Dealers riled over boat-price site - Trade Only Today

Dealers riled over boat-price site

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MRAA says the See Dealer Cost website could create an 'onerous situation' for the retail business

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A new website that provides consumers with information, including pricing, on boats and other sports products has sparked heated debate in the industry, with many saying it could cause significant harm to dealers and the boating business in general.

See Dealer Cost (www.paydealercost.com) is similar to sites in the automotive market in that it is not a selling site. It provides such information as standard and optional features, specifications and pricing.

As of Jan. 12, the site comprised only a home page stating, "No Frills: Just the Info. Now you have the tools to negotiate your best deal," with an e-mail address to request information. The site was expected to go live Jan. 21.

The pricing at the site is both MSRP and invoice, according to a release from the company. The invoice price does not include shipping from the manufacturer, dealer prep, taxes, title, license and other fees as applicable, nor does it include any wholesale incentives (program support, additional discounts, rebates, etc.) that the manufacturer might be offering to the dealer, according to those launching the site.

In addition to product and pricing information, site users can request a quote (from participating manufacturers and their dealers) and will have access to articles, a dealer search and used-boat values. More information will be added in the near future. The site and information are free to consumers.

The Marine Retailers Association of America, in an alert it sent to members, says the site is a "potentially onerous situation to your business as a marine retailer." It identifies the site's founders as two former marine executives - Jack Malone of Mercury and Yamaha and Dave Taylor of U.S. Marine.

"MRAA has made several unsuccessful attempts to conference with Messrs. Malone and Taylor in order to obtain further information and background concerning the website," the group says. "Without receiving a clearer understanding, we will be sending a letter to all manufacturers asking them not to supply their cost lists for this website. We are asking manufacturers to carefully consider the damage they could do to their dealer networks and, in turn, to consumers by being a part of this website."

Mike Walker, a spokesman for the site, had no comment on the MRAA alert. Calls requesting interviews with Malone or Taylor were not immediately returned.

The site, according to its founders, was created to reflect the changing retail environment. "Unfortunately today, essential information must be gathered from a variety of sources, causing delays and frustration," the company says in a statement. "In addition, pricing for new products has varied greatly over the past few years due to auctions, repossessions, below-invoice sales, etc., causing consumers to lose confidence in the pricing they do receive.

"The ... website is being launched to make it easier for consumers to gather essential information and to make it easier for consumers to make the decision to buy," the company adds.

Leads generated will be offered to manufacturers and their dealers, and advertising opportunities will be offered to manufacturers, dealers and other companies.

Soundings Trade Only received more than 40 online comments about the website, most of which opposed its launch. Here are some of them.

Larry Russo Sr.: I cannot imagine one manufacturer or one dealer in this industry supporting the [See Dealer Cost] effort. ... There is absolutely no upside to this for anyone trying to make a living building or selling boats. After several years of gut-wrenching downsizing, layoffs and financial losses, our industry is far too fragile to fend off an assault like this. ... All we need to do to overcome this matter is conduct business as usual. Ignore their attempts to gather sensitive, confidential data. Without information, their business will never get off the ground.

Kevin Mahoney: How are Jack and Dave compensated for this site? Are they going to ask manufacturers or dealer[s] to buy the leads this site creates, advertising from OEMs who are not boat manufacturers or dealers? Who might benefit from the advertising ... at our expense? For two people that made a damn nice living off of the industry for many years ... this is a slap in the face!

Chet: This is excellent news, and I hope the site takes off! While, yes, the dealer model will need to continue the change that has already started, the idea of hiding the cost from the consumer is archaic. Gone are the days of 30 percent margins, and any dealer holding hope for the return to that time deserves to go out of business. Lower margins, lower your overhead. This will allow retail financing the confidence they need to advance a known and measurable percentage. More lenders will enter the market, retail buyers will buy more with the confidence and this will spur growth. The biggest positive will be to put an end to the ever-ambiguous issue of valuations for the marketplace. Valuations will be the invoice, less a depreciation curve, which may vary slightly by make, period.

Lenny: I am always amazed at how out of touch [with] the buying public (consumers) the MRAA and marine industry are. Consumers want to arrive at a dealer educated and not feeling like a slick salesman is going to get over on them. That's why the auto sites exist; that's why no-haggle pricing in the auto industry exists. [You're] right, the marine industry is different; we sell a product that generally costs significantly more than an auto purchase, is a for-pleasure-only purpose and generally deals with a more educated, more savvy public. ... What about this don't you continue to get? It's OK, we'll just keep shrinking.

Chuck Guthrie: This group obviously is shortsighted in their efforts. If they believe in the site's concept they should have approached it in a manner where the boat manufacturers can modify their business models. The car industry business model is much different than the boat industry model. If manufacturers and dealers cannot make a sustainable profit, how can this site ever work? Are they trying to disrupt an industry where they lost their jobs? What manufacturer will want to advertise with them? What supplier would advertise and lose business from the manufacturer? What dealer would advertise with these guys? These guys are creating an adverse relationship with the industry in which they want to make money. The concept will evolve, but it will be with an Internet company that works with the industry.

Mark Passeri: Dear Sirs, I don't know why, with your years of experience in the boat business, you would desire to put the final nails in the coffins of the many dealers who have supported your incomes over the years, by starting a website that will surely undermine the already slim profitability of our dealerships due to the low volume of boats being sold these days. It is extremely unfortunate, in light of the knowledge you must surely have about the marine business, of how important it is for boat dealers to be able to maintain margin, even during the good times. I can't imagine what your motives are that you would be willing to have such a huge impact on the hundreds of boat dealers and their families who will surely suffer immeasurable damage as a result of this unfortunate thoughtlessness on your part.

Industry Worker: What this looks like to me is two old dinosaurs from our industry thinking they can make a buck off the Internet. Guess what guys, it's not 1998, and just because you have ".com" at the end of it doesn't mean it's going to make money. Heck, all it takes is an Internet connection and $20 a month to have a website. Do you think consumers are going to take this website seriously when they look at dealer cost, then go to several of the large Web-based dealers and see prices well below dealer cost? ... The reason this works on the auto side is there are no dealers that post any type of price on new product online. In the marine industry, there are all kinds of dealers posting prices for new boats and motors.

This article originally appeared in the February 2011 issue.

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