Industry needs more entry-level boats

Kudos to William Sisson, Editor of Soundings Trade Only for his recent editorials regarding what he calls “simple, sensible boats.” I call them entry-level boats. But whatever you want to call them, we need more affordable boats for first-time buyers.

I have never met William Sisson, but from reading his editorials, there is no doubt in my mind that he knows more about boating and the marine industry than any other trade magazine editor I have known or read in the past several years. And it is encouraging to me that he recognizes and writes about the need for what he refers to as “a new generation of ‘sensible’ boats – simple, seaworthy, efficient and more affordable. Boats with value and utility, boats that will encourage people to get back on the water.” He is spot-on with his thoughts on this.

Over the years, I have written several magazine columns about the need for more entry-level boats. There are some available in the market…but not enough in my opinion. Why is that? Well, many boat builders and dealers say there isn’t enough margin in the less expensive, entry-level rigs. So they focus more on building/selling larger, tricked-out and more expensive rigs that give them opportunities for greater margins. But in so doing, they are closing the door on many first time buyers who simply cannot afford $40,000, $50,000, $60,000 and more for their first family boat.

Bill Ek, an industry veteran with over 50 years as an executive in the boat building arena, has often said, “Builders and dealers are making customers when they offer entry-level rigs. Customers who will very likely buy another boat in the future.” There is no question in Ek’s mind and mine, that offering more lower priced boats can and will bring new people into the sport. And I think we all recognize the need for that, especially after we got hit with the Great Recession of 09 that is still hanging on.

Granted, the margins are lower on less expensive boats. But the margins on aftermarket products that dealers can sell boaters who buy the less expensive boats are excellent. These first-time buyers of more affordable boats are very likely to come back to their dealer for propellers, water skis, life jackets, outboard oil, and a multitude of other accessories. And eventually there will be some service work and, as just mentioned, they will very likely buy another boat in the future; most likely a larger boat with bigger margins.

As John Underwood, former owner of Top 100 Dealer Lockwood Marine, previous Chairman of MRAA and a contributor to this blog, wrote in a column we did together in 2007, “How about an inexpensive, rugged, non-rotting, self-bailing, ‘de-contented’ boat with decent performance on modest horsepower that can easily accept added toys as time goes on. Maybe this can be coupled to a no-frills trailer and a simplified, reliable engine.” That says it all!

Young families today have so many options for spending what recreational or surplus dollars they might have, like renting an RV, buying a camper, getting a 50-inch TV, Disney World vacations, playing golf, biking, doing home improvement projects, and much, much more. So to entice them into considering a boating lifestyle, builders and dealers alike need to consider offering more affordable boats to get new folks into the sport. High end, expensive boats just won’t bring in very many younger, less affluent buyers. But down the road, first-time buyers of less expensive boats are likely prospects in time for bigger, more expensive rigs.

So William Sisson is right on when he calls for “simple, sensible boats” in the industry.

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About Ben H. Sherwood

Ben H. Sherwood is a marine industry veteran and a marketing consultant who operates Sherwood Marine Marketing in Pleasant Prairie, Wis. For more info, click About on the main menu.

12 thoughts on “Industry needs more entry-level boats

  1. The future of the boating industry depends on whether or not Manufacturers are willing to get back to basics. Entry level priced boats that perform are in my opinion, going to be essential if we are to expect any growth.

  2. Damn! I didn’t think anybody remembered what I wrote in 2007. It handicaps my opinion expression. Fortunately, I still believe in that decontented boat.

    I was talking with one of tecnicians that used to work for me the other day, and he recalled the fun we used to have putting early day Carolina Skiffs together to suit the buyer. We were able to put a truly unique craft on the water for the customer with a big imagination and a small pocketbook. We started with an inexpensive fiberglass “bathtub” and added powerplants and toys from every conceibable source. The advent of OEM engine sales pretty well killed that effort.

    For me, putting something special together was as much fun (maybe more) than running it on the water. Being of Scottish descent and growing up in a Jewish neighborhood, keeping the price down just comes naturally.

    I read Mr. Sisson’s article, too, and can only say Bravo!

    John Underwood

  3. I am trying to see how an entry level boat would work in the current market when the best prices are for a pre-rigged package direct from the boat manufacturer.

    Shop labor rates today prohibit adding many optional items post-production without pricing the boat into oblivion. Most boat buyers are computer savvy, and have already bought their accessory equipment from an internet discount store, so that’s not likely to help the dealer’s margins.

    If we look at what the environmental laws are now mandating such as sophisticated (expensive) new outboard motors, and catalytic converters on the inboards, the price of new boats is spiralling upward while quality seems at a standstill in some cases. Until boat manufacturers pay full Shop Labor on the total warranty repair job a dealer does, and retail on the parts used to make the repair, I cannot see how a dealer would benefit in selling a new “inexpensive” boat line.

    I still think the used market is the best answer to attracting first time boat owners, and the depreciation they would confront when they decide to move up would be much less than a cheap new boat would suffer. Sorry to be contrarian, but that’s my thoughts.

    “Never buy a cheap boat or a discount parachute!”

    1. Jeff:

      You bring up good points. But I feel it is very much up to boat builders to make available some less expensive (I don’t mean cheaply built)boats that young families can afford. I know you realize that outboard motors are a tremendous profit center for boat builders. And, of course they could install smaller engines that still make the boat perform and leave off a lot of the bells and whistles that bump up the cost.

      And I think dealers can also push builders to offer them more pre-rigged boats so you and your customer can choose the brand and hp of the outboard that will go on the rig. And you should be able to specify the accessories on the rig. When I was a car dealer I specified what bells and whistles on the cars I ordered. Why can’t boat dealers do the same thing. Anyway, thanks for your thoughts.

    1. Susan: The size range and price depends a lot on the market. Salt water, big lakes like the Great Lakes, boating on rivers and small lakes, etc.determines much of how you can define an entry level boat. One of the best family vacations I had with my three kids was on Crystal Lake, Michigan where we used a 15 foot company owned runabout powered with a Johnson 40 hp outboard. We had a ball skiing and cruising. Below is what John Underwood had to say about your question that pretty much sums up how I think about your question:

      “I think an entry level boat has to be defined in terms of the intended use and the waters for that intended use. The most insecure situation in that use governing.

      Where I am (Coastal Georgia), a minimum general use boat is usually at least 17-19 feet. The minimum cost new for the least glitzy version is probably $14-15,000 – boat, motor and trailer. On an inland lake, particularly a small one, we are probably talking about a 13-15′ boat that could be had for as little as $6-8000. I’m afraid the dealer must decide what is minimal and stock nothing less. All that said, most people will not buy the absolute minimums priced above and their use intentions will adjust the price and maybe the size upward. I think any rig passing $20,000 is definitely out of entry level. Size is based on what is safe for the waters.

      Entry level is a concept rather than a fixed maximum of any parameter. What disqualifies a boat from the concept, to me, is one that contains excesses in terms of equipment, horsepower or elaborate hull properties beyond what the less demanding buyer would want. The dealer should be responsible for customizing the boat to the needs/desires of the more demanding customer. Any excesses in his accessory cost would be overcome by the deletion of the features not needed by the customer at hand.

      We could cure the engine pricing problem one of your respondents alluded to if engine manufacturers sold engines to their dealers and builders for the same price — for the most part, regardless of volume. I doubt the industry have achieved the will to do that — yet.
      John Underwood

    2. Susan:

      Skip Hegel also had some good thoughts on your question I would like to share with you. He said: “I think entry level is a boat that holds at least four adults and is in a “runabout class”, probably outboard powered, and is boat, motor and trailer for under $20,000………. Could be aluminum or glass. That, to me, is a dollar figure the average person might consider spending to test the waters and begin boating. Remember, we are trying to attract new customers thus the boat needs to be priced right and will probably be in the 15-16 foot range.”

      Skip

  4. Thanks Ben, I asked because we have a 23′ (21′ w/2′ of eng brkt) with a 150 Merc for $29,900.00 add a bimini, stereo and tandem trailer, is $35K and we can NOT sell them with a wood free hull. Our margin, no kidding is $ 1,800.00 a lost liter and I’m asking, what could possibly be more level entry. There are quite a few 15 to 16′ range of boats in that price category; problem is they want the 20K price with lots of seating and bigger boat; my opinion. Also, we offer boats without motors; however, we already purchase motors the same as “some” dealers( if there are OEMs out there purchasing for better than me, then we are being seriously lied to). We must mark up the hulls only because if we don’t sell so many motors a year, we will not be able to purchase for a fair price and supply those dealers that are not loose engine dealers. Catch 22

  5. Be that the truth, why am I still fixing Bayliners that were bought by the original owner in the 80’s and they still have them?
    They are not goig to trade those rigs in. Most are not seaworthy but they don’t care.Even now as the parts are going away they go on ebay.

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