End of the Showroom as we know it

[JV II]

Here is a sign of the times and and probably the end of the boat showroom coming. It reminds me of Cancun where there are 1000 Sq ft boat dealers with posters and catalogs of all the boats you can order, but no boats. Maybe some day you can build to order online. It is just too expensive and risky for a dealer to keep inventory.

GIFFORD MARINE COMPANY INC.​

[FONT=Century,Bookman Old Style]

676 Dartmouth Street
S Dartmouth, MA 02748
508-996-8288​

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[FONT=Bell MT,Times New Roman]August 7, 2009
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Dear Valued Customer,

Let me start by saying Thank You for your continued patronage at Gifford Marine. Without a strong customer base a business such as ours can not survive.

That being said I wanted to let you know first hand that you may be seeing some changes taking place in the next few months. Due to economic factors we decided to send our new boat inventory back to the factories to minimize costs. We will still be selling our quality lines of new Regal, Scout and Cobia boats but on a special order basis, as well as brokering used boats. In addition, we will maintain the Honda Marine, Honda Power Equipment, Yamaha and Volvo Penta lines as well as continue our trailer and inflatable business.

I do want you to know that despite any of the above changes Gifford Marine plans to provide exceptional quality service to all of its loyal customers and hopes to make some new ones along the way. We plan on increasing our Certified Marine Tech staff, keep up to date on the latest technology and increase efficiency in order to provide reasonable rates to you, our customers.

Other changes that may take place would be a possible move to a new location nearby or a downsizing at our current location. We will be winterizing and storing boats, as well as stepping up our repowering.

I will personally keep you informed of any significant future changes. If you should have any questions or concerns, please feel free to contact me directly.

Have a healthy and safe boating season.

Sincerely,

Paul Gifford
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****************************
Gifford Marine Co. Inc.
676 Dartmouth St.
So. Dartmouth, MA 02748
508-996-8288
508-997-9705 FAX
www.giffordmarine.com

 

[AndersonAcres]

Yes, probably a wise move. Perhaps the auto manufacturers will go to a 'build on order' plan, where they only build cars they have customer orders for.

 

[cain]

I say this is a trend you are going to start seeing more and more of in all different types of markets. In turn it can make the manufacturers and businesses more profitable by keeping overhead low.

This is the business model we have in the custom a/v world. We keep very little inventory and order the equipment once a project is approved and a sufficient deposit is made. It also keeps cash flow where it needs be which is essential in today's economy.

 

[Lauralex]

That's too bad. It would be nice to be able to at least get on a boat that you are considering even if it wasn't optioned like you wanted (to get a feel for the layout and room.) Seems now you better know someone who already has one. I understand the overhead reduction plan though. I'm wondering if the 'sight-unseen' marketting will deter anyone...?

 

[drob]

Does that mean the end of the boat shows? If noone is stocking the boats and they aren't available, what will be there dinghies and lines etc at the shows?

 

[Hampton]

Does that mean the end of the boat shows? If noone is stocking the boats and they aren't available, what will be there dinghies and lines etc at the shows?

They're going to use YOUR boat. They'll provide deals/incentives for you to provide your boat for their use in the boat shows - Free Bottom job and complete interior/exterior detailing before and after show....

Retailers have gone to "Just in Time" style of stocking over the last 10 years. Just in time production, delivery... Now, the boats will be coming off the assembly line and outfitted to order Just in Time for you to take delivery.

 

[JV II]

Russo Marine has a LARGE new showroom that is like a boat show plus outdoor storage in multiple locations. I bet they start putting everything they have inside including CPO boats. I imagine the boat shows will continue with more manufacturer funding and only targeting areas like Miami, Annapolis, Newport, Boston, and key west coast venues. They will likely cut back funding and participation in the rural areas. I also predict that there will be incentives for ride-alongs by appointment. Keeping aging inventory on a dealer lot, paying floor plan, and steep discounts are days going by.

I disagree about cars, though. They are going to continue to be purchased and drove off the lot the same day. The dealer who doesn't keep cars in stock for immediate gratification will lose out.

 

[fc3]

Stupid. Bad enough many dealers won't demo a boat on the water before you buy it. My dealer did demo a sistership to my 330DA before I wrote the check. But to not even stock a like boat is just stupid and suicidal. Guess he just wants to sell used boats.

My third boat was used in a boat show before I saw it or bought it. I first saw it at the show. While I was there, some stupid bimbo with spike heels tried to board the boat. I raised a fit with the dealer who then started to say "boat shoes only." Dealers better offer really big discounts to buyers of boats shown at a show.

Best regards,
Frank C

 

[tobnpr]

Not stocking inventory, and "factory direct" internet ordering will never work for the boat industry.

No one's stupid enough to stroke a check for a quarter mil or more for a boat that they can't see, touch, inspect, and sea trial before purchase.

 

[rondds]

No one's stupid enough to stroke a check for a quarter mil or more for a boat that they can't see, touch, inspect, and sea trial before purchase.

They will if there are contingencies written into the contract, sort of like the repo sites do.

My previous marina was a Maxum dealer. One of my dockmates bought a 37 from them - supposedly it was the boat they took the catalog photos with. It was in such bad condition when it arrived they literally put it back on the tractor trailer and sent it back. They wound up buying a Carver from another dealer.

 

[Lazy Daze]

I agree with Tobnpr. If I don't have inventory, I won't be able to sell. Plain and simple. Unfortunately, what this means for Gifford, is that they are out of the new boat industry. They may retain a few long time, loyal customers who may special order a boat. But based on that letter, they're out of the game.

Manufacturers are not going to just "wait around" for a special order to come in. It's not cost productive to do that. They need to keep the assembly line going.

However, I wouldn't be surprised if a few more dealers transition to service only.

Either way, it is interesting (that's the nicest way I could think to say it) what's going on.

 

[gerryb]

Boat shows will be the primary means to see/touch/feel?? I see dealers dropping on-floor inventory but I won't buy on spec alone. Too much money involved. But this industry does have to change if it will survive an economy with $9Trillion in national debt.

 

[bluebelly]

Whether it is boat dealers, car dealers, rv dealers, motorcylce dealers, etc., there will always be a distinct advantage to dealers that stock what they sell. What will happen over the next 3 to 4 years is dealers that require a floor plan in order to stock inventory will be supplanted by dealers who have the capital to floor plan that inventory themselves. Being in the auto/banking business I have already seen a few dealers that are being put out of business because they cannot secure anything better than a 50% floor plan on their inventory. And these guys need 100%. In the 1960's and 1970's the car business was truly only for the people who had the cash to operate. The last 30 years has seen a retail car industry being populated by dealers who use "other people's money" in order to operate. I bet the boating business is similar. You can count those so-called "other people" out for the immediate future. Lets face it, a cash rich boat dealer that has actual boats in his showroom will out sell the guy across the street that is selling from brochures. Those dealers wont stand a chance.

 

[Turtlesboat]

Boat shows are where it's at to climb all over new boats. I would have no problem going to a boat show, picking a boat, ordering a boat and having a local place deliver it, prep it and service it. They don't need to have it in stock.

 

[gerryb]

Lets face it, a cash rich boat dealer that has actual boats in his showroom will out sell the guy across the street that is selling from brochures. Those dealers wont stand a chance.

Makes sense. I think the cash-flow from maintenance will become even more important to fund floor operations.

 

[JV II]

Boat shows are where it's at to climb all over new boats. I would have no problem going to a boat show, picking a boat, ordering a boat and having a local place deliver it, prep it and service it. They don't need to have it in stock.

That is most likely true for the bigger boats. I would do the same. I would also be more likely to buy from the guy with inventory than from the guy with catalogs, UNLESS I can get a MUCH better price and the same reputation/service from the guy with catalogs. Its being done already. As I said before, its done in Cancun, which, let's face it is practically America (flame suit on). You could argue, America is becoming Cancun. The difference is that credit is relatively cheap here and practically unavailable in Cancun. The reality is that credit is becoming unaffordable and unavailable here, like in Cancun.

 

[JV II]

They're going to use YOUR boat. They'll provide deals/incentives for you to provide your boat for their use in the boat shows - Free Bottom job and complete interior/exterior detailing before and after show....

Imagine that bimbo with high heels walking on your bow, her snotty kids breaking off all your knobs and switches, sticking their candy on your v-birth, and walking across your ultraleather with their shoes, the old man taking a crap in your head, and those young democrats spilling their slurpies on your carpeting. You've seen what happens at the boat shows, right? What is your price? Free bottom paint and detailing?

 

[SR400DB]

At least on the west coast, Riviera dealers have been operating this way for years. For the most part they stock very few models and you put a chunk of change down, order the boat (the way you want), delivery is several months later. My dad has donw this several times over the years as he moved up. My boat was actually ordered by others prior to my purchasing the boat. They backed out, MM had 3 identical (for the most part) units in stock in No Cal and made me a great deal, this would not happen if they became an order only type of dealership.

 

[Carver370]

I would not buy a boat that I had to order. Boats are not mass produced like cars. For example there is another 370 Carver in my marina which is 2 hull numbers off from mine. I have known this boat since new and I have had mine since new.

I have had very minor issues with mine, in all the years of owning I have had to replace a holding tank 1 year into ownership because of a hairline crack in it (which was a manufacturer defect).

The other boat has had all sorts of issues, almost anything that could have gone wrong did. The fit and finish is quite different and even cruise speeds vary a small amount.

Moral of the story, not every boat is the same. The boat you look at in the dealers showroom may be very different than the boat that is ordered. I have a feeling the slightly used brokerage market will pick up heavily if no more showrooms become a reality.

Not to mention forking over a large sum for a boat and having to wait 6 months to a year for it to be produced. I need the immediate gratification!

 

[JV II]

How are you going to know all these minor glitches exist in a boat as you walk all over it in the showroom? Most don't show up until you are using it. So, I don't get the advantage other than the instant gratification and seeing the layout in real life (which can be done at the boat show).