fenderkicker

When bad goes to worse

Fire happens occasionally onboard boats, and when it does, the outcome is generally fairly bad.  Last week was another example of how serious a fire can be.

This started on one yacht early in the morning, and as there was most likely nobody onboard, the fire grew quickly (you hear the cameraman say within ten minutes) which is incredible.  It engulfed three boats (one to starboard, two to port), and all are completely destroyed.

Nobody was hurt which is the best news, however it goes to show how important fire safety is.

Radical Design...finally something new

After years of traditional shipbuilding, Feadship and Blohm & Voss in conjunction with De Voogt Naval Architects and Philipe Starck (respectively) have come up with the goods.

Sigma (above) has been in the water for a couple of weeks now, and is no doubt turning heads.  She was designed by Philipe Starck and built at Blohm & Voss, and is quite outstanding.

Predator has just been launched by Feadship.  She also has the reverse bow which should allow her to pierce the waves more effeciently than the traditional hull.  Designed by De Voogt Naval Architect she will be a popular yacht for the yachting enthusiasts.

Thanks to Merijn and Maarten at Super Yacht Times for the heads up and photos.

Lack of what?

It's all about communication - open, honest, communication.

The tricky thing about selling boats, is the seller generally has a personal affection with the boat due to a number of years cruising with the family.  This alters their perception of its' value.

Alternatively, the buyer has not had the time onboard with the family to skew their perception of its' value.

This heart felt value makes it difficult (almost impossible) for a seller to accept, or even enter into negotiations with a low ball offer.  So the brokers pull out the brown paper bag and begin to look at the ways to sweeten the deal.

There are many ways to do so: throw in use of the berth, include some future usage for the previous owner... whatever it takes to make up the last mile.

This is where the experienced broker will "broker" the deal and get it done despite the differences in what the buyer is offering and what the seller expects.  They are not doing their job if they simply throw in the towel.

Chances are, the deal can be completed, but only if the broker really wants it so.  Brokers work for commission, and will reduce it to help the deal go through.  There is however, a limit, and if there isn't enough, game over.

The difficult thing is to tell the buyer they couldn't buy the boat due to lack of commission.

Ouch!

Commissions... are they worth their weight?

A recent article in the Yacht Report raised an interesting subject in the large yacht market:  middlemen, their commission and if it is worth it.

Many readers may be extremely upset with the writers words, but then nobody likes to be told the truth.  Like the age-old saying goes - Truth hurts, don't it?

Basically the commissions earned by a broker are a percentage of the gross selling price, be it the sale of a yacht, or the sale of a charter onboard.  The yachts have become pretty big in recent years (many over 50 meters), consequently the selling price, charter fees and commissions have grown proportionally.  The trouble is, the amount of work required remains the same...in fact, it could be suggested the work is even less.

For example, if someone sells Viking Girl II and their client pays the asking price (Euro 585,000), total commission available to the broker(s) is Euro 58,500.  If that same broker sells Annaliesse (asking price Euro 79,000,000), the total available commission is Euro 3,950,000.  Same contract, same work.

This is a scenario which the owners are becoming more aware of, mainly because it is they who pay these figures as the seller.  They have begun to question:  Is it really worth it?

Our job as a broker has been irrevocably changed since we became dependent on the Internet.  In the past, we were selling secrets and these secrets we guarded under lock and key.  The internet has blasted that wide open where we no longer sell secrets, we sell a service, and like most services, payment should be done above board, transparent and most importantly be fixed.

That is exactly our formula for selling yachts.  We distribute and manage the sale of the yacht through the normal "broker" channels and charge the client a fixed fee.  The Owner is free to sell the yacht to a family member or friend, they can use our services or not.  The decision is entirely up to them.  If they use our help, we charge extra, but this is also fixed.  The key is that the amount is known from the beginning of the relationship.  If they decide the results are simply not coming in, the contract can be canceled with immediate effect.

We have approached a number of owners with this structure, and most get it and have signed on.  Some don't get the big picture, yet. 

In time, they will.

Exclusivity

[Wally B - 33m performance sailing yacht for sale]

When I'm out cycling I have ample time to study my surroundings, including those prominently displayed "For Sale" signs on the local properties.

Now look up a yachts magazine, flip to the last part with all those nice "Boats for sale" ads on glossy paper.

Note that the signs and the ads have the logo and telephone numbers and the slogans and whatnot of the broker. So far so good.

Then observe something else - "Exclusive!", "Sellers central agent!".  Basically same message: "You have to call me, only me. The commission is mine, mine, mine".

Is that good for the seller? Nah, cannot see how. Is it good for the buyer? Nope, not that either.

Is it good for the broker? Sure is!

Wonder why the seller accepts that sign on the front gate... puzzling indeed...

[Disclaimer: BCR Yachts offers an alternative solution of course :) ]

Client ownership…?

Note to client – the broker does not own you!

The idea is to find someone you feel comfortable with, and who looks after your interest, the key point being your interests.

Sure it is difficult, we are salespeople.  A good salesperson does not need to sell.  If they do, you probably shouldn't buy from then anyway.

The choice is yours.

[Photo courtesy of MYBA]

Paperless advertising…

Our competitors have the capacity to spend thousands of euros per month advertising in a variety of industry magazines. Some don’t just place a single page ad, but take up ten or more pages highlighting the latest yachts for sale.

If we placed a single page ad, would it be seen amongst the myriad of pages taken by similar companies.

I get the feeling our page would suddenly become the needle in the haystack.

Is it worth it…?

Probably not.

The no rules end game.

It's a strange business, this yachting thing.  We, on the ancillary services side, are supposed to be looking after the client, which in most cases is a person who has spent millions of Euros (or dollars) on an object which floats, the yacht.  This yacht normally takes up to 12 guests, houses 1 to 40 crew on board, and can range from 20 to 140 meters!  I won't even go into the costs.

Many of these yachts are for charter, and are occasionally rented for high profile events such as the Monaco Grand Prix or the Cannes Film Festival.  In recent years, the application procedure to these events have tightened up, and reserved only for those directly involved with the event...or so we thought.
The Monaco Grand Prix is certainly the most prestigious on the race calendar, so as you can imagine, watching it from the top deck of your 50 meter with your best friends is the ultimate bravado experience.  Unfortunately, the more prestigious the race becomes, the more difficult it is to have the yacht's application accepted, because it seems the guidelines change from year to year.

Now the thing is, we are specifically told that to get a boat accepted to the race, the charter guest, or owner must be directly involved with Formula 1 and/or one of the teams participating in the event.  So why, two weeks before the race, are yachting companies offering yachts available for charter which have a confirmed berth at the Grand Prix?  Surely the yacht would not receive a confirmed berth without clients???  Would it be related to the size of the tip to the port captain??  I even know of a former Formula One Champion who has been denied a berth for the event.  A former Champion!!!  This really is beyond me and my way of thinking.  How can we work efficiently and provide a good service to our charter clients when there are no rules?

Acceptance is certainly not based on a first-come, first-serve basis, no one will ever know what the exact criteria are, and we are becoming a little fed up with trying to figure it out.  It could be just the way things are done in Monaco...