By Frances and Michael Howorth
Here, Frances and Michael Howorth assess the sometimes complex nature of the relationship between superyacht brokers and shipyards. This feature appeared in the very first issue of the SuperYacht Times newspaper published back in 2014.
The relationship between sales brokers and the shipyards that build superyachts is both important and, by its very nature, complex. There exists between the two, a love-hate relationship that either works or does not. To some shipyards, the idea of having to deal with a prospective owner through the middleman is viewed as interference, whilst to others, that same person is the grease on the cog that keeps the essential wheels in motion from start of negotiations to delivery of a finished vessel.
In much the same way, brokers prefer working with shipyards that understand their work philosophy and value their input. Jan Jaap Minnema - a hugely accomplished broker with Fraser Worldwide - says, “Some shipyards have more experience of working with brokers and their clients and are better able to identify the needs of the broker who is representing the buyer. Shipyards need to accommodate the brokers by supplying information they need, such as GA’s, planning, delivery schedule, technical questions.”
The relationship between the two needs to be flexible and understanding to the point that either side can be contacted after business hours for updates, and to talk through change of plans made by clients. If the yard knows that you are a knowledgeable, broker and have questions that can add value, they are mostly all happy to work with you.
Patrick Coote of Blohm + Voss told us, “Enquiries for new projects can come directly from clients, indirectly through a broker or indeed via a multitude of weird and wonderful routes. Ultimately, the most important thing is simply that the enquiry reaches the shipyard. Far from being parasitic or even symbiotic, the relationship between shipyards and brokers is unquestionably mutualistic. Our priority is simply to ensure they know that our response to their enquiries will always be fast, accurate, comprehensive and honest.”
There are also those in the superyacht industry who believe when it comes to signing a new build that the role of broker is of vital importance. Mark Cavendish, Sales and Marketing Director for Heesen Yachts, believes in cultivating their attention and putting their sales activities to the forefront when it comes to selling their fast displacement yachts. “Ordinarily, outside brokers account for 50% of our sales year-on-year,” he says.
The company is well known within brokerage circles for hosting its annual brokers ski trip when about 20 or so Heesen staff invite up to 30 brokers from around the world to join them for a three day stay in the Italian Dolomites for a promotional, fun event. Cavendish explains, “It's rather like when Rolls Royce or Bentley gather their top salesmen from independent car showrooms and introduce them to a new and upcoming model. We do that by taking over the small 5 Star, Rosa Alpina Hotel in San Cassiano each year and introduce a yacht that we are building on spec in the hope that they may have a better understanding of what it will offer to their client.”
The relationship twixt broker and client should never be underestimated. Often it has been built on years of mutual understanding and many owners would never dream of entering into a relationship directly with a shipyard without their trusted broker by their side. For many years the serial yacht owner, John Staluppi, has relied on the advice of Peter Thompson, a superyacht Captain turned broker.
Thompson has worked in the industry for over 30 years and is now a partner with Worth Avenue Yachts in Monaco. His own experience representing owners in dealings with shipyards suggests things are changing, “What I find problematic,” he says, “Is that shipyards are now trying to take ‘ownership’ of clients soon after you have introduced them. It’s an unpleasant situation to encounter. Brokers like me have only got two commodities when it comes to selling our services: our integrity and our contacts. We handle both with the respect that each deserves but there are shipyards out there that simply do not respect that... In this business there should be more respect and integrity between the team players.”
Luuk V. van Zanten, Founder and Marketing Director at Curvelle, believes that as a yacht builder the relationship he has with a new-build competent sales broker who has been hired by the client to represent him, is a vital link in the yacht selling process. He comments, “As with any small shipyard it is difficult cover all the marketing and sales aspects over several sales channels and thus especially for new custom constructions, we very much welcome to work with competent brokers that are representing a specific client.”
In fact, Van Zanten would like to strengthen the current system between brokers and shipyards. He adds, “In most cases the broker gets paid a commission by the shipyard for introducing a customer and then goes on to represent both the client and the shipyard in contract negotiations to make the construction contract a reality. As an alternative arrangement we think that it will be more beneficial to all parties that the yard and the client each pay 50% of the broker’s fee. Since both client and shipyard make use of the broker’s skills and knowledge, it will be easier for the broker to act as a true middleman required by and paid for by both parties for the duration of the construction.”
Equally, there are those in the superyacht industry who believe that when it comes to new build yachts the role of broker has been greatly diminished. John Leonida is a partner with the law firm Clyde & Co in London. In his opinion, “Today more deals are gettingdone with no brokerage involvement at all, especially by experienced yacht owners... I am not certain that shipyards are as centrally focused on brokers the way they used to be. It was the case that in the past, shipyards perceived that deals were in the gift of the brokers. Pre-2000 when our knowledge of what could be built was limited, it was the specialist knowledge of very good brokers, that made shipyards crave their attention and offer commission.”
The SuperYacht Times iQ 2018 Report
Our market report is the most complete in the business and provides in-depth analysis of the fleet by size range, the construction book, the market for new and used yachts for sale and the superyacht builders, as well as a detailed overview of superyacht ownership. It also gives the personal views of Merijn de Waard, company founder and long-term superyacht market analyst, on the state of the market.