Having just posted a three-part blog series on the marina boat repair business, it’s only natural that I do one on the marina boat sales side.  As I discussed in that blog, the two share a high degree of interdependence.

Some of the aspects of the boat sales business don’t need to be discussed; for instance, the quality of the boat sales staff, the advertising budget, etc.  These are all important functions for any type of sales operation so I won’t bore you with what you already know.  Let’s just get into the showy parts of boat sales:  the showroom and the boat lines.

Don’t Show Me the Showroom

Some marinas have large boat showrooms that house a small number of boats.  Think of an automobile dealership showroom without the marble floors and you’ve got the idea.  Unlike automobile dealers, the ceiling height is much higher, which makes sense considering that boats are tall and they need a stand or cradle to keep them upright, adding to the need for high ceilings.  It’s difficult to segment whether they add to sales because the boat lines that typically are located within the showroom are the high volume, “household” names like Sea Ray.  What can be said is that they are expensive to heat and cool because the ceilings are so high.  More significantly, it can cost millions to build a good sized showroom, so the carrying cost of the debt has to be paid as well as higher utility costs.  Bigger is not always better.

Many marina boat sales businesses don’t have showrooms for the reasons above.  Typically what you find is that the boat lines that are sold are either more exotic, specialized or appeal to the entry level or first-time boat buyer.  It’s really more of a decision by management because the trade-off is fewer boat sales during hot periods but far fewer carrying costs during downturns.

Having the Right Boat Lines

Having the “hot” boat line really helps sales.  The downside is what’s hot today may not be tomorrow.  Yes dealers can change lines, but it’s not an easy process as I will discuss in the next part of this series.  During recessions, of course, there really is no hot boat line.

Having the Right Combination of Boat Lines

Digress for a moment with me.  Think about the last automobile dealership you were in… or any automobile dealership.  Did they sell just one price range of cars?  I don’t think so.  There were the entry level cars and mid-priced cars.  Some have luxury car lines.  When you look at the dealer’s business you will more likely than not find that they have a variety of brands, some domestic and some foreign.  It’s like they’re putting their money on red and black on the roulette table.

Boat dealers typically do this as well.  If they only sell one line of boat, they’ll have models that fit entry level, mid-level and luxury.  Maybe they’ll just leave one of them out, either entry-level or luxury.  What is more common, however, is to have two lines that have strong reputations in their respective pricing class.  For instance, one line is known for luxury-only and another for entry level and mid-level.  If a showroom was built, the ceiling height may be constrained to just the less tall entry level or mid-level boats, so it may be not be financially feasible for them to carry a luxury line without having a new building built.

Of course, having two lines provides more diversification.  What dealers have said to me, however, is that the reason they prefer more than one boat line is that no matter what financial stratum the next person who walks through the door is, they have a boat that will fit.  Boat dealers don’t get as much foot traffic as automobile dealers so it makes sense.

Boat Line Size Matters Too

Another reason why dealers like to have more than one boat line is that they don’t want to have any gap in boat size ranges.  For instance, one line serves boats of 18 to 33 feet and another service 34 to 50 feet.  Having a “dead” zone in between means the possibility of lost sales.

Coming Soon to a Blog Near You…

Part 2 of this series will address the relationship with the boat manufacturer and the interrelated triangle between boats sales, the manufacturer and boat repairs.