A Better Brokerage Model

[Amanaki]

We have started to think about selling our boat (40ft 2020 production yacht). We bought the boat new in the UK - now in the US - and never considered the preowned market or understood the market until recently.

It came as a shock to a) learn brokerage fees are so high relative to similar transactions (e.g. real estate), b) experience such poor service levels as perspective sellers from brokers (doesn’t seem to be limited to us from friends and comments on here), and c) see the lack of technology used and transparency compared to other markets (e.g. real estate).

Some small European brokers are starting to offer a better value or flat fee brokerage with various services from light marketing support to near full service brokerage. However, all that I can see are focused on their main full service brokerage and push to that model so they don’t cannibalise sales... again with poor service because there is no transparency / tech.

My question is why is no one offering the FSBO seller marketing support / access to yachtworld with light touch brokerage or lower cost outsourced full brokerage services to the traditional seller? Operating through an online platform similar to the real estate market (e.g. Redfin or Purplebricks) would provide more flexibility and volume to brokers, while reducing pricing and increasing transparency / service levels to sellers. There is clearly a volume / price trade off to balance for the traditional broker but if outsourcing more and leveraging existing tech, it seems it would tip in favour of the broker once they win market share through a new sales model.

What am I missing?

[psk125]

Access to Yachtworld is not free. That is one reason brokerage fees are so high. Boats don't tend to sell quickly, or often. Unlike a house or other living space, boats are luxuries, with quite a small number of potential buyers - especially sailboats. This is another reason brokerage fees are so high. There may not be a large enough market to divvy it up into full service/partial service. Even Redfin was in the paper this week with layoffs because of the downturn in housing sales. There are FSBO websites. They tend to be worth what people on them pay... i.e. not as good as Yachtworld. We sold our old boat last summer after agreeing with the broker on a flat fee which was more than what 10% of the sales price was. You are wanting to take advantage of technology without realizing what it actually costs. You are also counting on the professionalism of brokers who may not all be that professional. It is difficult to actually make much money as a yacht broker, so people who figure that out (serious professionals) go into other fields.

[PippaB]

You're almost describing Pop Yachts. I don't think they use Yachtworld (presumably costs) but they post (far too many) pictures on lots of websites.

Not an endorsement, I just know they exist.

[toolbar]

Pop yachts is a red flag for many potential buyers (myself included).

Paul

[Rumrace]

About 30% of sales people succeed. They are in the service industry listen solve issues provide comfort in purchases.

If a boating person is selling a brand with bravado good for them.

I’ve had nothing but good experiences with my real estate agent and boat broker. I got lucky by the sounds of it. 3 houses and a condo same woman.
Broker heck I moved Lakes from power to sail and had money left over to build a reckless 18’ on the side. Wonderful guy. Jeanneau claim 80% of their business is returning owners. I get it and my broker has that figured out too. Sends me teasers on our next boat. Doing his job.
I don’t know what either earned. Hope it was lots.

[bullislandken]

There are good marine brokers and bad ones. Unfortunately, I have run into mostly bad ones. I sold my last vessel myself in Januarynfor basically my asking price.

[bullislandken]

I can’t even get some brokers to respond to my requests for more info on their listed boat. I am US based and I hoped the EU brokers would be better but it was WORSE for me.

[psk125]

Originally Posted by bullislandken

I can’t even get some brokers to respond to my requests for more info on their listed boat. I am US based and I hoped the EU brokers would be better but it was WORSE for me.

In our boat hunt in 2021 we learned that many boats we found online were already sold. It takes time to 'de-list' things online. If the boat is already sold, there is little point in responding to a potential buyer unless the broker knows there is another similar boat available. Lately this has not been the case. We were told that brokers who might usually have twenty boats listed for sale might only have three, because of a 'Covid rush'. Some yacht brokers, like real estate brokers, may want to generate new leads for themselves, so leave the listing up longer than perhaps they should. Other yacht brokers may have other jobs that pay better. They don't have time for tire-kickers contacting them to talk for an hour about a boat they will never fly 2000 miles to actually see.

[Amanaki]

Great discussion so far.

With more than a million used boats sold last year in the US alone, there is a big enough market to go after.

The only way this would work for boats of any value is by providing access to YachtWorld given the traffic / brand it holds. Depending on the number of vessels listed the cost is typically less than $100 a month per boat from looking online. Consider a selling price of $100k, with the selling broker taking 2.5% and say $50p/h. That’s 50 hours of work on one boat which for someone local to the vessel seems high to me given most contract work and marketing can be outsourced.

Cost aside, the key piece in my view is transparency on service level. Being able to clearly see reviews (eg how responsive they have been), what a broker has sold recently, etc. would go a long way to helping the seller decide on broker, especially with buyer feedback available

[Amanaki]

Why do you view as a red flag?

[Allied39]

I would enjoy your take on this after you have sold a boat yourself.

I never held brokers in high regard....and I suppose I still don't. That being said I have a MUCH better understanding of what they have to deal with, and have much more compassion for them than I did before I sold my friends Tayana 42.

I dealt with tire kickers, dreamers, the clueless, the idiotic and the scum of the earth who hoped someone had cancer and was dying. Literally!!!

I happily ended up stumbling across a great fit who is now a highly valued friend. And another who just missed the sale but is also a good friend.

But they were maybe 2% of what I had to deal with.

Before that I was at the point of working out how to strip the vessel and scuttle her offshore rather than have her end up in the hands of one of the affore mentioned.

Thats how disgusted I was, and I do not believe in scuttling perfectly good vessels.

So, after that little rant....yes brokers fees are high.....but I wouldn't consider for a split second being a broker for ten times their fees.

You may, and I say may, be in a little better demographic buyer wise being a high dollar vessel. But perhaps not....perhaps it will be worse.

Thats my 2 cents. Have fun. And I sincerely hope you are not selling your vessel because of health issues, unlike some you are about to come in contact with.

[HankOnthewater]

Originally Posted by toolbar

Pop yachts is a red flag for many potential buyers (myself included).

Paul

I have never used or dealt with "pop yachts". Wondering what the 'red flag' means. Could you explain?

[psk125]

Pop yachts has a reputation of charging sellers who sign up for their service whenever the boat sells, even if the buyer sees a sign on the local bulletin board that the buyer posted because Pop Yachts was doing nothing to promote the boat and not generating any leads. Have fun transferring title if they put a lien on your boat. The fine print on their contract must be fascinating boilerplate.

[ranger58sb]

Originally Posted by Amanaki

The only way this would work for boats of any value is by providing access to YachtWorld given the traffic / brand it holds.

I suspect boattrader.com -- which offers FSBO opportunity -- may have relatively high traffic too, and it appears many of the YW listings are also on BT. Not aware of ownership, but might be YW owns BT too...

Knot 10 (not 10%) is a slightly less expensive alternative brokerage, in case you're not aware of that. 7% usually, AFAIK.

@psk125 described their 2021 experience. We had started shopping again back in approx May 2020 and I think I'd characterize the (sellers') market since then as being a (probably Covid-driven) anomaly. In other fora, I've seen commentary that suggests that market might be slightly cooling off...

-Chris

[Rumrace]

I said to a friend 2 years Before it happened “Marlow is blowing his brains out popping 4 new hulls in 2 years” and Hunter died an ugly departure 3rd time.
I don’t know if you read Benniteau polite closure of the yacht factory. They didn’t mention the attack on European trade or insults or broken agreements older than liberty. They just predicted this turn down in the market and closed their doors.
The market is the result of a trade war and the noisiest contributor got their ass kicked, compounded by a virus keyed to kill off non productive workers.
The market is consumer driven. There is another thread folk trying to figure out what’s the cheapest Chinese TV which will stand up in boat. They are probably too young to know some of their neighbours built the best TVs in the world.