As we endure the worst economic/market conditions in the boat industry since the early 90s, I would like to take this opportunity to comment on what I am observing from some of our manufacturer/ partners.
I have been presented dealer contracts that are designed to give the dealer less rights and the manufacturers a guarantee of success at the dealer’s expense. The business world can and should be a mutually profitable two-way street. The bottom line is, if I can’t understand the language in a contract as a layman due to excessive “legalese,” I WONT SIGN IT!
If you feel our past relationship is worth throwing away because you want greater protection and a business advantage over your dealers, you can find another dealer to sell your products. Strong-arm tactics will not change anything in the real world, or help our industry.
It won’t change the economic conditions.
It won’t help you manufacture and sell more products.
You certainly will strain or end the relationships that you worked hard to create.
It will hurt the industry as a whole.
If there were forward-thinking people instead of “marketing whizzes” that plagiarized their long-winded contracts from U.S. Marine, their focus would be on writing programs that help the dealers sell product through customer incentives that are real, not designed for the dealer to lend the manufacturer money while they build more boats to choke the pipeline with. There would be quality sales and service training for dealership staff members, building a better level of product and a focus on advertising them thoughtfully. In general, making an effort towards elevating the boat industry as a whole.
I cannot take advantage of any program I have seen this year while my lot is full of last year’s product. I am not alone. Why would I buy more new product when dealers throughout the country have lots full of non-current inventory. I have watched deal after deal [and/or my profit] disappear this year due to customers finding the “desperate guy,” and buying out of territory to save money. 20 years ago it was not as easy for a customer to do; now it takes minutes to check an entire manufacturer’s dealer network.
What happens to our margins when we have too much inventory in the field? They suffer, dealers’ ethics and territories suffer, relationships suffer, and the most desperate dealer will sell the product. Will this elevate the standards of the boat industry as a whole? No. Will it reduce the level of customer service and hurt the industry in the long haul? Yes. Meanwhile the manufacturers try to remain bulletproof, and watch it happen. .
What will I do?
I will not purchase as much product. Listen manufacturers; if you continue to build product at the current “growth” rates in a shrinking market, you will do more long-term damage to the industry as you will be “forced” to open dealers on top of dealers [when we really need less but better quality dealers].
I will be forced to put more strain on my staff and, as a result, service levels and morale will suffer. Combine this with lower margins and you have a candidate for your worst case scenario, [No, I wont pay you a 20% restocking fee for a scenario you helped create] and again, damage the industry as a whole.
I will find manufacturers that understand these aforementioned concepts and are willing to work with dealers with sensitivity, mutual sacrifice and risk, and willingness to get through the current market conditions.
The smart manufacturer will be there for me, and I will be there for them. And I will work harder than ever.