In the August 2024 MRAA Pulse Report, a monthly marine retailer survey we partner with Baird and Soundings Trade Only to produce, we found that 2024 continues to be challenging due to soft retail demand, high inventory levels, inflation, consumer hesitancy to purchase and more. This has led to a continuation of negative industry sentiment for 2024 and in the 3- to 5-year outlook.

These shared insights speak to the challenge of pre-owned sales, but also a slight rise in consumer interest. An anonymous dealer reported, “We have seen an increase in customers looking for pre-owned units, but many are looking for heavily discounted units – and still not choosing to purchase. We are spending a lot of time discussing price versus value with customers on pre-owned units, helping them weigh the different options of pre-owned versus new. There are a few sales, with ‘few’ being the optimal word.”

While many participants shared that they have seen retail declines and have too much new and pre-owned inventory on hand, others could benefit from and move more units in both segments if they could secure more inventory. Four percent of those surveyed reported new boat inventory was too low and 13 percent pre-owned inventory was too low! While 61 percent of participants said pre-owned boats were in decline in August, 20 percent reported growth. Even in tough times, there is light in the perceived darkness.

Here are three examples of bright spots from three random participant responses:

• “No real issues with pre-owned. The price of new remains a challenge for many prospective buyers, leaving late-model, pre-owned boats more attractive than ever, especially if they still carry a manufacturer’s warranty.”
• “We move pre-owned rather easily, just don’t have a lot of inventory.”
• “We are very low on used boats. What we have started moving in August.”

To understand how certain dealers are having success in the pre-owned market, we asked them this question: “What strategies are you using in a challenging market to move pre-owned boats?” While the responses varied, five tactics emerged from their responses. They are below:

1. Aggressive Pricing Strategies: To improve the attractiveness of pre-owned boats, dealers have instituted aggressive price drops, special pricing and heavy discounts. Some shared that they have even adjusted prices to meet current market demand. “We are buying them much more aggressively so that we can sell them at a decent margin and still be below average retail, ” a dealer shared. One team’s tactic is to lower the price until it generates enough leads and a buyer.
   MRAA advice: In some cases, it is as important for dealers to get used boats off of floor plan as it is to clear floor plans of new boats. Selling used boats late in the season may be financially beneficial as opposed to paying interest on them through the winter season. Keep track of your floorplan numbers and compare the possible costs between new and used as you move toward heavy discounts and aggressive price drops.
2. Marketing Efforts: “We are using every marketing technique possible and getting very aggressive on price,” reported a dealer. Even in tight times, dealers are investing in their digital marketing efforts. Tactics include social media, online platforms like Facebook Marketplace and Boat Trader. Other marketing plans include in-house or in-water boat shows. Others mentioned targeted email blasts to reach potential buyers. “(Hosting) Customer test ride days. Events at dealership,” said one respondent.
   MRAA advice: A used boat demo day can work nicely as there is no concern that you are taking a new boat, finishing rigging and prep and putting hours on it. The pre-owned boat just gets used a little bit more, not decreasing value but increasing the possibility of the sale.
3. Going the Extra Mile: To make pre-owned units more attractive to buyers and to enhance their value certain dealers offer better options and increased services. One survey respondent shared, “We are working with customers to get specific boats that fit their needs, being especially aware of pricing, budget constraints and especially finance terms, rates and payments.”
4. Additional Services: Many shared that detailing and fully servicing their used fleet is mandatory. Others include dealer warranties and additional financing options. “Getting additional warranty on used boat. Also providing repower options. Sometimes painting the hulls,” revealed a dealer.
5. Managing Inventory & Trade-Ins: Even though it’s considered a buyer’s market and some dealers seek more pre-owned inventory, they are being selective about what vessels they take in via trade. They avoid older or mechanically questionable boats. Some have sold units at a loss, while others have added brokering to their arsenal. “We are being conservative on our trade numbers to allow for flexibility in selling price without losing money. We also offer to broker boats for customers that would prefer to not trade in their boat,” remarked on survey participant.
   MRAA advice: Offering brokerage allows you to help the customer when perhaps their boat is not one you want to take in on trade or even when they want a price that is beyond the value you want to consider. 

These five common themes reflect dealers’ focus on marketing, maintaining quality in their inventory, pricing and trade-in selectivity. MRAA members can view the Ultimate Guide to the Pre-Owned Boat Market to navigate this portion of the market and capture more business.

Come November …
The other theme that also emerged was the concern for the economy and the upcoming election results. Some commented that they will wait for the election results to make further business decisions, while other confessed that they understand the nature of the business and that these things are out of their control.

“We’ve tightened our purchasing and overall business expenses, as a precaution. The boating world is receiving a cold slap in the face of pre-pandemic slumps. Some have forgotten this happens. But we always bounce back. The current economic and political climate has everyone on edge, but regardless of who’s in office, we believe the industry will rebound and stand strong once again,” declared an anonymous dealer.

Members can read the complete MRAA Pulse Report here.

If you are in doubt about any of the processes discussed above, we want you to be able to dig in deeper and use all the tools that we have available. If you are not a member, please contact Sherri Cuvala, Director of Membership, or visit join MRAA.