Here come the RVs. NTP-STAG, a company based in Tualatin, Ore., and the market’s largest wholesale supplier of recreational vehicle parts and accessories, has waded into the marine distribution business.
“Marine is a new adjacent space focus for us that we have decided to pursue in a much bigger and more focused way for 2020,” says Bill Rogers, the president of Keystone Automotive Operations, which owns NTP-STAG.
NTP-STAG’s arrival is the latest move in what has been a tremor of activity among distributors that either already did or wanted to work in both marine and RV. The process started in 2014, when Brunswick Corp. bought Bell Recreational Products, a Midwest-based distribution company that served boat and RV dealers. Brunswick made Bell part of subsidiary Land ’N’ Sea Distributing, the largest U.S. marine distributor.
Other crossovers have included Keller Marine and RV in Port Trevorton, Pa., which started in the marine distribution business in 1958 and added RVs to its menu in 1968. It opened a new distribution center near Tampa, Fla., in 2018, solidifying its position as an East Coast power.
Northern Wholesale Supply in Hugo, Minn., which serves the upper Midwest, maintained its existing facilities while expanding into new territories. And two years ago, Derema Group, a national marine representative agency based in West Chester, Pa., moved into the RV business.
“We saw opportunities in the RV sector from feedback from our dealers that were handling marine and RV products in their stores,” says Michael Conners, president of Land ‘N’ Sea Distributing. “We decided to explore the opportunity to expand further into RV with our current marine service model, and it has been tremendous.”
What’s Driving the Move
As is often the case with business-model shifts, the causes of this one are multiple and intertwined, but a big one is timing. As the boating industry struggled to recover from the economic meltdown of 2008, the RV market took off, starting at roughly 166,000 units sold in 2009 and increasing annually until it broke 500,000 units in 2017. Sales have declined slightly the past two years, but “RVs are not hurting by any means,” says Dan Staples, division manager at Northern Wholesale. “It seems the inventory has steadied as far as new sales, but the aftermarket is as strong as ever.”
Boating sales bottomed out near 130,000 units in 2012 and had only bounced back to roughly 200,000 by 2018. The industry has thrived by selling fewer boats for more money, which is fine for boatbuilders but is not as beneficial for parts and accessories distributors. For some of those companies, RVs have offset the losses.
“RVs are now 60 to 70 percent of our business,” says Lori Morrow, director of marketing for Keller Marine and RV. “Years ago it was more like 50-50.”
Another factor driving the crossover is diversification of customers. History shows that people who buy boats don’t usually buy recreational vehicles. It’s not that there’s no overlap, but there isn’t much.
“Boating is often an end in itself that requires a time investment,” Morrow says. “RVs can be used to pursue other activities. Whether you’re taking the kids to a soccer or football tournament, or you’re a NASCAR fan or you’re a college football person, the RV is a means to an end.”
Perhaps more important, the RV crowd offers a demographic difference. “RV has done a really good job of bringing millennials in,” says Kurt Forsman, president of Derema Group.
Having a customer base with a range of interests and ages lets dealers expand their selling opportunities while featuring products that are in many ways complementary, and that about 15 to 20 percent of the time are exactly the same.
“Both [industries] have a mix of selling activity that includes units, parts and accessories, as well as service,” Rogers says. “There is a heavy towing element to both. They each are seasonal businesses with similar seasons from a geographical perspective. There is a real need for the product to be available when the season is happening, which necessitates a strong maintenance program and parts-availability aspect. Both industries are big-ticket discretionary purchases which enable consumers to do what they love, living a lifestyle.”
Those similarities allow distributors to take advantage of the expertise and equipment they already possess. “There are tremendous synergies in the two sectors, even while they are different from each other,” says Tony Paigo, director of RV sales at Land ’N’ Sea. “To a distributor, it doesn’t matter what’s in the box. It’s a part, and either way, you’re buying it, warehousing it and delivering it.”
The Keys to Success
As important as it is for distributors to cash in on marine and RV similarities, to thrive they must also understand the differences. “The distribution part is easy,” Paigo says. “When it comes to sales, it’s not so easy. If you’re a marine guy and you walk into an RV dealer and you don’t know what a thermocouple is, you’re going to have a hard time.”
Paigo says it’s easier for someone with an RV background to get into marine, but it’s possible to move in either direction. And while some distributors have specialized staff to address each market, others train their salespeople to work in either sector.
The industry differences also play a role in the way products reach the dealer. “In marine, sometimes you’re rigging the whole boat, which can be a big project,” says Northern’s Staples. “RVs are turnkey at arrival, so it’s more of an aftermarket game.”
Whatever the differences, the endgame for distributors is service. They need to deliver the goods quickly and for a good price, but in an age where Amazon looms over all, they need to do more. Providing a frictionless ordering system, understanding dealers’ needs, offering training so a dealer’s staff can install and troubleshoot the parts they order, and maintaining personal relationships with their clients are keys to success.
“The biggest similarities [between the markets] is that the customers expect great service,” Conners says. “They expect you to have the right product in the right warehouse at the right time.”
For distributors that have invested in the required skills and knowledge, combining marine and RV has led to growth and stability. Will more companies join the movement? “I’m not seeing a lot of that on the distributor side,” Paigo says. “On the dealer level, it makes more sense.”
This article originally appeared in the March 2020 issue.