How Much to Offer in a Boat Yard?

[bigmack]

Hi All - you see a boat in a yard and you like it, its in good shape and will suit for fishing and family. How much would you offer - have you got a personal yard stick for this sort of thing? Without being silly of course...

Your thoughts - just interested in previous experience or actual experience in todays market with economics as it is.

thanks
PD

[PADDLES]

it's easy mack, you make a reasonable offer based on what the market is paying. bear in mind that the boat yard does this for a living, and they will only let it go for what the market is paying, and they definitely know the market. anything less and you will be wasting your breath.

[levinge]

Do your research, look at boatsales and boatpoint, they will give you a ball park figure.

Look at age of the motor, codition of prop
Condition of boat and trailer, service history...

Alloy look for damage/repair welds
Fibre look for cracking

Everything looks good until you really start to look closer, don't be fool by the shiney stuff.

remember if you buy in haste, you may leak in the bank balance trying to correct problems.

Pester the hell out of them with any question you can think of and then when your satisfied, go below the market price, you can always go up...

Another big tikker is, how long has this boat been in the yard!!! The longer its been there, the bigger chance they will want to move it and you have a little more in the bargaining stakes.

[bigmack]

thanks guys - good advice.

cheers

[Noelm]

pretty hard to make any sort of offer because like (say) a 100,000 dollar boat, you might get a few grand off, but a 1,000 dollar boat, you will be lucky to get anything off, it is a very open ended question you asked with too mnay variables.

[Braddles]

As for wasting your breath re/- making offers.. You have nothing to loose mate! If you really do want the boat - dont show that to the sales person - they ARE salesmen afterall - and are no different to used car sales persons.

No yard can sell at a loss - thats just not business sense - UNLESS they are in trouble, and need some urgent cash float (relatively common in this industry now) - OR the boat is taking up space / not the type of boat they are used to dealing with (a trade in say) - and may just want it gone.

If a boat has been sitting in a yard for a long time - either its there for a reason, or all boats will be stagnated in that yard - another reason to ask questions - why isnt the yard moving boats at all.. Maybe they are all overpriced or maybe dodgie reputation in local area...

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.

Remember to store a boat in the yard costs them money, and then all the costs of running a business. I suspect if you offered 13000 - 13500 on a 15K boat, you would get a good deal - and the dealer would be still making a very modest margin.

I hope that is of some help to you :-P

[cormorant]

IS it on consignment?

Lots of different strategies and depends on the dealer and the way he does business.

After the boat is fully checked out you need to put a value on it. Sounds like the dealer has it priced close as you are interested at the sticker price.

Positive things you can do to get a better price

- Have money ready
- confirm you are ready to do a deal
-confirm you are ready to drive away if you can sort out price detail.
- suggest you have another option offering good value as well. No need to lie as there is always a nother boat of a different style avaliable.
- If price is unmovable see what it is missing be it services or safety equipment , service and spare parts, and have those added to close the deal. Things such as bimini or canvas work many dealers have blokes thet will do stuff at good rates ad good standard. Better than you buying retail in a months time.
- get extended written warranty


They want to turnover sock as long as they can replace it of freshen up their line up so there is always some negotiation room.

If it is on consignment and you ae a valid buyer get him to contact the seller while you are there as often a seller will give in to get a quick confirmed sale.


Like with all purchases of boats if you don't have the skills and knowledge yourself to check out teh trailer, accessories motor and hull have a professional do it and take it for a test run on water as a condition of sale. many a dog is discovered on a test run. Small discoveries of electrical faults quickly lead to looking at how professionally and how old wiring and accessories have been fitted.

There is a couple of blokes on here who's profession is repairing and inspecting boats and they could possibly also offer advice on the dealer and pricing as many of them now each other.

Good luck - negotiate hard but fair as dealers deal with nobs all day so a honest approach that you are ready to buy but have limits will be a better approach

[Goldfinch]

Go in hard mate. It's a buyers market and every sale is money in the bank for any business right now. I knocked almost $10K off both the boats I bought in the past 3 years and they were in the $60 to $70K price range. Also push for big discounts on any extras you want as well. You never know how cheap the yard bought the boat secondhand until to put in a crazy offer. They all have margins but they all want sales.

Cheers
dave

[Steeler]

IS it on consignment?

Lots of different strategies and depends on the dealer and the way he does business.

After the boat is fully checked out you need to put a value on it. Sounds like the dealer has it priced close as you are interested at the sticker price.

Positive things you can do to get a better price

- Have money ready
- confirm you are ready to do a deal
-confirm you are ready to drive away if you can sort out price detail.
- suggest you have another option offering good value as well. No need to lie as there is always a nother boat of a different style avaliable.
- If price is unmovable see what it is missing be it services or safety equipment , service and spare parts, and have those added to close the deal. Things such as bimini or canvas work many dealers have blokes thet will do stuff at good rates ad good standard. Better than you buying retail in a months time.
- get extended written warranty


They want to turnover sock as long as they can replace it of freshen up their line up so there is always some negotiation room.

If it is on consignment and you ae a valid buyer get him to contact the seller while you are there as often a seller will give in to get a quick confirmed sale.


Like with all purchases of boats if you don't have the skills and knowledge yourself to check out teh trailer, accessories motor and hull have a professional do it and take it for a test run on water as a condition of sale. many a dog is discovered on a test run. Small discoveries of electrical faults quickly lead to looking at how professionally and how old wiring and accessories have been fitted.

There is a couple of blokes on here who's profession is repairing and inspecting boats and they could possibly also offer advice on the dealer and pricing as many of them now each other.

Good luck - negotiate hard but fair as dealers deal with nobs all day so a honest approach that you are ready to buy but have limits will be a better approach

Hi

Without a doubt one of the more sensible posts i have ever read on this forum regarding interaction between buyers and dealers.

Very easy for a seller to work with a person committed to purchase on the right deal.

Also easy for a buyer to work with a seller if they have demonstrated that they are a committed buyer once the right deal can be found.

Cheers

Steve

[finga]

Be rude.
They're rude when you ask for a reasonable trade in valuation.

[Steeler]

Trade in valuations are based on the wholesale value of your boat or vehicle.In the event the dealer can't shift it in good time ( generally 90 days ) he can call upon his nearest auction house or brokerage to come take it away at the same value he traded it for.

When you twist there arm up to a better trade price you have not miraculously increased the value of your trade all you have done is used up some of there over allowance. There are three figures incorporated into a vehicle or boats listed price and is as follows

Wholesale Value + Load Value + Over Allowance = Ticket Price

Wholesale value is a items real value

Load value is what the dealer requires to stay in business ( profit margin )

Over Allowance is the figure added to cover for those people who have to a higher opinion of what they are trading.

Cheers

Steve

[Scott79]

There are alot of variables as people have already suggested, but as a generalisation I reckon about 15% off the ticket price would be a good place to start. Not ridiculously low to give the impression that you are a time waster, but still a good saving for you if the final price is down around that mark.
Scott.

[bennyboy]

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

[PADDLES]

everyone always seems to expect to get some sort of a discount off the asking price, it's a bit of a game really. what happens if the asking price is actually a fair price for the boat?

it is a buyers market at the moment especially in the times immediately following the boat show (ie. people get a little excited at the show and place an order without having sold their existing boat first) on the other side of the coin however, the second hand boat prices are ridiculously high, so don't ask, don't get. but on the whole, if you are buying from a reasonable dealership they know the market better than you do and there won't be too much room to move on price unless they really need to move something on.

[finga]

everyone always seems to expect to get some sort of a discount off the asking price, it's a bit of a game really. what happens if the asking price is actually a fair price for the boat?


They can only say no to the offer.
You can either come up or they can rethink your offer.
Simple really as boats are everywhere for sale.

[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.:o :o :o 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"

[lee8sec]

They may do the motor at a small markup but look at what some charge for fitting. Leigh

[PinHead]

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.:o :o :o 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!!;)

I even have to supply work clothes, safety boots and all other PPE.

I have costed my business down to exactly how much it costs me per hour to stay viable..and I know I would close down in no time if I worked on 10% mark up.

[PinHead]

I was told something quite a few years ago which I have not forgotten.

You can out and work really hard every day...get lots of work because you are not pricing correctly (too cheap..not done the homework on overheads) and you will go broke.

You can also sit at home all day and watch TV..and you will go broke.

BUT..whilst watching TV you are not racking up debts to suppliers etc and working your butt off.

I know that if I have to go broke which one I would choose.

[PinHead]

Back to the original question: offer them what you think is a fair price and maybe they will accept that..if not then both sides may compromise.
If it is what you really want then be fair as you may want them in business still if you have any issues with the product you buy.

[wrxhoon]

What you offer them depends on what you think is fair price . If the boat is overpriced they won't sell it so you can go lowball .
If priced bang on market they will sell it, just try to get something off .
I sold a boat 3 months ago at the advertised price $43900 because it was the right price. You always get dick***ds that will offer you $10-15k less regardless of the price, I just say thanks but no thanks.
It is the buyers benefit if seller overprices the boat because he won't get much interest in it and the sellers advantage to price it right at the selling price so you get more interest .
Whenever I sell a boat/car I try to price it right on the selling price and I never bargain.

Do your research, check prices of other boats of the same make/condition etc and then deside what this boat is worth, remember is worth exacly what someone will pay for it.
Good luck with it .

[RTFM1000]

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

I can assure all the "non believers" that bennyboy is correct in what he is saying and i back his comments 100%.
There appear to be some "dealers" that are happy to work on a 5% markup on new boat, motor, trailer packages. A good situation for the consumer, not so good for the dealership trying to make a $. Used rigs are a different story. There is no standard % markup on used. The price will be determined by whatever the market value of the goods at the time.

RTFM1000.

[kc]

Best way I have every brought boats, and I've had more than my fair share, is go shopping and cashed up and look for boats on consignment. The dealer generally gets a straight % cut from the seller and is usually keen to encourage a sale at just about any price. Also, as has been suggested, get the dealer to ring the seller and make a cash now offer while you consider and can quote a few other options.

My current boat was an absolute nick under these circumstances.....also agree with the comment about fitting. What some dealers miss on the sale price they make up for on fitting and servicing...which I can understand. No one in business can live on a 5% sales margin...they have to have a profit line and this is generally the workshop.

Cheap priced encourage an increasing customer base that in turn use the service facilities of "their" dealer. Typical "loss leader" sales strategy which can work for some. Profitless volume is usually dumb but if the business model has been geared and planned around after sales service and add ons it can be a winner.

KC