Job done with Marine Auctions (Part II)
by John Curnow on 5 Oct 2012
In Part I, we got to learn some home truths about selling and buying boats from Adrian Seiffert of Marine Auctions. Part II is all about the new ways Marine Auctions are going to assist you with the sale of boats, pens and other marine items.
Adrian Seiffert with a Riviera Sports that was auctioned recently. Marine Auctions
Marine Auctions have been reviewing moving online for around 18 months before commencing. It’s a far cry from the early days when they made and physically sent out expensive brochures. They were trialling some items and ensuring the accuracy of their 40 to 50k email address database, which they know gets on-sent to possibly 220 to 250k more. How? Well one person phoned to ask where the office in California was, as he wanted to pop down. Interestingly, there are very few dedicated marine auction services around the globe today, which is why Marine Auctions works so hard to target their information to all potential buyers and why opening the equation to a global audience has been an important step for them.
‘Without all the buyers from all over the globe, many of our vessels would not have sold or achieved the sale prices they did. Historically, we have always had lots of telephone bidding and very recently, a 49’ steel sloop designed by the late Ben Lexcen would not have sold to a buyer in Spain without global reach and telephone bidding. We'll have both types of online auction as we expand the service. There will be those timed to run for just one week and also fully live and in real time, so there are no issues running them concurrently. The latter will continue to have our selection limited to no more than 40 or 50 boats.’
The first live online and simultaneous bidding auction will be held at the Rivergate International Boat Show from 5th to 7th October, 2012. Four vessels from Noble with unreserved price tags will be one of the highlights. ‘We cannot sell every boat out there, but we are somewhat unique in that we also sell berths and other marine assets. Part of me feels that in five or 10 years’ time, the whole thing may well be all conducted online and that includes pens and other assets. Berths are now about 50% of what they were, and in comparison to other countries, they’re even cheaper again. One client bought his pen at our auction and put his boat there. He flies in for a month and uses the boat. To him, one year at Hamilton Island is the same as one month in his native Hong Kong’, commented Adrian.
‘We would get 20 to 30 enquiries for all of our boats. Some are perhaps just sniffing or very much looking for a bargain, but there will easily be four or five bidders who miss out on each vessel. The terms are simple - 10% deposit and balance in seven days, and we get an unconditional offer on nearly every boat, as well.’
Technology has certainly expanded the possibilities, just as much as the potential market base, ‘We’re always looking to upgrade our software and make it more user friendly. At one point, we may have had 200 vessels from one brand alone sitting around Australia on consignment, but the manufacturers are now only building to order. More than one global manufacturer is talking with us right now, as they see us as potentially a new channel. Everyone is looking for ways to sell boats and not parking them in lots. The last new boats from Noble that we sold only recently all came from being on consignment with dealers around country and all sold above their reserve price. I do feel this will be an expanding trend, as we are selling 30 to 40 pm from 18 to 100' (private and commercial) and some brokers would not sell that in a year.’
The Internet certainly has made its impact, but it seems the humble digital camera has become the weapon of choice. When I look at a boat, I just go click, click, click, as the camera is my memory. I take three cameras with me - two digital and the phone as a backup. To a degree and in certain applications, I can now do desktop valuations. Simply send 100 pictures or more and the specifications and we can get it done. This was not possible even five years ago and it is more time efficient and cheaper, as well. One purchaser commented before buying that he did not need to be sent the boat’s specifications, as he could see them from the 150 images we’d sent through. We are opening a bigger market for our sellers here in Australia and really the world, I guess. If a prospect cannot get to a boat, then we can send them a list of a dozen or so surveyors nearby and then they can bid over the phone or online. That and all the images seem to be more than enough. It is very much an open market and you must be more proactive than ever before. Days are gone of ad in the paper and expecting people to turn up for both selling a boat and auctions themselves are over. I find a lot of brokers saying the phone is not ringing. Ours are going all the time.’
Now if the banks are talking with them, then the clearance rates must be something. ‘Ours are down a little from 18 months ago. I hope to get all the lots unreserved in time. This is happening a bit with earth moving at the moment and there can be $100m worth of stock in the one auction and they’re all unreserved. Currently, during a lot of our auctions, an owner will downgrade the reserve as we’re underway, so that their vessel gets sold. Everybody is a valuer now, as a result of the Internet. Historically, the difference between the advertised price and the selling price was around 20% and I feel it may be a bit more now. The market has bottomed and we will never see it at previous levels again. There are still buyers for boats and our enquiry rates are huge, with a lot of people from the mining sector, especially. From all our enquiries, we’ll move 50% on the day and within two weeks we have achieved 70% clearance, no matter whether it was two or 50 boats on offer and they are all cash buyers.’
‘I love the challenge and I love achieving. When we sell and the vendors smile, it is great. The days of dealers with a yard of boats, ads in papers and expecting people to show up are gone and hence the number of organisations that are closing their doors’, said Adrian.
It is a really tough market around the world now, yet Marine Auctions are getting results. You may wonder why you’d choose now to be pretty much at the leading edge with the online auctions and when you consider that there are a lot of physical aspects with an asset purchase of this nature. Perhaps it is how you define service, which is more than just images and phone calls. ‘I want my staff to have huge phone bills each month’, said Adrian. ‘The biggest thing with service is to contact our vendors every few days to provide feedback from the enquiries. We get up to 10,000 hits a day on our site. The word ‘auction’ may offer connotations of low prices, but it is our job to get the best price and thus create that market level.’
Adrian then went on to describe a few instances where not just the volume of enquiry was important, but also quality. Two stand out, like the widow who had not been able to move her late husband’s boat. It had been listed for 18 months at $20k over the odds and not moved. She got the new price and was so delighted that she even gave Adrian a case of wine. Seems she very much appreciated the fact that the differential was nothing in comparison to the holding costs. Another was a large vessel Marine Auctions had put $4.5m on and the bank had stipulated $4.5 as the reserve. Come the day of auction, Adrian thought they may get closer to $5m as there had been 160 real enquiries from the right people. The cheque was written immediately after the auction for the final price - $5.5m.
There are a lot of adages riddled throughout this article, but there appear to be even more that are appropriate. Adrian highlighted a few, ‘Sometimes the craft you think will sell, actually don't get a lot of action and yet others that would be classed as challenging, get a lot. Go figure. I can tell you though, that project boats are usually hard to move. I have also seen bidders get lost in the sport of the auction, because they are so competitive. Conversely, an offer at the right time still works. Finally, do not judge prospective buyers. I have seen many appear and some may wonder if they could afford a piece of rope, let alone the whole boat. Another asked if he could look over a boat. Given a positive response, he stripped down and jumped over the side to review the hull. It certainly takes all sorts...’
When you boil it right down, if you need to get the job done, then you probably need to have a word with the team at Marine Auctions. Quite possibly the only thing you have to lose is the title to your boat or pen, as you hand it on to the next owner, and that will leave you free to do whatever it is that you need. Nice work, eh?
Read Part I here
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