The Evolution of a Revolution

Lessons learned from the most successful boatbuilder of its era include asking, What if?
Author:
Publish date:
Updated on
Bayliner started as a regional wooden-boat brand. Moving to fiberglass, it disrupted boat sales by offering quality products at lower prices than competitors.

Bayliner started as a regional wooden-boat brand. Moving to fiberglass, it disrupted boat sales by offering quality products at lower prices than competitors.

Bayliner is one of the greatest rags-to-riches tales in the marine industry. It grew from an open-lot retail store into the world’s largest boatbuilder, increasing sales more than $100 million year over year during a five-year period, eventually reaching a sales peak of 60,000 boats in 1988. That equates to more than $1 billion in annual retail sales through a dealer network that covered North America and 60 other countries.

Pretty incredible numbers, and while it may be true that times are now different, some lessons from Bayliner’s business model can be applied today. First and foremost is that Bayliner succeeded because it challenged conventional wisdom.

Bayliner started as a bare-bones retail business: one vacant Seattle lot and one owner, J. Orin Edson. He started by selling his own used, small-hydroplane racing boats and gear in 1955. Then he sold equipment that fellow racers owned. When it appeared he might have the makings of a real business, he bought unfinished wooden runabouts. One at a time, he painted, rigged and sold them.

Within three years, there was a real store, then an outboard franchise. Then came more stores — six in the Puget Sound area. By the early 1970s, Edson’s stores made him the largest boat retailer in Washington, handling sales for Sea Ray, Reinell, Fiberform and others. With this growth came a clear understanding of consumer hot buttons. Edson started to ask, What if? As in, at a time when all boat dealers closed on Sundays, what if we stayed open and doubled the opportunities for weekend boat shoppers? Or even more important: What if we started building small fiberglass runabouts to sell only in our stores?

Dubbed Bayliner, the brand was for customers who, even then, believed most boats simply cost too much. By controlling the builder’s profit margin, Edson could lower the retail cost and increase sales volume.

The brand eventually became known as the value line for families. Bayliner reached its peak in 1988, with 60,000 units sold at retail.

The brand eventually became known as the value line for families. Bayliner reached its peak in 1988, with 60,000 units sold at retail.

The strategy worked, but not perfectly. It was quicker to cycle a boat through a mold than a retail buyer through the doors of a store. With the prospect of excess capacity, the company asked nearby dealers to sell the fledgling Bayliner brand. The plan worked. Bayliner added new models and more dealers. By the late ’70s, Bayliner had enough breadth (15- to 40-footers) to single-handedly support any dealership in the country.

Bayliner’s upward growth, however, was anything but a straight-line chart. There were two OPEC-inspired oil crises — one raising prices 400 percent — and a couple of recessions. The company reduced staff, closed plants, developed more fuel-efficient hulls and a built a line of sailboats.

The company was spread thin when the watershed year of 1980 arrived. Bayliner sold its retail division and line of sailboats. The business model was changed to focus only on powerboats, with lower pricing, higher quality and a simpler buying process.

The what ifs then began in earnest. What if we offered only one color choice? By adopting a single-color approach, Bayliner saved millions in inventory costs. Becoming vertically integrated saved millions more; Bayliner ultimately built its own trailers, windshields, wiring harnesses and outboards. With retail prices as low as $3,999 for a 14-foot runabout package, retail volume skyrocketed as the ’80s proceeded. Bayliner went from three factories to 26. Brunswick Corp. bought the company in 1986.

During the years of innovation and growth, Bayliner employed as many as 6,000 people, including some of the most knowledgeable and talented people ever to work in the marine industry.

And Edson? Well, let’s just say he is the only billionaire on the Forbes list ever to make his fortune in the boat business.

George Sullivan

George Sullivan

George Sullivan was with Bayliner from 1972 to 1990 as vice president of marketing and communications. From 1990 to 2005, he worked with Genmar Holdings, including 10 years as senior vice president of marketing. george.sullivan@mac.com

This article originally appeared in the March 2019 issue.

Related