Control your distribution

A key component of Skipper Bud’s (Ranked 2 in 2005) success has been its expansion into other areas of the marine business than boat sales, both as a means of diversifying, but also to create further opportunities for boat sales.

In the mid-80s when Skipper Bud’s was trying to sell boats in Milwaukee, it was almost a contingency of the sale to offer the buyer a slip on Lake Michigan as well. So the company built what President Dennis Ellerbrock believes may have been the first dry stack on Lake Michigan, possibly even the Great Lakes, and the idea for Skipper Marine Development was born.

“If you’re selling cookies, you would love to control the shelves that those cookies are sold off of,” he explains. “Well we want to control the distribution, as well, and for us, distribution is access to the water. Skipper Marine Development develops access to the water. So as a result, we’ve been able to invest in and manage marinas where our boat selling and service operations have an opportunity to earn their way in as well.”

Several other Top 100 Dealers have strategies for meeting the water access issue head-on, taking their businesses’ futures into their own hands and creating a diverse set of paths for the rest of the industry to follow.

Many of these dealers own marinas and have their own strategy to balance the two types of businesses. Bosun’s Marine (Ranked 47 in 2006) owner Tim Leedham is pretty clear about his.

“In order to further enhance and control the quality of the consumer’s experience, we have decided to totally control the entire infrastructure,” he explains. “We are a sales and service focused and driven boat dealership. Thus, the marina serves to support the greater goal by supporting the dealership and completing the consumer experience.”

Currently, Leedham is renovating one of his marina locations, expanding from 61 slips to 152 slips. With the health of the big boat market, many marina owners have been catering to it at the expense of their small boat customers, overhauling their docks to accommodate larger boats. But Leedham has consciously bucked this trend.

“What we’re looking to do is have the marina reflect the meat and potatoes of boat sales,” he comments. “Of the 152 slips, 130 of them will cater to boats up to 30 feet. That is the part of the industry that is not being paid attention to in new marina development.”

Over time, Leedham expects to purchase more marinas, complementing his growing dealership and guaranteeing water access for his customers now and into the future.

Like Bosun’s Marine, the management team at Marina One (Ranked 21 in 2006) — a five-store dealership chain based in Deerfield Beach, Fla. — aims to serve as a one-stop shop for its customers.

“From the sale to the storage to the service, the customer never has to look farther than the [Marina One] Yacht Club building for all their boating needs — an experience which furthers our goal of making customers ‘a customer for life,’” explains Rick DuBois, general manager.

While the company was approached several years ago by condo developers with a tempting offer to buy its waterfront property, the decision to instead expand that marina and build an even larger one at another location has become “priceless.”

“Now, as the marine industry shrinks to roadside sales lots with lack of access to on-water storage, we stand proud and newly built on the water,” DuBois says.

Prince William Marine Sales (Ranked 19 in 2006) is a Virginia dealership and marina, the slips of which are rented exclusively to its boat customers. The marina is often full, so with access tight in the region, Prince William rents slips at five other local marinas that don’t sell boats. The dealership typically places boats for sale in those slips, and once the boats are sold, it leases the slips to the boat buyers.

Park Boat Co. Powersports (Ranked 38 in 2006), a one-location dealership based in Washington, N.C., is moving its boat sales business from an on-water location to a busier, highway location in hopes of boosting its exposure. But Park isn’t selling its former dealership. It plans to convert it into a dry stack marina.

“Water access is becoming an area of increasing concern, and we are trying to ensure that boaters in our area will have access now and in the future,” says Terry Smithwick, company president.

Florida-based Galati Yacht Sales (Ranked 2 in 2006) has proven that where there is a gap in its customers’ boating experience, it will fill it, whether within a dealer’s traditional sphere or not. Water access is no exception.

“One of the challenges we face in selling yachts is the availability of slips for our potential buyers,” explains Carmine Galati, principal of Galati Yacht Sales.

Through the dealership’s recent launch of Coastal Marina Management — a marina consulting and management company — it’s able to help waterfront condo developers design and maintain the marina portion of their businesses while not only growing its revenues, but taking control of slips within its territory. While a relatively new company, it has already signed several contracts, according to Galati.

“As part of the management agreement, we ask for control of some of the slips they build,” he explains. “This will allow us to help customers find slips for their new yachts and provide an outlet for us to display and sell more yachts.”

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