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Old     (bandsecurity)      Join Date: Jul 2008       12-19-2009, 3:20 PM Reply   
I know that there is a lot of talk on here about prices and what is a good deal. A buddy of mine came across a Malibu invoice to a boat dealer (now out of business) for a 2008 VLX (no trailer). Here is the break down:
Boat - $36,600
Grow Boating Surcharge - $72
Pullup Cleats - $150
Wedge - $1400
Shipping Cover - $150
Depth Finder - $235
Core Shield Graphics - No charge
Malibu Monsoon 340hp - $1250
Sound Pack 1 - $825
Swim Platform - $150
Freight - $200
Total - $41,032
Illusion Tower - No charge

The MSRP was $58k for a base VLX in 2008. The mark is almost 50%. I dont feel so bad for the dealers now.
Old     (doubleup720)      Join Date: Jul 2007       12-19-2009, 4:03 PM Reply   
Don't forget about the $4000 for a trailer,$850 for a bimini top, $750 for board racks, freight and prep to put the package together. Who pays MSRP for a boat?
Old     (99_slaunch)      Join Date: Oct 2005       12-19-2009, 4:04 PM Reply   
MSRP is meaningless. Does any one even pay MSRP? I know I don't.
Old     (meathead65)      Join Date: Sep 2006       12-19-2009, 5:38 PM Reply   
Actually, a 30 percent markup on 41032.00 would be 58617.00. So if "MSRP" is a 30% mark, and dealers discount 10-20%, then there's your real world margin.
Old     (dru1974)      Join Date: Nov 2009       12-19-2009, 6:21 PM Reply   
As if, if you think a boat dealer makes only around 10k for a boat sale you are as gullible as a blonde buying a wedding dress.
Do the simple math dimwitt, guaranteed they make closer to 25k per boat and thats a cant pay for rent on a delership, wages and isurance and everything else that comes with a boat dealership from 10 k per boat.....duh
Old     (you_da_man)      Join Date: Sep 2009       12-19-2009, 7:17 PM Reply   
Do some boat manufacturers offer dealers a holdback for each boat sold?
Old     (krbaugh)      Join Date: Mar 2002       12-19-2009, 7:22 PM Reply   
Oh brother not this thread again

Ya gotta love people that think dealers make 25K on a 58K boat sale

(Message edited by krbaugh on December 19, 2009)
Old     (dru1974)      Join Date: Nov 2009       12-19-2009, 7:37 PM Reply   
What big kev do the basic math... they have to in order to pay the bills, a good dealer ship may sell for less becouse they sell more quantity but thats the way it is.
Old     (krbaugh)      Join Date: Mar 2002       12-19-2009, 7:44 PM Reply   
Sorry I have seen the prices of multiple boat manufatures and know exactly how it works you are just plan wrong

(Message edited by krbaugh on December 19, 2009)
Old     (bandsecurity)      Join Date: Jul 2008       12-19-2009, 7:48 PM Reply   
Actually, Meathead it is a 43% markup which is almost 50% assuming there is a markup on the trailer. 30% of $40k is 12k which would put the price at $52 not $58.
Old     (krbaugh)      Join Date: Mar 2002       12-19-2009, 8:05 PM Reply   
see this is what drives me Crazy dealers go by margin not percent plus the cost of getting the boat to the dealer for 200.00 wow they dealer must be right next door to the factory and the cost of getting the boat ready for delivery is not on the list

(Message edited by krbaugh on December 19, 2009)
Old     (dru1974)      Join Date: Nov 2009       12-19-2009, 8:12 PM Reply   
Omg My uncle is a sealer, when I am out there I help with sales and I am Talking canadian dollers but by the time that someone has bought the must have trailer with any other options they usualy get....DO THE MATH!!!!!
Old     (dru1974)      Join Date: Nov 2009       12-19-2009, 8:16 PM Reply   
ant type today, But I am a business owner myself and I realize the dealership has bills, but dont bull sh&^*&^% me I know better, I dont mind It is business, I dont run my companies as non for profit.
Old     (krbaugh)      Join Date: Mar 2002       12-19-2009, 8:24 PM Reply   
I have done the math that is how I know. We can post back and forth all day
but be sure dealers would love to make
30% margin the actul amount of profit is not close to 30%

(Message edited by krbaugh on December 19, 2009)
Old     (dru1974)      Join Date: Nov 2009       12-19-2009, 8:31 PM Reply   
30% of 72000 21600 Rite but its closer to 37.5 percent depending
Old     (dru1974)      Join Date: Nov 2009       12-19-2009, 8:34 PM Reply   
Or are you going to say 20 % ...anyhow kev I am sure your a great guy whom works in the boat industry and I have know problems with it people need to make money and thats what makes the world go round, Happy Holidays kev, good debate......goodnite
Old     (krbaugh)      Join Date: Mar 2002       12-19-2009, 8:59 PM Reply   
No problem I just hate for people to read this and then go into a dealer thinking that there is 25k profit on a 51k boat, So they think they can talk the dealer out of half that

Unrealistic and does no one any good

Good night

FYI I dont work in the boating industry and never have
Old     (kstateskier)      Join Date: May 2002       12-19-2009, 9:09 PM Reply   
Dealers are able to open the doors because they make money on a lot of other things that do not include boat sales. Just like car dealers, a lot of boat dealers make a good amount of money on service. Also, pro shop sales and other items they sell throughout the dealership help them pay the bills. If companies made the amount you are talking about Drew, a quality dealership in the Midwest that has no interest outside of wake/ski boats would not sell Rangers, Bayliners, etc. When was the last time you saw a wake boat dealer (outside of Cali/Florida) that had a dealership anywhere near prime real estate? Kevin has had a close relationship with manufacturers for MANY years, so I think he has an idea on what happens in this industry. I haven't been directly around boat dealers since the early part of this decade, but then, I know that a good dealer in the Midwest may sell 40-50 new wake boats. At your estimate, the dealer would be bringing in sales of $1-1.25 million a year, just in tournament boat sales. Now, I am also in business and for the fixed costs a boat dealer has, that is a pretty nice amount of sales that doesn't include any service or proshop sales. The average dealer in the midwest probably only has between 3-7 full time employees, so the labor cost isn't that high.
Old     (meathead65)      Join Date: Sep 2006       12-19-2009, 10:24 PM Reply are wrong. Look up "markup" and then argue. Using your math, tell me what figure you get if you give a give a 43% discount off the'd sell the boat for 33K...glad you don't set pricing for my store.

If you can't even set margin and markup, don't call me out. And if you guys think dealers make 25K on a 58K MSRP, you need meds.
Old     (brett564)      Join Date: Jul 2006       12-20-2009, 7:28 AM Reply   
Spell Check! Grammer Check! Proof Read! Never underestimate how poor your arguments will always look and how hard it is to take you seriously when you write like this.

Like, omG!
Old     (mattscraft)      Join Date: May 2009       12-20-2009, 10:44 AM Reply   
So, I won't mention any names, but through a legal battle I was privy to see the dealer invoice on my new 09 boat purchase in 08(One of the first 09s off the line). MSRP was around $84,000 w/trailer plus all the bells & whistles, dealer invoice from the factory $53,700, purchase price $63,100 so about a $10,000 GROSS profit for the dealer which I think is extremely fair (15%). Typically, depending on factory order or waiting for older stock (floored boat) you would see the same boat selling for around $70,000. This would be about a 24% gross margin; typically I could see an average of 20% gross margin, not great. In my business if we cannot make 30% gross margin, we prefer not to play.

How many new boats can they sell a year, 5, 10, 20??? Out of this gross is overhead, commissions, etc. etc. etc. Do the math, not a great business, unless you can turn additional revenue from service, pro shop and used boats. Look at the car market, dealers make money by trading used cars and service!

The premium boat market is very similar to my business, we have an inflated MSRP if you will, and negotiate down from there to an ASP (Average Selling Price) it is all part of the game, learn to play boys. There is a sucker born every minute, and if you pay MSRP, shame on you, there is always room to negotiate, do your homework and remove your rose colored glasses. Always remember, end of the month, end of the quarter, even better end of the fiscal year, the best deals can be had!!!
Old     (bandsecurity)      Join Date: Jul 2008       12-20-2009, 11:50 AM Reply   
The irony of an argument with someone named Meathead about math on a forum is awesome. Meathead, I feel sorry for you not only because you are a meathead but because your math skills are not great. Here is a link that will do the work for you:
Oh, and you might want to talk to your boss about all the mistakes you have been making pricing items in your store.

(Message edited by bandsecurity on December 20, 2009)

(Message edited by bandsecurity on December 20, 2009)
Old     (bandsecurity)      Join Date: Jul 2008       12-20-2009, 11:57 AM Reply   
Meathead, here is the definition and a nice little example for you if you cant figure out how to work the calculator
Definition: A percentage added to the cost to get the retail selling price.
Also Known As: markon, markup
Examples: A widget bought for $5 and sells for $10 has a mark-up of 100%. (Add $5 to the $5 cost to get the price.) A widget bought for $2, which sells for $3, has a mark-up of 50%, (Add $1 to the $2 cost to get the price.)
Old     (meathead65)      Join Date: Sep 2006       12-20-2009, 12:08 PM Reply   
Nice try. Just because you found it on the internet doesn't make it true.

A 30 percent markup on 100 dollars is what? Using your math, its 130 dollars, right?

Okay, so times are tough, and you need to sell that 130 retail item at "cost", which would be a 30 percent discount using your logic. So you give the buyer 30% sold it for 91 bucks...and lost 9 dollars!!!

Retail markup is determined by dividing the cost of the item by the remainder of the markup percentage of 100. To mark up our original boat invoice of 41032.00 by 30%, divide 41032.00 by 70%. The result is 58617.00. Easy, huh?

Now if you sell the boat for 30% off, you will sell it for cost.

I've been dealing with markup in this industry for almost 20 years. You are wrong, I'm sorry.

And my boss is ME, so I try not to lose him too much money.

Your math gives you COST PLUS %, which is entirely different from "markup". Retail 101.
Old     (meathead65)      Join Date: Sep 2006       12-20-2009, 12:20 PM Reply   

After reading the first post, I see where i was wrong. You did say "markup"...and I always think in terms of "Margin"..which is calculated by my method. Every boat/car/big ticket retailer works on Margin, not markup. In my world, the terms are used to denote the same end result...a correct retail price to reflect the profit margin. Anywhere I may have typed "markup", please substitute the word "Margin".

Again, using you cut and paste from above, you will get in trouble using cost plus % markup...because your retail discount MUST be based on a correctly calculated MARGIN. If you were to sell the 3 dollar widget, that you priced using a cost plus % markup of 50%,for retail say at 40% off (1.80), you just lost money, rather than making 10 points. Now if you price the item that cost 2 dollars using a 50% margin..the retail price is now 4 dollars. Now you know that you can discount the item off retail at any percentage below 50 and still maintain profit.

(Message edited by meathead65 on December 20, 2009)
Old     (bandsecurity)      Join Date: Jul 2008       12-20-2009, 12:27 PM Reply   
Meathead, you are going at it backwards. You take the cost of the item and "mark it up" a percentage. In this case, 43% to get to $58k. So you take $41k times 1.43 and you get $58k.
You are talking about Margin. Markup and Margin are different. The Gross Profit percentage from the sales price of $58k would be 30%.
Old     (meathead65)      Join Date: Sep 2006       12-20-2009, 12:30 PM Reply   
You are correct..see above post. I still maintain that no boat dealer works off "markup" but rather relies on Margin to determine retail pricing.
Old     (krbaugh)      Join Date: Mar 2002       12-20-2009, 1:58 PM Reply   
You are correct sir
Old     (loudontn)      Join Date: Feb 2005       12-21-2009, 6:55 AM Reply   
Margin's how the boat industry, and almost every other industry, works. Cost divided by 1 - % margin.
Old     (krbaugh)      Join Date: Mar 2002       12-21-2009, 9:28 AM Reply   
to use the original example

41032 / .80 = 51290 a sale with a 20% margin

41032 / .70 = 58617.00 MSRP with a 30% margin
Old     (rio_sanger)      Join Date: Apr 2007       12-21-2009, 7:29 PM Reply   
Margin, mark up, it's all semantics. In the end, the dealer's profit is how much more he sold said product for, over what he paid for it.

Example: I'm Joe Dealer, I pay $41,000 for something, and sell it for $58,000, I just made over a 41% profit on my original investment.

Now on the other hand, if Dick Salesman gives John Customer more than a a 29% "discount" on that same "$58,000" item, I'm not going to be too happy.
Old     (meathead65)      Join Date: Sep 2006       12-22-2009, 12:37 PM Reply   

That's why I hate even mentioning "markup" as defined above. Joe Consumer finds out the dealer has a 41% "Markup", but then gets all indignant when his offer of 25% off MSRP is refused...he's thinking the dealer is still making 16 points and is now just a greedy gouging bast**d.
Old     (ef3529)      Join Date: Nov 2003       12-24-2009, 7:57 AM Reply   
Mike, I think you are totally out of line for posting that. I have helped my local dealer for years and they struggle every year combining sales, service and pro shop sales. You can never compare the car industry to the boat industry. Car dealers sell 50-200 cars a month plus service etc. Boat dealers sell 10-50 a year and have to make up the differnece with service and proshop sales just to pay the bills. You will be the same person who shops your local dealer, buys out of territory because you save $1000 and then post on the internet because your local dealer won't give you first class service or is no longer in business and you had to drive 3 hours. There may be a few dealers who are doing ok at best, but I know several who are working as hard as they can to make it. Every dealer has a different cost on their boat because of delivery. When you figure in what a dealer "Needs" on each boat just to keep the lights on, it makes the actual cost for each boat different for each dealer. I do not own a dealership or anything like that. I like my local dealer and know what times are like for them and have been. They do the best they can, work 6 days a week and still don't make good money at all. If you want someone to service your boat and take care of you then respect them and what it takes to keep the door open. Sorry for the rant but it just ticks me off when people post crap like this and then try and make the arugment that the boat bussiness is a huge money maker. Mike, if you ever owned a business or ran one you would understand what it takes to make it work.

(Message edited by ef3529 on December 24, 2009)
Old     (loudontn)      Join Date: Feb 2005       12-24-2009, 8:56 AM Reply   
Well said.
Old     (krbaugh)      Join Date: Mar 2002       12-24-2009, 9:14 AM Reply   
Mega dittos ef3529
Old    00wakesetter            12-24-2009, 9:23 AM Reply   
Cant say he is wrong!
Old     (montana_sanger)      Join Date: Nov 2007       12-24-2009, 10:22 AM Reply   
Thank you for saying something, I sat on my hands for a week watching this post. For what its worth I have no shame in telling you guys how I figure my pricing. I take the raw cost which is boat, trailer, motor, accys, 2% flooring aquisition fee which is new this year (don't get me started on G.E.),transport,rigging and commission and add 10%. I have no idea what MSRP is on any of my lines and could care less. Once I get over say 50K that 10% is a pipe dream. Now I know for a fact that lots of dealers could never survive at that however every market is different. I try to work more off of volume than hitting a home run on every deal. It has worked very well as we are one the largest Lund Dealers in the Northwest. Hopefully we'll get there with our Sangers. Some of the numbers I see here are so laughable I want to cry. This board is so anti dealer its sad. I'm on here everyday but rarely post anymore. Please remember there are a few of us good ones out there still.
Old     (polarbill)      Join Date: Jun 2003       12-24-2009, 10:51 AM Reply   
I know it has already been said but most industries don't work off of markup. They work off of margin. They are calculated completely different and for example a 30% margin is more than a 30% markup. Someone above had the equation right. I have had to have this conversation with our employees numerous times to use margin not markup. We have actually made up a spreadsheet because they simply don't understand the equation for margin. For every gross margin percent we have listed the corresponding multiplier(markup).

I can tell you how Cope and Mcphetres did it because I got into their pricing when I probably wasn't suppose to and since they are no long I don't mind saying how they did it. They calculated it the same but different lines of boats commanded different margins. We sold Mastercraft and Centurion but I would make almost double the money off of a MC sale as a Centurion sale. Therefore I almost always tried to talk someone into a Mastercraft.

For Mastercraft lets say an X2's invoice was listed at 40k. Cope and mcphetres would then add a $1500 pack(some cost of doing business, maybe to cover flooring) which I think is pretty common in the boating industry. Then there was a couple other small fees added to that. Then they would add $3300(invoice cost) or so for the sportboat trailer. So now we are up to roughly 45k. Then we would try and get about 20% gross margin on top of that. 45000/.80=56250. After this we would add about 1500 for freight and prep. So the selling price would be 57750. I believe that freight and prep was closer to 750-1000 in actual cost. This is a little off because most of the X2's we sold were right around 60k or more but shows you how it is calculated. Now if you take the original 40k I mentioned that is on the dealer invoice you can take off whatever the dealer discount is and I think Cope and Mcphetres discount from MC was about 3%. I doubt and dealer gets 10% off invoice but I could be wrong. Either way that give us an actual dealer cost of 38800 for just the boat. 38800(boat)+3300(trailer)+1000(freight and prep cost)= 43100 actual cost. 43100/57750=25% gross margin on the boat. We tried to add 25% GP to any options added after the fact. This sell price was usually right around 10% under MSRP. What these gross profits don't really take into account is flooring cost on the boat. I am not very knowledgeable on that but the longer the boat is on the dealers lot the more they are adding to the cost of the boat and the less money they are making as they probably have to discount the boat making even less money.

The 25% is based off of selling a prime season current year model boat. If you averaged it out over all MC sold for a given year Cope probably made an average of 10-15% gross profit on mastercraft sales.

For selling the Centurions it was basically the same other than the margins above dealer invoice were closer to 13% than the 20% used for MC. This is why I would rather sell a MC and also had a little more room to throw crap like wakeboards in with the sale.

After all this I don't think it even affects how someone should buying a boat. As a buyer you should never base your purchase price on what the seller is making. You should base it on what other comparable boats of the same manufacturer and similar manufacturer's are selling for aka market price. Boat dealers have to get a certain margin or it isn't worth selling. Deal with it. Boats like Sanger, Centurion and Calabria probably don't get the Margins of a Malibu, Mastercraft or a Nautique but it is the same in any industry. Really well known, long lived brand names demand more money.

Also if people think they can go in and try and get a dealer to sell a boat at 5% Gross Profit they are dreaming. The dealer would just close if that were the case. As a buyer is you want to have bargaining power look at leftover boats.

(Message edited by polarbill on December 24, 2009)

(Message edited by polarbill on December 24, 2009)

(Message edited by polarbill on December 24, 2009)
Old     (spyderwinches)      Join Date: Nov 2008       12-24-2009, 12:35 PM Reply   
All of you can dispute how much dealers make or how much dealers should make and how they should make it. But lets get real! With over 75% of boat dealers out of business atleast on the west coast and with all the non current inventory that has flooded the market boat dealerships are doing whatever it takes now a days to sell a boat and in alot of cases that meens selling the boat below dealer cost to move it now, so they are not sitting on it next season. Yes there are some dealers still making money on those repo boats, but it is no where near what they were making when the boat industry was at its best. In these hard times that we are all facing dealers are trying to price there boats as agressively as they can and even at that agressive price the consumer is still going to come in and low ball the salesman. So when you walk into your local dealer next time and dont see as many boats in there yard or on the showroom floor as they use to have and you dont see all the employees that the dealer use to have and you take a look at your favorite boat and the price they have posted on it, just remember that dealer is doing what it takes to stay open and help you in your future boat purchase and in the long run of your boating life. The industry has changed and the mark ups or margins, whatever you want to call them are no where near as high as they use to be and if you beleive that a dealer is making 50% on you then you are very mistaken
Old     (brett564)      Join Date: Jul 2006       12-24-2009, 3:55 PM Reply   
Wait a minute. When my dealer told me I got this boat for a steal, and that he made less than 1% on this purchase, that wasn't true? The magic is gone...


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