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View Full Version : how much to start a boat dealership



axkiker
07-12-2006, 04:43 AM
Hey has anyone out there looked into opening up a boat dealership. Not that I am really considering it but im currious as to how much financial backing one would need in order to get something underway. Might be something I would consider in the future. I know there are alot of variables such as brand and amount of inventory etc
what are your thoughts, any ideas as to the ins and outs. Are there lending institutions which specialize in this. Idealy it would be great if a lending institution would flip the bill for inventory up front then allow you to pay it back as it sold. Almost like a line of credit. Thats how we did it in the mortgage business anyways. Any knowledge of the success rate for boating business.
I know this is vague im just trying to get ideas.
thanks

ChumpChange
07-12-2006, 05:59 AM
Wow...this response is going to take a long time to type....too much for me at least.
Financing your inventory will be about the hardest thing to find. Banks have labeled dealerships high risk lately due to the fact that they never know where their collateral really is. A flooring line, somewhat comparable to the wharehouse line that you speak of in the mortgage industry is the line of credit that you'd need. The difrerece is a flooring line generally comes from the manufacturer of a product/boat with terms such as 90 days interest free. What boat manufacturer is going to finance 'your' dealership when most don't carry inventory themselves. That statment is of course different if you're talking Bayliner type boats and not custom.
I used to be able to finance used car dealerships. Generally they cannot get a flooring line because all vehicles are used and provide no factory based financing. As the bank, I know the owner of the dealership probably drives one of his cars around, lets his wife drive any car off the lot as well as let his girlfriends drive any car off the lot. The bank never knows where or what the inventory is doing, thus making it high risk.
There is plenty more to say....I'm just not going to type it. Takes too much time.

phebus
07-12-2006, 05:59 AM
From what I've seen from most dealerships, you don't need any money. You just need a good book keeper to juggle the funds, and rob Peter to pay Paul..........
Then, when it all catches up to you, close the doors in the middle of the night, and go open a new dealership :D

ThongMagnet
07-12-2006, 09:03 AM
Eliminator will let you setup a dealership. Basically you need to buy 3 boats from them ($300-500K).
Good luck...this is not the time to open a new dealership.

Cole Trickle
07-12-2006, 09:13 AM
Good luck...this is not the time to open a new dealership.
my thoughts exactly! :)

andy01
07-12-2006, 09:15 AM
Most custom builders will set you up with a three boat buy in. Paid for up front, that is how you start "dealer pricing" then you buy and pay for them as time goes on. You'll need first and last months rent for a big lot to park your boats on. You'll need a mechanic to fix little things, you'll capital to take trades in and a detail guy. You'll need insurance and a list of other things depending on state. I would say with a million dollars you could do it real easy, you can start a boat company off of a million dollars with backing. Just depends on how big or small you want to start out, you could do it for a lot less then a million if you had backing on the inventory and didn't put the dealership in a high rent place. Why do you think so many of the boat builders and dealers are not in LA/OC. All of the boat builders at sometime where in OC then rent went up/property value went up and they moved further out.
Good luck with your idea, it can make money..... how fast and how easy depends on the boat line you carry and boat qaulity.
Andy

axkiker
07-12-2006, 09:18 AM
yeah its just something that I think about from time to time. I kinda agree that its probably not the right time for a boating business. Maybe more of a brokering business, but the new deals are probably on the decline with everything else.

2Driver
07-12-2006, 09:20 AM
About 1988 The "Boat Broker" came to town (LHC) and rented a small dirt lot and some chain link fencing off Acoma. Everyone laughed, "like a town of 17,000 people needed yet another "boat dealership".
If I remember he started with 3 old used boats on consignment on that old piece of dirt and advertised it like it was the biggest boat dealership west of the Mississippi. I'm convinced there is always room in a saturated market for someone who can do it "better" than everyone else.

ThongMagnet
07-12-2006, 09:24 AM
yeah its just something that I think about from time to time. I kinda agree that its probably not the right time for a boating business. Maybe more of a brokering business, but the new deals are probably on the decline with everything else.
Consignments and boat repairs are always a good time in the warmer states. In the summer its always going to be busy. From there you pick-up a customer base, and a dealership is possible.