It is easy to say that the pleasure yacht industry is in the doldrums. For some it is. For others, if these are bad times, let’s keep them rolling.
Why the difference? Not easy to analyze yet not too hard for us to look at the facts to determine the polar opposites of those selling boats and those surviving and trying to sell boats.
First, there is not one reason, but multiple.
We always say the 3 BASICS apply to any boat sale. 1. Brand name that is desirable. 2. Condition (must be immaculate). And 3. Price. If a vessel is not “priced right” it will not sell whether new or used.
Many new boat manufacturers cannot see themselves in numbers 1 or 2. After all, we are desirable, aren’t we? And our boats are new so condition is, well, new.
Logical argument. But when you “manage by walking around” you have to accept that your boat building company may not be doing all that is possible in this economy to produce the right boats.
How many times have I heard that “it took us a year to straighten out all the factory mistakes”? In fact, on some brokerage lists that is a positive for getting a used boat. The listing will state “all the new boat bugs are out.” What kind of message does that send to a prospective buyer? Why should that even be a discussion, but it is. Oh and by the way, one will never spend more for a boat than when it is new.
Price is always tricky. But always a factor in the purchase of a pleasure yacht. Perhaps we should use the term “perceived value” whenever we discuss the price issue. As long you the buyer “perceive” value, the price gets paid. Simple as that.
We know that boat prices do not go up. Oh we kid ourselves into thinking that the prices have stabilized or that values are good because the supply is low, but reality is and I know that this will be a shock to some of you, “boats go down in value.” It’s how you maintain them that determines how much they go down.
With used or brokerage boats, the same 3 basics apply. Used boats present a special situation because of, supply, condition, and price. Here one has to determine that the brand is desirable #1, plus that the model of that brand is desirable. All manufacturers have produced their “Edsel” (that was a car named after Henry Ford’s son, produced in 1958, 59 and 60 that was an epic failure). It maybe the easiest question to answer. Call the manufacturer and ask how many of this model did you produce? Low number=low desirability. Stay away unless price is SUBSTANTIALLY lower.
Also with used boats, a survey will help determine value AND you have the option of really negotiating price unlike new vessels that have a fixed margin which is very hard for a dealer to go below.
So why are some boats selling well and others can’t buy an order? There is no one answer, but multiple reasons.
Use a good yacht broker that knows the market for their area and will help you. It’s quite easy to separate the “salespersons” from the helpers with just a few minutes of conversation.