The word on the street is that expert advice has taken a hit lately, as certain parts of society seek out advice online in the form of YouTube videos, online influencers and other online outlets to find their own information to surmise a strategy for their business, health and life’s other decisions. Call me old-fashioned, but I still prefer picking the brain of the wise. Why? It’s these educated — through their experiences and schooling — individuals who have their fingers on the pulse of the topic and subjects that they are experts in. They also use their ears to hear what’s really going on in the real world.

That’s why, when we started out to construct a pre-owned boat market article series, we sought out some of the marine industry’s most sought after and well-respected experts. I’m happy to say that all their collective years in the business, industry knowledge and discussions have built a bank of insights that can help you find more success in your pre-owned boat sales efforts. Here’s a synopsis of each article in our series — that can be read in full in our soon-to-be-released “The Ultimate MRAA Guide to the Pre-Owned Boat Market”  — that can illuminate a pathway for your team in its pursuit of prosperity.

Article 1
7 Tactics for Managing Your Pre-Owned Trade-In Process by Carrie Stacey, Founder Stacey International, LLC
Trade-ins are the lifeblood of new unit sales when they are done correctly. Having a Pre-Owned Boat Trade-In Process to manage your trade-ins and pre-owned boat buying can be a major contributor to the success of your business. This is especially true with new boat inventory still hard to come by and the return to normal (pre COVID-19) remaining unpredictable as the marketplace. Remember, margins are better on pre-owned boats and the first step toward selling new boats and a more profitable experience!

Article 2
Tap Into Your Captive Audience for Quality Pre-Owned Inventory by Valerie Ziebron, President VRZ Consulting
We’ve all heard the phrase “We don’t have anything to sell” said at least once over the past two years. Some live (and regrettably struggle) by that mentality and mantra. While others have adapted to ask, “How can we find inventory and keep our pipeline filled with deals?” This article offers 16 valuable insights for adding pre-owned inventory and improve processes at your dealership to overcome challenges.

Article 3
Using Consignment to buy More Boats by David Parker, President of Parker Business Planning
How can a dealership add more boats to its inventory when new boat inventory levels remain low for the foreseeable future and the growth in demand for pre-owned boats has also skyrocketed? Despite a tight market, marine retailers can add two effective ways to obtain quality “used” boats for sale. That is through consignment and direct purchase.

Article 4
When Will the Boat Inventory Normalize? What if it Doesn’t? by Sam Dantzler, Garage Composites, Wheelhouse College
Have you considered becoming a boat hunter as a solution to counteract the low inventory levels of new boats and to add more pre-owned units to your showroom? By taking an aggressive and proactive approach to add as many quality pre-owned boats as you can, you’re making it a top priority and separating yourself from the unpredictable retail/inventory levels over the past couple selling season.

Article 5
5 Elements of a Successful Boat-Buying Campaign by Tim Schmidt, VP of Digital — Octane Marketing
Acquiring quality preowned units is more critical than ever. The best option is to improve how you purchase pre-owned boats directly from owners looking to sell. Learn about five key elements of a successful boat-buying digital marketing campaign, and common pitfalls to avoid.

Article 6
The Selling Game by Tony Gonzalez, Garage Composites (An MRAA Dealer Week session excerpt)
The demand for boats is as strong as it has ever been, but constant and unpredictable supply chain struggles and slow inventory responses have forced dealers to pivot in order to satisfy the consumer demand for boats and the boating lifestyle the comes with it. The pre-owned boat market, if effectively tied a marketing plan with tactics and a formal process, can help appease the needs of many of your customers.

Article 7
Increase Inventory, Reduce Risk — A Win-Win by Caroline Mantel, Director of Business Development, Boat History Report
When times get desperate, often time businesses and consumers look for simple short cuts or way to profit quickly. Although pre-owned boats can be found and purchased, despite more recent growth in demand, there are certain risks out there to avoid and also untapped potential. There are proper steps you should take to get more pre-owned boats, avoid potential fraud and improve your business.

Article 8
The Changing Landscape of Pre-Owned Boat Values a special interview with Lenny Sims, VP Business Development/Strategy — Specialty Vehicles for J.D. Power
What are dealers to do when the pre-owned boats for which they have recently received valuations are higher than their market will support? In this exclusive MRAA interview with Lenny Sims, VP Business Development/Strategy — Specialty Vehicles for J.D. Power, we dig deep on the topic of pre-owned boat values, inflation, how boat pricing is set and more.

Article 9
Maximize Your F&I Profit on Pre-Owned Boats by Myril Shaw, COO, Dealer Profit Services
New boat inventory issues persist, so pre-owned boats offer dealerships an option for added profits and consumers an option for getting out on the water. But what happens if the new boat inventory levels normalize and pre-owned boats become too numerous? It takes the correct approach in order for pre-owned boats to be a significant factor in every dealership’s sales and F&I profit.

Article 10
MRAA Pre-Owned Boat Sales Process by Bob McCann, MRAA Lead Certification Consultant
The MRAA’s example Pre-Owned Boat Sale Process Map highlights each of the necessary steps that marine retailers need to take prior to selling the pre-owned boat. Yes, it’s not just a turn and burn effort when it comes to finding success in the pre-owned boat market. This process has three different stages, Acquire, Refine and Market and the correct procedures necessary for each.

Bonus article about “Full Disclosure Selling,” a special interview with Dale Finch, President & CEO, Titan Certified Inc.
We just added a special Q&A session with Titan Certified Inc. President and CEO Dale Finch discussing “Full Disclosure Selling” and the testing portion of MRAA’s Certified Pre-Owned Boat Program, which includes the independent third-party testing process in order to obtain Certification.

MRAA Members can access these full-length articles in “The Ultimate MRAA Guide to the Pre-Owned Boat Market,” here: https://mraa.com/preownedboatmarketguide/

Insights to Help You Identify and Avoid Any Traps Along the Way

By Jared Zimlin, Director of Business Development, Elite Recreational Finance

In the new norm we are currently in, demand is up and the supply of new boats down or delayed. Because of this, many dealers are turning more and more to selling pre-owned boats. There are some great opportunities for a dealership to gain new customers as well as hold strong margins.

As with new boat sales, the bulk of customers finance their purchase. Even if they are paying cash, many are just going to their local bank to get the funds, so we also consider those as finance deals.

Here are 5 important tips to help you get more pre-owned boats approved and avoid some traps along the way.

1. Keep the Financing at the Dealership
You can’t control the sale if you let the customer get their own financing. When a customer goes to their local bank, several things can happen that will cost you a sale. And it also generates a lot of questions, such as:

• Does their bank lend on used boats?
• How many model years back will they lend?
• How do they value a pre-owned boat?
• Could they tell your customer “you are paying too much” because they don’t allow for electronics and other equipment on the boat?
• What if they do more business with your competitor and refer your customer there?

Questions, questions, questions! This is all you have if you let them walk. Most marine lender programs offer strong pre-owned programs. The rate may be bumped a bit and the terms may be shortened or not; it depends on the bank and the customer’s credit. It’s important to know that if you keep the financing at the dealership, you are less likely to wait for those customers riding the “Be Back Bus” that never turns around.

2. Understand Indirect vs. Direct Lender Programs
From a lender’s perspective, pre-owned boats and consignment boats are two different things. If you read your Indirect lender agreements, they all state that you own the collateral you are seeking to help finance. Indirect lenders will want to see a clear trail on the title from the previous owner to the dealer to the new owner. If you don’t own the boat and are simply consigning it, you’ll need to partner with lenders who have correspondent programs and can lend on a peer-to-peer transaction with you simply acting as a broker.

3. Know Each Lender Age Restrictions
Each lender looks at pre-owned boats differently. Some lenders only go back five years, while some allow for 10, and there are some that will go back as far as 30! This is key when making sure you have the correct mix of lenders in your portfolio. If you put your finance eggs in a small number of lender’s baskets who only go as far back as 10 years and take a trade or pick up a boat at auction that is a 2009, you will not be able to best serve the customer’s finance needs. The easiest place to find this information is on a lender’s rate sheet.

4. Understand Each Lender’s Loan to Value
Knowing the loan-to-value determination is critical. It can help you close the sale or lose the deal. Just like age restrictions, each bank has different rules when it comes to valuing the Loan to Value.

First, what is loan to value? Simply put, it’s the amount to finance divided by the value accepted by the lender. So where does that value come from? Primarily lenders look at NADA. Some will use BUC and occasionally look online for comparable figures. Since NADA is the most widely used, let’s stick with that. You need to look at a lender’s rate sheets to see what value in NADA they use: “Used Trade-In,” “Average Retail” or “High Retail.” Most lenders use “Used Trade-In.”

Next, you need to determine what that will advance above that value, and will they make exceptions for options? Some lenders will take “Used Trade-In” + 10 percent then add 10 percent for options. Some will do ‚”Used Trade-In” + 25 percent all in. The important thing here is, read your rate sheet and know the program.

Why is this critical? If you want to hold your margin on the sale and the lender is only going to advance so much above the NADA value, you will need to get the extra as a down payment.

5. Market Pre-Owned Boat Financing
In the words of the Grinch, “Solve world peace, tell no one.” This holds true for pre-owned boat financing. If a customer knows they can finance, they may be more likely to purchase. Maybe they are a payment buyer. Maybe they are doing well in the market and want to keep their cash working for them instead of putting it into a used boat. Whatever the reason, if you offer financing, let the world know. Place a note in your ads, as well as on your website and social media feeds. Get some signage. Post payments on boat tags.

These tips are meant to help you capitalize on the increased desire for pre-owned boats. There are other areas to focus on with this segment including service contracts, cash conversions and all the nuances between lender programs. However, those are universal topics to all F&I training, so this article is meant to provide you with actionable items to increase your ability to get more pre-owned boats approved and make more of your customers’ dreams of being on the water come true.

About the Author
Jared Zimlin is the Director of Business Development, Elite Recreational Finance, Education Champions with MRAA. Zimlin draws upon his two decades of business development experience solving problems for manufacturers, distributors and dealers across multiple industries with comprehensive retail finance, equipment finance and inventory finance solutions. A University of Florida alum, Zimlin is an avid cyclist and Club President of Gearlink Racing Inc.

In November, 2021 MRAA launched the Marine Industry Compensation Study. It was conducted for the first time in 2017 and came as a response to an industry-driven desire to identify compensation and staffing trends in dealerships across North America. With several years having passed, economic and workforce changes and, of course we can’t forget the COVID-19 pandemic, we have been curious to know what has changed for dealers in terms of compensation. Now, after several months of waiting, we are happy to announce we are just two weeks away from releasing the full report!

While some of the data is still being flushed out, here are some things you can look forward to seeing. With 102 dealership responses, initial data has come in for 37 positions for total compensation and other compensation information. Positions reported come from the front office, sales department, service department, parts/accessories/retail department and marina and include:

• Front Office: Owner, General Manager, Receptionist, Bookkeeper, Controller, Warranty Administrator, Title Clerk and Accounts Payable Clerk
• Sales Department: Sales Director, Sales Manager, Sales Lead, Sales Consultant, Sales Assistant/Lot Attendant, F&I Manager, F&I Associate, Sales/Marketing Assistant, Marketing Manager and Internet Sales Manager
• Service Department: Service Director, Service Manager, Service Apprentice, Service Technician ‚Äì Entry Level, Service Technician ‚Äì Intermediate, Service Technician ‚Äì Senior/Master, Service Writer/Advisor, Boat Detailer, Rigger, Service/Parts Associate and Shop Foreman
• Parts/Accessories/Retail Department: Parts Manager and Parts Associate
• Marina: Marina Manager, Gas Dock Attendant, Marina Operations/Maintenance Personnel, Storage Runner/Yard & Marine Attendant, Yard Foreman and Yard Staff/Porter

The data for each position has been broken down based on characteristics such as geographic distribution, region (metro/suburb vs. small town vs. rural/low population), revenue (more or less than $10 million total annual revenue), Marine Industry Certification Dealership status, number of employees and whether or not there is a marina.

The 2021 Marine Industry Compensation Study was launched with support of the Bill & Kristin Fenech Foundation on behalf of Barletta Pontoon Boats and will be available mid-May.