There’s no doubt you want your customers to buy more boats. First, it will improve your dealership’s inventory levels and, in turn, help you gain more space in your showroom. Secondly, it will help you hone your boat-buying plan for 2025 vessels. But it can feel downright nerve wracking to focus on your dealership’s strategic boat-buying when you’re faced with an inventory surplus in a soft market highlighted by indecisive customers who sit on the fence awaiting more favorable times to make a purchase.
You must maintain your objective and that is to optimize your inventory and ensure your profitability. Perhaps you need to consider Plan B in your scenario plan and make some adjustments.
Here are eight steps to help you improve at boat buying.
1. Build Your Sales Forecast
To help you make sound purchasing and stocking decisions, begin with a realistic sales forecast that includes categories and months. This will give you a better understanding of category demands and slow-moving inventory and help you align your buying to meet market demands. Tip: Remember to include any discounts provided to you by the manufacturers that may have contributed this year vs. previous years.
MRAA Members can revisit the MRAA Ask the Expert webinar “The Dynamics of Evolving Inventory Conditions” with Chad Lyon, Managing Director – Marine & RV Wells Fargo Distribution Finance, on MRAATraining.com.
2. Know Your Inventory Costs
Managing your budget effectively and reducing avoidable costs is critical to your success. Work closely with your sales team to create projected inventory level estimates and floorplan interest expenses. Ideally, compare this to your similar selling seasons — not the Pandemic period — and the marine industry averages to gain perspective of where you currently stand.
3. Get Good at Inventory Management
It seems obvious, but you must track your inventory’s age and turnover rates. You do this by buttoning up your inventory management efforts and creating a clear system for your team to use and understand. It helps you know and identify the age of units, your average inventory weeks on hand and your inventory turns by make and model. Knowing when boats sell week-to-week or month by month helps you identify peaks, valleys and a misaligned trajectory. Tip: Focus on sales not your close to avoid boosting the wrong month(s). This critical data can help guide your decision-making efforts.
4. Analyze Past Performance
Point No. 2 mentioned this, but your team needs to compare your current inventory levels with your dealership’s prior performance. You need to dig into all your previous years and certain periods to comprehend your inventory levels, seeking comparable data. Knowing your numbers here will help you gain insight into current inventory levels and help you adjust your planning. Remember to look for equivalent seasons/months and not necessarily the outliers when the market sees drastic changes (e.g.: 2008-2009, 2020-2021).
5. Incentivize Your Sales Team
Providing your sales team with incentives has proven to help move inventory. Be sure to include performance incentives for moving certain boats or when units move within a shorter time frame. Reinvesting in sales training can also help brush off any dust, encourage growth and offer motivation.
6. Be Able to Identify Your Customers
Marine industry expert David Parker identified four types of buyers in his blog, “4 Tips to Help Your Dealership Manage Inventory.” They are Bargain Buyers, Early Adopters, Smart Buyers and Impulse Buyers. Dissecting your CRM will help you better understand your customers by flagging their buyer types and preferences. Having this information in hand will influence your purchasing strategies.
7. Manage Aging Inventory
Some dealers have commented that they feel they are giving away everything to get a sale. But for your aging units, you need to set a comfortable margin (or range) and grant your sales team the ability to work down. Leverage your marketing efforts by exploring nontraditional methods to help move aging vessels. Ideally, you want to engage your existing customers and attract new ones. Inventory management includes approaching lenders about the potential for reducing aging unit costs while you’re working tirelessly to move them. Tip: Place your aging boats up front (potentially mixed with newest models), clearly identifying them and their featured deep discount prices to draw attention!
8. Leverage Industry Insights
Immersing yourself in industry trends and data is critical for your success. Reach out to your floor plan lenders to better understand inventory levels throughout the industry and for a historical perspective. Communicate early and often with your manufacturer reps, too, sharing your concerns and desires to potentially adjust your orders downward from previous years. That way you can meet each other’s expectations and find common ground. Trust your data and industry numbers more than you do opinion. You want to make sound decisions and avoid being influenced by the wrong inputs.
A Proactive Approach to Boat Buying
Ultimately, you want to set up your dealership for success and to outlast a softer market. Installing inventory management tactics and strategies will help you align your product purchases with the current conditions. Your proactive effort combined with scenario planning can help you remain flexible in your boat-buying approach.
Need more strategies, visit the MRAA Spotlight page: Boat Buying Strategies for 2025.
[AIMIE, MRAA’s AI for Marine Industry Education and content delivery system, was a resource in this content production. Learn more.]