Boating Industry

October 2014

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20 | Boating Industry | October 2014 [ 20 Groups ] showrooms, professionalism of the sales force, sales presentation, consistent lead follow-up, ser- vices offered such as winterization and storage and a great delivery experience are just some of the factors that help drive sales and margins. Long-term 20 Group members consistently increase sales volume, improve service and CSI scores and significantly upgrade their facilities. Very often, they build new stores and/or add additional locations, which in turn increase sales, all while significantly increasing net profits. The higher net profits create better balance sheets, allowing for increased floorplan limits and the ability to upgrade their facilities and buy more products. This is truly a win/win scenario for both the dealer and the manufacturer alike. Unless your brand is promoting entirely to an entry-level buyer, low price is not the primary reason that customers buy a boat. However, deal- ers who sell to this market segment can also ben- efit from the 20 Group experience by improving all the other profit centers in their business. MISPERCEPTION — 20 Groups encour- age dealers to stock fewer boats. REALITY — 20 Group members are encouraged to stock the proper lev- els of inventory in order to average two plus turns annually. GE recommends that marine dealers achieve at least two turns (a six- month supply) to remain financially healthy. Our dealer members are encouraged not to exceed four turns (a three-month supply) as they are likely to miss boat sales due to insuf- ficient inventory. So the "sweet spot" is between a three- to six-month supply of inventory at all times. In order to achieve higher than two turns, we encourage dealers to pre-sell boats from manufacturing slots. MISPERCEPTION — Warranty claims increase when a dealer joins a 20 Group (implying bogus warranty claims are submitted). REALITY — True, warranty claims do increase, but not because dealers are trying to hurt the manufacturers. Prior to joining a 20 Group, most dealers are dis- organized in their service departments, so they do a lousy job of submitting warranty claims on a timely basis. We emphasize proper monitoring and reporting of ALL service income, including warranty. Dealers are entitled to all amounts they are legitimately due, but dealers are never encour- aged to submit bogus claims. The resulting in- crease in warranty claims represents the amount that should have been submitted all along. MISPERCEPTION — Dealers like doing warranty work. REALITY — Dealers greatly dislike doing warranty work. Warranty rates typically allow less time than jobs normally take and often reimburse at lower than

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