Dayton entrepreneur finds watercraft help float larger business

Dayton entrepreneur finds watercraft help float larger business

March 26th, 2011 by Ellis Smith in Business Around the Region

Keith Ellis, left, and Mark Harris of the Sandhill Boat Co. move a 22-foot pontoon boat in front of their Dayton, Tenn., showroom. Staff Photo by John Rawlston/Chattanooga Times Free Press

Keith Ellis, left, and Mark Harris of the...

Keith Ellis, wearing a red flannel shirt, sits behind a desk in front of his laptop, as Price Rodgers flips through a boat parts catalog. It's a sunny spring day, and fishing boats dot the Chickamauga Lake only a few miles from Sandhill Boat Co. on U.S. Highway 27.

Ellis, co-owner of Dayton-based Charlie Rogers Ford and Crown Motors auto dealership, has always dabbled a bit in used boat sales, even though selling cars was his bread and butter.

"Boating is replacing going on vacation," declared Price Rogers, son of dealership co-owner Charlie Rogers. "With these pontoon boats, dad can fish on the lake and bring the family along too."

They may look like they're just relaxing, but they are the most successful boat salesmen in Dayton, they say.

Venture on a whim

They got into selling new boats almost by accident.

Car sales weren't exactly topping the charts in early 2010, so as an experiment he thought he'd try to sell a few Sunbeam pontoon boats at the 2010 Chattanooga Boat & Sport Show in early January.

Unexpectedly, he sold seven boats at the expo, which turned into 70 sales within a year, he said.

Now he's a dealer for several boat brands, which he sells from a rented building down the street from the auto dealerships.

Overall, Ellis said he's done pretty well for a $50,000 startup investment.

"We've quadrupled that," he said, and he's got another $500,000 in inventory ready to move.

The store, named after the Sandhill cranes that migrate through Ellis' backyard, competes with Arrowhead Marine, which sells boats from the shores of Chickamauga Lake.

Arrowhead used to have a store front on Highway 27 along with its marina. But Arrowwhead shut down its showroom during the recession to consolidate.

Arrowhead sales manager Jim Rose said he's seen sales double since early 2010, but most of the increase has been due to Internet sales, where buyers searching for the best price care little for the store's proximity to where they live.

"It's nice to be on the water, but it's nice to have that highway location, too," Rose said.

Ellis too, used the Internet to sell boats, with online sales regularly beating walk-in business, he said.

Changing times

While the boating public has changed the way it buys, the demographics of boat buying have changed too.

Buyers who formerly bought pricey power boats have downgraded to less expensive and more practical pontoon boats, and demand has diminished for the top-tier watercraft, salesmen said.

The pontoon boats Ellis sells use metal tubes to support a flat deck, and although they are less expensive than typical powerboats, they don't do as well in rough water.

But for $16,000 to $24,000, the "average working man can buy himself a nice affordable boat," Ellis said, "instead of the usual $40,000 boats" that were more popular before the recession.

Ellis claims that his customers range from teenagers to older empty nesters, as consumers discover that they can still have a lot of fun with the cheaper boats.

"The prospects I've got here, they're from young families with little toddlers all the way up to granny."

Rose at Arrowhead said he's seen a different side to the consumption shift, with his buyers becoming more affluent.

"Before [the recession] you had just the average Joe buying one and financing it for 15 years," Rose said. "People that are buying now, it's somebody that they have that kind of money."

In the meantime, Ellis plans to spread around some of the money he's made on boat sales to help support the auto businesses.

"This will be a shot in the arm for the car lots come summer," he said.