A Determined Dealership goes a long way in Temple Texas

by: Elizabeth Altick McCarthy, editor Boat and Motor Dealer, Feb. 2000 issue.

Related Editorial by Elizabeth McCarthy, Great Guns on the Internet

Marine Outlet began almost by accident in 1969. Rick Smith, who was teaching high school at the time, had the opportunity to open a marina at a lake near Belton, Texas, which President Lyndon B. Johnson had just dedicated. As the local boaters asked him to do repairs, he found he needed a dealer agreement to get parts. So he purchased three Chrysler Marine boats and five motors. That is how a multi-million dollar, award-winning dealership was started "from scratch".

Today, the thousands of people who drive by Marine Outlet on Interstate 35 see acres of boats to suit every taste. Smith describes the array as ranging from "high-performance, fire-breathing, bass or ski boats" to "a small jon boat for the pond out in the pasture."

Over three decades, Marine Outlet has grown, expanded, contracted, seen lean years, boom years and even years when it seemed the business could go under. But with common sense, faith, friendship, and perseverance, Smith held on, and now, like many dealer, is enjoying one of his best years yet.

"It is really hard to believe that I have been in the marine business for more than 30 years," says Smith. "It seems like such a short time ago that I was opening my marina on Lake Stillhouse Hollow."

When he bought the Chrysler boats, he also picked up the AMF Alcort line, "so I started as both a power and sail dealer, one of the few dual dealers in Texas. My sailor friends could not understand how I could 'lower' myself to sell 'stinkpotter' and my powerboat friends wondered how I had the patience to deal with the 'bed sheet' sailors. I continued with both until the late 1980s when sailing  interest had declined and we were no longer selling enough units to warrant stocking sailboats, too."

In 1976, Smith moved the dealership away from the lake for number of reasons. He had to pay the U.S. Corps of Engineers as much as five percent on each sale for doing business on government property. "Anyone who has been around the boat business for awhile knows that such a percentage is a major portion of your gross profit," he says. "The other reason I moved the sales lot was because I found that in our market people tended to purchase their boats in town. Many had the misconception that prices were always higher at the lake."

Smith moved the dealership twice before he found the "ideal" spot on Interstate 35 near Temple. "The traffic count is high and the visibility is great," he says. The location continues to be Marine Outlet's best advertisement, with 35,000 vehicles passing each day. Motorists and truckers regularly stop by on their way to Waco and Dallas/Ft. Worth to the north, and Austin and San Antonio to the south. The dealership is also near Fort Hood, busy hospital complexes, high-tech industry, and even a new Sun City.

"During the growth phases of the  mid-1980's," says Smith, "I was encouraged by one of my major manufactures to open stores in several other cities surrounding Temple. This 'encouragement' was partially a threat. In other words, if I did not do so, they would find someone who would sell their product in these markets. Since I was already selling a lot of product in these areas, I opened up several satellite operations that offered full service and sales.

At first it worked out very well. "But when the 1989 recession hit, I was unprepared for a major slow-down in business. Texas was hit especially hard."

Rick's wife, Linda, who is Marine Outlet's marketing director, remembers, "When the oil industry bellied up, the banks were taken over by the FDIC. Rick saw what was happening in Houston-there were 400 bankruptcies a day, and other boat businesses were closing. He saw what was ahead, put the brakes on, and started condensing." Rick continues: "Several of my long-time friends were smart enough to bail out and a couple had to close their doors," says Rick. "I was paying a mortgage and had everything I owned tied up in the business.

"I did not have major financial reserves to maintain multiple locations although one of my other locations was rivaling my flagship store. It was a very difficult time, and I had to sell and close down all of the stores except my Temple base of operations. "Anyone who stays in the boat business for awhile knows about the ups and downs. My stores went from a total gross of over $3 million to less than $1 million and then to $500,000. I was out of trust with one of my major banks and was fortunate enough that they allowed me to pay off the debt over a period of time and worked with me to reduce my inventory.

"So I just took it day by day and was fortunate that my family and the good Lord gave me the strength to hold on until business started coming back in 1992. Since then we have had only one downturn year and have been able to find and establish long term relationships with some excellent suppliers."

Today, Marine Outlet's annual revenue tops $3 million with the sale of about 300 boats per year. New boat sales account for 75 percent of the revenue and pre-owned about 15 percent. The balance is revenue from service, accessories and F&I.

When asked how many line he carries, Smith says, "Too many!"

"We kid him about it," says Linda, "He wants to please everyone-it's one of his foibles. In his 31 years in the business he has carried almost every line, and he can tell you what's wrong with a boat if he doesn't carry it anymore.

"He knows all the people who were originally in the industry, the histories of the companies, and all the mergers and acquisitions. And he's good at predicting what will work in our area, so we do have a great mix of boats."

Marine Outlet's line of pre-owned boats is advertised on its Web site (www.marineoutlet.com) with year, model, a description, photo and price. (The Web site, which was recently expanded, generates at least one E-mail or phone call a day, and visitors have exceeded 200 per month, according to Rick.)

F&I is managed by Jackie Cooper, who has been with Marine Outlet for five years. She says that several years ago the business was outsourced. "They charged too much," she says, 'and they took to long , especially when customers wanted their boats 'right now'. They left us out of the loop, and our customers were getting mad when we couldn't answer their questions."

Now Jackie does the work herself. For smaller loans she uses the local bank. For larger deals, she works with national indirect lenders.

"We go out of our way to make it work for young people; the soldiers from Fort Hood, for instance," says Linda. "We've Fed Ex'd documents to Bosnia and Kuwait for signatures. We'll take post-dated checks for down payments. We go the extra mile when there has been a bankruptcy or divorce that has marred someone's credit. It makes it more tedious, but it gives us a really good feeling when we can help, and it makes us friends." Linda cites one example where she went out of the way to help a young person buy a boat and it paid off. The first day he was on the water with his new boat he helped save a life.

Through the years, Rick has served the industry as president of regional industry organizations and has earned top sales awards from manufacturers. He acknowledges the highs and lows of business ownership, and recognizes what has been important to him: "My family, my associates, and my customers depended on me to be level-headed and to keep my eyes on my goals, I know in the grand design of things no historian will write of the trials and challenges of a Temple, Texas, boat dealer, but that's fine with me, because I have had the opportunity to grow with my children, my spouse, my customers, and my associates.