Upstart Florida broker eyes a big 2014Posted on
The late 2000s generally will not be remembered as a good time for boat businesses since the real estate market crash dried up the net worth of many would-be boat owners.
But for the two owners of POP Yachts International, who themselves were hurt in the crash, the combination of boat sell-offs and their own software acumen resulted in a new kind of boat brokerage that has taken the industry by storm, according to the Sarasota (Fla.) Herald-Tribune.
Less than five years old, the Sarasota company operates a national brokerage that completed its 1,000th boat sale of 2013 earlier this month, at an average price of $38,000.
The business is fueled by Internet listings that fan out to 150 sites.
“We conservatively expect sales growth of 30 percent to 60 percent in 2014,” Nick Owens, chief technology officer and co-owner of the business with Scott McNally, told the Herald-Tribune.
Going into 2014, the company has 4,300 live listings that 140 agents nationwide are showing.
Besides the global Web exposure, customers are drawn by the business covenant inherent in the company’s name, which stands for “Paid On Performance.”
POP COO McNally came up with the concept. Sellers are only obliged to pay sales commissions if POP brings in a deal to which they agree. Sellers, meanwhile, can continue working to sell their boats on their own.
“That was one of the keys for getting so many listings,” McNally said. “Customers don’t like being locked into a one-year exclusive agreement. And then if they sell the boat to their neighbor, they still have to pay a broker 10 percent.”
Similarly, if the customer wants to break off an agreement with POP, there’s only a 30-day break-off period — significantly less time than most brokerages. “We are not a discount firm. If we do our job, we charge an industry-standard 10 percent. But only if we do our job,” McNally said.
Laden with real estate debt, McNally and Owens declared personal bankruptcy — Owens in 2009 and McNally two years later. Owen sank his information technology career profits into houses and had seven when he sought debt relief. McNally had $9.7 million in creditors’ claims between his strip malls and property management firm.
But underwater real estate also has fueled POP Yachts’ growth.
“We had sellers that absolutely had to get rid of their boats,” Owens said. “So we were moving distressed inventory, matching out-of-country buyers with local boat sellers.”
In January the company will launch a new venture with another Sarasota-based company, the National Boat Owners Association, to co-market.