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Member
Posts: 1406
| Hummm...tell me what you think! Should boat dealers have to make a living the same way auto dealers do with their boat and motors invoice listed on the net?
I say it's ABOUT TIME. Why on earth should this equipment be priced with a 35% or more margin? Dealers are protected by territory have to live by similar pricing guidelines and make great money offering great after the sale service.
http://www.seedealercost.com
Good Luck
Tyee
Edited by tyee 3/21/2011 10:54 AM
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Posts: 2300
Location: Berlin | I would say yes as soon as they sell as many boats as car dealers do cars. | |
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Posts: 2445
Location: Fremont, Wisconsin | tyee - 3/21/2011 10:49 AM
Hummm...tell me what you think! Should boat dealers have to make a living the same way auto dealers do with their boat and motors invoice listed on the net?
I say it's ABOUT TIME. Why on earth should this equipment be priced with a 35% or more margin? Dealers are protected by territory have to live by similar pricing guidelines and make great money offering great after the sale service.
http://www.seedealercost.com
Good Luck
Tyee
n/m
Edited by stacker 3/21/2011 1:20 PM
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Location: Rhinelander | 35%?
No. Not even close.
Many brands can't promise more than 7% to 10% Net. Too many dealers and too much price competition. If a dealer hit's 20% on a boat package, it's celebration time, and absolutely unheard of for many major brands. | |
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Posts: 1406
| Steve,
I hate shopping...much less negotiating...........and I'm not alone. Now I know what the motor costs and what the boat costs. This lets me decide who "services" me best.
I just used the list to price out a Lund w/ motor and the invoice vs. Retail was 35%, I priced the same package at 10 dealers in the midwest 2 months ago and the price differed so much that I was disgusted in the Lund dealers (some were more than 30% based on these numbers. (maybe I should have looked at a Tuffy huh Denny) Now while I know that dealers seldom sell at MSRP, but this will help me determine what "package" best fits my needs and helps me determine who is bending me over more! Besides most dealers add so many other options, I at least can feel more comfortable if I have to be in that position.......... | |
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Location: Rhinelander | No way does a dealer actually sell a Lund at a real 30% mark.
If you were calling on the phone for quote, many dealers will quote near list because
they don't know if you actually have a trade or not, and can't tell if you are a buyer or just a price checker, and can't tell if you have financing, cash, or anything else until you are in the store and a check is in hand. The actual selling price is very similar between dealers. I bet the 10 dealers you called to price check them were disgusted with you too...buy from a local dealer who can take care of you and negotiate your best price.
Mitigating circumstances:
The longer the dealer has the boat, the less he makes after interest payments, and if the boat is about to come of FFP, the dealer may want to 'dump' it.
If the boat doesn't sell before FFP ends of if the dealer is using bank floor, the dealer can lose all the margin in it over the course of a single winter
By the way, the dealer buys the Lund as a Brunswick package. You also don't seem to have controls, cables, V-6 kit if applicable, and prop in those prices from what I can tell, nor is rigging considered.
The list you posted is useless.
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Posts: 1406
| Steve...agreed there is a lot to it.. But I told you I'm not a negotiator I know the sales game too. But now the consumers have a better understanding....... it gives me that warm fuzzy and keeps dealers honest! The car lots didn't like the invoice price either when it went on line but now its everywhere and the manufacturers still found ways to reward good dealers. Had I walked into the wrong dealer I would have paid his 30% and not given it a second thoguht.
No more used carsalesman at boat dealers! We both know the value of a good dealer but even as a price checker it should make no difference weather I have cash in hand, am local or have a trade, the price should have been the same. If they were disgusted.... too bad. They didn't get my business and never will. I know how they deflate trade ins, and mark up accessories. With this tool I have a starting point and know what I'm paying for when comparing products, IT SAVES ME TIME. I think it's a great tool especially for those products that sell more like, 25hp to 60hp units, and Irwin looses his butt trying to shut them down. In my case motor was a tiller, no cables or rigging necessary, I'll try various props for best performance so it wasn't useless to me.
Good Luck
Tyee
Edited by tyee 3/21/2011 8:53 PM
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Location: Rhinelander | Tyee,
The prices you see on that little ditty of a website are not dealer invoice.
I honestly don't think you understand the retail boat business very well.
Nothing about that website will keep a dealer 'honest'.
Go ahead and buy at between the dealer 'invoice' and suggested list on that website..and all the mean old boat dealers out there know why I'd say that.
'No more used carsalesman at boat dealers!'
Uhhh, OK.
'no cables or rigging necessary'
Must be a little tiller, no bolting it to the boat or hooking up a tach or ignition switch, etc. Try all the props you want, you still will have to buy one.
Dealers do not 'deflate' trade ins, they value them at what they need to invest to resell the item at a reasonable margin. If a trade eats up the entire margin and the dealer has to invest in it (and it usually will) here's what happens:
The dealer has to pay off the floor plan invoice on the new boat rig he took the trade in on. His 'profit' is gone, and he has to SPEND money on the trade.
He now has invested his operating cash in the trade because no floor plan is available for used products, and cash is a short commodity for boat dealers these days.
Every day the trade doesn't sell, he has incurred a considerable opportunity cost.
Now look at the trades on the lot. Imagine the dealer's investment in those units. Trade ins are a major cause of dealers failing and going out of business.
Your lucky these days to get anything on an older trade.
Don't forget freight. Rigging. Cost to go to boat and sport shows. Salesman's commissions or salaries. Advertising. It's a business, not a charity for buyers.
Boat dealers need to make a profit, that's obvious or there would be no one to service your rig.
your website 'dealer invoice':
Lund Fury 16' Tiller $6923.00
25 HP ML 4 Stroke $3525.00
Trailer, included
Lund selling price at the Minneapolis show...I shot the video: $8999.00 for the package.
Ummm... | |
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Posts: 1406
| Steve, lets clarify this please. I am not a dealer and I know you are responsible for many. This is how I see it, please open my eyes if I am wrong. I think I do know the boat business well and this "business" isn't much different than other businesses or industries.
The 16 fury invoice price you copied from the list is at $6923.00 and includes a 25hp merc with prop rigging and shorelander trailer, the retail price on the same website is $9231.00. (When introduced it was $9722.00 according to a July 2010 press release from Lund.) Your "show" price (early in the season with factory rebates was $8999.00. So at show price, the dealer is still getting 30 points!
Please tell me where I have misread the website? any Lund dealers want to discuss this?
"For 2011, Lund will go smaller and lighter with its affordable new Fury and Impact models. The 16-foot 2-inch 1600 Fury is priced at $9,722 with a 25-hp Merc four-stroke and a trailer."
You don't need to tell me all the costs associated to running a business at 7-10% margins but with 30% margins dealers better get ready to do just that. Good Luck
Tyee
Edited by tyee 3/21/2011 11:59 PM
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Posts: 744
| Mr. Obvious has a few questions:
1) Why does it matter how much the dealer is making? It's no different than any other thing you buy on this planet: if you don't like the price, don't buy it.
2) If boat dealers are making sooooo much money, why aren't you one? Actually think about this question a bit. If you can't come up with any good answers, then you would be a fool not to become one. If you can come up with some reasons (and we know you can), then those are the exact same reasons your dealer's margin is so (allegedly) high. | |
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Location: Rhinelander | 'So at show price, the dealer is still getting 30 points! '
No. Freight, set up, costs for free floor plan, advertising, and other promotional expenses. Most importantly you are not figuring margin correctly.
If the dealer makes 7% to 10% or even a bit higher as a gross regularly, they will be out of business unless they own the shop outright, are the mechanic and the sales staff, and don't advertise much or go to shows.
Expecting a dealer to sell at near cost is not reality unless he needs to dump the boat to stop the cash flow bleeding into interest charges and opportunity cost not having a model that sells well in that location on the floor.
Two boats on the floor of a larger regional show will cost an average of $3000.00. If the dealer has some co-op, that can help, but shows are expensive.
Electric is going to be at least $500 per month and ALOT more if outdoor security lights need to be on
Have to pay a salesman. Look that up, boat salesman average salaries. Let's go with a rookie and pay him $28,500.00 for working 6 to 7 days a week most of the year.
Property tax. Let's go cheap at $2000
Mechanic. Let's go REALLY cheap at $30,000, and hope the dealer has a good service record and his shop pays for the mechanic at least 8 months out of the year and keeps the lights on. If so, that takes care of property costs, insurance, and a few other items not listed here and may drop the number of 16' Fury models the dealer needs to sell to break even so far in a new year to 24 or so without taking a single trade in or paying a cent in interest. If repairs are down or the dealer doesn't work on 4 wheelers and snowmobiles, or the dealer charges less than $60 per hour, that income center will not be real profitable.
Rigger, parts sales, etc, man with many hats. Again, cheap at $25,000.
We won't even discuss the cost of stocking parts and accessories, oil, etc.
Smaller dealer, owner and three employees in house, owns the property outright. Before a nickle can be put in the owner's pocket, he has to sell 38 of those 16' Fury models.
Unless he deals with all dealer hopping price shoppers. | |
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Posts: 53
| Great post, Steve!
You nailed it! | |
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Member
Posts: 1406
| Steve, In one breath you told me dealers make 7-10% and now you tell me if they only make 7-10 they will be out of business? which is it? Defining business costs to justify 30 points is silly. A 40k new car brings 2-5% maybe 6 points. Why should a boat bring 5 times that when it depreciates twice as fast?
costs for free floor plan....i thought it was free?
You don't need to define the costs of running a dealership to me. But I suppose you should to those that think a $20,000 profit on a 60 thousand dollar boat i a big deal. Overhead, personal consumables, health insurance, floor plans etc I understand it well. The fact remains that there are tons of dealers out there making 30 points on these "luxury" products. It took years to get the Automobile market in check (invoice on the net helped to do just that). I am in sales and very seldom do we get 20 points much less 30 and in recent years it's more like 10 or less. I sell through Distributors as well (similar to your dealers) and even territory protected distributors rarely get that as they have the same overhead you describe above. My point remains that an informed consumer becomes a better customer and this SHOULD put many dealers in check. How many times do your dealers call you about a guy on the hook looking for a better deal? Won't this help.....hummmmmm.
Good Luck
Tyee
Edited by tyee 3/22/2011 4:35 PM
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Location: Rhinelander | You are soo badly out of line on actual margins it's past trying to reason with you.
Tell me how you are figuring margin. Use real math.
FFP is a PROGRAM, not a desciption. Take that option, and the dealer pays as much as 10% more on his invoice so he doesn't have to pay monthly interest payments that would stop your heart on a $500,000 inventory.
Some lines offer NO more than 7 to 10% gross margin. Carry only those and your volume had better be really high. Clear enough for you now?
'You don't need to define the costs of running a dealership to me. '
Apparently, someone needs to!
'But I suppose you should to those that think a $20,000 profit on a 60 thousand dollar boat is a big deal. '
No one does, so it's not. No one does. I told you your list is a pile of steaming poo for actual retail margins, and it is. If a Lund/Ranger/Alumacraft/Skeeter dealer made $20 K on a $60 K sale on average, they'd be dancing in the street, high on pure joy.
The only way to fully describe your comment that boat dealers are making 30% on a rig sale is...
Not
Even
Close.
How many dealers call me with a guy on the hook looking for a better deal? Two today, and they both will make less than 15% gross after I found them a discounted rig.
'The fact remains that there are tons of dealers out there making 30 points on these "luxury" products. '
Probably the most glaring inaccurate statement I've ever read here. Seriously, Tyee....
My dealers would be celebrating all spring if they made 30 points....on nearly anything in the store that isn't an accessory.
Also, just in case you haven't thought of this, dealers need to average their margins on all lines. One may bring in a bit more than another, but doesn't sell the numbers the lower margin boat might. | |
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Posts: 1406
| Steve, understood. Clarification: Gross margin is revenue- cost of goods sold)/revenue. Cost of sales or Cogs includes variable costs and fixed costs directly related to the sale, material labor shipping it does not include office expenses, rent admin and other business expenses etc. In retail it's generaly the markup over wholesale so this is the distinction I am making that the website is using for invoice compared to msrp when I speak of points.
I know 30 points is not profit and there are costs to operate said business yada yada yada but...the discussion I was looking for is of what value does this list bring to the consumer and weather it should be kept confidential between manufacturer and dealer? The list is accurate it shows an invoice and a MSRP directly from many dealers. we've obviously been debating something entirely differnet than I intended which is, If the list is useless why are manufacturers suing to shut it down? Do the dealers feel threatened? Should they? Should price lists of boats and motors be confidential unlike that of the auto industry?
Good Luck
Tyee | |
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Location: Rhinelander | If the information is supposed to be confidential between the manufacturer and the dealer, then yes, they should sue the website. And they should win. The value to the consumer is basically zero, not enough is known about the business by the consumer to make any sense out of the listing other than to create confusion.
Point I was making is margin is completely different than mark up. A 30% margin would be dividing the dealer invoice by .70. Actual average margins are WAY less that that. | |
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| Like you are going to buy a new boat. Hahahaha
Not even a good troll tyee | |
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| STEVE lol do you have kids???? remember when they ask a question and you answer then they start the game but why but why nice response but why lmao | |
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Member
Posts: 650
| Comparing boats to cars is insane. whole different ball game. Also my bracket is done. | |
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