"one of the most challenging times ever seen in the history of the marine industry."

Re: "one of the most challenging times ever seen in the history of the marine industr

Dave S said:
While we can debate the causes of today's economic climate forever, the point I tried to make when I posted this to begin with is now is the time to buy a boat if you can. The time will never be better.
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Maybe. But when boat sales are soft, so are trade-ins. Last time looked, there were a bunch of 330s on the market, so prices were a bit low. Some of the marginal buyers for big gas boats are probably sitting out because of economic uncertainly on their part. On the other hand, boats in the 40-45' range might not be as soft because they're diesel and don't cost as much to run. Plus the guys who can drop a few hundred large on a boat might not be in such uncertain shape.

So I might take a big hit to get out of my 330 while only getting a small benefit on a 420 or 460. Maybe I should list the boat and see what happens. Worst thing that could happen is that she sells for my price and I'll have to move up. Darn.

Best regards,
Frank C
 
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Re: "one of the most challenging times ever seen in the history of the marine industr

The greedy SOB mortgage idiots made a lot of contractors rich in the last 8 years. When there was no shortage of work the fees were an outrage and nobody was in any rush to complete the work. Hopefully they recognized that was an anomaly and banked some of that cash.

Perhaps Gary's $200 a day mason would have been making $2 a day in Mexico, so making 100 times that is not so bad. If he undercut everyone else in his region, the guy would be working 7 days a week, making $73,000 per year. Not bad for a mason. (even better, considering he probably does it for cash).
 
Re: "one of the most challenging times ever seen in the history of the marine industr

Jim,

I'm not sure how one guy working on a Saturday for about 5 hours and getting $200 is losing money... I supplied all the bricks, sand, and morter...

I had the same issue with pool vendors... One guy shows up at my house and gets out of the car and says "This is going to be over $100K" and he didn't even know what size pool I wanted or see the back yard... He never made it to the back yard either. Another guy told me he was so busy because people were putting pools in instead of buying houses... but he could start on Monday if I signed a contract that day (it was Thursday). The hell with the pool... I'll wait till the economy tanks even more.

I don't know... if you are a buyer, a slowing economy is a good thing... if you are a seller, you have to drop prices... Economics 101 (supply vs. demand).
 
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Re: "one of the most challenging times ever seen in the history of the marine industr

tmhudson2 said:
Politics are, for better or worse, the public face of economics. The larger government is allowed to grow, the greater force it becomes on our life, and our livelihood. ....
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Very well said I think. I also think its healthy to discuss these topics on forums like these. So many times a moderator will try to close the door on these discussions because its not "related" to the forum.

However, if we don't exchange ideas at least somewhere and become more educated about people's opinions and experiences...there's a good chance our meddling government will continue in the runaway-trainwreck fashion that it is. And some day very few of us will be able to talk boating because either our rights (as in New Jersey, or the EPA dumping law) will have been trampled on or our wallets (fuel taxes, fuel costs, luxury taxes) will have been emptied.

I enjoy reading and throwing these topics around. I just wish we could all do it on the back of my Dancer docked over at Put-In-Bay with a case of beer and some scantily clad ladies lounging on the bow. In any event hopefully we all learn a little something in the end.
 
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Re: "one of the most challenging times ever seen in the history of the marine industr

...so let's put some numbers on this... if I were buying a used boat right now, in this market, I think I would be looking to offer at least 20% less than the current NADA LOW RETAIL price or the average asking from sites like yachtworld... I don't think that's a low ball and I DO THINK sellers will accept it... However, I think 40% is a lowball and there will be no deal... If these numbers are right, this is a "buyers" market, but certainly not a disastrous market... I do think this will get worse later in the year however as NADA and asking prices gravitate downwards to reflect the lower offers.... That's when you want to buy, buy, buy..
 
Re: "one of the most challenging times ever seen in the history of the marine industr

Wow, shawn you are seriuosly long winded.... So please don't get me going on comparing labor cost, biulding costs, operating cost and legacy cost with Sea Ray, I live in the world of Auotmotive.... where no other cost compare to the US automotive worker... and even that's coming down drastically. Please do not sit there and tell me about why a 44 should cost 600,000 dollars, its ridiculuos, and dont even think that for one moment that Sea Ray isn't doubling their money on most boats they sell, it's even worse on the smaller boats..... Thus..... do you even know how many parts are made overseas for Sea Ray..,? Probably not, because your not privy to all this infoarmation.... it's stagerring my friend, thus like the American Auto these days,..... 75% imported parts.....TV's Stereos' coffe pots.... Props, prop shafts, bearing etc, I could go on, but I don't have that kind of time....So please consider this the next time your buying, or even working your your boat..... it really shouldn't cost what they ask and get for these boats...The average Sea Ray line worker, is 15.00 an hour....Hmmmm labor costs......I think not...Low volume..hmmm i think not....
Happy Easter....
 
Re: "one of the most challenging times ever seen in the history of the marine industr

In terms of the housing market. . .I think there is a floor on the price of houses. As prices sink, the speculators will drop out of the market. Homebuilders won't build houses on spec.

This decreases supply.

Also, as the prices drop the "casual seller"; i.e. those that are voluntarily selling because they want a different neighborhood or to "change the drapes" will also disappear. People don't like to lose money on houses, even if the house they are buying is proportionally cheaper.

I know of two people that had their homes on the market for an extended period, then took the house off the market when the realtor contracts expired. Oh sure. . .they could have dropped prices, but they didn't want to. This behavior also reduces supply.

But on the flip side. . .do the math. In my area, a starter home goes for $350k. Run the numbers. . . with 20% down and a reasonable 6% 30 year mortgage -> that's a $1700/ month mortgage. Add $400/month for property taxes.

You are not living in that house working at McDonald's. Heck, even a college graduate making $80K per year will struggle to buy that house. Which is why in my area it typically takes TWO working college grads to buy a house. And it takes a while to pull that off. . .20% down means a $70K downpayment. . .which ain't chicken scratch.

Which goes to say that there is a limit on demand. Most guys don't have a second wife they can put to work to make mortgage payments. :)
 
Re: "one of the most challenging times ever seen in the history of the marine industr

I've enjoyed reading this thread. I never did understand why talking politics is taboo. Don't we learn from others?

As far as boat prices and the costs of boating, there is no doubt they have outpaced inflation by a big chunk. If those in the marine industry do not figure out ways to bring the costs back down, the industry will continue to shrink.

Owning and operating a boat has become extremely expensive. And, as Americans, most of us do not have a lot of free time. So, when you calculate the costs based on per hour of enjoyment, it is astronomical. I treasure my time with boats and on the water, so I'll be one of the last ones out. But, I have an exit point, too.

I have gone to boat shows for years. There was a time when you saw a good number of people in the finance booths signing for boats. Ove the last few years, I have watched this fall to almost none. This trend began before the downturn in the economy, when you could still get a HELOC for a great rate at 110% of the value of your home. There is no doubt in my mind the soft marine market is due to more than just the current economy.
 
Re: "one of the most challenging times ever seen in the history of the marine industr

To me, it almost seems like there is a long game being played here.

It almost seems like "boating" is a luxury item where "increasing volume" is not the path to success. I bet half to three-quarters of buyers are *not* price sensitive. Yeah, these buyers will price shop and "get a good deal" -> but if the price of everyone's 26 foot express cruiser goes from $100K to $110K -> these buyers are still buying.

So, if for a few years, some of the boating volume will go away -> but the core luxury buyers will stay in the game. And then five years from now. . if you stick with the annual price increases. . .the core luxury buyers will continue to buy at the five times inflated price levels. And then the other folks will jump back in once the economy turns for the better.

Sounds stupid. . . and if you put this into a speadsheet, it seems to not work very well. . .but that SURE SEEMS how the market is going.
 
Re: "one of the most challenging times ever seen in the history of the marine industr

boltman said:
..... it really shouldn't cost what they ask and get for these boats...
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Man - if the markup is that huge than why aren't the Japanese, Germans, Swedes, English, and Chinese, or for that matter venture capital Americans flocking to the boating industry like they have everything else????

That statement COMPLETELY ignores market forces which have been in effect since the day this country was born.

I may have been long winded but my attempt to summarize the cost/profit situation failed badly in your eyes. And I agree we certainly don't have the information necessary to conduct that argument - so I'll resort to my claim then that Sea Ray must have some magic dust that they spread to their competitors and customers that allows them such extraordinary profit margin in our highly competitive global market.

boltman said:
.....and dont even think that for one moment that Sea Ray isn't doubling their money on most boats they sell, it's even worse on the smaller boats........
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And if that's the case - how about everyone on CSR pony up a few bucks and we can start our own business making boats. We'll make them look just like Sea Ray models (well except for that awful window on the 350) and we'll sell the 44' model for $200k below Sea Ray list price and we'll still make a killing.

I accept paypal.

---> And let me say for the record that my tone here is not acidic or bitter - I'm an easy going 36 year old. I'm smiling as I write this...and like I said somebody's boat and some beverages would be a far better place to throw this stuff around :).
 
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Re: "one of the most challenging times ever seen in the history of the marine industr

We could also sell Cactus plants.........I heard there is big profits in the Cactus business. Maybe Gary could help us out on that one.

:smt043:smt043:smt043


By the way Gary, how is the used House Trailer business doing? :wow:
 
Re: "one of the most challenging times ever seen in the history of the marine industr

Seems he's run into some delivery issues

Mobilehome2.jpg
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Re: "one of the most challenging times ever seen in the history of the marine industr

boltman said:
The economy is in OK shape, but very localized.....I'm in the fastener business and I'm doing triple digit numbers with the Automotive industry....go figure...I have a part that takes 3 of them on the Chevy Malibu........ that car has an average stay on the dealership lot of 13 days, with no incentives or rebates... Can't wait until Chevy puts on their Thrid shift.... fo rthis car..
That said, why or why should a 44 foot Dancer be in the upper 600's...I don't get it... why does a 12" TV on that boat cost 3500.00 when I can get it in WalMart for 300.00 and instal myself.. Why are the diesels a 100,000 dollar option, when I can buy a 5.9 liter cummins brand new for under 20,000....These Boats are too much and just like the housing market righting itself... so shall everything else, including boats... cars planes and trains.... there's something to be siad when you buy a new boat and 3 months later it's only worth Half... of it's purchase price......it means, the company is screwing everyone , even themselves for future sales... comments eccepted...
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Not to hijack the thread, but I've always wondered what a given boat actually costs to build-relative to it's sales price. Take the 44 Dancer: I'm talking DIRECT costs: materials, and direct and indirect labor costs. The nuts and bolts... without overhead of any kind.

I'll bet it would scare us if we knew what they "cost".
 
Re: "one of the most challenging times ever seen in the history of the marine industr

Shawn,
the magic pixie dust is called marketing.... BRAND DISTINCTION...thats what searay has...



Rob
 
Re: "one of the most challenging times ever seen in the history of the marine industr

Brunswick is a public company and their financials are available for anyone to look at. The company as a whole is not all that profitable and if it was, their stock price would reflect that. If you think they are rolling in the cash, go buy some stock and partake in the party.

On the surface, the company does about $5B in revenue and the cost of goods is around $4B. The other $1B is spent on sales/marketing and other overhead... The CEO makes about $1M/year and made another $1M in stock option exercises last year which is inline with the size company he runs. They sure do a good job of hiding all that extreme profit as I don't see it.
 
Re: "one of the most challenging times ever seen in the history of the marine industr

Gary,
Why aren't you coloring eggs?
 
Re: "one of the most challenging times ever seen in the history of the marine industr

We already did that... and had a stupid egg hunt in the yard....
 
Re: "one of the most challenging times ever seen in the history of the marine industr

Yeah, well, knowning the "cost" before overhead is relatively meaningless. Overhead costs for national marketing and management costs are real. It would not surprise me if the cost to the dealer is half the MSRP of the boat. But Marine Max, for all we dump on them, have to pay bills as well. Your slimeball salesman does indeed have kids that really do deserve braces.

I honestly have no problem with a dealer making a "fair" margin on a boat. . .even if it is say 30% of the sales cost. I have no problem with SeaRay making its own fair margin.

We can go back to the brick layer. Times are tough. .. volume is down. . .so you raise your price so you can pay off the orthodontist? Doesn't sit well, doesn't it? Gary sure didn't buy that argument.

Actually, with boats I think it is more of "we can't let the customers think we are scared" mentality. You discount a boat 10%. . the customer smells blood and asks for a 20% discount. You raise the price 5% and make the customer think that boat is selling hot. . and maybe he asks for a smaller discount. OR maybe he asks for a 20% discount anyway. . but you discount from the higher price.
 
Re: "one of the most challenging times ever seen in the history of the marine industr

All this pedantic talk about the cost of boats and profit and overhead and cost of material is giving me a headache. If a boat is priced too high, people simply will not buy it. If it has poor quality, people will tend to leave it alone and look elsewhere. No matter how you try to rationalize costs.....it is what it is. If a boat cost too much for you, move on for the love of Pete and find something you can afford. Brunswick will lower the price of their boats only if they don't sell. In these times of economic trouble, no one is selling LOTS of boats but Searay is proportionately keeping its market share so the price of a new 48SD ain't going down....sorry.
Just my $.02.
 
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