Dealer Outlook

Trade Only Dealer Outlook Blog

A boat show angle to manufacturer showrooms?

No question the factory showroom model is seen as a mixed bag, but generally it is viewed with optimism. It’s safe to say advantages and downsides are still being identified.

If you missed Part 1, please see Tuesday’s Dealer Outlook.

On the plus side, there’s agreement this concept could boost big-boat sales. Given that dealers cannot, or will no longer, shoulder the financial risks of stocking many big boats, the so-called factory showroom could prove helpful to all — dealers, builders and customers.

“Looking forward, the ability to stock a half-dozen or more big Marquis and Carver yachts isn’t in my cards anymore,” says Ohio dealer John Sima, of Sima Marine. “I’ll gladly fly bona fide customers to Florida every day if it means selling some boats, and I’ll be with them on every flight.”

Sima hits one of the biggest advantages of this factory showroom concept: keeping his existing customers. We know that, traditionally, satisfied customers are most likely to move up within a brand. However, that move is highly influenced by the customer’s opportunity to see and touch his next dream boat. Absent that stimulus, the customer is left wide open to the draw of other brands. Access to a factory showroom, therefore, can keep that door shut.

But that raises an interesting question. Existing customers aside, if the models aren’t in stock to see, how does a prospect become interested in the brand in the first place? Boating magazine ads? Maybe. Web sites? Sure, to some degree. Boat Shows? Ah, yes!

Like them or not, boat shows continue to stand alone as the single, most effective, cost efficient method of generating initial interest in a product by large numbers of prospects. The Miami and Fort Lauderdale shows — where builders have a big presence — notwithstanding, how are manufacturers and dealers going to create the very necessary initial awareness (buzz) for their brand in markets across the country? Dealers won’t have stock boats to take to the local show?

Realistically, builders will need to find a way to have a real presence in these shows or risk leaving themselves and their dealers vulnerable to other brands that do. Does it mean consignment boats or a fleet of traveling show models? Logically, manufacturers will have to find new ways to help their dealers be impact exhibitors in shows.

Nothing comes without cost, of course. While there are no rules-of-thumb in this new concept yet, clearly boatbuilders that adopt the factory showroom model, or some variation of it, must have the ability to sustain first-class regional showrooms. Concurrently, dealers must be financially capable of supporting such a model by successfully closing sales using it.

Of equal potential, this new system could be a big game-changer for improved relationships between dealers and manufacturers. Here is a genuine opportunity to work together to transparently identify any cost-sharing needs and balanced benefits with which both can prosper.

So is this a “new normal” or just a flash in the pan? Like anything else, the devil can be in the details worked out between dealer and builder. But it’s apparent that to make it work the integrity of the manufacturer must be absolute and the commitment by the dealer will have to be beyond question.

The idea is not for everyone or even needed by everyone. It is not likely to lead to widespread factory-direct selling. Dealers will continue to be the primary distribution channel for this industry. But for those who see an advantage in adopting it, this concept will likely morph into some combination of stocking coupled with the power of a factory regional showroom.

That will make it more a “new normal” than a short-lived marketing idea. We’ll see how it plays out.

Comments

7 comments on “A boat show angle to manufacturer showrooms?

  1. Cjohnbuy

    When John Sima has to go to Galati Marine with his customer its going to be a sad day. Sounds like the best idea is just to give the Galat machine a finders fee and ship all the awesome northern and midwestern customers south. Sounds like if you are not a chosen display center, all thats left are dock fees and service. Lets hope property values return fast so the marinas can become condo develepments.

  2. JACK DOLAN

    LETS TAKE EASY ON THE MANUFACTURERS. FINDING,ESTABLISHING ,SETUP, HIRING,TRAINING STAFF. TROUBLESHOOTING, SELLING, JUST MEETING THE GENERAL PUBLIC WILL SO TAX THE AVERAGE MANUFACTURER HE WILL WALK AWAY BEFORE HIS” NEW IDEA” SHOWROOM IS EVER OPENED. I THINK ABLE BODIED DEALERSHIPS SHOULD MAKE THEM SELVES AVAILABLE TO PREFORM THESE SERVICES FOR THE MANUFACTURER. AGREE ON THE MODELS TO BE SHIPPED TO THE DEALERSHIP. AGREE ON THE AMOUNT OF FLOOR SPACE RENTAL THE DEALER WILL CHARGE, AGREE ON THE HANDLING FEE TO BE CHARGED, PLUS DEALER” COST PLUS” PROFIT ON EACH SALE. THE MANUFACTURER SHOULD SELECT THE BOAT SHOWS THEY WISH TO MAN AND ATTEND AND ALSO WHAT MEDIA THEY WISH TO PURCHASE TO PROMOTE THEIR “SHOWROOM”. I THINK THIS “NEW IDEA” SYSTEM WILL REALLY WORK!!!! JACK DOLAN

  3. rog

    At some point dealers will have to start realizing that the manufacturer is not their “friend.” At best he is a supplier and his job is to push as much product as he can. He really doesn’t care who buys. He only cares that he sells, and there’s nothing wrong with that. That’s business. However a move to a “factory showroom” is a very short step from “factory direct.” So dealers referring a potential buyer to a factory should make sure their paper work is in order or they’ll be quickly out of business as far as new boat sales are concerned.

    Dealers would also be wise to think about sourcing product from sources other than the same old crowd, even though that crowd is now operating under new names. Many dealers went broke, and others are having a hard time, because of what the old crowd did. Why go back to that well again?

  4. Chip Hart

    Norm,

    It will be interesting how this plays out with boat shows. For years, the majority of automotive manufacturers have been sending “manufacturer owned vehicles” to auto shows therefore relieving the local dealers of the burden of pulling stock from inventory (or stock from a number of dealerships). They also took responsibility for detailing prior to and throughout a show and then shipping to the next show. In some cases, dealers took delivery of the stock following a show but did not purchase prior to the show.

    The manufacturer therefore also controlled the inventory appearing at a show. They pre determined what models and colors would be popular. Some manufacturers also purchased the exhibit space for dealers and dealer groups (which I am sure every marine dealer would love). A very effective (and cost effective) business relationship between the dealer and manufacturers that not all brands enjoy.

    People attending auto shows that were in the market for new vehicles always wanted the car that was on the show floor.

    When the industry is done reinventing itself, I certainly hope that the manufacturers get back to supporting their dealers at boat shows.

  5. Builder of small boats sold through dealers

    rog:
    It’s never good to do business with friends or family as the saying goes.
    Both parties should have a high level of respect for what each brings to the party. The relationship is & should be defined by those involved (ie Marine Max & Brunswick).
    Anyone with a lick of sence realizes that if a factory wants to go direct that they will encur the same overheads & issues that a dealer encurs and will have to sell the product at the same or higher price to give the retail customer the level of service & inventory selection the market requires.
    The factory regional show room concepts is to address the later issue & to overcome the lack of REASONABLE floorplanning.

  6. Sunshine State

    Boat Shows have filled a gap in the often dysfunctional Builder/Dealer arrangement whereby it has been difficult to view a comprehensive lineup of models convenient to see and properly displayed at one effective location.
    Every day can be a boat show.The model benefits all vessel sizes.

Leave a Reply

Your email address will not be published. Required fields are marked *

Comments are moderated and generally will be posted if they are on-topic and not abusive. For more information, please see our Comments Policy.