NEW Boat Profit Margins
Konnie
was just on a business trip on the east coast and priced the SSi220 and it
was $5,000 less than in Arizona where we live.
So I get back home and the local dealer tell me the profit margin on the
boat is only 20% and he has discounted 15% and can't go any lower.
I don't mind paying anyone in business a fair profit but I would like the
truth - does any one know how much profit are in these boats?
Konnie
Gould 0738
>truth - does any one know how much profit are in these boats?
>
>Konnie
Not enough.
My suggestion: Forget all about trying to
buy a boat like an automobile. Don't worry about whether the dealer is making
$1, $100, $1000, or $10000. Shop around enough to get the *best price* (all
factors considered) that will lift the minimal number of dollars from your
wallet and then just simply enjoy the boat. Why be peeved because the gross
profit might have been more than you (surely missing some important factors in
the equation) considered "fair"? The consumers objective is to find the lowest
price, not the smallest profit. :-)
Good luck. Hope you enjoy your boat.
Tuuk
from the dealers in my area. I wouldn't trust any of them. They are salesmen
and will maximize their profits. Find the boat you like, model number,
engine and all that comes with it including the covers, life jackets,
paddles, trailer etc etc. Call all the other dealers, get a quote on exact
same deal. Go online and email all the dealers. Let them know you are
quoting from here to Moscow and the hungry one will give you a price, then
take that price to your nearest dealer, ask them to beat it by 10%. They
will cry a bit, but will realize they will deliver it, service it, and let
them have the honor of selling you your boat. But stand behind your guns,
they will say this and that and cry broke as they drive off their property
in their Cadillac, but just stand behind your gun. I am guessing the profit
margins on a boat are around 20% if not a little more. I think a fair profit
margin would be 3 to 5%. Don't forget by you buying a boat, the end user,
there will be a long line in the supply chain of that boat that have a lot
of hungry hands out. If you squeeze the dealer, he squeezes his agent, who
squeezes the next guy who squeezes on your behalf the manufacture. Those
manufactured suggested retail prices are just that, suggested and there are
a lot of suckers who pay full pop. They make enough margins, your right.
"Gould 0738" <goul...@aol.com> wrote in message
news:20031215141705...@mb-m04.aol.com...
Harry Krause
> Be very careful what the dealers tell you. I can only speak from experience
> from the dealers in my area. I wouldn't trust any of them.
Another right-winger speaks out against the American system of selling
big-ticket items.
--
Email sent to piedty...@yahoo.com is never read.
Gould 0738
>margin would be 3 to 5%.
3 to 5%?
Find a likely tree.
Break out fire and chisel.
Make your own dugout canoe.
That's all that would be left of the boat business at a true 3-5% margin.
The boat business is *not* the automobile business. One of the major missing
factors is volume. When I was in the car business,
it wasn't unusual for my single, medium size dealership to crank out 1000 new
cars in a year. There are a lot of manufacturers that don't sell 1000 boats in
a year, nationwide. Probably most.
When comparison shopping, it is well to remember that there is a value
associated with being considered a preferred customer- rather than the cheap
screw who beat the last $50 out of the deal and even *then* bought a boat 200
miles away.
It's important to weigh all factors when deciding on the best price. Some
dealers can offer more value than others, even while selling the exact same
product and options.
John Gaquin
"Konnie" <R...@thirdreef.net> wrote in message
> My mate and I are considering purchasing a 22' or 23' Chaparral runabout.
At whatever price, arrange to take delivery 'launch ready' at least 60 to 90
days before you anticipate your true boating season to begin. Based on my
reading of this and other boating fora, it will take at least that long to
resolve warranty claims with a new boat.
JG
Eric H
dealer set-up and rigging and are easily remedied. Warranty issues become
apparent over the first couple of boating seasons and require more extensive
solutions.
My 2001 model suffered a shift problem that under went several reasonable
"fixes". This summer I decided I had reached the end of my rope. I now have
a new 2004 outboard with a full 3 year warranty.
"John Gaquin" <john....@comcast.net> wrote in message
news:9qydnVNIsq0...@comcast.com...
John Gaquin
I go only by what I read in 5 different places online. Your post supports
my position. We're not talking about rocket science, brain surgery, or
long-term corrosion control. Dealer prep, fit & finish, etc., should be
zero-defect. Mounting an engine to a vehicle such that it works in a
reliable fashion is 100 year old technology.
JG
Clams Canino
It *should be* simple. But there's so many little sytems interacting, that
rigging out a new boat can be "challanging". I did my own this year and had
a few "teething problems" and Cod knows I was motivated to get everything
right the *1st* time.
Bolting the engine on is the easy part, you have to get the throttle /
shifter, ignition harness, gauages and harness, and charging system all
"intigrated" to the boats pre-rigged electrics. I still need to screw with
the "hot-horn" sender to be at 100% perfect.
My local dealership has "kids" doing a lot of the setup stuff. Now, I know
what *I* went through and I'm kind of a savvant when it comes to this
automotive crap, I can just imagine what a kid with a manual goes through.
Zero defect my ass, expect teething problems and allow time to sort them
out.
-W
(Oh - specify 3M 5200 as the sealant where the outboard bolts on. I've seen
bastiches using clear silicone seal!!)
"Gene Kearns" <ewke...@triad.rr.nospam.com> wrote in message
news:6eautvc2qlqnk6p77...@4ax.com...
> Bear in mind that during the busiest part of the season most repair
> facilities are overloaded with work and for the most part understaffed
> (which tend to be under trained if they are seasonal hires). If they
> have made a sale and rigging the boat is a prerequisite to getting
> paid, all warranty claims and repairs will go to the back of the
> line.... and pretty much stay there as long as "sold-boats" are
> waiting to be rigged. Warranty claims and repairs are worked in
> "stand-by" between sales.
>
> 60-90 days is about right.
>
> PS
> This scenario also describes why there are so many problems with
> rigging. Dealership practice is to "get 'em on the water" ASAP,
> collect the sales amount, and deal with the returns and "other issues"
> later... at their convenience.
>
> It is just the nature of the beast and is the source of most of the
> frustrations with dealers.
>
> --
>
>
>
> Grady-White Gulfstream, out of Southport, NC.
>
> http://myworkshop.idleplay.net/cavern/
Homepage
> http://www.southharbourvillage.com/directions.asp Where
Southport,NC is located.
> http://www.southharbourvillage.com/autoupdater.htm Real Time
Pictures at My Marina
> http://www.thebayguide.com/rec.boats Rec.boats
at Lee Yeaton's Bayguide
>
Clams Canino
Hmmmmm
Well "that type of motor" is about all I work with so at least one of my
mistakes was inexcusable. (undertightened the shift cable retainer thigie)
I honestly don't know how often the same combo's come up again and again.
But, throw in inexperienced and seasonal help, and I can see where the
mistakes come from. I'm not saying I like them, but to plan ahead for the
time lost seems like a good reality.
-W
"Gene Kearns" <ewke...@triad.rr.nospam.com> wrote in message
> Point is, you aren't a dealership.
>
> If this was your 25th install of that type of motor on that type of
> hull, do you think you'd have any fewer problems?
RG
Sun Country Marine? If so, proceed with caution, and don't expect any
deals. They are not known for aggressive pricing, and their service
department is widely recognized as one of the worst in AZ. Never heard a
positive comment from anybody who's had to deal with their service
department. I know several people who own Chaparrals and Formulas, and they
all have negative things to say regarding Sun Country's service department.
If you're stuck on Chapparral (nothing wrong with that) then I wouldn't
hesitate to shop out of town. On the other hand, you may want to consider
other manufacturers, which would bring other local dealers into the mix.
RG
Tuuk
research price, boat and motor. Squeeze the dealer as much as possible, this
will in turn force him to squeeze the supply chain ahead of him. I am sure
there are 25% margins available to be worked on, I do not think a 5% margin
is unreasonable. There will be warranty work that they will receive
remuneration from the manufacture and there will be extras and more value
the dealer can add to the sale. They will make money from you, but for the
big purchase, squeeze that down as much as you can. When they start talking
manufacture suggested retail prices, then say they will give you 10 off or
an extra 5%, you offer to buy the boat for 45% off the manufacture suggested
retail price, they will still make money.
"RG" <r...@nospam.com> wrote in message
news:seIDb.11708$J77.9274@fed1read07...
Harry Krause
> On Tue, 16 Dec 2003 16:06:31 GMT, "Clams Canino"
> <wa1...@nowayspam.comcast.net> wrote:
>
>>Oh yes.....
>>
>>It *should be* simple. But there's so many little sytems interacting, that
>>rigging out a new boat can be "challanging". I did my own this year and had
>>a few "teething problems" and Cod knows I was motivated to get everything
>>right the *1st* time.
>>
>>Bolting the engine on is the easy part, you have to get the throttle /
>>shifter, ignition harness, gauages and harness, and charging system all
>>"intigrated" to the boats pre-rigged electrics. I still need to screw with
>>the "hot-horn" sender to be at 100% perfect.
>>
>>My local dealership has "kids" doing a lot of the setup stuff. Now, I know
>>what *I* went through and I'm kind of a savvant when it comes to this
>>automotive crap, I can just imagine what a kid with a manual goes through.
>>Zero defect my ass, expect teething problems and allow time to sort them
>>out.
>>
>
> Point is, you aren't a dealership.
>
> If this was your 25th install of that type of motor on that type of
> hull, do you think you'd have any fewer problems?
>
The dealership that prepped our Parker did a fabulous job rigging our
accessories. The boat came "pre-rigged" for Yamaha, and the engine was
already installed, so the dealer concentrated on my bags and boxes of
goodies and on adjusting our trailer. Rigging can be an art form if done
properly.
Harry Krause
> I think you should do as much research as possible on your new boat,
> research price, boat and motor. Squeeze the dealer as much as possible, this
> will in turn force him to squeeze the supply chain ahead of him. I am sure
> there are 25% margins available to be worked on, I do not think a 5% margin
> is unreasonable. There will be warranty work that they will receive
> remuneration from the manufacture and there will be extras and more value
> the dealer can add to the sale. They will make money from you, but for the
> big purchase, squeeze that down as much as you can. When they start talking
> manufacture suggested retail prices, then say they will give you 10 off or
> an extra 5%, you offer to buy the boat for 45% off the manufacture suggested
> retail price, they will still make money.
>
Is this the price you have to pay to foch some dumb broad from down under?
You haven't a clue, Tuuk, on this or anything else.
Curtis CCR
> Be very careful what the dealers tell you. I can only speak from experience
> from the dealers in my area. I wouldn't trust any of them. They are salesmen
> and will maximize their profits. Find the boat you like, model number,
> engine and all that comes with it including the covers, life jackets,
> paddles, trailer etc etc. Call all the other dealers, get a quote on exact
> same deal. Go online and email all the dealers. Let them know you are
> quoting from here to Moscow and the hungry one will give you a price, then
> take that price to your nearest dealer, ask them to beat it by 10%. They
> will cry a bit, but will realize they will deliver it, service it, and let
> them have the honor of selling you your boat. But stand behind your guns,
> they will say this and that and cry broke as they drive off their property
> in their Cadillac, but just stand behind your gun. I am guessing the profit
> margins on a boat are around 20% if not a little more. I think a fair profit
> margin would be 3 to 5%. Don't forget by you buying a boat, the end user,
> there will be a long line in the supply chain of that boat that have a lot
> of hungry hands out. If you squeeze the dealer, he squeezes his agent, who
> squeezes the next guy who squeezes on your behalf the manufacture. Those
> manufactured suggested retail prices are just that, suggested and there are
> a lot of suckers who pay full pop. They make enough margins, your right.
For Christ's sake. Just make your best deal.
You are displaying the same ingnorance that I hear, even from some
people that work for me, over what profit is. Seem to think that
anything over what the dealer pays is "profit". That's my favorite
line about mark-ups being *PURE*PROFIT*
No. It's margin. We refer to it where I work as operating margin. I
would be out of business in a heartbeat if I only had a 3%-5%
operating margin on what I sell. You think the difference between
what the dealer pays and what he sells for is just going into his
swiss bank acount?
So what if the guy if the guy drives a Caddilac? Doesn't a boat
dealer (even a boat salesman) have a right to make a good living -
just like you?
"Hey! You could give me a better deal on this boat if you were
driving a Yugo. I'll take my business elsewhere!"
I am not saying that you have an obligation to pay more than you want
to. You can walk away from any deal YOU THINK is unfair. Make your
best deal. Find the guy that will sell you the boat at the cheapest
price and give you the service you want/need. But spare us any
definition of "fair" profit - there is no such thing - Especially on
luxury items like boats.
Tuuk
operating margins, profit margins, etc etc. But it has been known since the
beginning of time that once you own a boat, all parts, simply because they
are "marine" parts are priced way out of wack. So I do not understand why
you defend such a gouging practice. Just because someone can afford a boat,
doesn't mean everyone can afford a boat. I understand you targeting that
corporate executive who keeps his/her boat down there at the yacht club and
calls ahead for the marina guy to have his boat all fueled up and ready for
turn key and go. All cleaned up and maintained. Yes, you can rape that
person. But for the most part, that is a profit strategy that you boat
dealers use overall. I had to once buy a water pump for an old OMC 165hp
I/O. Now the marina told me it was 300 dollars because it had a bronze
impeller, the automotive dealer told me he could supply me with an exact
pump as my sample which was cast iron impeller for 25 dollars with swap. I
chose the marina because I am always in salt water. I picked it up at the
marina and it had a cast iron impeller, the marina purchased it from the
same auto guy I spoke to and turned around and charged me the OMC 300 dollar
price. Of course I told him what he could do with the pump, he sent it back
to the auto parts guy where I purchased it for 25 dollars, same price he
purchased it for, or he probably got a discount, that is fair.
You dealers are doing this steady, your margins are high, and due to
globalization and internet shopping, your forced to be more efficient and
add more value. Now you don't like it so you cry the blues. Hey, if you
cannot run your business ethically and profitably then why are you in the
business. Go sell flowers or something. But do not badmouth the consumer who
doesn't want to be raped by you and know it.
"Curtis CCR" <curt...@sbcglobal.net> wrote in message
news:c678797a.0312...@posting.google.com...
Tuuk
"marine" industry.
Go price your spark plugs at the marina, the price the exact same ones at
Boat U.S. or an auto parts place. That difference is called "margins".
Hey, if you are that big corporate executive who can afford to have the
marina and boat club look after your yacht so all you do is go there, turn
key and go, then that is your prerogative. Not me, I am not as wealthy as
you, nor as magnanimous. You can give your money away as you wish.
I think the term here is "fair" profit. You know you have to go to the
dealer for some parts or some warranty. This you are forced to do, through
distributor or dealer protection set ups. You think they have low margins
for this? This is perfect opportunity for high margins. Captive market. Just
because it is a "marine" market, doesn't mean that everyone in the "marine"
hobby or lifestyle can afford what comes along with it.
So the original poster, who recognized this is totally right for questioning
the profit margins he may be gouged on. He has every right to squeeze the
dealer as much as possible. He also has the right to buy all his parts off
shore or off the internet and save 50% or more. If the dealers were not so
greedily profit motivated in the first place, the tears would not be here
today. Same as the unions and the teachers, but that is another rant.
"Gene Kearns" <ewke...@triad.rr.nospam.com> wrote in message
news:9k5vtvoj531tamfrs...@4ax.com...
> On Tue, 16 Dec 2003 17:31:51 -0500, " Tuuk"
> <bangkok...@yahoo.com> wrote:
>
> >I think you should do as much research as possible on your new boat,
> >research price, boat and motor. Squeeze the dealer as much as possible,
this
> >will in turn force him to squeeze the supply chain ahead of him. I am
sure
> >there are 25% margins available to be worked on, I do not think a 5%
margin
> >is unreasonable. There will be warranty work that they will receive
> >remuneration from the manufacture and there will be extras and more value
> >the dealer can add to the sale. They will make money from you, but for
the
> >big purchase, squeeze that down as much as you can. When they start
talking
> >manufacture suggested retail prices, then say they will give you 10 off
or
> >an extra 5%, you offer to buy the boat for 45% off the manufacture
suggested
> >retail price, they will still make money.
> >
>
> 45% off? 45%?? Did you get 45% off of your boat?
RG
> On Thu, 18 Dec 2003 11:41:54 -0500, " Tuuk"
> <bangkok...@yahoo.com> wrote:
>
>
> 45% off? 45%?? Did you get 45% off of your boat?
>
I hope he got 45% off when he bought the $2 word "magnanimous" and used it
in his previous post. Sheesh.
Curtis CCR
> Yes there is such a thing as "Fair Profit"
On a boat? Bullshit. The guy is entitled to make as much money as he
can by selling a boat. He is under no obligation to sell you a boat
at less than his asking price any more than you are under any
obliagtion to buy the boat at any price. If the next customer through
the door is willing to pay a price the dealer will accept, even if
it's 25% percent over cost, then it's fair.
> I understand the terms margins,
> operating margins, profit margins, etc etc.
Tuuk" <bangkok...@yahoo.com> wrote in messagenews:<NerDb.7720$8Y4.3...@read2.cgocable.net>..."I am guessing the profit margins on a boat are around 20% if not a little more. I think a fair profit margin would be 3 to 5%..."
...leads me to believe you don't understand at all.
A 3% to 5% margin would probably leave a lot of dealers in the red
after after expenses are paid. If you can find a dealer with the
volume and overhead structure that allows him to sell it to you for 3%
over his cost, by all means buy the boat. But don't try to tell me
he's making 3% profit on it. Profit is what the business owners get
to keep in their pockets as personal enrichment. He'd probably like
to keep making his Cadallac payment as much as you want a boat.
> But it has been known since the
> beginning of time that once you own a boat, all parts, simply because they
> are "marine" parts are priced way out of wack. So I do not understand why
> you defend such a gouging practice.
Both of those sentences are untrue.
All parts are not more expensive simply because they are "marine"
parts. Certain parts cost more for very good reason. They may be
specially built for a specific marine application (less likely to
corrode, blow up). Other parts may simply be marked up because people
will pay it. Many parts are no more expensive.
If you don't want to buy the marine part, go to the auto parts store,
or hardware store for you items instead of the local marine dealer or
chandelry.
The other day, I blew a fuse in my car. Maybe 50 cents at an auto
parts store. Because I didn't want to drive an additional 20 minute
(round trip) to the closet auto parts store I went to the West Marine
that's a block from my office and paid $2 for two fuses. Same fuse as
the one that blew - nothing special. Probably made by the same
company that makes the one at the auto parts store - just repackaged
under a marine brand name. I didn't have to pay the higher price - I
chose too. Likewise if I needed that same fuse on the boat, I could
have purchased it for 50 cents at the auto store (and I have).
> Just because someone can afford a boat,
> doesn't mean everyone can afford a boat.
And you're not entitle to a boat. So if you can't afford one, don't
get one.
> I understand you targeting that
> corporate executive who keeps his/her boat down there at the yacht club and
> calls ahead for the marina guy to have his boat all fueled up and ready for
> turn key and go. All cleaned up and maintained. Yes, you can rape that
> person.
So a boat price should be based on the size of the buyer's checkbook?
I smell another damned political thread startin here.
> But for the most part, that is a profit strategy that you boat
> dealers use overall.
What the hell makes you think I am boat dealer. My only connection
with the boating industry is as a customer.
> I had to once buy a water pump for an old OMC 165hp
> I/O. Now the marina told me it was 300 dollars because it had a bronze
> impeller, the automotive dealer told me he could supply me with an exact
> pump as my sample which was cast iron impeller for 25 dollars with swap. I
> chose the marina because I am always in salt water. I picked it up at the
> marina and it had a cast iron impeller, the marina purchased it from the
> same auto guy I spoke to and turned around and charged me the OMC 300 dollar
> price. Of course I told him what he could do with the pump, he sent it back
> to the auto parts guy where I purchased it for 25 dollars, same price he
> purchased it for, or he probably got a discount, that is fair.
Yeah. That's fair. And if you felt you needed that bronze impellor
you were more than welcome to shop around for it. If you decide that
the $25 automotive pump was suitable, then you paid the same price
whether it was going in a boat or a car.
This individual case you described as nothing to do with profit
margin. That marina dealer was probably committing fraud. Trying to
sell you something that wasn't was he said it was.
> You dealers are doing this steady, your margins are high, and due to
> globalization and internet shopping, your forced to be more efficient and
> add more value. Now you don't like it so you cry the blues.
Who's crying? Sound like you are. "My boat parts are soooo
expensive.... boooo hoooo." "The boat dealer is driving a nice car.
He must be ripping me off. Boooo Hooooo. It's not faaaair!"
So go buy your boat on the internet.
> Hey, if you
> cannot run your business ethically and profitably then why are you in the
> business.
There is nothing unethical about a business making a profit. Nothing
unethical about selling boat at 20% margin.
I don't think it's ethical to call someone a rapist just because he
won't price his products at a loss or break even.
> Go sell flowers or something.
You'd probably bitch about the raping you took at the flower shop too.
> But do not badmouth the consumer who
> doesn't want to be raped by you and know it.
You gotta a thing about "rape"?
Even using it metaphorically, it isn't rape if you can say "no" and
walk away. Never heard of a dealer forcing someone to buy a boat.
RG
at all. Maybe there is another "RG" and if so, my apologies...I did NOT
comment on this thread at all.
RichG