New relationships for a new boating market

In the movies, characters who travel into the future are often shocked by the amount of change that has occurred in a mere 20 or 30 years. But in reality, the boating industry has experienced drastic change in a much shorter time frame. If a boating executive from two or three years ago were transported into the current marketplace, they would likely be stunned by how marine companies have evolved.

One area of particular change is boat builder/dealer partnerships. Many dealers who once boasted of their long-term relationships with a handful of boat builders now offer their customers an entirely different line-up of brands. Others have added brands in an attempt to cover a larger segment of the boating public. And still others have left the boating industry altogether.

Mark Saba’s situation is a different kind of example. A long-time boater who owns two Ford dealerships and a Nissan dealership in Vermont, he recently jumped at an opportunity to buy up a local boat dealership in Colchester – The Boat Works Inc. – which he has renamed Saba Marine.

The dealership, which officially opened under new ownership on March 1, formerly sold a well known runabout brand, but when management discovered Sea Ray was available, they couldn’t walk away from the opportunity.

“The average tenure of a Sea Ray dealer is 20 years,” says Jeremy Belchamber, director of operations. “Knowing the Sea Ray brand, loyalty and name recognition, we felt it was a good time to secure that franchise and try to capitalize on it.”

The Vermont dealer also carries the Lund and South Bay brands, and has gotten into the brokerage business. Combined, it had already sold a half-dozen boats as of late March.

Brands in transition
The Saba Marine example is the exception to the rule. Few outsiders are getting into the boating business for the first time these days. Perhaps more typical is the example of Ralph Stokley, owner of Stokley’s Marine, Nicholasville, Ky. His dealership was a Crownline dealer from the time the boat builder was launched in the early 90s. But when the boat builder closed down for more than 9 months last year and underwent a change in ownership, Stokley’s Marine couldn’t get any boats, and the company started looking for other opportunities.

Late last summer, the Sea Ray brand became available locally when a multi-location dealer with a satellite store in the area closed it, and Stokley’s Marine took advantage of the opportunity.

The No. 1 reason Sea Ray appealed to the dealership, according to Stokley, is its financial stability.

“We also spent some time with the people from Sea Ray and got a good feeling,” he says. “They care about a dealer and the profitability of a dealership.”

Other considerations were the brand’s status as a market leader and the wide range of boats its offers from 17 to 60 feet in length. While Crownline Boats is now back on its feet under the ownership of Tony Zielinski and Dave and Lisa Wilson, Stokley believes he has made the best decision for his company.

In the past year, Boater’s Exchange has also carried boat brands that were undergoing a transition. And like many of its fellow dealers, the Rockledge, Fla.-based company decided to take action, rather than remaining in limbo. It replaced both a small fishing boat brand and a deck boat brand with Nautic Star, according to Paul Berube, vice president.

In addition, when its current brand, WorldCat, purchased Glacier Bay, the dealership decided to add that brand to its line-up as well.

When opportunity knocks
These changes aren’t the only ones Boater’s Exchange has made this year, however. With less competition in the market and a floorplan that is still intact, it took the opportunity to diversify its product offering and upgrade its portfolio of brands.

“The times have definitely created this opportunity,” says Berube. “There’s no way we could have made these changes five years ago.”

Over the years, Boater’s Exchange has developed an evaluation form that helps the company make decisions about the boat builders with which it will conduct business (See sidebar). One builder to pass this test was Yamaha Jet Drive Boats.

“We brought on Yamaha in order to have a family-oriented boat that competes with sterndrives,” explains Berube. “In my market, sterndrives are not as well received because I’m a saltwater dealership. The Yamaha Jet Drive Boats don’t have the aesthetic drawbacks of an outboard. A family looking for a runabout, they like having that beautiful back-end.”

Yamaha also is a well organized, service-oriented company that requires dealers to take a consultative sales approach, something Berube says his company excels at.

Another boat builder that met the Boater’s Exchange list of criteria was Hewes/Pathfinder/Maverick. In fact, the dealership first contacted the manufacturer a year and a half ago, asking if they’d be willing to replace the two current dealerships they had in its market. The answer was “No.”

“When one went out of business and the other one started to teeter, my phone rang, and they asked me, ‘Are you still interested?’ I said, “Absolutely.’”

The three boat brands represent the upper echelon of saltwater fishing boats in the state of Florida, Berube explains, and they’re made in the dealership’s local area, which makes it much easier to communicate with the factory and ultimately get boats. In addition, the company has a very loyal customer base, which Boater’s Exchange experienced first hand within weeks of taking on the brands. The first customer to buy a Pathfinder from the dealership had owned three boats from the manufacturer in less than 10 years.

“That loyalty is what we’re after,” says Berube. “When a boat manufacturer can generate that, it says a lot about the quality of the boats.”

Maverick also has good marketing programs, is plugged into what the fishing guy wants, and like the dealership, is privately owned, he adds.
Another important factor is the lack of ordering pressure the manufacturer’s sales rep has put on Boater’s Exchange.

“I hate ordering discounts,” says Berube. “It entices us to make bad decisions about stocking levels. I prefer it when every dealer buys the boat for the same price. It makes it very fair, especially when a dealership is trying to get started on a new playing field.”

Catering to a new market
Parker Boat Co. has added three boat brands since October in an effort to respond to changes in its marketplace.

“We’ve been taking Statistical Surveys and looking at what is selling is our market areas,” explains Roy Parker, Jr., president. “We’ve been asking ourselves, ‘Where are there holes or opportunities we’re not covering?’”

The Orlando-based dealership’s main brands are Grady-White, Sea Ray and Boston Whaler. Recently, it has added Parker, Hurricane and Tigé in an effort to balance out its high-end, high-priced boat lines with good quality, value-priced boats. Of course, it doesn’t hurt that Parker Boat Co. has been getting calls intended for Parker Marine Enterprises for years due to their similar company names.

“We’re looking for segments of the business that don’t compete with the products we have currently,” says Parker. “Hurricane Deck Boats don’t compete with Sea Ray because they don’t make outboard powered deck boats. And in the Parker line, a 25-foot boat is $50,000, while the same sized Boston Whaler is $80,000.”

Other considerations are the quality of the product and the reputation that the factory has for supporting the dealers in terms of warranty.

In the case of Tigé, an additional factor came into play. Roy’s son, Bobby, has recently taken over as sales manager at the dealership’s Daytona location, and one of his passions is ski boats. While Parker doesn’t expect to sell more than 10 to 15 Tigé units per year, he points out that will be 10 or 15 boats they didn’t sell last year.

In the past 10 days, Parker Boat Co. has sold eight boats, only one of which was new. However, it’s difficult for the dealership to find pre-owned boats that they’re willing to get behind. While it has turned to customers for consignment boats, Parker says they often owe more than what the company can buy them for. And though it continues to buy boats at auction, quality is often an issue.

“Value-priced product, that’s what consumers are looking for right now,” Parker concludes. “People are still going boating and still buying boats, but they want that bargain. They’re looking to spend less money to get out on the water.”