Baggy Sartape has exported yachts all around the world and has been a trusted and successful broker in Hong Kong for the last 16 years.
When he told me that he had written a book about boat sales (The Business of Boating In Asia), I was really excited to see what it was about and I bought it right away.
He has done an amazing job describing the history of yachting, both in the western and Eastern market but also offered a great description of the business of boating in Asia.
I asked Baggy to respond to a few questions for our audience:
1) Tell us a bit about yourself and how you got into the boating industry.
Originally from India, I grew up and studied in Hong Kong. I wanted to get out of the traditional business of trading and I was lucky to find a job as an assistant yacht broker in 1998. This was the time the Asian market had crashed, people were defaulting their loans and businesses were just not hiring. But for boat brokerages the business was fantastic. They acquired all the boats that desperate owners were selling. Most of the affluent people at the time had lost huge amounts of money in properties and stock markets and strangely, many boat owners had committed suicide in their boats. Such boats in the Asian superstitious society were deemed worthless. For boat brokers, it was a great time to buy these stressed assets and sell them overseas to USA and Australia where the demand was strong. I was only 18 years old at that time, and Internet was very new. I made a website for the company and registered boats online which helped boost sales. Then I saw a few ups and downs in the market. The 2001 terrorist attacks in the US changed our markets completely and we had to concentrate on selling in Asia. Eventually, in 2005 I started this company Asia Boating Ltd and was on my own with a partner.
2) Why did you decide to write this book?
There were a few reasons.
During my career, I had seen many businessmen from overseas coming and opening brokerage offices in China, Philippines, Singapore and Hong Kong. They often invested heavily on bringing in stock boats and then sitting in a fancy office in a marina club waiting for a miraculous buyer to show up.
People often fell prey to the biased news that boat shows had sold a huge number of boats, but in reality, there were no potential buyers.
Let’s take China as an example:
Chinese boat shows are usually well depicted with beautiful models, flashing media, and large TVs or press coverage. As a result builders from the western world were very interested and rushed into China. Boating professionals and brand names that go to China also cannot publicize the real situation about the business simply because they always have to maintain the image of being successful and prosperous.
I am not saying China or India are good or bad for boating business. I only want to give people the real sense of situation, so pretendant or actors to the Chinese market (who often have difficulties finding objective information about their market) can get an objective description of the situation.
Another reason is the lack of knowledge people in the industry have about Asia. They have difficulty identifying the difference that the market offered between the different countries and they was just no source of information to educate them.
I described the positive and negative aspects of these specific markets but also tried to provide solutions on how each market can be improved. As a result, boating professionals are more likely to create influence in the areas that are needed such as development of boating infrastructure or government tax policies, instead of rushing into a country and opening big showrooms and hoping for miraculous sales.
Another reason was to inform the newcomers in our industry. There is less information available about the boating industry in Asia. And as a newcomer, if he of she is a broker or an entrepreneur, should at least have some non-subjective information about the industry and have some general knowledge about the political structures, government policies and how they affect the industry.
3) Which target audience was the book written for and why do you think they should invest in it?
In the boating industry, there are people who look at high prices of luxury yachts and get attracted by the commissions they can earn.
Many of them often cannot sell anything. They get disappointed, blame their bosses or the markets and leave.
These are the people who look for jobs and not a career.
Then there are people who have the passion for the business.
They are the ones who like to increase their knowledge constantly. These people take the initiative to try new things and expand their wings.
While greed will often lead to take uneducated risks and often failure, taking the time to understand your market will bring you the best results.
I strongly feel that the start of your downfall comes from the belief that you know everything. Once you stop learning, you start to slide down in your career. I wrote the book for individuals who want to know more and understand different perspectives in order to help themselves. Asia is a huge market but people often have unrealistic views of the market. Often the media says something flamboyant about Asian rich people or they say something very scary about human right issues in Asia. I believe that to understand Asian markets it is important to see it from an experienced person’s point of view in the real groundwork. And we have to be wiser when believing the media.
4) You started the book with a wonderful description of the history and the evolution of the boating industry.
I learned amazing facts such as the invention of the outboard engine or the history behind the first propeller.
Why do you think it is important for a boat sales professional to know the history of their industry?
Industries like boating are always evolving. I have always found that many people in the boating industry are very resistant to change. Just a few years ago, I told the propeller story to a client who had doubts about buying a IPS drive boat. He was very resistant to change to an IPS drive boat from the traditional shaft drive. Of course, we had all our data and years of experience in using IPS drives but that story of the propeller invention also helped to convince the customer.
When I had begun selling boats, I remember a customer asking me, “When was the first fiberglass boat built and how long do they last?” Being young and inexperienced I was not able to answer him. But it gave me the need to understand the history of boating. As a salesperson its my job to put effort in knowing things that can satisfy the customer’s doubts. That does not mean talking about history to every customer that walks in. It would be stupid to say things that the customer is not interested in. Sales is like tango, you are reacting to your customer’s concerns.
You have to understand their priorities. If the customer’s priority is to have a huge deck to entertain his guests and you are telling him how good the engines are, then it is not going to work out. Understand your customer’s priorities and make them your own.
In sales, a customer can feel your enthusiasm, your passion. Knowing about your craft, the history, the technology will reflect in your conversation with your customers and make the conversations more interesting. Imagine you want to hire a fitness trainer to improve your health and you walk into a gym and meet a friendly trainer who will not just answer your questions but give you some interesting facts, helpful tips and keep you engaged in an interesting conversation. Aren’t you more likely to hire that trainer?
On page 32 you said that yachts are a product of complexity. And you compare them to other luxury items like jewelry, real estate, luxury cars and even planes. You then detail the added value of investing in a yacht by comparing the accommodation to a house, a transportation vehicle like a car, and the complexity of a navigation system like an aircraft, emphasizing the safety of operation and redundancy of systems to avoid beak downs on the open sea.
This paragraph alone was worth 10 times the investment of the book for me. Simply because you create an anchoring effect by using metaphors to compare the boat to many other important assets which massively increase its perceived value to the client’s eyes.
5) How did you come up with this concept and have you ever used it in your sales process?
When I started selling boats, the company was originally a luxury car dealership, so I used to work in the same office together with the car salesmen. I learned a lot from the car salesmen about sales. When I was buying real estate, I found the agent’s job very similar to mine and was very impressed with her persistence and patience in answering my questions and helping me to do market research before I bought a property. I understood I could not just be presentable and convincing like a car salesman, but I also had to realize that it’s a big investment that a customer makes and had to provide him with honest market information and a valuable deal.
In a place like Hong Kong and China, there are many first time buyers who relate buying a yacht to buying a property. The bigger it is, the more worth it has. I even had clients coming to me and asking me the area of the boat in square feet to compare the prices of different boats per square feet. Just like how it is done for properties in Hong Kong. So naturally when I was selling them boats, I had to explain to them that a yacht was much more than the interior and exterior space. It had to be sleek and luxurious like a high-end car, accommodating like an apartment and its safety and navigation I compared to a plane, where their life depended on its safety features when things went wrong. It really helped to put things into perspective for the customers and they started seeing the value in terms of equipment, design, safety standards etc.
The comparison of boats to jewelry happened during a conversation with a government official in Asia. The official was saw boating as an elitist activity and was not interested in solving the issues that the boating industry was facing. So I had to tell him how many jobs the boating industry creates and how the industry employs high-skilled professionals and skilled laborers, which in return helps the economy. I finally told the official that buying a boat was not like buying a diamond or a painting and keeping it in a private gallery. It is not a piece of stone. It is a usable asset and an ongoing creation of employment.
6) I'm curious to know your opinion on where the market is heading toward and what you are doing to adapt?
If I had to predict the future of boating in one word it would be “flexibility”.
The demographics of the world and especially Asia are always changing.
Today’s market cycles are very short, the market booms and busts are much faster than 1980s.
People can move their money overseas with a click of a mouse in seconds. So wealth moves in and out of a country very fast.
This can make a country a great market for a few years but completely saturated and suddenly depressed. If you look at Asia as a whole, people are so globalized and connected that their governments are forced to imply low taxes and ease the regulations for businesses. Governments who fail to do so, see the money move out of the country in huge numbers.
People are not interested in paying their hard-earned money to the government as taxes. Yet a large number of people in India, Vietnam, Cambodia, Indonesia and China want to use luxury yachts, luxury cars, and other high-end products. They demand these luxuries and rightly so, because they have earned it. So they move out of their countries, go to Singapore, Hong Kong and spend their money and enjoy the free lifestyle.
These governments who look at their wealth dissipating, have no other choice but to cut their luxury taxes and keep the people’s money in the country.
In the coming years, we are going to see a big boom in yachting in these countries one by one, as they are starting to compete with each other by lowering their taxes and creating boating infrastructure.
Many new opportunities will be available in different areas of the market such as brokerage, dealership or manufacturing. But be careful not to focus solely on higher end products. The rise of the middle class will also offer amazing opportunities and this is why adjusting the design and price range to this new pool of buyers might be the best bet to capture the opportunity the market has to offer.
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To your success!
— Vincent Finetti
Founder & Instructor
Yacht Sales Academy
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