Whould YOU travel for a great deal on a new boat?

[Bubba1235]

This is poll to see how far you would travel to buy a new boat if you got a great deal.


A engineering buddy of mine was recently laid off when a major OEM filed backruptcy. I can't mention names (at his request) but if you follow the news... We talked at some length over the weekend and he is trying to put together financing to start his own boat manufactuing company. Yes, I asked him if he had lost his mind given the economy and market but he said he believes this is a great time to try his idea. He is a firm believer that when the market gets shaken up it creates new opportunities.

He is convinced that many if not most of the manufactures fell into the trap of supporting dealers and all the middlemen as well as pricing themselves out of the market. He has the opportunity to by some molds at dirt cheap prices and has located a facility to rent.

We talked for half an hour going over his costs and he tells me that boats are WAY over priced. He explained that he can buy a Mecr drive and 4.3 V-6 package for about $6,000 complete and ready to drop in if he buys in a quantity of 50 or more from Merc. But, he can buy a couple of truck loads of units from other bankrupt builders for less than this. He went on to say that they used to figure around $2000 for materials (FG and Gel Coat) in the hull and cap for the average 19' bow rider and $3000 to $4000 for the fixtures and accessories. With labor included, he believes he ban build a nice 19' bow rider for under $15K and retail them out in the $20K to $25K range.

Now is where it gets a bit tricky. He wants nothing to do with a dealer network, trucking, financing inventories (boats will be built to order with a lead time of under 30 days) etc. Instead he is going to build a web site (thats why he called me) where the boater can log on, see the different options, etc. and order their new boat, and then come to the factory to pick it up. (His new facility is next to a small lake and he will provide test drive of your new boat before you accept it.)

The big unknown for him is will people buy that way without seeing the boat in a local dealers show room (he will have his own show room), will they drive and be responsibile for their own transporting the boat back home and in general is it so far from the old paradigm people will be too hesitant?

Please share your thoughts as I will give him the feedback from everyone here.

 

[IVAZ]

Re: Whould YOU travel for a great deal on a new boat?

According to the bayliner website you can already get 19' bowrider for 20k-25k. How would his boats differ from something like this?http://www.bayliner.com/bowriders.asp?modelid=122446
I know bayliner is not known for great quality but the new ones seem to be pretty nice. It would be great if somebody could build a boat in that range with a higher level of refinenment and options.

 

[rrhodes]

Re: Whould YOU travel for a great deal on a new boat?

The issue I think most people will have is not having a local dealer to go to for warranty work. Of course the powerplant would not be an issue because any Merc dealer could service it.


He needs to make sure that he has enough profit to deal with any design flaws and warranty claims that come through.

 

[rjlipscomb]

Re: Whould YOU travel for a great deal on a new boat?

Speaking only for myself...
Web sites can show you a lot about the boat. Reputation goes a long way to selling it. Price gets me to drive a certain distance. BUT, how much will I save by driving to his shop and bringing the boat home? What do I do about warranty issues? Right now this boat has no reputation and we all know about boats. Seems he might do well in his geographic area. Me, I'd probably pass until there was more reason to substantiate my driving across the country to save a few dollars. I wish him luck and let me know when he starts building 26-27 ft cruisers (my next boat).

 

[capt sam]

Re: Whould YOU travel for a great deal on a new boat?

I'm editting my post after rereading your original post. I can tell you I know several custom builders with molds and a lifetime of experience who barely keep the doors open with very little overhead and they charge as much if not more than most mass production builders. There are numerous costs your friend hasn't considered yet.

 

[ThePostMan]

Re: Whould YOU travel for a great deal on a new boat?

Well, I think you loaded your poll questions a bit, but that's understandable. I don't want a "dealer to hold my hand", but I wouldn't buy a new boat from an unproven start-up company, either. I'm sure he has the best of intentions, and might actually be able to pull it off. . .but bottom line, a boat is a big-ticket item. Most people prefer to spend that kind of money on proven name brands with solid reputations, rather than save a few bucks by going generic.

 

[dingbat]

Re: Whould YOU travel for a great deal on a new boat?

Having been involved in the design, manufacturing, Marketing and Sales of a product line for 31 years I would suggest that your friend revisit his cost structure.

Way too many cost not accounted for. There is no profitability in the numbers your tossing around.

 

[sickwilly]

Re: Whould YOU travel for a great deal on a new boat?

No, because I only buy slightly used. I would travel for a used boat, but not for a new one, when I could find a slightly used "better" brand for the same amount of money.

If he is going to do this and be successful, he will need to be able to provide great financing -- as I believe that will be the key to the someone willing to buy off the internet to save money. That is, pre-baked-in manufacture-financed low monthly payments.

I wish him luck!

 

[RotaryRacer]

Re: Whould YOU travel for a great deal on a new boat?

The name and reputation behind a boat is important. If there is no history at all, the up hill battle to actually start making meaningful sales numbers will be huge.

I would say that yes if he can buy the name and the molds he would have a better chance of success.

What is his general geographic location?

SouthEast
SouthWest
NorthEast
MidWest
West
NorthWest

The type of boats used in those areas and the local market is going to be a big contributor to this.

 

[sickwilly]

Re: Whould YOU travel for a great deal on a new boat?

Sounds like he wants his cake and to eat it too. He does not want to mess around with marketing, wants to pre-buy the molds so no R&D, and does not want to deal with shipping, nor financing.

The internet is pretty powerful and a game changer, but can it really remove from the equation all the other aspects of manufacturing and selling boats?

I will be eager to watch this experiment from the side lines.

 

[haulnazz15]

Re: Whould YOU travel for a great deal on a new boat?

I don't think the name is hardly that important. There are more freakin boat manufacturers that have come and gone over the past 30 years than you can count. There are VERY few boat companies that were around in the 60/70's that are still around today. Cobalt, Chris Craft, Wellcraft, Sea Ray, etc. are just the main ones who survived the boating industry crunches.

Bass Pro seems to bring out some new brand every 5-7 years or so, and it doesn't seem to impact their sales much. Tahoe was nothing 10 years ago, now they are everywhere. Ebbtide and Four Winns were smaller groups from the late 80's that have now come into their prime with little history to show for it. My only issue with your friends idea is that he doesn't have anything to set him apart from the crowd. Reusing old molds doesn't show innovation, he is just claiming his quality will be better. The rest of the money-related holes in his plan are making his idea look like swiss cheese.

 

[exsailor]

Re: Whould YOU travel for a great deal on a new boat?

Would I? I just did. Bought my new (leftover) 07 Trophy 1802 Walkaround from a dealer over 300 miles away. He beat the local guy's price by better than $5000. I'd drive a long way for $5000 ($4000 after you subtract NJ tolls ).

 

[smitty1258]

Re: Whould YOU travel for a great deal on a new boat?

3 questions

how much capitol is he starting with.

saying your not going to market/advertise is just silly, there are so many different formats that are much cheaper than traditional advertising, what would he be willing to due for a current customer that brought him a new customer? Nothing sells like word of mouth.

what does he purpose if something slides past QC and the end user lives 1000 miles away?

Im all for more competition in the boating industry and I would agree that the current industry is overpriced.

 

[RollingWanderer]

Re: Whould YOU travel for a great deal on a new boat?

Hmmm...I've been thinking a lot about this one. Let me start by first saying that I agree with your friend that now is a good time to start a new business. It's always better to start when the market is at a low point, because that gives you the growing potential of an upswinging market. The worst time to start a business...right before a crash !

I didn't vote in the poll, because I think I fall somewhere in between. I don't need my hand held by a dealer, but I do think it's important to have a good relationship with a local dealer/shop and support local business. For me the boat store is a lot like the motorcycle shop...I'm there more often to shoot the breeze and buy the occassional part even if it is a little more expensive. I do most of my own work, but it's nice to have a good relationship with someone local to do the things that I don't want to get into. I don't mind paying a little more to support the people in my community and I like having the peace of mind that if I need them...they'll be there. I'm sure I'm an abberation though, otherwise we wouldn't have so many big box stores and websites hawking stuff for a small fraction less than what I can go buy locally.

In the end, I would consider an offering like your friend is thinking about, but it needs to be considerably cheaper and with superb quality. Even then, I'm not sure I'd give up my local shop/dealer...but that's just my .02.

-RW

 

[RotaryRacer]

Re: Whould YOU travel for a great deal on a new boat?

There are VERY few boat companies that were around in the 60/70's that are still around today. Cobalt, Chris Craft, Wellcraft, Sea Ray, etc. are just the main ones who survived the boating industry crunches.

Ebbtide and Four Winns were smaller groups from the late 80's that have now come into their prime with little history to show for it.

A few thoughts on this...

The Four Winns name started in 75. They built upon the solid reputation that Saf-T-Mate had built since the early 60s.

Other companies you didn't mention that have been around a long time (30 -40 years or more) would be Glastron, Larson, Starcraft, Bayliner, Mastercraft, Nautique (Correct Craft), Century, Whaler, Grady White, Donzi, Cobia, Regal, Hurricane, Rinker...I could keep going.

The point is that almost all of the primary (staple) boat brands have been around a long, long time....Names are important.

Granted, many of these companies have been bought, sold, re-sold changed format and are hardly the same company they started off as.

However, reputation matters. Brands like Tahoe that emerged out of "nothing" are usually just an extension of existing companies (Tracker marine in this case). They had a reputation to fall back on.

 

[scoutabout]

Re: Whould YOU travel for a great deal on a new boat?

I would certainly be intrigued and might even consider driving that far just to check out a demo boat if the price was that much lower. The problem is I'm nuts. I'm not sure the average family boater getting into it for the first time is going to be into that. And all us old salts know that, really, buying used is a much better value proposition for boats.

My biggest concern would be the following, however:

I don't think the current desperate state of the auto and marine and aviation and....(fill in your choice here) industry is a simple as "its also obvious that the current paradigm of supporting a dealer network and providing marketing is not doing very well..."

The fact that credit has dried up therefore people aren't buying stuff therefore people who make the stuff aren't needed to make it and are losing their jobs and those people therefore aren't buying stuff and other people are losing their jobs, etc., etc. isn't something a great product and a great price is necessarily going to have any impact on. The ills of the economy go much deeper than that. We are just seeing the manifistation of it at the retail level.

I'd also suggest that rather than the manufacturers "supporting" a dealer network, it's actually the other way around. The manufacturer is lead weight around the dealer's neck most of the time. And in the case of a bloated, poorly run company like GM, the sorry dealers are taking it in the neck becuase the products, already on shaky ground desirability wise, were finally sunk by the tanking world economy. I believe a well-run company probably benefits greatly by independent dealers.

Nonetheless, it will be a cold day on the lake before I fail to wish a boating enthusiast the best with his business proposition. I shall stand by and observe with interest.

 

[triumphrick]

Re: Whould YOU travel for a great deal on a new boat?

Here I am following up behind the owner of a boat I am looking for! For the past few years that I have lurked and posted on these forums, I have read so many tales of woe from unsuspecting boat owners. Some are really tragic...some have contributed to hundreds of pages of posts against manufacturers that I have become wary of.
A boat manufacturers reputation is very important to me. I am going to buy a boat from a company that I trust will deliver a product that won't become a major headache in my life. I have bought and sold 4 boats in the past eighteen months. Every boat I worked on to get it to a point where the buyer has a turn key boat with no surprises. Evidently i can fix my own rig....but i sure as hell won't deal with a delamination of a hull or a cracked transom from a manufacturing defect. Right now as we look for our next move up, it will be from a company that I find has a reputation beyond reproach....Scout is one of those manufacturers. And, yes, I would travel about 500 miles to get the deal I couldn't live without!

 

[smitty1258]

Re: Whould YOU travel for a great deal on a new boat?

I would def look into it. And honestly with credit the way it is, I think others who have some cash would to. Heres where I am personally. I have a "good" amount saved up. I currently have a nice, trouble free boat that is paid for. My eyes are peeled everyday for a new boat, do I need it? no. Do I want it, yes. Looking for "the deal", if a manufacture can provide that "deal" and back it up, youll take my money, everyday of the week. I will not however use pen after pen to take out a loan on a boat, that I just paid 45k+ for and then put it on the water, and instantly lose 5-10k. Unrealistic, maybe. I want a wakeboard boat, plain and simple, I dont want to spend the 45k+ for the ones that really make me blush like a school girl. Offer me a new inboard, basic, and nice in the 20k range, Ill even be the first demo boat

 

[superpop]

Re: Whould YOU travel for a great deal on a new boat?

Typical Engineer, thinks Sales and Marketing is useless. I have been in Medical Capital Equipment sales for over 15 years and I have met a lot of engineers that though us sales guys were just overpaid cheerleaders. Wrong. First off, most boat buyers are uninformed as to what makes a 20 foot Cobalt cost twice as much as a 20 foot Bayliner, A sales person is there to educate the buyer and differentiate the product, you aint doing that over the internet. Sure the Cobalt is better built but I would argue that there are other brands that are just as good that don't cost as much, but Cobalt has spent a lot of money MARKETING their product to their core buying audience. I personally love to get a good deal but I also would not risk a 20-30K investment on a brand that I knew nothing about. The other flaw that I see in the plan is the target market that is being contemplated. Manufacturers of this size of boat are plentiful already and the market is really flooded with boats of this size, most of the big manufacturers can finance the carrying costs associated with building and holding the boats until they sell, I doubt your buddy can do this, and if he plans on building them JIT he is going to run into labor problems because he probably won't have a linear pipeline of business. I see bad things happening after only a cursory review and the limited info you have provided. Sorry if I sound negative, but that's the reality.

 

[superpop]

Re: Whould YOU travel for a great deal on a new boat?

I would also say that I think the assumption that the dealer networks have harmed the auto makers is flawed as well, Toyota seems to do great with a dealer network, they just don't have them on every other block and in every small town like the big three did. I think a limited distribution model would work great with boats, were you have one or two dealers per state and they work together to preserve the brand value and prestige. I think Mastercraft does this and it seems to work for them. The big three's woes stem from 20 years of bad decisions and an outdated dealer model. The other consideration would be the cost structure, the numbers you mention do not add up, what about B&O Tax, Insurance, FICA, L&I regulatory permits ect, that stuff can add up fast. I bring all this up because you mention that he is talking about investing a lot of money in this and he could get burned bad by all the little things that no one mentions.