How Much to Offer in a Boat Yard?

[Swindells]

Usually the mark up on some of these boats is massive, you can certainly negotiate a deal for yourself, even if they're unwilling to move on the price you can negotiate for things like, registration, safety gear, anchors etc. i've done it plenty of times in the past.

Another trick is to spend an hour with the salesman asking every question under the sun, then tell him you'll take it now for cash if he knocks $1000 off the asking price, if he says no, tell him you'll think about it and start walking away. after the amount of time he has spent on you he'll almost always call you back and say $750.

[tin can marlin]

Most boat yards would struggle to make 10% markup on a BMT package and on a motor only you are talking around 5%

If you get 2 or 3% off the price you are doing well
$1500 off a $50,000 boat is reasonable
$150 off a $5000 boat.

This is off the Cash price. RRP is certainly a different story but no one advertises at RRP

As if Benny boy they could not survive on this type of marin how do you pay rent staff salesman commisions intrest on there floor stock and all the other costs that go with a business plus you have got tax etc having said that they would not be paying much tax on those margins they would have to be working on 20% at least to make it worth while so i would say it would be fair to offer arourd 6 or 7% below the price tag. There is no doubt it is hard out there in boat land but working on 10% mark up then having to neg would not work.

[finding_time]

Motor only 5%....What the? I recently got a price on a new motor of $3900 and i know for a fact that there buy price was a tad under $3200 so a near $700 mark up or a tad over 20% as TCM sugested, To me it doesn't seem to bad and i was supprised it wasn't more ,but it's a hell of alot more than 5% NO business would last 10 minutes running margines so low!

[bennyboy]

As if Benny boy they could not survive on this type of marin how do you pay rent staff salesman commisions intrest on there floor stock and all the other costs that go with a business plus you have got tax etc having said that they would not be paying much tax on those margins they would have to be working on 20% at least to make it worth while so i would say it would be fair to offer arourd 6 or 7% below the price tag. There is no doubt it is hard out there in boat land but working on 10% mark up then having to neg would not work.

Why do you think there has been so many boat yards shut down?
How do I know the figures? How do you think I earn my living?

I know of 1 dealer down the coast who sells outboard motors at dealer cost and relies on a couple of % kick back from the manufacturers at the end of the year provided he makes his targets. Is that smart business? Does that help keep the industry afloat?

Motors at the recent boat show were sold for around 2.5% markup (not even margin which would be a bit more) was there much difference in the "boat show" price and normal price? No!

Does it make business sence? NO but with 4 dealers for just one of the outboard brands in Brisbane and in all reality a pretty small market, you can only sell for what the next dealer is willing to undercut you buy

[PinHead]

10% mark up..guarantee to going broke.

I would be looking at between 25 and 30% mark up minimum to survive.

[bennyboy]

Motor only 5%....What the? I recently got a price on a new motor of $3900 and i know for a fact that there buy price was a tad under $3200 so a near $700 mark up or a tad over 20% as TCM sugested, To me it doesn't seem to bad and i was supprised it wasn't more ,but it's a hell of alot more than 5% NO business would last 10 minutes running margines so low!

Buy price at $3200 plus 10% mark up + 10% GST = $3872. Thats about 10% mark up

RRP on motors is less than 20% so if your buy price included GST by god you got ripped off! Please give everyone else here a warning on who to avoid!

[PinHead]

so that 10% mark up gives about 8% margin...not worth the effort in reality. Sure would have to sell a lot to keep the doors open.

[cormorant]

For the biggest dealers what would be the biggest % kickback at end of month, quarter and full year. Are we talking 15% of wolesale cost?? Are we talking rebate of all freight charges? Are we talkig promotional 44 gal drums of service oils for teh workshop?

There is a big trail on the parts , consumables that get sold and of course fitting and so on so it is not just about the price of the motor. Dare I mention inkjet printers as a example.

Must also remember all the things dealers get given and promotion they get from the good manufacturers and tickets to the tennis in a corporate box ..........ha ha What about teh subsidised tour for the family to see the factory??

[finding_time]

Buy price at $3200 plus 10% mark up + 10% GST = $3872. Thats about 10% mark up

RRP on motors is less than 20% so if your buy price included GST by god you got ripped off! Please give everyone else here a warning on who to avoid!

Yeh but your sum didn't add getting the $320 back in gst he paid to the wholesaler So back up near 20% in my book!! I'm with Pinhead if your not getting 25%it's a waste of time!!

[boatboy50]

Guys,

Everytime this topic comes up it amazes me how little people understand about the industry.

The earlier posts from guys in the industry are closer to the mark, and are probably talking about net results, not gross.

No dealer I am aware of makes anything like 25% in a boat sale or engine sale. It's simply unrealistic.

Good luck Pinhead if you can make a business profitable in the marine industry based on what you've spoken about. I'd love to see it.

Bennyboy sounds to me like he knows what he's talking about. Some dealers sell product for rediculous dollars just like his Gold Coast dealer example. Unfortunately, it means the others have to sell for less margin, and others take it too far, which is why the industry has so few dealers left now.

If your buying a product the dealer owns, sometimes you won't get any discount at all. If your buying something on consignment or not on the lot, you may get some form of a discount.

[PinHead]

wow..no wonder so many have shut their doors..25% mark up = 20% margin..and out of that rental on premises..interest on loans for floor stock..before you even look at wages electricity etc.
But..a downturn can be good in some instances.
In my industry there were quite a few doing installs for prices that are totally unprofitable..and most of them have gone now...thankfully.

[finga]

To give you some idea, my last wave runner when traded, I got 9500 for it (best deal around), and they sold it for 11990! Thats a mark up of 2500. I suspect for a 10-15K craft thats about what they operate on.

This example is over 25% markup. And that's on the sold price NOT the offered for sale price.
I would assume that the be the norm and it's a known fact not speculation.

I know when I looked at trading in 'Junior' they offered me $2750 on a trade in on a $60k boat.
Up the road they were going to put it on consignment for $5,000+ their bit.
So when people say they work on 5% margin to me is crap.
I might be wrong but there are at least 2 examples of where I'm not.

[tin can marlin]

This example is over 25% markup. And that's on the sold price NOT the offered for sale price.
I would assume that the be the norm and it's a known fact not speculation.

I know when I looked at trading in 'Junior' they offered me $2750 on a trade in on a $60k boat.
Up the road they were going to put it on consignment for $5,000+ their bit.
So when people say they work on 5% margin to me is crap.
I might be wrong but there are at least 2 examples of where I'm not.

I think you are on the money finga and a lot of the reason boat yards have gone under is poor serivce and loseing customer base due to that and over chargeing and also living the high life. Not because they did not have good margins.

[finding_time]

wow..no wonder so many have shut their doors..25% mark up = 20% margin..and out of that rental on premises..interest on loans for floor stock..before you even look at wages electricity etc.
But..a downturn can be good in some instances.
In my industry there were quite a few doing installs for prices that are totally unprofitable..and most of them have gone now...thankfully.

Full agree Pinhead And your list just scratches the surface of costs, you could add staff super, accounts fees, all Government charges ( business rego, company rego etc, workers comp etc etc, vehicle rego), WPHS costs (tagging electrical equipment, tranning , etc) water,advertising( a biggy i would think) and on and on and on. It would have to be 20% and even then you would think they would be sailing close to the wind, no wonder so many disapeared!!

[bennyboy]

I think there is a difference between actually working in the industry and knowing what margins I make on a sale to saying what "you would have to make"