Negotiating Price On a New Cat

[Bulawayo]

I do wonder at this...... I accept that a broker might have X% commission but why use a broker? Naturally, it shall depend upon on locations but why not negotiate directly? We have bought three new cats directly from the factory and each time we did manage a very substantial discount. For anyone seeking clarification we physically went directly to the factories concerned and talked to the people that made decisions. I would imagine if you went directly to the Lagoon factory when they were in the middle of producing a bunch of charter vessels that you would be wating your time. However, if you went in between times there might well be a different attitude. As I was always taught "cash is King" - if one factory wont play ball there are many others who will put out the red carpet for you. I am sure several of the South African factories shall welcome you with open arms: and quality will not be affected.

[Steamer]

Originally Posted by Bulawayo

... I accept that a broker might have X% commission but why use a broker? Naturally, it shall depend upon on locations but why not negotiate directly?...

NUMBER OF YARDS ("NAMES") MAINTAIN VERY STRONG DEALERSHIP PROTECTION POLICY. PROSPECTIVE BUYERS WILLING TO TALK DIRECTLY TO THE "BOSS" WILL BE AUTOMATICALLY SWITCHED OVER TO PROPER REGIONAL DEALER.

++

... I am sure several of the South African factories shall welcome you with open arms...

KEY WORD ABOVE IS "SEVERAL"! EVEN THERE IN S.A. WE HAVE A "NAME" WHO WILL NEVER ACCEPT DIRECT CONTACTS WITH THE YARD MANAGEMENT.

THERE ARE ALSO GREAT DEAL OF THE YARDS WORLDWIDE ABLE TO BUILD QUALITY BOAT WITHOUT ANY "THIRD PARTY" INVOLVED.

+ Fully agree with the rest of message.

[sailpower]

Buying direct sounds great. The manufacturer can subtract the 15% dealer commission and you just saved a bunch.

BUT, who commissions the boat? If the factory does it then they will have to add that expense back in.

After that who does the warranty work? Are you going to take the boat back to the factory? If so, better add that future expense back in.

After those calculations are you saving enough to make it worthwhile? If yes then good luck and well done.

I suppose if a manufacturer cuts out their dealers on a regular basis they will soon be out of stocking dealers. What then?

[Bulawayo]

Isnt that the whole point? I read about how cars and boats are different. But are they really? Break it down. We are buying a product, whether it be a boat, car or house and the seller wants our money. We are often talking about sums of money in excess of many property costs. Why do we have to accept (and believe) that these guys are making just a few percent? Certainly they wish to protect their position and income and that is natural, but we should have the choice. As for warranty work; is that really so impossible to work out? What does a broker do that we cannot? In this day of comms it is so easy to get a live uplink to establish an issue. Many organisations already do this. Just why do we defend and support such an arrangement that costs us money? As for commissioning a boat - well, I certainly do not need spoon feeding with such help - what do you do when you buy a car or a house? Does someone hold your hand every step of the way?
Perhaps we should be given a choice. Use method 'A' and pay (for example) $450k and be cosseted the whole way or take option 'B' and pay $400k and commission at the factory & sail away with your standard warranty in place.
Why do we just accept (and defend) the way we are sold our boats without even attempting to question this?
Again when we talk about brokers (and South Africa) there are builders there whom are more than happy to talk to buyers directly, and for those of us following the story of Hugh buying his new SF50 demonstrates ably this situation. I dont have specifics but I imagine the factories that follow such a regime shall be the massive bulk production factories like Fountaine Pajot, Lagoon, possibly R&C; companies that mass produce for the charter market. If a factory wont want to talk to us then we might question why? Protectionism? The smaller factories, I believe shall welcome the contact as it means potential business. Also, remember that many smaller producers do not offer significant remote support but may have a representative in a major market location to assist with any issues that may arise. However, others may opt to just resolve or agree a solution from a distance.
Remember, we are paying them and yet they set the criteria and then demand we follow their dicatate? If this happened in the workplace there would be massive discontent.

[brownoarsman]

Here's an interesting spin: can the savings gained by approaching a smaller factory directly for a build be used to have a catamaran custom-built with the expertise of a naval architect?
Put another way: does savings equal the cost of lost efficiency from existing molds as well as the added costs of design plans from a naval architect? Or, are the smaller yards mentioned working on their own production models and this is just about asking for a lower price on that specific model?


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[alansmith]

Maybe it's my age. But I feel that there are so many nice clean well thought out boats to be had on the used market why bother with a brand-new boat. If you look at Moorings and see how much the boats are being sold for after only five years of service in their fleet I would vomit to see I had lost over 50% of my value of my brand-new boat in five years. that's a lot of jing.

[downunder]

Originally Posted by brownoarsman

Here's an interesting spin: can the savings gained by approaching a smaller factory directly for a build be used to have a catamaran custom-built with the expertise of a naval architect?
Put another way: does savings equal the cost of lost efficiency from existing molds as well as the added costs of design plans from a naval architect? Or, are the smaller yards mentioned working on their own production models and this is just about asking for a lower price on that specific model?


Sent from my iPhone using Cruisers Sailing Forum

I doubt very much you will ever get a price premium with a custom build using a naval architect. You are talking of the premium end of the market.

eg A Morelli & Melvile designed 50ft cat built in NZ or USA.

Small builders you are more likely to find cost over-runs also.

Thats not to say it can't be done in countries with lower labour costs. You still need a competent experienced builder.

[tuskie]

Originally Posted by alansmith

Maybe it's my age. But I feel that there are so many nice clean well thought out boats to be had on the used market why bother with a brand-new boat. If you look at Moorings and see how much the boats are being sold for after only five years of service in their fleet I would vomit to see I had lost over 50% of my value of my brand-new boat in five years. that's a lot of jing.

I totally agree Alan, but people with the money to buy new like to justify that decision. Good luck to them and I wish I had the money to do likewise.

Buying new allows you to buy the latest model (even though it may be inferior to the previous) in the specification and interior decor of your choice. Dealers fawn over new buyers and give them the royal VIP treatment. This sales technique is effective.

Lastly, it is a widely espoused fiction on this forum that sailing catamarans cost 10% of their purchase price to annually maintain. So using this (flawed) calculation, it is better to buy a new boat than one a couple of years old, because the maintenance costs of the used cat for the first few years when added to the purchase price are very close to the new price. Don't waste too much time overthinking this logic, because it isn't! It does help new buyers justify their decision in "sound economic terms".

[weavis]

Where there is a strong dealer network and 'exclusivity', there is not too much chance of a discount.

However, for the smaller manufacturers, there is not the same tie in with the network if sales are slow. A colleague of mine wanted a particular vessel but felt he did not want to work with either the dealer based in Europe or pay the asking price. Double Whiskey on here told me to approach the factory directly and gave me the phone number. So I called to Poland.

One year later, my colleague is the proud owner of the boat he wanted for £42K less and deals direct with the factory if he needs something.

Seaworthy Lass and Noelex are having a custom built boat manufactured to their specs as I write, and for less money than I would have expected. Its going to be beautiful, apart from the bits I would have done different. But wow-what a boat.

As Bulawayo pointed out, there are many manufacturers in South Africa who make superb boats and will work with the individual for a good price without cutting standards or equipment.

As for making a lower bid on a boat. Do not make the classic mistake of putting yourself in the sellers shoes. They are not going to accept a bid that does not suit them and will negotiate with you to a level that both parties accept. I have had low offers accepted and reasonable offers refused on the first round so - you have to start somewhere.

Just do it and take it from there.

[monte]

For larger manufacturers (lagoon, FP, etc ) the dealer network is an important fuse between builder and customer. The dealer takes on much of the process the manufacturers don't want to be involved in, including contracts and after sales service and warranty issues. Buying factory direct isn't an option. Besides that if they did sell direct there would be friction with the dealers and brokers setting themselves up as intermediate dealers, resulting in poor service. Pretty much the same as buying a ford car factory direct...not gonna happen. Of course it's a slightly different story for smaller volume builders who may be happy to act as builder and dealer, but of course they are including a similar margin to cover the expense of dealing direct with the customer.

[Bulawayo]

I think we are all saying very similar things ........ the big producers already have their markets within the charter sector and have no real need to deal with individuals. As such, they also (inadvertently?) bench mark prices. This is a double edged sword - and one which I defy anyone conclusively to prove otherwise - we do not know (and don't need to know?) what their true profit margin is. I have also seen spread sheets from a manufacturer where by the bottom line is 5%. What is not obvious is the level of marks ups to get to the bottom line. When you see the price of an electric windlass and then see the price that you pay in a shop there is world of difference. Factor in the tax status and bulk buying power and the difference widens more. I agree the labour element and fixings also needs to be accounted for but the same issues apply.
I would also suggest that if more boats were available then the status quo of sailing might be affected with potentially thousands more people congesting the water and filling up all the anchorages/marina's. I suppose that would lead to more incidents, more legislation and all leading to more taxes and then our capital savings shall be gone! Perhaps we should just leave well alone.

[EllesBelles]

Originally Posted by scarlet

Sorry if this is a dumb question, but I just never thought of it before.

Can, and DO people negotiate a price on a new catamaran? I know going to the boat shows, they always have 'deals'.. but some of their "deals" are still overpriced in my estimation, especially considering depreciation.

I've ALWAYS negotiated price on new cars when buying them... So, is it the same with Cats? will the manufacturers budge on their prices?

For new boats, we found that if you ask manufacturers (and we talked to several - I can give you specifics if you PM me) they all offered us some kind of "less than asking/retail price" deals.
For used cats, IMHO it will come down to basic supply and demand. For example, we looked at some cats where there were many similar models available on the market. There the prices were softest.
We ended up buying an Antares 44i cat, and because the new Antares are sold out through the end of 2018 and very few come on the market, the price of the cat we looked at was extremely firm. We found that most used Antares tend to sell within a very short time, or never come on the market at all before being snapped up.
Another factor for how much you can negotiate is likely be how many other people are bidding. When we were buying our Antares, we were told there was another interested buyer who was getting ready to bid so we'd best make our best offer. At the time, we wondered whether there really was another buyer interested in the same boat.
Months later, we happened to meet and enjoy getting to know a family on another Antares several years older than ours that they'd purchased about the same time. We discovered they were the actual couple who was just about to bid on the boat we bought when we made our offer and put down our deposit. So it was true!

Another suggestion. Read "Getting to Yes" by Roger Fisher, an excellent book giving guidance on becoming a better negotiator. Amazon link to this book in paperback. http://amzn.to/1OKMxpU

Good luck with your negotation.

[valhalla360]

Originally Posted by Steamer

Pushing Builders down by 20% may deliver no any answer at all as Builders will take it clear that Buyer does not understand things.

There is a little chance to have Dealers respond that they could negotiate boat specs to meet Buyers budget.

Your response sounds like standard negotiating tactics...I'm sorry but the manufacturer doesn't let us lower the price... then when you start walking out the door suddenly they gain the authority. (I'm presuming you've done the tire kicking and are now to the point of buying.)

If you re-read my post, I never said you would get 20% off. I said it was a starting point. The problem is if you start off asking for 5% off and they have the ability to go 10% off, you left 5% on the table. You always want to start below what you think they can really give you.

Of course, as others have said if the factory is booked for the next 6 months, they don't have a lot of incentive to bargain but you don't know that until you try.

[Bulawayo]

Originally Posted by valhalla360

Your response sounds like standard negotiating tactics...I'm sorry but the manufacturer doesn't let us lower the price... then when you start walking out the door suddenly they gain the authority. (I'm presuming you've done the tire kicking and are now to the point of buying.)

If you re-read my post, I never said you would get 20% off. I said it was a starting point. The problem is if you start off asking for 5% off and they have the ability to go 10% off, you left 5% on the table. You always want to start below what you think they can really give you.

Of course, as others have said if the factory is booked for the next 6 months, they don't have a lot of incentive to bargain but you don't know that until you try.

Valhalla, 20% is a fair starting point in my view. I have bought new previously and started off requesting a 30% discount. It is surprising how far you can get if the manufacturer realises you are a serious buyer and not just a tyre kicker. I didnt achieve 30% but then I didnt expect to for the very reason you outlined. The present rash of charter cats are not to my taste so I am refining my present selection right now. I keep reminding people that cash is king and starting out at 5% is hardly a meaningful discount. With the present global economic future having clouds on the horizon I would rather have my hard won crusts in my pocket than to freely give them away just because I was not determined enough to negotiate hard.

[geoff326]

Originally Posted by alansmith

Maybe it's my age. But I feel that there are so many nice clean well thought out boats to be had on the used market why bother with a brand-new boat. If you look at Moorings and see how much the boats are being sold for after only five years of service in their fleet I would vomit to see I had lost over 50% of my value of my brand-new boat in five years. that's a lot of jing.

Well, if one looks at the asking prices of privately owned Lagoons a couple of years old, they don't seem to be any cheaper than the new price. Sure, they maybe loaded down with options but at the end of the day they're still a secondhand boat.