fair commission for brokers

BarryD

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Factors to consider...

OK I'm not a broker and so this is outside my area but I think before you debate the fee the operational cost factors need to be reviewed.

1. Office / boat yard rent on what is prime watefront development land
2. Berthing costs
3. Cost of regular advertising space in the glossies not the local rag
4. Web space
5. 7 days a week staffing
6. Telephone / Fax stuff
Load more...

Lets try and add some numbers in.
1. £30,000 per annum to lease a couple of offices in a marina
2. 10 35' berths - some discount maybe allthough the marina could sell them at full price - call it a further £25,000
3. Need some help here, it's £400 a week for a local rage - call it £10,000? per annum (Kim?) for a half page in MBM / MBY
4. Web space is dirt cheap - but it has to work otherwise you've falied. I thnk you could get 25Mb 99.9% reliabilty for about £1,000 per year - maybe less, proabbly more but it's a figure to work with.
5. OK 40 hour weeks, high seasonal loading - a receptionist for £15,000 all in a sales type for £20,000 + a chunk of commission. As a manger - you draw a living wage - £40,000 PA.
6. Telephones / Fax stuff - easilly £500 per month, £6,000 PA

Please flame me as I'm guessing here. That would give us a standing cost of £147,000 PA call it £150,000.

Boats seem to sell either very quickly or very slowly (mine went in a day, the boat I bought took six months). Average boat price - call it £50,000 (I'm cheap) and I expect to be able to sell 5 a month if I'm lucky. 60 a year - I need to make £2,500 per boat or set my commission at 5%.

Loads of variable to play with and I'm probably way off on most of them - and missing some really important ones. I'd say that as a minimum you should set the commisison at 6 - 8% which is where it is (grief that was lucky!)

If you want to discuss the service you get for the money that is a dfferent consideration <G>.

Barry D.

IMHO & FWIW, NWGOI.
 

byron

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Personally I feel those wonderful dudes who are boat brokers should charge about 35% + VAT. On death they should be raised to Sainthood and huge monuments put on their graves.


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byron

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Re: Factors to consider...

Advertising rates in Yachting Journals is stinking cheap compared to a local paper.
MBM costs £470 for a half page. Circulation appx. 16,058
MBY costs £665 for a half page. Circulation appx. 19,736
Bear in mind that a Broker will get discounts on these rates based on series etc. My circulation figures are based on the last made available in BRAD as are the advertising rates.

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byron

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No Mike, obviously everything is for sale but I am not actively trying to sell my boat.

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tcm

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Re: Fag packet details

this is quite a decent stab! Think some of the standing costs a bit high eg 15 grand for a south coasty receptionist. Also not sure if the saleman got the commission. So err that's obviously very realistic too.
 

coliholic

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Re: Factors to consider...

Your reasoning sounds good enough to have been written by tcm or jfm. Either you've been taking lessons or have been reading their posts and making notes. Whatever way you look at it, that's cheating and 8% is way too much. Especially if they're trying to sell my boat.

Oh and what DOES NWGOI stand for?
 

Gludy

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Re: Factors to consider...

I purchased my boat last year and during a period of a few months went around a fair few brokers. In most cases I was just handed the keys and told where the boat was berthed. In one case an office lady took us to the boat but did not know anything about it. I ended up buying my boat from a private seller who placed a private advert.

I accept the point about overheads but also think that the commission of 6% to 8% is too high. I think that the market is calling out for a different more efficient structure for selling/purchasing boats.

In general, I find the marine industry to be very inefficient indeed. So far I have not had good service from any mail order company with one exception - Marine Electronics - they know their stuff, offer good advice and sell at a price that cannot be beaten. But as for the rest of the industry - its useless. In fact, an item I ordered 6 months ago arrived this week - I had given in on it but the package arrived six months after order without any explanation or contact since the original order.

Some companies I find just plain rude - I feel that I am a bit of a nuisance for being a customer placing an order. I tried a new company last week and out of the 12 items ordered they only had 2 in stock - they said they would send them but didn't.

I then experience, with disbelief the Gael Force catalogue without prices - I cannot believe that such an investment could have been made based on such a gross misunderstanding of how anyone makes a purchasing decision.

No market can stay this way without inviting someone to do something about it. I appreciate it is a specialist market and not as large as some believe but even allowing for that, I now expect poor service and being overcharged as a norm.


Paul
 

tcm

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Re: flattered!

must sa Barry's figs look rather well thought-out - far too well researched for my Wifeonomics. 'Spect jfm will have more detailed workings, but on regulation sheets of paper 2millimetres wide.
 
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Re: Factors to consider...

> MBM costs £470 for a half page. Circulation appx. 16,058
> MBY costs £665 for a half page. Circulation appx. 19,736

Interesting I was recently told 1/2 and 1/4 pages in Yachting Monthly about cost about £1200 and £1700. Maybe this was for an advert up in the editorial section of the magazine, perhaps the broker pages have lower rates?
 
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Re: Factors to consider - berthing

> 2. Berthing costs

Do vendors expect free berthing or storage costs? Maybe this is a facet of the motor boat sales process?
 
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Re: Factors to consider...

> 4. Web space is dirt cheap

That's true but turning internet disk space into a live web site will involve more expenditure.

Many brokers appear to hand craft their web pages as their list changes but this is a relatively labour intensive approach. The result is that many yachts for sale on the internet have actually been sold because the broker has not got round to editing the web site for a month or two.
 

BarryD

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Wild Stab in the dark...

Just guessing but we worked started to work out the costs when we found the service so poor and figured we could do better. And (answering a question from higher up) I thought the broker will need their own berths for boats they buy and trade etc... but natrually the seller pays for their own sales berth so the costs could be offset somewhat.

Think 8% is reasonable given the above but only if the sales service matches - which it patenly doesnt in most cases.

I can really only see a brokerage working if you've got a workshop attached (more start up costs) or a decent chandelry to play with. + a cafe


Barry D.

IMHO & FWIW, NWGOI.
 

byron

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Re: Factors to consider...

Yes! Brokers do have their own rate which WILL be different from R.O.P. or Classified. The rate you mention you say is for Yachting Monthly which isn't one I quoted. Also the rates I quote are for B&W not colour.

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