Skip to main content

First it was Maritimo. That was followed by Regal. Then came J&D Acquisitions (Irwin Jacobs) with Carver and Marquis. They’re the most recent major brands to announce new “factory showrooms.” In fact, Regal just completed a gala grand opening in Orlando, Fla., reportedly with more than 500 in attendance.

Of course, it’s too soon to know what impact, if any, these factory showrooms will have on retail sales for the dealers representing these brands. Clearly, the manufacturers hope this gives their dealers a boost. Moreover, dealers I’ve spoken with share that hope, albeit not without some concern and controversy about the concept, its operation and its long-term outlook. That certainly makes this idea worthy of more discussion.

First, the factory showroom doesn’t appear to be a business model for the vast majority of builders. While one of the obvious benefits is to relieve dealers of stocking and floorplan burdens, it simply isn’t applicable to small boats — say, under 30 feet or so — which is the majority of boats our industry builds. Dealers need a reasonable inventory of small boats to effectively sell, and builders simply can’t survive building small boats only on retail orders. While our industry must move closer than ever to a just-in-time supply model, some levels of retail inventory will always be in play.

Some dealers worry this is the first step to factory-direct selling. But direct selling is not new. In Florida, for example, many manufacturers build and sell offshore fishing boats in their localized area. Intrepid and Yellowfin are fine examples. But as NMMA president Thom Dammrich points out, “You can do that successfully in a localized area but not nationally. There is no doubt the major brands that sell nationally will continue to rely on dealers.”

For large boats, on the other hand, there is real merit in the factory showroom idea. It eliminates the stocking costs and floorplan dilemma for dealers, according to MRAA president Phil Keeter, who sees a lot of positives in the idea. Among them, it means a better variety of product for the customer to see, trained factory personnel to talk with the customer, and, very important, both the dealer and builder can make better margins without the inherent interest costs.

Flying large-boat customers to the factory showroom makes real sense when you do the math. For example, floorplan interest on a $500,000 boat at 11 percent is $55,000 a year. Obviously, dealers can fly a lot of qualified customers to see and run the boats with that kind of money available. And it works. MasterCraft has reportedly been aggressive in bringing qualified customers — always accompanied by their dealer — to the factory and has recorded a high closing rate.

That also highlights the difference between having a factory showroom at the factory or some other neutral site versus at a retail dealership, as announced by Carver-Marquis. The latter could lead to barriers and apprehension, noted Keeter. But one thing seems logical — any dealer who wouldn’t take to time to fly with the customer would 1) be failing to control the possible sale and 2) be giving up extraordinary time to build a personal relationship with that customer.

This blog on factory showrooms will continue in Thursday’s Dealer Outlook, when we look at additional upsides and downsides of this latest move and answer the question: Is this a flash in the pan or here to stay?

Related

DOMETIC-EARNINGS

Dometic Posts Sales Increase for Q4

Net sales of $596 million were up 11% compared with the previous-year quarter, and profit was reported at $2.6 million.

NEPTUNE-AWARDS

Marine Marketers to Present Neptune Awards

The group will hand out its annual honors during the Miami International Boat Show in February.

MARINEMAX-EARNINGS

MarineMax Releases Q1 2023 Results

Record revenue of $507.9 million was a 7% increase over the previous year, and the growth was driven primarily by acquisitions, including IGY Marinas.

VOLVO-EARNINGS

Volvo Penta Reports Q4, FY22 Results

Net sales of $470 million for the quarter were a 33% increase compared to the prior year period.

Pulse-Report

DEALERS: Are You Improving the Service Experience?

Our monthly Pulse Report survey asks this and other questions about your dealership. Take the survey here.

NMRA-SCHOLARSHIP

NMRA Sets Scholarship Deadline

Students pursuing education in the marine trades can apply for the National Marine Representatives Association awards until April 1.

MARINE-PRODUCTS

Marine Products Reports Record Q4

The builder of Chaparral and Robalo boats reported net sales were up 42% for the quarter and 28% for fiscal year 2022.

1_SHURHOLD

Shurhold Appoints COO

Forrest Ferrari has years of management, business development, IT and quality-assurance experience.