Contract building of boats

Has anyone ever heard of a boat company that would make boats, based partially on their own design, on a contract basis?

What I'm asking is, say you have a boat company that makes a very good hull, the right power, the right size, etc. From the shear line down its exactly what another party is looking for.

The second party has a deck, cockpit liner, etc, designed and molds made and delivers them to the boat company. They would be substantially different then the way the boat companies original design looked so the second party would not be seen as to be trying to steal business. Then the boat company would build complete boats on a contrat basis, to be private labled and sold to the public by the second party.

Does this sound like it would be good for both parties? As long as the boats are different enough, I would think that the boat company could get better utilization from their facilities and personnel which would help their bottom line. And the second party would benefit from less up-front cost and a proven hull design. They could direct their efforts towards marketing the boats.

What do you think? Have you ever heard of having boats built by one company to be sold by another under a private label?

Dennis

 

Dennis,

This happens rarely because the deck, liner, etc. never fit on any other hull design. The fit has to be perfect or it's a no-go. Therefore, no one wastes their time doing it.

What some builders will do is build a standard hull and customize the interior and decks to owner demands. This is semi-custom boatbuilding, which is a little cheaper than full custom boatbuilding because you get to use the same hull design over and over again.

Eric Sponberg
Naval Architect, PE

Now located in St. Augustine, FL (having recently moved from Newport, RI)

 

Some companies, like Duffy&Duffy, sell hulls or semi finished boats. If anybody wanted to buy several and put their deck and liner, it would be feasible. However, for a boatbuilder to be supplied with a deck could be a lot of extra work. I tell my customers, when they supply their materials, that the jobs are straight time. Who would you suggest be responsible for alterations or extra time for fitting?

 

Lots of boat manufactures use different deck arrangements for the same hull. That in itself shouldn't be a problem at all.

My thought was to have a deck and cockpit liner mold set made, in close cooperation with the my designer, the original hull designer and the builder, and then supply the molds to the boat builder. This should assure that the alternate deck/cockpit liner fit as the original.

The builder would build the entire boat using their hull molds and the deck molds supplied to them. With proper input, and planning there shouldn't be any surprises. I could see how a builder would not want to lose their markup on components or labor.

The difference to the boat builder is they have zero outlay for the new molds and bottom line, they sell more boats.

The form of the contract would have to deal with how the boats ar to be finished out, how warranties issues are handled, quantity of boats over how long of a period of time, etc.

They would not be doing this for free or really for any less then they would bid and aggree to do the work in advance. I would think, and I may be missing something here, that if the terms were right, a builder would jump at the chance to build more boats.

The second party would "leave the building to the builders" and concentrate on marketing. Their profit would be the difference between what they paid the builder, their marketing expense and other costs.

Dennis

 

Quote:
Have you ever heard of having boats built by one company to be sold by another under a private label?

This is already done by a number of boat builders, as is dual brands. One manufacturer builds them then uses the others marketing network to reach a wider market. Both benefit. There are a couple of boats built here in OZ that are marketed as something else in the US under a US builders badge. Makes Americans feel good about themselves I guess. (Sorry I used you yanks as an example but is the only example I have specific knowledge of)

Brett

 

Well I hadn't thought of so far away, but what the heck. Someone must have some plant capacity they would like to utilize. I know at my work we are always looking for new products to sell.
Dennis

 

I have thought for a while that if I ever was foolish enough to start building boats, I would design the boat and have the tooling made. Then I would find a builder with some excess capacity and have them build the boats for me. That way I can just deal with the design and selling and let the builder deal with the employees, government and bankers. Now, if I could just find someone with a quarter million dollars to loan me at no interest, for 40 years.....

 

I am looking to start a boat building company. My interests are in High performance pleasure boats. I too have been looking for an existing boat company to build my first series of boats with my specifications. It is possible and I have found that company. I will be starting my first boat this November. I am looking for people who want to work with me in the developement of this company. We will want different people with different talents. We will need actual fabricators, designers, engineers etc. Please contact me if you have interest in working together on this project. Thank you, Kurt Scrudato Kurt@walkonwood.com

 

Timm,
My thoughts exactly. Although I wouldn't have guessed it would take a quarter mil. There would be design costs, and then having the molds made. Does anyone have an idea as to what these things cost?
What would it cost to have a design done to the point it could be shopped for building it?
What would it cost to have a high quality mold(s) made?
Anyone have any experience with either they wouldd like to share?
Dennis

 

The cost all depends on the size of the boat. A few years ago, I got quotes from a number of people to build plugs and molds for a 20' walkaround design. The hull, deck and small part molds were going to cost somewhere between $100,000 and $125,000 US. That didn't include the first boat, which would probably cost $15,000 for materials. Labor would probably be a couple hundred hours as it is a prototype. Then you have to advertise, go to boat shows, have a truck to haul your prototype around in, a trailer . . . I would think you could easily blow through a quarter mil setting up a company to build a 20'-25' powerboat. You will notice I didn't include any design costs. I was working for the boat company so I didn't keep track of how many hours it took. I imagine I could design a similar boat for a client for a few thousand dollars, although the detail would be somewhat limited.

The least expensive way may be to find some older molds and refurbish them. I know of one successful boatbuilder who started out by picking old molds up out of peoples yards, they just wanted someone to haul the junk away. He rebuilt the molds and started making small boats. As he has gotten more successful, he started tooling up new models from scratch.

 

Gentlemen,

Of course, the cost of the tooling is a function of the size of the boat. On a recent speedboat project for a small runabout, the client spent nearly $500,000 on design, CNC milling of the full size hull and deck plugs, prototype tooling, and final production tooling. This was a little high for a small speedboat, but not out of sight. You have to expect tooling to cost some big bucks, because the quality of your parts can never be better than your tooling.

I worked with another major boat manufacturer a few years back on the production tooling for a 65' motoryacht. He spent well $1 million on prototype and production tooling.

There are a lot of problems with your idea about farming out the tooling to different builders. First, of course, is the first cost of the design and the tooling. You have to make your money back that you put up front for the design and tooling and that is going to be tacked onto the price of the finished boat, in addition to all your other sales costs.

Also, boat building is most successful and most profitable when you can make many boats exactly the same time and again. You are proposing making one boat here, another boat there, etc.... There ends up being no production history from builder to builder. Every boat will be different anyway, so where is the savings in the learning curve, in the cost of production materials, etc. There is none.

Two other factors to consider are, if you move that tooling from builder to builder, you are going to do a lot of damage to the molds in transit. Molds don't like to move--they twist and crack. Plus you have to add in the cost of moving the tooling in the cost of the boat. That's no good.

Finally, why would one builder want to build your boat one day, only to have another builder build a similar boat the next month. Why would a builder want to build against his competition? If he has room to build one boat, he would want to keep that room for that boat so that he can build more. Once he has use of the molds, he would not want to let them go. If another order is coming, that first builder will want it.

Also, if you change builders, you will change quality--no two builders are alike, and the boats will come out different every time. Maybe not badly, but they will be different.

So as far as I can see, there are a lot of practical considerations against your idea. I don't think it will work.

Eric

 

Eric,

I agree that it makes no sense to switch from one builder to another. My thoughts were that you would contract for long term production of the boats by one particular builder. This is already being done in Europe, Scandinavia and New Zealand that I know of.

This scheme would not work well if the boat was not highly standardized. If I ever did this type of thing, it would be with a smallish (20'-25') sportfishing boat, probably a center console. Every boat would be the same color, there would be few options and the boat would be as simple as I could make it. It would probably have pretty simple and straightforward construction thus helping ensure long life and lower warranty problems.

As far as farming out the tooling, this is how the industry works at present. Most smaller builders do not have the staff to tool up their own designs, thus the reason for all the tooling companies such as Marine Concepts, North End Composites, Vectorworks, etc. . . .

Eric, on another note I hope your recent move to Florida went smoothly and that you have managed to unpack enough to get back to designing. I myself moved back to Florida last winter and I am still trying to get organized again!

 

My thought was to have one builder build all the boats. Furthur, to save costs for my design and maybe to allow the builder I partner with to get more utilization out of his hull molds, I would try to find builder with a hull (just the hull) design that would perform exactly how I would envision the finished boat to be, had I built my own hull. Then working with my partner-builder, I would have my designer work with his designer and come up with the deck, cockpit liner, engine boxes, etc, that would be needed for my partner (the builder) to build the boat we all agreed could be built.
I can't see a down side.
The builder builds more boats for which he is fairly compensated as agreed up front, without having to layout money for tooling. The new boat design would be totaly indistinguishable (sic) from the boat he also builds and sells under his own name so it should be a totaly new customer base. A builder might be able to save some money on his own boats due to the economies of scale. Buy more engines and your going to get them each for less, right?
The advantage to me would be I wouldn't have to hire and employees to build them, wouldn't have to have a plant to make them in and would only have to have the deck, cockpit, etc molds made. I have a pre-determined price that I purchase boats for and I sell them myself. I amortize the design and mold costs out over the boats I sell.
Yes, I suppose if the contract were ever terminated, the molds could go elsewhere, but they were made to fit a hull design I wouldn't own so what would be the point. They would'nt fit anything else.
If I were a builder a someone asked me if I wanted to build boats for them why would I say no. I would look at the plan, decide how much I could build them for, add a profit and quote the guy.
If I didn't, someone else would.
And Timm, I haven't seen that check for quarter mil yet, what gives????
Dennis

 

Sorry, I wasn't signed in when I wrote the above.
Dennis

 

I guess I misread your original intentions when you were speaking of one party, second party, etc. Certainly, if you can find a builder with a suitable hull design, to which you would add your take on the layout, construction, etc., that may work. The key is finding the right builder with the right hull design to begin with.

In the end, at worst, the builder may still be working against himself by building two boats of the same size which may compete against each other. Alternatively, if your new design is a significant improvement over the original design, then your input would naturally translate back to the original boat with structural and design improvements. So two boats that are fairly different will end up coming closer together in design and construction. Again, they will compete against each other, and one of the designs (probably the older one) will eventually get retired. But finally, in the ideal world, both boats will be hugely successful, everyone makes money, and you can all eat ice cream at the end of the day.

It will all come down to economics--cost to redesign and retool vs. income from sales. The better design for the market will win out. And there is nothing wrong with that. The boat building business survives on new product. J-Boats is probably the best example of that. They are a hugely successful company, and that is because they are always designing new boats. Sometimes they rework a deck and interior for existing hulls and call the boat something else, but also they are always bringing out new models. So they make money on attracting both new customers as well as offering their tried and true older customers something fresh.

Aside to Timm--yes we are all moved into our new house in St. Augustine and my design business continues to scoot along. I have 2 motoryacht designs being built up north with prospects for 2 more new designs coming up next year, and a 37' sailboat design with the latest in my free-standing wingmast technology being built in Michigan.

Regards,

Eric