Repossessed inventory — both new and used — can present another opportunity. The source of such boats could be auction houses (see the “Auction Items” feature article in the June issue of Boating Industry magazine), small banks or even the new dealer-only Web site launched by GE in conjunction with BoatTrader.com.
“There are a lot of deals out there right now with all the new and used boats that have been repossessed by lending institutions,” says David Parker of Parker Business Planning. “Buying repos at a deep discount is certainly the easiest way to increase margins.”
In addition, there are a number of small, regional banks with portfolios of retail boat models that are not part of the large liquidator programs.
“I’m advising dealers to go to the banks in their local area and let them know that the local dealer can do a better job of minimizing the bank’s losses and maximizing their returns by allowing their local dealers to retail these boats,” says Yamaha Marine University instructor and dealer consultant Noel Osborne. “Banks are not in the repo business and don’t have the equipment or manpower to pick up these boats.”
Osborne warns that in many states, such as Florida, you can’t repossess a boat without a license, which represents another opportunity.
“There are people out there who will do the repossession for the banks,” he says. “You can form a relationship with those people, go to the bank and say: “I have a licensed repo man on my staff who can do this so we can present you with a total package.”
There also may be opportunities to provide repossession houses with services, such as evaluating the condition of boats for sale, servicing them and transporting them.
“There is profit potential in providing these services,” Osborne says. “Rather than throwing the whole repo thing under the bus, we’re advising dealers to be very proactive. They are better off making some money on these transactions than make no money.”