Posts: 32880
Location: Rhinelander, Wisconsin | DJS,
The margins on fishing boats are low in comparison to many other consumer durable goods. A dealer can't survive on less than 8% unless his/her overhead is near zero and at that margin the volume has to be high...which isn't happening in this economy.
Getting 10% off sticker of a boat retailing at 15% over dealer net isn't in the cards unless floor plan interest is eating up the dealer's potential margin on the rig and he has to 'dump' it before all the margin is gone.
There are several large brands that due to dealer net costs and competition create an marketplace where making 10% on a rig before additional rigging and accessories ( where the margin really is) is almost impossible. That means a dealer has to pay his sales force, the light bill, interest on the floor plan, and himself out of a gross $5K on a $50,000 sale. Even with interest rates at an all time low, dealer floor plan is in high single to low double digits due to the high risk nature of the paper. think about that...if one is stocking $500,000 worth of product, which used to be less than 50% of the required amount of a yearly contract to purchase by a couple builders to be a 'top line' dealer, the interest bill on that product line alone can be over $4K a month after the free floor period is over...usually about 6 months. That's what happened to so many of the marine dealers over by you who went under, they simply couldn't make the interest payments as the buyers disappeared during the recession. Then the manufacturer has to buy back the boats that have been sitting on the dealer lot getting weathered from the floor plan company...at 100% of original invoice. That's what happened to a few manufacturers over by you as well.
It's a tough business. When it's stellar, it's really stellar, and when it's not, it plain sucks.
Accurate numbers, sorry you don't like them.
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