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Business Observer Friday, Feb. 26, 2016 3 years ago

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Scott McNally and Nick Owens brought a new approach to the yacht brokerage industry with POP Yachts, their online-based boat and yacht brokerage.
by: Steven Benna Staff Writer

Scott McNally and Nick Owens brought a new approach to the yacht brokerage industry with POP Yachts, their online-based boat and yacht brokerage.

They view themselves as industry disruptors in their niche of being a middleman in yacht and boat sales. “All industries stand to be disrupted,” Owens says, citing Uber's disruption of the taxi industry as one example. “A smart person finds an industry that hasn't yet been disrupted.”

Despite the name, Sarasota-based POP Yachts is moving away from the exclusive upper-class client base most yacht brokers covet. Other brokers have boats available for $50,000-plus and only target the elite, McNally says. “We've changed that. We're opening up to the average Joe with a boat,” he says. The floor price for boats sold on POP Yachts is $15,000.

Their approach is 100% online, skipping boat shows and using features like digital marketing and e-contracts. Everything from payroll to finding a boat to signing a purchase agreement is done electronically.

“If you're shopping for a boat online, you'll see POP Yachts within five minutes,” Owens says. “We want to be a volume provider — like the Wal-Mart of the boat industry.”

The online broker currently has more than 7,000 boats listed for sale on its website. It pushes those sales with ads on 160 websites worldwide. McNally says the company spends about $40,000 per month on digital marketing — by far its largest expense.

Owens joined POP Yachts in May 2010 to develop unique software for the broker. That system gave the firm a “massive competitive advantage,” McNally says. Part of that software includes an algorithm that determines if someone is serious about buying a boat or just casually browsing the website.

The automation “triggers high response,” Owens says, and that has been reflected in the company's sales growth. POP Yacht's target goal for 2016 is to broker 2,000 boat sales, which would be a 43% increase over 2015. So far in 2016, POP Yachts has closed deals for 122 boats, according to its website. POP Yachts does not have 2015 revenue figures available, but the broker reported $5.45 million in revenues in 2014.

POP Yachts charges the industry standard 10% commission when it sells a boat. Private sellers, while avoiding that fee, face a national average of 270 days to sell a boat, McNally says, citing industry research. The average time it took POP Yachts to sell a boat was 170 days, 37% faster than the average. That's why POP Yachts executives are confident in their name: The POP in POP Yachts stands for Paid On Performance.

POP Yachts doesn't really have any direct competition, McNally says. Brokers like Anna Maria Island-based Galati Yacht Sales and Clearwater-based MarineMax are “sort of competitors, sort of not,” he says. People selling their boats on their own are the biggest form of competition, Owens says.

And Owens and McNally aren't concerned with other brokers. “Other yacht brokers have different approaches and broker bigger boats,” Owens says. “We run our business our own way with blinders on.”

If POP Yachts is going to reach the 2000-boats-sold mark in 2016, it will need to rely partly on its reputation and referrals, Owens says. The other lingering question, he adds: “How can you reach people that don't know about boat brokerage?”

Follow Steven Benna on Twitter @steve_benna

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