Skipper's blog: A case of too many catering for too few

THINK of all the select, top-brand, aspirational items that literally ooze exclusivity, be they watches, handbags, shoes, sunglasses, automobiles, etc. – the sort of goods without which, according to the Life and Leisure section in the Australian Financial Review, we simply cannot live. Yes, dear reader, I agree with you; this is an opening paragraph of shameless pretentiousness and petty, arrant, shallow snobbery which has probably confirmed the suspicions many of you have long entertained: that I am a hedonistic, materialistic, venal, far-to-the-Right bastard full of unbridled pomposity and pseudo-intellectual arrogance. And whilst you’re absolutely right, there is a point to be made, to which I now turn…

When we think of things that are coveted, special and experienced by a select few, this shouldn’t necessarily equate to price or rarity; it could be something as simple as lucking upon the best fish and chips in the neighbourhood; discovering an unassuming local garage that can do the electronic diagnosis on your previously dealer-serviced car, or finding you can still buy a stylus for your 1960s Decca record player. The Skipper also thinks that the marine industry is – or should be - a true paradigm of exclusivity, in that its products are, for the most part, only available in dedicated, specialist outlets which don’t dilute the experience by stocking other leisure items such as mountain bikes or golf equipment.  In short, if you want a boat or a motor, you simply have to go to a boat shop. So this, in a way, is exclusivity, in that the customer becomes immersed in the esoteric marine world by visiting a dealership.

However, whilst the word “exclusivity” might refer to the marine industry in general with its specifically oriented, single-purpose outlets, there is actually little real exclusivity when it comes to places where one can, for instance, buy an outboard motor. Why? Because there are far too many of them, that’s why. If an outboard isn’t a highly specialised, intricate and somewhat exclusive purchase, then what is? It’s not a toaster, a fridge or a microwave oven, so why do the importers appoint dealers who are sometimes only a 10-minute drive from each other?

The whole way of distributing, promoting and selling outboards in Australia has descended into the realms of farce. Whilst a brand name may still mean something, it is patently obvious that brand equity, worthwhile retailer territories which lend themselves to comprehensive, profitable prospecting,  and dealers’ pride at being part of a select, privileged, sought-out group are now as much part of the past as Betamax VCRs. With no exceptions whatsoever, there isn’t one outboard company currently worthy of respect, admiration or envy for its epoch-making, innovative business practices.

A respondent to a previous blog mentioned the case of a particular brand adding an additional outlet less than 10 minutes away from a respected, solid, long-standing Sydney dealer (an institution in that city’s marine industry). I don’t propose to dissect and analyse this matter again, but suffice it to say that this will result in no more sales for that brand than should have already been achievable in that territory with the original dealer. This is rank stupidity. There are now more outlets for a single outboard brand in that area than there are for Toyota, Holden and Ford respectively, each of whom has one outlet for the whole shire. And it’s the same – although not just for this particular brand – in places like the Gold Coast, Brisbane and Perth.

How has it got to the point where the number of dealers for a brand of marine engine exceeds the number of places where you can buy the three most popular automotive brands in Australia? And bear in mind that, volume-wise, the outboard industry isn’t even 5% of the size of the car industry.

If ever there was an opportune time to seriously review and drastically revamp the way in which the outboard industry does business, it is now. For a start, and with no brand exceptions, all distributors need to take a sharp, sweeping scythe to their dealer networks and remorselessly excise the huge, bloated swathes of excess outlets. And what effect would this have on sales of each brand? Virtually none whatsoever, I’d bet. With outboards, as with almost everything else, the old 80/20 rule applies, whereby 20% of the dealers give over 80% of the volume.

First under the microscope for any dynamic, enlightened, forward-thinking outboard manager should be dual- or multi-franchise outlets, particularly those which favour a brand or brands other than that sold by that manager’s company. This is – and apologies for using one of today’s most laboured, cringe-inducing, done-to-death clichés – a no-brainer. The manager should disengage from any such outlets as a matter of urgency as no dealer can ever effectively or enthusiastically promote, sell and service more than one core brand.

Next would be a review, unfortunately, of the sole dealers. Difficult call, this, requiring the wisdom of Solomon, but there is no doubt that the core ranks also need ruthlessly pared if brand equity, viability, exclusivity and – here’s my favourite word again – profitability are to be achieved rather than aspirational. I don’t really know how one would go about this next proposal (well, not legally, anyway, in that you can’t deliberately obstruct, restrict or limit a dealer’s trading ability), but I personally would have my sword hovering over those mercenary, wholly price-driven agents provocateur or irritants who sell out of (or even inside) their territory at lamentably low mark-ups that just torpedo everybody else’s sustainability and bring the industry ever closer to basket-case status.

Following my 80/20 rationale, you’d probably think that low-volume dealers – even loyal, profitable, service-oriented ones – would be callously cast adrift, but this is not so. Many such dealers – and I personally know dozens of them from across the brand spectrum – are sterling examples of the principles, devotion, propriety and ethos that once made this industry an absolute delight to be a part of. But really, the time has come for importers to act decisively. By my reckoning, any more than three dealers (say two volume-oriented outlets and a good, steady, reliable service-oriented enterprise to complement them) would nowadays be overkill in any major metro area – even boating meccas like Brisbane and Sydney.
We must change the way we do business. E-commerce, online retailing and the internet have essentially destroyed everything we believed sacrosanct, and there are few physical boundaries remaining. Whilst one should never, ever buy a complex technical product like a modern outboard online and have it shipped (with no PDI or professional fit-up) from another territory or country, there is nothing whatsoever wrong with having to travel (maybe even 1-2 hours if necessary) to make such a special purchase.

This is what exclusivity is all about – where a dealer can look forward to welcoming clients who may have travelled from the outer reaches of his territory. It’s a feel-good occasion in two ways: the dealer can see that he has a worthwhile territory and the buyer can feel justifiably proud to have purchased something so special that it could not be sourced locally. Let’s face it: the way things are at present is just a jumble, a muddle and an anachronistic mess. It’d be a brave call to make, but the first outboard company to realise that there’s more to business than ubiquitous signage and a high concentration of red dots on the territory map on the boardroom will blaze a trail that its competitors will scramble over each other to follow. How about fewer dealers holding larger territories and selling more units? Now there’s an original thought.