A dealer-to-dealer wholesale channelPosted on Written by Reagan Haynes
A new tool launched by BoatTrader.com is helping to keep wholesale inventory out of the retail market and making it available to other dealers around the country.
The 2,600 dealers in BoatTrader.com’s network have access to a wholesale section that was launched May 20, says David Bingham, BoatTrader.com general manager. The mechanism began as a way to help GE unload liquidated inventory, according to Bingham, but evolved to allow dealers in the BoatTrader.com network to list boats, too.
“This is all available to dealers, and either they can contact GE and talk to them about their listings or go dealer-to-dealer, which may be the real story here,” Bingham says. “We’re now allowing dealerships to go into the wholesale tool and list wholesale inventory, whether it’s trade-ins or aged inventory they want to move somewhere else.”
Bingham says that less than a week after offering the tool to dealers there was a good deal of interest. The 4,000
e-mails sent to dealers announcing the program saw an open rate of more than 40 percent. With floorplan costs rising and inventory mounting, dealers are taking a beating, he says.
“What they’re seeing is more of the just-in-time inventory process,” Bingham points out.
Bingham has a background in aviation, and he says dealer-to-dealer wholesale lists are common in that industry. He would like to see that in the boating industry, too. The price of shipping is relatively inexpensive, and dealers looking to move one or two boats might not want to waste their time and money to go to auction, Bingham says.
“A guy who listed a boat Thursday at lunchtime had one lead on that boat by Friday,” Bingham says.
The site is password-protected, and the password changes to prevent hacking. It is not available to consumers, so the boats do not hit the retail market and skew prices. Dealers get the boats at lower margins, so it helps them, and it gets the boats into a retail market where they’re solvent, Bingham says. “It puts them where they’re needed,” he says.
And it’s not just repos and aging models; it also extends to trade-ins. If a dealer knows he can move a trade relatively quickly and at low expense, it might help him put a deal together, Bingham says.
It’s an opportunity for dealers that need a specific boat to find one quickly, says Kevin Roggenbuck, owner of Lake Union Sea Ray, with four locations in the Seattle area.
“I think it’s fair to say that dealers out there, under the circumstances, ordered less inventory because they were being conservative,” Roggenbuck says. “And maybe they were a little overly conservative, so there are going to be some pockets they are going to need to fill.”
That is true in Texas, for example, where dealers have enjoyed robust sales and are looking to get their hands on as much inventory as possible, Bingham says. “I think the consumers need somebody they can depend on to take care of the boat and with warranty service,” Roggenbuck says. “If consumers are buying boats directly from banks, there isn’t much help for them.”
The site now is dominated by repos, but Bingham hopes that when the glut disappears from the market, it will remain a sharing tool for dealers.
BoatTrader.com is talking to other financial institutions as well to see if any are interested in joining GE in unloading liquidated product.
“We’ve gotten a ton of interest from other banks. It’s just that a lot of them, they’ve never thought of doing it this way,” Bingham says. “So they’re really curious to see the results that GE is getting.”
For information, contact Bingham at (757) 351-7122, or e-mail firstname.lastname@example.org.
BoatTrader.com and Soundings Trade Only are divisions of Norfolk, Va.-based Dominion Enterprises.
This article originally appeared in the July 2009 issue.