. Those reports, NADA guide values and recent auction trends all factor into floor pricing.
“We always try to maximize the value of the asset and minimize the loss against the outstanding balance, but in truth, the best way to do that is to sell it as quickly and efficiently as possible,” Piccinati says, adding, “We are always shooting for well over 80 percent of NADA.”
Sell-through percentages will vary by location and event. At Manheim’s “branded” sites — its five top-performing locations where staff are trained specifically to deal with boats — the sales average 56 percent. With that said, a recent sale at one of its other locations sold 100 percent of its boats.
At Adesa, conversion rates are at an all-time high but steady. “It has stayed at a very steady 85 percent-plus, which is very strong,” says Jane Morgan, president of the company’s Specialty Sales Division.
Both companies try to make the process as efficient as possible for buyers and sellers, providing title transfer and payment on site.
The auction houses get a percentage of each boat sale. In addition, they charge fees for a variety of services offered to sellers and buyers, ranging from boat inspection and detailing to financing and transporting.
One of the most important services Adesa offers buyers, says Morgan, is its certification program, which adds significant value to the sale.
“This is a very big deal for dealers … [If] we have made it a ‘cert,’ then mess up, we are going to own it, not the incoming buyer,” says Morgan.
Although Manheim offers the RV and motorcycle sellers a 100-plus point inspection certification, it doesn’t have a similar program for boat sales.
“We are not quite there yet with the boats, although we plan on being able to offer something soon, whether it will be a certification or some kind of warranty that can be provided to the retail customer,” says Karen Braddy, general manager of specialty and heavy truck sales, Manheim, Atlanta. “We see that as a real value-add for dealers, so we are exploring what it might be.”