Dealer Territory Rules - Let's Change Them!

[SilentSeven]

Interesting. As a non-new boat buyer...can someone explain it like I'm 5, please?

What I gather is that dealership territory's are closed? That is...if I live in territory X and try to buy from a dealer in territory Y....the dealer in Y cannot sell to me. I can only purchase from dealer X? And this is set by Nautiques' franchise rules?

While maybe not a great consumer rule, I can't imagine this is unique to the boating industry...or is it?

[NautiqueJeff]

The way I understand it, any dealer can sell you any boat. If you buy a boat out of territory, the selling dealer is required by Nautique to pay the dealer in your territory a set fee.

[RiggerJon]

The FTC already prohibits dealership restrictions on used boats - so obtaining a used boat isn't an issue. However, service for a used boat can be. I've experienced issues because I didn't buy a used boat from a local dealer. Some dealerships service all boats equally (Buxton), and some bifurcate the service level provided based on where you purchased it.

In regard to new boats, I have heard what Jeff's described, and that those additional territory fees are passed along to the purchaser. However, I don't think we know for sure how Nautique enforces dealership restrictions, or if the agreements are consistent. (Jeff?) However they do it, it seems to be effective.

If the FTC were to take the case, it would eliminate fees for out of territory purchases. It would also encourage your local dealer to treat you like a first class citizen if service is needed for a boat purchased elsewhere, as they would have to earn your business - instead of expecting it, and delivering poor service if you don't comply.

[NautiqueJeff]

I don't know very much about how it is enforced. I have heard in the past that some dealers have been caught trying to get away without paying the fee, but I don't know any details on what happened in those cases.

[RDT-G23]

Quote removed by Admin for not following the Guidelines for Quoting Previous Posts in a Thread.

Interesting. I've not heard about this fee, but will inquire. I live in one (very large) MSA in TX, my lakehouse (where the boat is obviously utilized) is just outside of another - call it "medium sized" MSA where another Nautique dealer is located. I buy my boats from the dealer (I beleive to be the highest volume dealer in the US) in a third-huge set of smaller MSAs (or it could be looked at as one "monster MSA"). I have a relationship with my dealer-as my business has been used by his business for many years. He and I know each other pretty well; he has never mentioned a fee, but now I'm compelled to chase this.

[brudererscr]

I am sorry, but I completely disagree with this post. While I understand the meaning behind it, what world are you living in? All cost of goods have gone up and demand is through the roof. Go try and buy a Car. All those dealers are marking up costs above MSRP. I was just informed by my dealer that they are going to charge me $10,000 above MSRP for the car I have on order. I like that they were honest in telling me that the market is where it is and I can get my money back for the downpayment if I don't agree with their policy. They have given me the choice. Imagine if the nautique dealers were charging above MSRP?

I have bought three new boats. 2014, 2019 and just bought a 2022. All G23's. Do I like that the price of my 2022 has gone up almost $100K since my 2014. Absolutely not, but I get to make that choice. I can tell you this, a 2022 G23 is NOT even close to the same boat as my 2014 G23. My discounts have stayed relatively the same for each boat. Within a percentage for the first two boats and was off about 4% for the 3rd boat. The rising costs of goods(January had inflation of 6.2%. Highest since 1982) and the demand is why you are seeing increase costs and lower discounts.

I personally like that dealerships have territories and play relatively nice with each other. My Dealer is great and provides excellent service. You want to travel across states and get the best deal, then go for it. There are numerous 1 and 2 year old used boats that you can purchase from any dealer you want. Haggle the best possible price for them.

[RiggerJon]

If you lived in a territory where you didn't have a great dealership, I suspect your opinion would be quite different. What if you didn't have a great relationship and your service was crap?

To be clear - I'm not arguing that costs shouldn't go up. They absolutely should. What I'm saying is it's important that we have a CHOICE where we choose to do business so the increases are based on something other than the manufacturer's will.

In regard to the car dealer analogy - you had the choice take your business to a different car dealership that's not gouging you, but you chose otherwise. Seems like a bad decision to me, but that's your choice - you had the option. We just got a new car 3 weeks ago - it had no markups, and I didn't shop around.

When your 2028 G23 costs $500k, it's too late to roll things back. We need an open marketplace now.

[Kenv]

If i'm paying 500K for fiberglass....It better have 3 Verados and a tuna tower.....LOL

[Wayward]

Go try and buy a Car. All those dealers are marking up costs above MSRP. I was just informed by my dealer that they are going to charge me $10,000 above MSRP for the car I have on order. I like that they were honest in telling me that the market is where it is and I can get my money back for the downpayment if I don't agree with their policy. They have given me the choice. Imagine if the nautique dealers were charging above MSRP?

That's not a very fair comparison..... Lets just say that the average margin isn't even in the same universe..... That car dealer is trying to capitalize on market limitations by charging you 10k over sticker. It is, what it is, right now. Supply is low. Lots of dealers doing the same. Imagine if they were all trying to make $50-$100k net profit on every car sale??

It's kind of ironic that you bring up that point. The current situation with cars/trucks is limiting customer choices, and driving the market up. That's the same sort of market influence that having territories produces. It limits the market, and drives higher margins.

There are advantages and disadvantages to both ways. However, it's hard not to admit that competition is good for the consumer.

[aerojust]

New to this game as I could do anything to my 2000 SN, no need for a dealer / service. I am about to close on a 2020 230 with a transferable warrantee. Is the territory issue tied to service as well? I am centrally located a few hours from 2 dealers.

[RiggerJon]

Yes, it can be. When you schedule service, some dealerships will ask from where your boat was purchased, and this is a big red flag. If they ask this, they will then provide a different service level based on the response. In my case, the dealership wanted me to leave the boat on their lot for weeks to reserve my place in line - no scheduling the appt, unknown resolution timelines, etc. They clearly didn't want to work on the boat, and wanted to deliver an unworkable solution to encourage me to go elsewhere. Good dealerships won't ask from where you purchased the boat - they'll treat you just like any other customer and deliver great service.

[scottb7]

"They clearly didn't want to work on the boat, and wanted to deliver an unworkable solution to encourage me to go elsewhere."

This is probably not true. It is likely that they don't have the resources in staff to get to everyone, so they are going to prioritize to those that bought boat's there.

Yes, they are bad business people with an inability to flex the size of their staff, but I would not characterize as you did.



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[RiggerJon]

If this were an isolated event, I could see your conclusion being a fair assessment - but it wasn't my only encounter. I'm not mischaracterizing or embellishing the situation.

As evidence, here's another example: The "bad" dealership is part of a network of dealerships, and I purchased the used boat from a different out of state dealer in the network. The out of state dealership struggled to get the trailer registered in Texas (this went on for over a year, I'll spare you the details), and eventually stated the DMV needed a weight certificate to complete the registration. I asked the "bad" dealer if they could lift the boat off the trailer so I could run it a few blocks away and get it weighed - 30 min max. They said they could, for $175. I said "sure, when can I bring it?" This is when they backpedaled on the offer and needed to schedule it weeks out, which wasn't an option as the tags were expired. They didn't care. I then realized the fee was likely just being used to brush me off. $175 for 5 min of their time and 30 min on the lift, and they couldn't find the time to help me resolve an issue that their dealer network was responsible for.

I lived it first hand - this wasn't/isn't just bad business.

[countiemountie]

So I recently emailed on out of state dealer, N3 Boatworks, and asked the price on a new G21 that was listed nationally. The response was basically ' we would like you to use your local dealer' I responded that both of the dealers in my state didn't have a G21. The sales rep from N3 responded "well, this is our only new G21 and we want it to be a local sale" WTF!! I would TRY to understand if there was a boat in my state available, but there wasn't. It's not like N3 would be stealing a sale. This is absolutely ridiculous!

And the best part is, they said they anticipate having pre-owned G23s coming in. So it's OK to sell me used vs new? And I didn't ask for a G23 I asked about a 21. I guess listening to a customer request isn't allowed either. Pathetic.

[NautiqueJeff]

The territory rules do not apply to used boats. Those can be sold anywhere.