Dealer Outlook

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Santa: It’s game on this year!

Dear Santa:

Last year, I sent you my Christmas wish list. But, with all do respect, sir — you really failed to deliver the goodies! Well, tis another season to be positive, so here’s the list and we’re counting on you to come thru this year:

1. Please arrange for government and regulators to speak in a unified voice! The big banks’ recent pledge to President Obama to take a “second look” at all loan apps isn’t going to cut it! Yes, the banking debacle of ‘09 calls for investigations, explanations and appropriate policy changes. But, the President’s call for banks to start providing “reasonable credit in their communities” won’t happen while regulators are also demanding banks shrink their loan portfolios and raise new capital!

2. Santa, remember the 85 percent of “Discover Boating” funds . . . you know, the ones that were pledged to go directly to dealers to help move products? Well, it appears they’ve gotten side-tracked somewhere, according to many dealers. So, please persuade all manufacturers to find and use that money as intended to help dealers pay for boat show space and other buyer incentives during the critical show season just ahead.

3. And while you’re at it, inspire all manufacturers who survive this recession to draft new Manufacturer/Dealer Agreements that contain ALL the provisions approved and recommended by the NMMA board in 2006. If this recession has taught us anything, it’s that we’ll never do business “as usual” again. How obvious it is now that manufacturers cannot survive without dealers and vice-versa. So, a new balanced relationship should be the birthright of the pending industry recovery.

4. Santa, make it an industry priority to immediately develop an inventory-sharing system for dealers similar to the one adopted years ago and used so effectively by the auto industry today. It will benefit dealers, manufacturers and consumers.

5. Bring on the buyers, especially to the industry’s winter boat shows. There is a large pent-up demand and you can help unleash it by stuffing a lot of desire as well as some extra down-payment money in their stockings!

6. Bring on the manufacturers who have the foresight to produce a line of reasonably-priced, entry-level boats. It’s a key for growth going forward. More standardization, fewer models, less choices and more value are where the consumer has been driven by this economic debacle. We need to be there, too.

7. Speed up the pace at which we are able to bring back the good employees that were jettisoned for budget, not performance, reasons. Companies like Regal and Brunswick (Meridian), among others, have started. Santa, we want to see more able to do it.

8. Empower all dealers to demand they be paid their customary street labor rates for all warranty work performed AND that they also receive the normal markup on all parts taken from their inventory for warranty service or they will do business with another builder who does. 

9. When it comes to the SBA programs, Santa, we need you to move the administration to cut the talk and start the walk on a program lucrative enough for more than the current limited number of banks to want in, OR make large direct loans for working capital and floorplans. And, while you’re at it, bring back down the current excessive interest rates that are sucking the life out of many dealerships.

10. Rid the industry of manufacturers who build junk. Ditto for dealers who give us all a black eye by failing to provide quality service to all customers.

Merry Christmas to all!


6 comments on “Santa: It’s game on this year!

  1. Don Thurston

    By now it’s clear that the boat industry is going to have to reinvent itself when it comes to financing it’s wholesale inventory. Even dealers who have their own cash, a local bank or GE Credit are going to have to look at inventory turn, margins and cash retention. Manufacturers must pay attention too and look closely at “days supply” and ways to keep their dealers healthy and not stuff the goose when it comes to building “market share”.
    One subject that’s been kicked all over the place, but in these times of high fuel and liability costs, FREIGHT has become one of our most expensive features on a boat. I call it a feature because it’s not an option. It would be darn near impossible for most of us dealers to get a boat delivered to our showroom without having to cut a check to the truck driver for thousands of dollars worth of freight. Over the course of the model year, that freight bill can severely drain your cash as you try to rebuild sales and your business. Keeping Cash the King.
    I encourage and enjoy pursuing the goal of being free of the banks, but when donkey meat is the only thing on the menu, well, ya just gotta develope a taste for the burro! This in no way makes you regressive. In fact, if the boat industry gets its hands around boat swapping among dealers, it can alleviate the process of a swap without having to penalize a dealer who wants to balance his inventory by making him cut a large check for the “F” word. The boat and all costs associated with the production of the “BOAT PRODUCT” can slide right over to your floorplan with only a minor cost of moving the boat. I think also it’s fair to assume that we are talking about boats under 30 feet being the ones most likely to swap around. But, in all cases, freight should be considered a part of the boat, and financed as such.
    You know, Dunkin Donuts doesn’t pour the coffee directly into your mouth while you drink it, they put it in a cup. They price it as $1.99 for a large including the cup !! Not $1.74 plus 25 cents for the cup , and oh, by the way, cash only for the cup ! DD Cards not acepted for cup payment, see fine print on bottom of cup, but not right now !
    This is one of a few ideas we can press for as dealers and manufacturers that will help us grow healthy as an industry, and help our bankers understand our businesses better.
    I know I’m not writing a book, but one last comment about servce. We enjoy having the highest CSI scores with our manufacturers and it didn’t come easy. We’re the highest in the World with our main line of boats and darned proud of it. Service income including storage has saved our butts in this downturn. I encourage all dealers to become more the boating facilitator for your customer than just the one who sells the most. Think about that and maybe we’ll see more articles on that !

  2. Noel Osborne


    That is quite a list. Hopefully we might see some progess on some of these items. I want to put my two-cents forward on what I see as the single most important item that Santa can deliver which is a inventory management and control system that will hopefully make the banks feel more comfortable doing business with our industry. Dealers are being highly critical of the banks for not providing inventory financing but would you, if you were a banker, loan money to our industry right now. How many millions have the banks already lost due to dealership failures and there is more to come.
    We all know that inventory-turms are critical to dealership survivals but many manufacturers have shoved product down the dealers throats knowing full well that the dealer would not be able to move it out in a timely manner. Dealers need to develop Business Plans that will realistically project sales on a monthly basis for the entire year and manufacturers should not ship product that would result in a turns-ratio of less that 2:1. In fact for the health of the industry it should be 3:1. This practice would automatically lower the lenders risk to a major degree. The formula is simple- match the production level to the consumers appetite. This may require some radical changes on the production floor however radical changes is what we need both now and in the future. When the banks become comfortable with our ability to properly manage our industry and reduce their risk, then lending will reappear. Until then I doubt that you will see a lot of banking interest towards our industry.

  3. Ron Knapik

    Never let manufactures forget. No more telling us dealers what to do. And yes, they need to be reminded on the grow boating funds.

    Remember, manufacturers memories and only as long as their noses. We as dealers, who wish to survive and thrive have to make sure they learned from all this.

  4. Comrade Karl

    WoW. why do you listen to those manufactures that are telling you what to do(I assume that means they are telling you how to run Your business)??
    Better yet why would you do business with them??
    As a person on the Manufacturer side of this 3 legged stole I never understand this retoric.
    The survivors are the really big & the smaller focused & specialized who have their own money (capital). Read the latest from Brunswick- they have a very strong cash position.
    If you are in sales or in a non nessary business you shouldn’t have to told how to operate you should already know. Your greed makes you deal with those you do not trust, let alone like. If these dictator manufacturers, as you describe, are treating you this way then they must also be treating their employees & suppliers this way & cutting every corner on the production floor. So why be involved??
    Ron this is not about you personally but I read alot of similar comments here every week and always scratch my head wondering.
    Norm my only wish for 2010 is we all start working togeather, because we can not survive & get through this without each other.
    Happy New Year to all.

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