Put pre-owned in the front seat

Pre-owned boat sales are nothing new for Crystal-Pierz Marine.

The Minnesota-based dealership chain (Ranked 5 in 2006) has always taken trade-ins and used to have a selection of pre-owned boats at each of its facilities.

“We had 12 locations that all did OK with used boats,” explains Luke Kujawa, COO. “Now we make higher margins on our used boats than our new ones.”

That’s partly because pre-owned boats are no longer taking a back seat to the dealer’s new product. With the launch of its Used Boat Superstore last July, Crystal-Pierz now has a detailing shop, service department, warranty department and sales staff devoted primarily to pre-owned boat sales.

There’s also a major difference between pre-owned and new boats that gives the superstore an advantage.

“When you’re in an aggressive market, like where we are in Minnesota, with as many dealers as we have selling a lot of the same [new] product, it tends to really, really drive down profit margins,” he explains. “With used boats, one of the nice things is you’re selling a one-of-a-kind boat. They can’t compare that exact boat to anyplace else so you’re able to hold margin a little bit better.”

That doesn’t mean overcharging, however. A pre-owned boat that has been cleaned, detailed, inspected and given a warranty offers consumers a lot of value for their money, he says. In fact, Crystal-Pierz has a one- to four-star warranty system based on the condition of the boat, its age and the options on it.

Kujawa believes the opening of the 200-boat superstore may allow the dealership to attract more used boat buyers away from the driveway-to-driveway market.

“If somebody was going to buy a boat from their neighbor or someone down the street, it would seem they would at least want to go shop and compare at a place with the largest centralized selection of used boats before they decide to make that purchase,” he comments.

Kujawa still considers the superstore to be in “test phase,” but he says initial results are “very positive.” The key to that success largely comes down to how the dealership now views its pre-owned boat business.

“It’s easy to get what we call ‘polluted by the deal’ and want to put too much money into a trade to get that front-end deal,” he explains. “When you’re an inventory manager in charge of overseeing a used boat center, you’re simply buying inventory that you’ll be able to sell and make a profit on. That gives you a whole different perspective.”

This best practice can also be found in the Sales Department category.

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