I’m an engineer. I live to reduce things down to basics. I love to break complex components into smaller pieces that make them easier to explain. Last week, we compared the price of different boats by measuring the cost of each pound of those boats. What did that simple price-to-displacement tool teach us?
The Bad News On Shopping for Luxury Goods.
Comparing custom-made high-end products is tricky. The quality of the build and the cost of the labor are factors. Timeline and schedule also play a role. if you’re looking for quick delivery, you’ll have to give up on price or quality. Want good quality and you want it fast? It will cost more, a lot more. When I received my yacht design degree, far longer ago that I want to admit, my favorite professor advised me, “Paul, your talent might take you far. But remember, you can tell your future clients to choose any 2 of these 3 things: Quality, delivery, or price.”
That’s the classic offsetting, triangular logic of value: Balancing cost, time and quality.
As we talked about last week, we often use price-per-pound to unlock this cost, time and quality narrative in building yachts. There are significant differences between the $25 per-bound boat and $50 per-pound yacht. Somebody has to build every pound of that boat and there are only a few ways to make large savings. Structure takes materials; people cost money; companies have overhead –they must earn profits. Builders and designers establish targets in performance, quality and equipment. These specifications range in all sorts of ways, to the consumer these are not always obvious. Labor costs and finish can vary widely for construction in Turkey or Taiwan, or Europe and the US. Ask the hard questions, ask us to help you.
Alternative Boating Facts
What’s dangerous — and far too common — in our business is pretending the offsetting relationship between cost, time and quality doesn’t exist. When we see marketing materials claiming significant capabilities for a boat, the supporting paperwork better show how we achieve those capabilities. Do the spec’s support those claims? Often, the answer is disappointing. We’ve seen an alarming number of cases in ‘alternative boating facts’ — this appears to only lure would-be buyers in the door.
We’ve seen as much as 60% difference between pricing of two apparently comparable programs. Ask the tough questions.
We’re experts, yet we still get fooled by cost figures from builders. So much in the build of a boat is buried in the details, sometimes goes unseen to many. Likely, you’re shopping between boats that appear similar –have similar missions — but if they are are priced differently, be wary. False narratives get sold in our business more than we like: A yacht may be advertised at a low price, but in the fine-print the options are different, the build is different. The boats are different.
Somebody has to stand up and say this in our industry: There is always a cost to produce the right solutions. There is no explaining away that value triangle to an engineer, even a professional like me.
I welcome your feedback. It’s exciting for our firm to take the lead on this complex issue of value in boats.