Avoiding the Boatyard Blues: Costs and Fees
Managing refits and repairs requires a hands-on approach for boat owners, and accurate price quoting is an essential element of this process.
I’ve worked in the marine industry for 23 years as a mechanic, electrician, and boatyard manager, and I work now as a consultant for boat buyers and owners. Exposed to the inner workings of this somewhat enigmatic business, I’ve learned a few lessons. Chief among these is that when it comes to maintenance, repair, and other boatyard work, vessel owners should leave as little to chance as possible. Because the cost of boat ownership isn’t likely to go down, and because a properly built and maintained vessel is one that’s likely to bring you back to the dock at the end of the day, it pays for you to become and remain as involved as possible in refit, service, and repair projects.
When I converse with boat owners on the subject of their interaction with boatyards, the discussion invariably turns to cost or, more precisely, to the unpredictability of the cost of maintenance or repairs. On many occasions, I’ve heard boat owners say, “I take whatever the yard tells me about the cost and I triple it. Then I know what the job will really cost,” or words to this effect. Having said that, I’m convinced that most boatyards and marine contractors aim to please, and they want their customers to return.
The solution to this problem, clearly, is to emulate other industries in providing boat owners with fixed-price quotes. A few months ago, I wrote a column on this very subject, imploring marine professionals to get savvy on the subject of quoting because it’s likely that more and more owners will shun yards that can’t offer this level of cost predictability. I strongly believe that this process, when adopted, will provide a sea change in the way the industry is perceived by consumers. Admittedly, it’s not an easy leap to make; however, the rewards, in my experience, are undeniable.
T&M vs. Fixed Quote
I routinely hear the terms “time and materials” and “fixed quote” used within the industry, and when I do, I often suggest to my clients that they ask for clear definitions from the contractor. My definitions of these terms, while typical, are by no means codified within the industry, which is why you must ask for clarification, in writing, before committing to any work.
In most cases, when you cruise into a boatyard or work with a marine contractor—this can include anyone from engine mechanics and electronics techs to riggers and varnishers/painters; from here on, I’ll simply refer to all folks carrying out work as “boatyards”—you may have a choice as to how the work will be invoiced. A common approach involves charging for the time that the project takes as well as for the cost of the materials, plus a reasonable markup for these materials.
When I managed boatyards, customers would occasionally ask what I paid for materials or what my “markup” was. While some yards are reticent about sharing this information, I was unabashed in my explanation; the markup on materials is part of the yard’s overall profit plan, along with the markup on labor. Remember, the yard’s goal is, understandably, to make a profit, and that’s its incentive to work harder and smarter. Expect to pay the markup, provided that it’s not exorbitant; it typically ranges from 10 percent to 40 percent, depending upon the product or part.
This concept—carrying out work and being paid for how long it takes, however long that may be; it’s often referred to simply as T&M—has been around for many years, and it’s well entrenched in the marine industry. Many boatyards prefer to work using this approach. When I discuss this concept with managers and yard owners, the refrains are familiar: “T&M is safe” or “We can’t get burned because you really can never tell how long a repair or project is going to take.” The notion is that most undertakings of the marine variety are such an incredible shot in the dark that no boatyard would dream of any billing approach other than T&M. With this approach, risk is minimized—to the boatyard. The boat owner really has no idea how much the project is going to cost, and in many cases, the boatyard doesn’t know, either. Thankfully, an alternative exists: fixed-price quotes.
Quoting is just that, a quotation for a specific project, repair, refit, or upgrade, and it’s a game changer to be sure, as it offers clear advantages both to you and to the boatyard. For you, the consumer, it affords you the opportunity to consider the proposal as well as compare it to those provided by others. You can also plan and budget for the project secure in the knowledge that the price is fixed.