Insight into Yamaha Dealer Allotment

[deubank1776]

Did the OP mean '23? The 22s have been out for a while...

Im pretty sure he is referring to 22' model year.

 

[fatboyroy]

We have had dealersships deny us a deposit due to not being close enough (in their territory). The dealer we found our exact boat we wanted called their rep first to confirm that it was ok to sell to us since we werent in their “territory”. Does that help explain it a bit better?

I think it also got to do with maintenance money. When I bought my boat, my rep told me they sold me the boat because I'm close enough to the dealer and they make money on maintenance. He told me they make very little money on selling yamaha boat compared to other brand. Of course I havent taken the boat for maintenance I do it all myself lol.

 

[adrianp89]

Im pretty sure he is referring to 22' model year.

Yes, those have been out for almost 6 months.

 

[Chrisbert]

I think it also got to do with maintenance money. When I bought my boat, my rep told me they sold me the boat because I'm close enough to the dealer and they make money on maintenance. He told me they make very little money on selling yamaha boat compared to other brand. Of course I havent taken the boat for maintenance I do it all myself lol.

I bet that's spot on. My dealer told me they don't make a lot on each boat at time of sale.

 

[deubank1776]

Yes, those have been out for almost 6 months.

I know. Why would you think he is talking about 23?

 

[Jim_in_Delaware]

I bet that's spot on. My dealer told me they don't make a lot on each boat at time of sale.

Call me a skeptic, but would you expect a dealer to tell you that he makes a lot of money on the sale of a boat?

I don't know if it true, but I thought I read somewhere that a dealer makes about 20% on the MSRP sale of a boat plus the "fees" they apply.

Jim

 

[DogDadDave]

I bet that's spot on. My dealer told me they don't make a lot on each boat at time of sale.

That was traditionally true, when they were discounting people 10% or more off MSRP. Now that they're selling virtually everything at MSRP+prep+admin fees they're making a lot more per unit.

Problem now is that sales volume is way lower, so they know they'll be taking a hit on that maintenance/service income later.

 

[906Tony]

Yes indeed. Doesn't make sense, but I'm thinking it makes "Covid sense".

That wasn't even a consideration when I bought mine, and I'm wondering if perhaps certain dealers work within a small network of friendly dealers to make trades when trying to source a boat for a customer.

For my state, there are 3 Yamaha dealerships within a smaller radius than you stated, and like I said, maybe it's because I bought mine before the world fell apart, but there was no such barrier to me at that time.

I have noticed on Team Winnebagoland’s website they spell it out very clear. I was just browsing on their site a couple months back and I saw they had a used 2020 AR240 for sale. In bold heading across the page it said ; Not For sale to customers out of state. I don’t get it. If I was in the market, I would have definitely gave it a try. Or ask a Wisconsin friend to buy it so I could buy it from him

 

[212s]

He told me they make very little money on selling yamaha boat compared to other brand.

You didn't actually believe that line, did you?
All sales people avoid talking about profit margins - it's in their best interest to make you feel you need to pay top price, doesn't matter which brand it is either, they all spew the same line. Same goes for vehicles, houses, RVs, anything big ticket.

 

[212s]

That was traditionally true, when they were discounting people 10% or more off MSRP. Now that they're selling virtually everything at MSRP+prep+admin fees they're making a lot more per unit.

That's supply and demand - if supply is low, you can gouge more. If demand is high, you can gouge more. Some dealers are selling above list price too. Just saw an ad for private sale a 3 year old 2019 212x for 10k over list. They'll probably get it too.

 

[Taylorman]

I think it also got to do with maintenance money. When I bought my boat, my rep told me they sold me the boat because I'm close enough to the dealer and they make money on maintenance. He told me they make very little money on selling yamaha boat compared to other brand. Of course I havent taken the boat for maintenance I do it all myself lol.

This makes sense. Business without a recurring rev component are wise to position themselves to have a shot at earning future rev.

Call me a skeptic, but would you expect a dealer to tell you that he makes a lot of money on the sale of a boat?

I don't know if it true, but I thought I read somewhere that a dealer makes about 20% on the MSRP sale of a boat plus the "fees" they apply.

Jim

Saying they don’t make much is a classic sales tactic. It’s used to lower expectations of the buyer ahead of negotiations.

I’ve read typical profit at MSRP is 10-15% on boats in this ‘lower’ price range. 15% and higher is only found on boats that costs hundreds of thousands. I read it on the internet so it has to be accurate

Would be interested to hear from anyone with firsthand knowledge of the markups. Not that it’ll help me get a discount in this market but nice to know.

 

[fatboyroy]

You didn't actually believe that line, did you?
All sales people avoid talking about profit margins - it's in their best interest to make you feel you need to pay top price, doesn't matter which brand it is either, they all spew the same line. Same goes for vehicles, houses, RVs, anything big ticket.

When I purchased my boat and at that time they could easily sell it above MSRP for out of state buyer. Point is, even if they make a lot of money on the boat or not, maintenance is incremental revenue they dont want to lose, thus selling to local buyer hoping they would take it in for maintenance.

 

[Taylorman]

I did find this site that claims to show MSRP and invoice pricing https://seedealercost.com/marine/browse/category/Jet Boats. If they’re accurate, the Yamaha’s are on the lower end of the 10-15% margin range.

That being said, without a recurring rev model it’s smart business to keep as many boats local as possible for a shot at the maintenance rev. Maxing out billable shop hours would make for a very profitable business.

 

[Beachbummer]

Perhaps 15% margin is low compared to the margins of the repair shop, where an oil change and "thorough" inspection goes for $500?? It's all in perspective

 

[Taylorman]

Perhaps 15% margin is low compared to the margins of the repair shop, where an oil change and "thorough" inspection goes for $500?? It's all in perspective

Absolutely. From a percentage standpoint, labor rates always have huge gross margins. While the consumer pays for the expertise and convenience the business assumes 100% of the cost risk e.g. business still pays wages if the billable hours are light. That risk has to be priced in.

 

[Beachbummer]

Don't get me wrong, there is huge risk and expense that the business has to bear. I'm the strongest advocate for voluntary agreements and exchanges. Customers pay more for the perception/expectation Yamaha knows best, and the dealer can charge a hefty premium for the privilege. I'm sure their pricing is optimized to make the most revenue, and little near-by competition gives them great flexibility in setting very high rates. Such is life.
BUT Price is more often than not, not directly related to cost, but to scarcity. Sure cost plays a factor, but it's willingness and ability to pay that really drives the price, and lack of near -by competition and the brand name on the door that allows them to charge more and say, what's your alternative?

 

[212s]

I did find this site that claims to show MSRP and invoice pricing https://seedealercost.com/marine/browse/category/Jet Boats.

I've seen this site before and it's BS with fake 10% invoice numbers - do the math and listings are nothing more than 10% off - they just get the list prices from websites and don't really know anything. As an example, I priced a boat at the boat show that was discounted 12% below MSRP...margins are more likely 20% on trailerable boats, houses are over 70% - the bigger the ticket, the bigger the margin. Same goes for cars where you can easily get 5-10% off MSRP without asking - you really think all these dealers like to make no money on a sale?

Granted pricing is less competitive during covid and none of this applies anymore.

 

[Taylorman]

I've seen this site before and it's BS with fake 10% invoice numbers - do the math and listings are nothing more than 10% off - they just get the list prices from websites and don't really know anything. As an example, I priced a boat at the boat show that was discounted 12% below MSRP...margins are more likely 20% on trailerable boats, houses are over 70% - the bigger the ticket, the bigger the margin. Same goes for cars where you can easily get 5-10% off MSRP without asking - you really think all these dealers like to make no money on a sale?

Granted pricing is less competitive during covid and none of this applies anymore.

As a disclaimer, I have no idea how the site gets their numbers or their accuracy. With that said, your theory that it’s a flat 10% is wrong. Look at the site and do the math yourself. The second boat that shows on the link I provide is a 2018 Chaparrel MSRP $39,895 and Invoice $29,921. That’s a $9,974 markup or roughly 25%.

Again, I have no idea if the site is accurate but if you looked at it and did the math you’d see the percentages vary greatly.

 

[212s]

Again, I have no idea if the site is accurate but if you looked at it and did the math you’d see the percentages vary greatly.

I just went and looked at the page you linked and all of the Chaps are exactly 10% except the second one "Chaparral Boats 203 Vortex VRX 2018" which oddly enough is exactly 25%. Those numbers do not seem legit...makes me wonder if they're just a fake harvest site which is why I won't register there.

Either way we know sales people avoid the truth to maximize profit and commissions.

 

[Taylorman]

I just went and looked at the page you linked and all of the Chaps are exactly 10% except the second one "Chaparral Boats 203 Vortex VRX 2018" which oddly enough is exactly 25%. Those numbers do not seem legit...makes me wonder if they're just a fake harvest site which is why I won't register there.

Either way we know sales people avoid the truth to maximize profit and commissions.

I don’t put much stock in the accuracy of that site mainly because I couldn’t find any explanation on how they got their prices. In fact I didn’t find any trust building statements at all but maybe I didn’t look hard enough. I linked to jet boats for obvious reasons but if you look at other boat types and brands the margins vary significantly. For example the 2021 Malibu Axis wake boats are marked up $20k - $24k with the highest MSRP only $84k. So who knows.

Even if the site was accurate to the penny it wouldn’t matter one bit these days.