Dealers markups

Discussion in 'Boatbuilding' started by k76, Aug 28, 2007.

  1. k76
    Joined: Aug 2007
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    Location: Lake Macquarie, Aus

    k76 Junior Member

    I'm looking into the feasibility of producing a small'ish sailboat. I've got a fair idea of what the retail price will have to be if I'm going to sell anything, and I'm working my way through the production costs. If I'm going to be able to sell any number of boats I need to sell through dealers, and they obviously want a cut. Anyone got an idea of what they will accept? Any tips on how to handle them? I'll talk to them in due time of course, if I decide to proceed.
     
  2. Pericles
    Joined: Sep 2006
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    Location: The heights of High Wycombe, not too far from Rive

    Pericles Senior Member

  3. Raggi_Thor
    Joined: Jan 2004
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    Location: Trondheim, NORWAY

    Raggi_Thor Nav.arch/Designer/Builder

    I am guessing at 40% of the retail price.
    It's normal that the sales person earn more money than the designer and the manufacturer :)
     

  4. alan white
    Joined: Mar 2007
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    Location: maine

    alan white Senior Member

    Discount structures are established from retail price, which is almost never gotten. Even a deep discount to a dealer of, say, 80%, may leave the dealer with little incentive. He in turn may have to discount 60% to make a profit.
    Therefore, forget about discount structures except as a way to reward dealers who buy a lot of boats at once.
    Ask yourself what the boat will realistically sell for and figure on grossing half of that. You may do much better or worse. To a dealer, a hot-selling boat is worth making only 10% on, but a slow-selling boat isn't worthwhile as an investment unless the payoff is much bigger, say, 60%.
    Your talent in efficiently producing a hot-selling boat is what determines, in the end, how much you make per boat. Dealers pay different percentages and there's no hard and fast rule, just the law of supply and demand.

    Alan
     
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