Bump's World - May 2021
May 3, 2021
JULY IS THE NEW OCTOBER
My first sales position in the yachting business was with Sailboats Northeast. I started in August 1980. I was a commissioned salesman for SBNE selling mostly new boats, some trade-ins, and some used boats.
Most of the new boats I sold were in stock in our inventory in Marblehead. They were lined up in a storage area in a lumber yard.
In 1980 Marblehead was the place to go to buy a boat. There were at least 6 boats dealers and a fair amount of inventory. Every major boat builder was represented. People would just come to Marblehead to see boats. I got a lot of walk-ins. I was always ready to go show boats, so I got to deal with a lot of the walk-ins. I also had no real customer base, at that point, so that was my source of business.
At SBNE our 2 major lines were Sabre Yachts and C&C Yachts. Over the ten years I was there, we represented many other builders, but Sabre and C&C remained our bread and butter.
A customer would come in and we would drive over to the lumber yard. I would show a C&C 25, 27, and 30. Then I would show a Sabre 28, 30, and 32. The customer would like the Sabre, and say the 28 is a little small, the 32 is a little big and the 30 looks perfect. This also happened when they liked C&C. They would buy that boat. SBNE would order another boat from the builder to replace the one I just sold and it would arrive in about a month.
My biggest selling months were March, April, May, and June. I was able to sell at least one boat per week. On the contract I would write that they could trade the boat back in within 3 years and get a full trade value of the base price of the boat and the options. That seemed very generous but back then there was 10 precent inflation so the prices were going up in leaps and bounds.
When I took the boat back in trade the replacement was 30% more so I was able to sell the trade in for the value I gave the buyer. Thru the 1980s I walked my customer up to one bigger boat after another. They bought a C&C 27, then, 33, then 35, then 38, then 41 and then 44.
By the late 1980's these bigger yachts took longer to build and I was not able to just sell the boat at the lumber yard. Also the bigger yachts had more options and the buyer wanted choices. So even if we had the model in stock, it may not have the optional keel or engine, cushion color etc.
This was happening across the yacht industry and a huge effort was made to convince buyers they had to order in the fall to get the yacht they wanted for the spring. The Newport and Annapolis Boat Shows became huge and a huge selling platform. Customers still showed up in May wanting to buy a yacht. These customers had little choices and had to settle for what remained in left over inventory.
The builders loved this situation since now hey had boats to build all winter. The industry changed the buying habits and it seems to be a really good situation for the industry.
This system worked well until 2020. The pandemic. Builders got behind. Parts were slow coming in, and suppliers also had issues delivering. Factories were shut down. At the same time the public decided that boating was a good healthy sport and sales went up. Very quickly inventories were depleted. Yachts that were already on order were delayed creating many upset customers.
So you have a reduced ability to produce yachts and an increase in demand. The result of this is an order back log. Some builders for some models are seeing production available slots at over a year out. Years ago customers did not like waiting over the winter for their boat, but now to miss a sailing season is really bad.
Right now on many models we offer the current delivery date is next spring 2022. If you come strutting down the docks at Newport or Annapolis you will most likely be shocked to see the yacht you dreamed of is far in the future and not available for next summer.
At New Wave Yachts we are now selling yachts for delivery next spring. Going forward will this change?? It is very hard for a builder to increase the number of boats they build. They could expand facilities and hire more workers, but the workers will need training. The experienced workers train the new workers and that slows down production and quality goes down with new workers. So the builder has added workers and expanded facilities and is now a couple of years down the road and their production has dropped down to past build levels so now they find themselves way over staffed and expensed which leads to financial disaster. As a builder you are much better being sold out than over produced. One is annoying and the other leads to bankruptcy.
If you want a boat for next spring you better start thinking about it now.
Please mail comments to me at Bump@newwaveyachts.com