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| Message Subject: Buying a new boat? | |||
Guest |
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| What can you expect to get as a percentage off the sticker price at a large boat show this off season? I have heard that mark-ups can be in the 30% range. I imagine selling luxury item like new bots in a recession is getting a little tricky. | |||
| sworrall |
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Posts: 32880 Location: Rhinelander, Wisconsin | Margins on boats are more in the 8% average to low average to 18% high range (most dealers would near pass out if they got 18%). That's why 'show pricing' hasn't been that big a deal since the pricing began serious margin declines in the middle to late 90's. | ||
| guest |
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| So if you don't get at least 10% off sticker you are being a fool? If your not getting paid by a boat manufacturer feel free to chime in. | |||
| sworrall |
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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. | ||
| DJS |
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| Thanks for the reply Steve. But I guess again what can I expect to get off of the sticker price? Anyone out there bought a new boat recently? I guess since it seems there aren't any replies to a new boat buying question I assume no one is actually buying any which goes back to my point that paying anywhere near sticker would be a huge mistake. Like everyone else they want to rake in the profits when the going is good but they don't want to take a beating during a recession, GOOD LUCK WITH THAT! | |||
| sworrall |
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Posts: 32880 Location: Rhinelander, Wisconsin | 'Rake' in profits? 8% to 15% isn't even close to that. When it's good out there, it is volume that allows dealers to do well, not huge margins. As I explained, the margins on fishing boats are not very good. Dealers are not 'taking a beating' because the asking price includes unreasonable profit margins, they are taking a beating because very few folks are buying boats. What are they to do...take the tiny margin they DO make on a sale and give it to you; making nothing? No one there very soon to service your boat. Ask the folks who bought boats from the hundreds of dealers who have gone out of business in the last couple years in the US. The recession didn't drop dealer margins, they HAVE to make the described margins or they are no loner in business. Pricing has held the line and even dropped in some cases as factories take a hit. Layoffs have been huge, consolidation is now a common theme in brands...etc. By the way, 'profit' isn't a dirty word. Without it, the economy stalls and businesses go out, leaving unemployed in the wake of it all. One thing though..ask the dealer for a cash price and let them know you do not have a trade in. Best to buy cash and sell your current boat yourself. Dealers frequently have to take 20% of their COST and invest it into a used boat PLUS their margin, and if that rig doesn't sell quickly...another contributing factor that put dealers under recently. So most will place the sticker at trade in price, and give the customer a lower price for a cash deal. | ||
| Brian Hoffies |
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DJS - 12/3/2010 5:17 AM Thanks for the reply Steve. But I guess again what can I expect to get off of the sticker price? Anyone out there bought a new boat recently? I guess since it seems there aren't any replies to a new boat buying question I assume no one is actually buying any which goes back to my point that paying anywhere near sticker would be a huge mistake. Like everyone else they want to rake in the profits when the going is good but they don't want to take a beating during a recession, GOOD LUCK WITH THAT! How about you get away from your desk and go find out what you can buy a new boat for? Nothing irritates me more then know it all people who want to tell other people how to run their business. How about you stick a couple million on the table and sell boats for 5% over cost. Be sure you look your techs in the eye and tell them "no raise this year, figure a new way to feed your two kids." I takes money to run any sort of business. Really...........do you think 10 to 15 percent is to much to make? If you are serious about buying a boat you won't do it banging on a keyboard. Get out and see what kind of deal you can make standing face to face with one of these millionaire boat dealers. | |||
| lambeau |
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Like everyone else they want to rake in the profits when the going is good but they don't want to take a beating during a recession, GOOD LUCK WITH THAT! those #*^@ capitalists trying to make money. the sheer gall of those bastards. you might keep in mind that when companies make money, they hire employees. those corporate profits and employee incomes are what's getting taxed to help all the socialists. find a boat you like. make an offer you're willing to pay. if the dealer can sell you the boat at that price, he will; if he can't, he'll say no. it's called "negotiating" and there's nothing wrong with it. your part is to try and pay the least possible and his part is to make the most possible. go in with a maximum in mind and prepared to walk away and you'll probably do just fine. of course, if the price of a new boat if more than you're willing or able to pay, buy a used one - there's a ton of deals out there on nice used rigs. sheesh. Edited by lambeau 12/3/2010 9:24 AM | |||
| VMS (unlogged) |
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| Hi Everyone, I would agree with Mike here. I have never even thought about the profit margin for a boat or recreational product. I would call different dealers and find out their bottom line price on the rig of choice. Then, when I go to a dealer to discuss price, I have a very good idea of what I should be able to get for a price. It can vary by a couple thousand dollars or more depending on the boat and the dealers you are considering. Case in point (I hope this is o.k) My last rig purchased was in the fall of 2004 for a 2005 model boat. After deciding on the equipment I wanted rigged from the dealer, I called around, including the dealer I purchased my previous boat from. I was able to shave off almost $1500 by calling around, and between the two lowest priced dealers, one of them was where I purchased my previous rig from. I went to them directly and told them what I could buy the boat for... They asked me what dealer. After telling them, they came to $20 above the other dealer's price...enough for me to say "lets do this." My humble opinion about % profit margins... So skewed in such a way that most anyone just coming off the street is not going to be able to follow the numbers for that margin. There are some guidelines that can be followed for something like automobiles, but even there, you still negotiate the price rather than worry about profit margin. Not everything is about price, either. One must also consider customer service, service department, etc. as well.... I'd much rather pay a few $$ more for good service than just low price. Something to consider anyway... Steve | |||
| DJS |
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| Good advice guys thanks for the tips guys. As far as no one there for service I work very near a delership that services all the outboards I am willing to buy so that isn't a problem. Sworall the cash advice is esaclty the kind of info I wasn't sure about, thanks for sharing. | |||
| Slow Rollin |
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Posts: 619 | there was comment about getting a better deal or asking for the cash price......i would always expect any dealer to give me there best price right up front....i would never buy from a dealer if they would not give the best price up front - to me someone was trying to take advantage of me by not giving best price right away. anyone that thinks a trade in vs a cash price should be different - dont be fooled...your playing the game of jack the price up to show you more for your trade - dont be fooled on that - do your homework. | ||
| guest |
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you might keep in mind that when companies make money, they hire employees. those corporate profits and employee incomes are what's getting taxed to help all the socialists. Alright, the rest of your post is fine. This part takes the cake though. Someone needs to take an economics class. The US has never been a pure capitalist society. There has always been a little government mixed in. Pure capitalist equals zero government intervention. Pure socialism equals complete government control. Now, don't get your britches in a wad...we are so far from EITHER of those scenarios that it's pointless to mention perfering or wanting one or the other. If you want pure capitalism, I'll hire your 6 year old to work in a sweat shop for 22 hours a day, and if you want pure socialism, we wouldn't be talking about rich or poor, cause neither would exist. Don't spout off political crap if you don't understand what you're talking about. | |||
| momuskies |
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Posts: 431 | Why would any dealer give the "best price" right away. The dealer is there to make money. If you can sell a boat for 22,000 to one person when you would be willing to sell it for 20, you go for the 22 every time. Do you really expect to walk in and say, "Hey I want that boat." Dealer says sold. As you're filling out the paperwork, Dealer says I know you agreed to buy the boat for 22, but I'll mark it down to 20 now. And there are lots of places you can get a discount for paying cash. | ||
| Muskie Treats |
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Posts: 2384 Location: On the X that marks the mucky spot | Go with the place that will serve you the best! You can get a great price from someone across the country but when something goes wrong (and something always does) the place you bought the boat from will probably give you preferential treatment. Also, the boat show is close at hand and the deals there are usually better then anything you're going to get today unless someone's trying to blow something out to make room for the new ones. I will plug Frankie's here for 2 reasons. 1. He walks the talk when it comes to the muskie resource. The ponds he's set-up have stocked more then all the other dealerships in MN combined (pretty easy because that number is 0). 2. He has the best tech's and service I've experienced. My next boat (assuming I go new) will be from Frankie, even if it's a little higher then the guy down the street. Remember, the price isn't always the price... | ||
| Slow Rollin |
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Posts: 619 | momuskies - 12/3/2010 2:33 PM Why would any dealer give the "best price" right away. The dealer is there to make money. If you can sell a boat for 22,000 to one person when you would be willing to sell it for 20, you go for the 22 every time. Do you really expect to walk in and say, "Hey I want that boat." Dealer says sold. As you're filling out the paperwork, Dealer says I know you agreed to buy the boat for 22, but I'll mark it down to 20 now. And there are lots of places you can get a discount for paying cash. i think thats the old way of sales alot are used too.....today alot people involved in sales (including myself) know the value of honesty - never take advantage of a customer even if you can (that statement goes along way) *the bottom line on price never matters if there is a trade or cash - it doesnt matter - either way - if you look at an invoice it doesnt say cash price or trade in price does it? Edited by Slow Rollin 12/3/2010 4:32 PM | ||
| KSauers |
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Posts: 743 | guest - 12/3/2010 3:31 PM you might keep in mind that when companies make money, they hire employees. those corporate profits and employee incomes are what's getting taxed to help all the socialists. Alright, the rest of your post is fine. This part takes the cake though. Someone needs to take an economics class. The US has never been a pure capitalist society. There has always been a little government mixed in. Pure capitalist equals zero government intervention. Pure socialism equals complete government control. Now, don't get your britches in a wad...we are so far from EITHER of those scenarios that it's pointless to mention perfering or wanting one or the other. If you want pure capitalism, I'll hire your 6 year old to work in a sweat shop for 22 hours a day, and if you want pure socialism, we wouldn't be talking about rich or poor, cause neither would exist. Don't spout off political crap if you don't understand what you're talking about. That's exactly where obama and his ilk want to take us. Recreate the USSR where the ruling class has everything and the rest have breadlines. Take as much control over the people as they can. Why do you think he spends so much time demonizing business and profits. It's called class warfare . Right out of the Alinsky playbook. And by the way have the guts to use your real name. Kurt | ||
| muskyone |
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Posts: 1536 Location: God's Country......USA..... Western Wisconsin | Treats, thanks a lot for the vote of confidence. I hope that you will stop by and see me when the time is right for you to get that new rig. As Steve stated there is a limit as to what discounts can be given. 10% off the "sticker price" is generally not in the cards unless the "sticker" price is blown out of proportion. Remember that a boat show price is probably allready discounted and that there are generally some extras at boat show time. Ie: extended warranties, free cover etc. Your best bet is to make a few calls get some reasonable price ideas, pick the dealer you like and go in sit down and make a deal. You have to remember that dealers all like to see some type of commitment toward an actual purchase. If you come in person it goes a long way towards building a relationship with your dealer. They see who you are, an actual person not just a voice on the phone. Also remember, who, at the dealership you spoke with. This will keep misunderstandings to a minimum and make sure that you don't have to start from square one all over again. Just my two cents worth as a boat salesman with a little time on my hands. Mike | ||
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