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Powering Up

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By MARY SHEDDEN, The Tampa Tribune

Published: October 23, 2007

ST. PETERSBURG - Jim Dillon is convinced it's time he and other independent boat dealers build an armada.

Rough economic times and the buying power of large corporate dealers has prompted the co-owner of St. Petersburg's Passport Marine to launch a plan that lets independent dealers expand their access to inventory without buying more of the luxury vehicles.

The franchise concept is simple: A local dealer joins a network and taps into a corporate-sized fleet of available boats for sale and a coordinated financing program. Higher sales are inevitable when customers have more selection under the one Passport Marine brand, he said.

'The idea is that we want all the benefits and personal service of a locally owned company with the benefits of a national brand,' said Dillon, who formally launches the concept this week at the Fort Lauderdale International Boat Show.

Since 1997, the money Americans spent on new boats increased to $9.58 billion from $4.9 billion, according to the National Marine Manufacturers Association. But the number of boats sold is nearly unchanged. And industry leaders expect as much as a 10 percent drop in sales in 2007.

The slump is triggered by the same woes hitting the nation's overall economy: A gloomy housing market and reduced consumer spending means fewer people invest in a luxury item, like a new power boat. Dillon said teaming up in this kind of environment benefits the mom-and-pop dealers.

'Our risk is our biggest advantage,' he said. 'In a down economic time, all dealers - ourselves included - need to reduce costs. By sharing inventory ... we've opened up markets and we're able to compete.'

Dillon, a New Yorker who has spent his entire life around boating, opened the first Passport Marine in Aventura. Since then, he and business partner Andrew Sturner have expanded to seven stores in the eastern United States, including two St. Petersburg locations.

So far, initial dealer partnerships have increased Passport's available inventory 250 percent, Dillon said. The $20 million he has invested on the St. Petersburg lot doesn't sting as much knowing that customers unsatisfied with his on-site selection can learn about boats other partner dealers have available. Dillon declined to disclose how much a dealer would profit when selling a boat from a partner location.

There's also a long-term appeal to the plan. It provides an exit strategy for mom-and-pop operations, which usually end up with store real estate as the lone asset when they want to retire. With a national brand tied to the store, new dealers are more likely to want to buy the entire operation, he said.

Dillon said the franchise plan would not mean local dealers would change their name or hand over the ownership. Instead, the Passport name would be added to the store's banner and marketing. Like the current system, each dealer would be responsible for acquiring and paying for their own store's inventory.

Independent dealers today struggle to compete against corporate boat dealers such as Clearwater-based Marine Max, Dillon said. They also have less clout with manufacturers.

'A single store pits you against industry giants with no resources,' he said. 'We have alternatives.'

Reporter Mary Shedden can be reached at (813)259-7365 or mshedden@tampatrib.com.

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