Leland, N.C.-based Southport Boats recently introduced its 2011 "Floor Plan Free Buying Program" designed to reduce field inventory and eliminate associated floorplan risk and expense to dealerships.
The program does away with stocking requirements for dealerships and gives an incentive for a single demonstration model. The company's entire model line will be available for customers to see and sea-trial by visiting the North Carolina plant.
"The flight of major floorplan lenders from the marine market has left hundreds of excellent dealerships with loyal customer bases, but without credit facilities for new product," said CEO Frank Longino. "This fact, combined with reduced market demand, makes the traditional field inventory business model obsolete and unsustainable."
All of Southport's models are available at the factory and the company encourages dealers to send their customers with or without accompaniment.
"We're only minutes from the Wilmington airport with good connections, so it's only a day trip," Longino told Soundings Trade Only. "Dealers may purchase more than one model, and several have. We will subsidize the purchase of only one demonstrator model per year. As long as the dealership has a demonstrator model in stock or on order, they may receive an additional 5 percent discount on all their orders. So the only incentive to stock boats is if the dealer wants to have immediate delivery during the height of their season, which is as it should be."
Local banks, Longino said, seem more willing to finance a single demonstration model, as opposed to a full floor of models.
"I believe that the marine industry marketplace will eventually have several large players utilizing the traditional business model and many niche builder/dealer partnerships utilizing a lower fixed-cost model that essentially eschews dependence on large floorplan providers," he said. "Builders that are unwilling or unable to convert from the conventional model but do not have the mass necessary to make that model work will be stuck in a lower-margin, lower-volume situation."
In last two years, Southport has reduced its field inventory by 87 percent, Longino said.
Southport builds four models of sportfishing boats from 26 to 28 feet.