JIRSACK - STOCK.ADOBE.COMIt’s dealer meeting season, which means that by the time you’re reading this, the verdict on the year ahead will be largely cemented in the minds of our dealers and manufacturers. Dealer meetings are where the conversations about the year ahead really begin. It’s where dealers show up to see new products and hear about new manufacturer programs. It’s where they connect with same-brand dealers to get a pulse on the marketplace. And it’s the one place where dealers don’t just talk, but are asked to put their money where their mouth is and place bets on how many boats they’ll be able to sell in the new model year.
Like all things in business the past few years, the continuing effects of the pandemic will be in play. Dealer inventories are largely still too low, but the days of taking orders on presold boats are coming to an end. “The tide has changed,” one dealer recently told me. “What’s transpiring is that all the preordered boats have been delivered, and new-boat sales have completely dried up. We are getting more aggressive with pricing, and I’ve had to start discounting boats in inventory. I should end the year better than last year, but the rest of the year will just be trying to not bleed too much.”
You don’t have to look much further than the June Pulse Report — published by MRAA, Soundings Trade Only and Baird Research — to understand that this dealer is not alone. In our question about the outlook for the second half of the year, dealers proved guarded at best. “I expect the second half to be challenged for new business,” one dealer commented. “Economic headwinds are apparent,” another noted. “Expect weakening demand to accelerate,” yet another forecasted. “Heading into the second half of the year up about 10 percent over 2021, but it’s going to be a challenge to hold the lead, as sales activity has decelerated.”
Yet another dealer noted: “The market is tightening with fewer buyers, which will create less demand as the supply grows. Over time, this will affect pricing and margins, and will weed out the dealers that are not prepared for the slowdown.”
Welcome to the post-pandemic marketplace. The question you should be asking yourself is: Am I one of those dealers who is not prepared for the slowdown? No matter how your business fared at the six-month mark of 2022, no matter the tone of the news you chose to share at the dealer meetings, and no matter how your business is doing today, there’s no denying the shifting trends affecting dealers across North America.
That doesn’t mean, however, that you have to fall victim to those trends. The cycle of the boat business is somewhat logical and predictable. There are indicators — interest rates, unemployment claims, home prices, consumer confidence and more — that in many ways foretell where the market is headed. Good boat dealers adjust their business accordingly.
Start with the honesty and transparency necessary to identify bad habits your team developed during the pandemic. The past couple of years have felt like a race against the clock to get boats ordered, prepped, delivered, serviced and more. And customer demands didn’t made things any easier. Along the way, you have cut corners and found easier routes. If you’re lucky, those practices haven’t caught up with you yet, but that’s where a turn in the marketplace can upend your business quickly.
If sales activity is slowing, take a look at the sales side of your business. Does your team have new salespeople who know nothing different than no inventory, everything’s presold, and margins are 30 to 35 percent? Or do you have seasoned salespeople who have forgotten about the rising inventory days of 2019 and the skinny margins required to move product?
One way or another, it’s time to identify and rethink your approach to the business. It’s going to be good to have inventory back on the ground. We need to expect that it will get back to normal. Customers are starting to negotiate again. That’s normal. Does your team remember how to operate effectively in normal times?
This is where discipline comes into play — the discipline to get back to good habits, and the discipline to forgo anything extreme or misguided. Having inventory is right. Too much inventory is wrong. Do you know the balance? This December in Austin, Texas, you and your team will have access to the definitive playbook on how to instill the discipline you need to be successful in the post-pandemic marketplace. MRAA’s Dealer Week, a three-plus-day educational event, will offer more than 20 courses for dealers about the latest trends, leading strategies, expert advice and best practices.
The MRAA team has broken these courses into three focused tracks: Sales and Marketing, Leadership, and Service and Parts. You can view the entire lineup at DealerWeek.com/education. Dealer Week will give you tools to better market and sell your brands, improve your service department’s effectiveness and profitability, and lead your team to sustained success no matter what the market offers.
If dealer meetings are where the new year’s conversations begin, Dealer Week is where you have the final say in how you and your business will approach the year ahead. Don’t miss the opportunity to set the right course for the post-pandemic marketplace.
Matt Gruhn is president of the Marine Retailers Association of the Americas.
This article was originally published in the September 2022 issue.
