Marine Fabricator | May 2012

By Kelly Frush

Setting your canvas shop apart from the competition can be challenging, especially in the current economy. Providing your customers with new options for clear windows can differentiate you from the other guy, but the array of options and price points on the market can be overwhelming—for you and your customers. Being knowledgeable about what’s out there allows you to educate your customers and make the right decision for their needs, which helps seal the sale. This article explains the differences between several clear window options, how to work with them and how your customers can maintain them for years of visibility.

Window options explained

On the most basic level, clear windows are available in soft vinyl and rigid acrylic and polycarbonate. Soft vinyl costs less than the rigid options but also provides reduced clarity. Rigid provides better clarity but costs more.

“At the top end of the range, you have much better vision and clarity in the polycarbonate and acrylic options,” says Dave Elliot of David’s Custom Trimmers in Brisbane, Australia. “You’re not going to have wrinkles in those top-end products. In the bottom-end products, there’s more maintenance if you want to maintain them, which the average boater does not.” Rigid products generally last longer than soft vinyl, which can be a way to sell your customer on the rigid window option.

Mike Erickson of Canvas Designers in Riviera Beach, Fla., offers EZ2CY products. “Versus other polycarbonates, EZ2CY is inherently UV resistant,” he says. “There’s no coating on top of it, so if you get a scratch you can buff it out and it’ll look brand new again.”

Ocean Clear Windows currently offers two types of semi-rigid, polycarbonate windows. “We offer OC3, our newest product, which is available early summer 2012,” says Steve Sisco of Ocean Clear Windows and Fabrication Supplies in Alta Loma, Calif. “OC3 is less expensive and has a more flexible scratch coating for longer life and less crazing.” Ocean Clear also distributes Makrolon AR2.

There are different price points available in the semi-rigid category. “Ocean Clear semi-rigid windows cost less than coated vinyl windows but offer glass-like clarity, superior strength and a smoother finish due to its self-tensioning nature,” Sisco says. “Polycarbonate is highly UV resistant and scratch resistant. Polycarbonate can be sewn or bonded in-house for greater control and profits.” Sisco pointed out that Ocean Clear does not collect or require any licensing or franchise fees.

Manart-Hirsch stocks PVC and polycarbonate window products. “All of our products are available directly through us or through distributors that carry our products,” says Rick Hirsch of Manart-Hirsch in Lynbrook, N.Y.

Rainier Industries in Tuckwila, Wash., offers polycarbonate and impact-resistant acrylic. Rainier Windows are rigid but can bend. They retain their memory but return to the original flat shape, so that windows can be stored flat when not on the boat. Rainier Windows can also screen UV rays. Fabricators need to become a Qualified Fabricator through Rainier to be able to sell Rainier products.

Some customers may not want to spend the extra money for rigid windows, or they have smaller boats that don’t necessarily require a rigid window enclosure. “Most of what my shop is using is 40 mm clear extruded vinyl,” says Chris Ritsema of Canvas Innovations in Holland, Mich. “Clear extruded vinyl is the most popular option that we use.”

Strataglass is available in 60, 40, 30 and 20 mm options. “It’s highly scratch-resistant and easy to work with on the trimming table and during installation,” says Walter Johnson of Strataglass. “It’s highly forgiving for unintended table, installation or customer abuse. With proper maintenance, it lasts years.”

Whether you and your customer decide to go with soft or rigid windows, both options are readily available in all parts of the world.

“I offer them all, but if someone comes in for an old service job and just wants to get another season out of something, I might end up using the basic rolled goods,” says Elliot of his customer base. “If someone has an enclosure they don’t want to spend the money on, we’ll use extruded, and it goes uphill from there.” In the end, it’s all about listening to your customer’s needs and knowing product availability and pros and cons to serve those needs.

Soft vs. rigid

The main difference between vinyl and polycarbonate and acrylic lies in cost, quality and time savings. Whereas vinyl is more affordable, the quality is not as posh, and whereas rigid windows provide clarity, the cost can be prohibitive. Finding out what your customer’s goals are can help narrow down the choices.

“Soft vinyl is much quicker to fabricate,” Elliot says. “Rigid is definitely a slower process, depending on the methods used.”

Erickson agrees. “Rigid windows are roughly twice as expensive, but last three times as long,” he says. Rigid windows take more time to fabricate, but using technology can save your shop a lot of time. “You can shortcut an enclosure that saves you a bunch of time,” Erickson says. “EZ2CY product is done completely in CAD—the plastic parts are cut on a computer cutting table. We use 17 man hours per enclosure by using CAD technology.” Of course, the cost of new technology can be prohibitive up front, but for a growing shop with growing demand, it might be worth it in terms of cost savings.

Sisco agrees with the comments about cost and time savings between soft and rigid options. “Many fabricators have mastered working with polycarbonate and find it to be a time saver,” he says. “Semi- rigid windows hide minor fabricator mistakes better because of its self-tensioning nature.”

Ritsema’s rule of thumb is that rigid enclosures are typically double the cost and labor of soft vinyl. “There’s always more time with a rigid enclosure, which is why we get more money for them, and it’s a nicer product,” he says. “There’s just a ton of prep work.”

There is a difference in demand between soft vinyl and rigid products. “Rigid products have a limited but growing marketplace due to the wide spectrum of materials and their various capabilities,” Johnson says. “Most are application-specific and require highly developed skills and equipment, plus they are two to three times more expensive and have their own quirks.” But the market is a little different for soft vinyl.

“The use of soft vinyl is massive and can be used for literally endless amounts of applications to separate environments,” Johnson says. “Thousands of canvas shops with standard sewing or binding machines can do an unlimited amount of applications that are very user-friendly and do an excellent job for a reasonable price.”

Techniques and tools

With the variety of window products available on the market comes a variety of techniques for working with them. Every fabricator has different techniques and methods.

Elliot preheats and preshrinks every panel of soft vinyl. “We put it on a black trampoline in the sunlight for a day to preshrink it,” he says. “Shrinkage is just one difference between the rigid and soft vinyl.”

When Ritsema prepares his rigid windows, he uses clear plastic wrap to protect the product from scratches. “It’s handled so much between the sewing table that we leave the protective film on until we install it,” he says. “We don’t want to deliver a finished product with scratches in it.”

Ritsema uses a binding technique he calls “sandwiching” where a rigid window is inserted between layers of fabric. “We use one full sheet of fabric, and we insert the window into a full sheet and then trim the excess. Other shops may use strips for binding.” Ritsema notes that this is called a “deluxe model” in the Marine Fabricators Association Time Standards Manual.

To secure edging and binding before sewing, Ritsema uses a stapler. “We staple through the edging and remove the staples as we sew,” he says. “That holds everything securely.”

Elliot uses some different methods for preparing his edges and bindings. “On every one of my products, we use double-sided tape, spray contact cement, and glue together before we sew,” he says. “I use very little binding on all of my products. I prefold all my edges instead of binding. My theory is that one of the value points in products has always been the binding, and so every part is stuck together so we can concentrate on the neatness of sewing. We aim for perfection in sewing.”

Elliot has specific methods for cutting rigid window products. “I use a Japanese-made knife blade that is extremely hard, called KAI 7300 High Carbon Stainless,” he says.

If you decide to use Rainier windows, no cutting is necessary. Rainier will cut the windows for you according to your patterns. The fabricator can then finish the job with zippers and fasteners.

Erickson suggests gluing acrylic glass into pockets. “Acrylic is not polycarbonate,” he says. “It’s not sewable—the glass is not sewn into the pockets. The pockets are created first and the glass is glued into that pocket.”

Fabricators typically end up using the same tools for clear windows as they use for typical canvas jobs. “Every fabricator will have the basic tools,” Elliot says. “You need metal shears. Knife blades make it easier for straight areas. You’ll need rulers and straightedges to score the side of the windows.”

Elliot uses a standard long-arm sewing machine and other standard equipment, such as Teflon thread and zippers, for working with vinyl.

Fabricators don’t need many new tools to get started with soft vinyl. “Just a sewing machine, scissors, thread, zippers and fabric,” Erickson says. “With rigid windows, you need specific cutting tools for the glass, but rather than sewing the border, you glue the border.”

The market

The clear window market continues to grow as fabricators become increasingly more comfortable working with the products. And as more customers become familiar with them, more boats will use them. “Clear windows are the majority of what I do,” Ritsema says. “Seventy percent of the canvas work we’re doing includes a window of some sort. We’d be in trouble without clear windows.”

“The market is fantastic,” Erickson says. “I have more demand than I can answer and I had the best year ever last year.”

Hirsch reports that from his perspective, the majority of the marine market is still interested in PVC, but customers want scratch resistance. “Polycarbonates are increasing in demand yearly,” he says.

Elliot is seeing a decrease in rigid flybridge enclosures. “People are letting their flybridge enclosures go until they can’t see through them at all, then they’ll replace one panel at time,” he says. But Elliot notes that is just part of his market. “As far as the yachting circuit is concerned, I tend to use more high-end products than the cheap ones,” he says. “However, there is always opportunity for more inexpensive options like soft vinyl.”

Warranties and life expectancies

If you’re looking for a straightforward warranty on a clear window product, it might be hard to come by. While EZ2CY offers a 5-year prorated warranty, many other clear window manufacturers handle their warranty issues as they come up.

“Due to the variety of applications and fabricator techniques, Ocean Clearhandles warranty issues on a case-by-case basis,” Sisco says. That sentiment is echoed by fabricators, as well.

“I’ve never even looked into product warranties,” Ritsema says. “I look everything over before I cut it and if there’s a problem with the product, I go to my vendor. I’ve never had any customer call me to complain. I use good, name brand products and my end products typically last five to seven years.”

Johnson says there is no specific warranty on the products Strataglass produces, but Strataglass will replace any faulty product upon inspection or during fabrication, provided that all of the material requested to be replaced is returned, whether cut or not. Also, any products that fail within an unreasonably short period of time will be replaced after being inspected and agreeing that it was an undue failure.

“Cases must be considered on an individual basis, and it will be at the discretion of the manufacturer as to whether the situation is warrantable,” Johnson says. “Strataglass will last five-plus years with proper maintenance.”

Elliot agrees that a specific warranty can be hard to come by on clear window products.

“Makrolon or polycarbonate has a warranty for architectural uses, but you have to look very carefully,” he says. “The company states that it comes with a five to seven year warranty, but the details state that the warranty does not apply to marine or automotive uses.” Reading a product’s fine print may prove beneficial to fabricators before extending a warranty to customers.

Hirsch points out that it’s difficult to warranty a product when you don’t know how the end user will maintain it. “No PVC or polycarbonates have a true warranty, as customer care plays a major role in longevity of windows in a marine environment,” he says. “But with proper care, there is no reason our Aqua-View should not last at least five-plus years.”

Fabricators agree that the end product’s longevity depends mostly on how the customer cares for it. “Rolled goods can last six to seven months or they can last eight years,” Elliot says. “I’ve seen exactly the same thing with extruded—12 months at its worst and eight to 10 years at its best. As far as Strataglass and other sheet products are concerned, I’ve seen some enclosures that are 12 years old, but they have been looked after. Longevity entirely relates to keeping them clean.”

Care and maintenance

Educating your customers on how to clean and maintain their clear window products is crucial for the lifespan of the window and can help your reputation as a fabricator. Clear window products take more care and maintenance than standard canvas, but can do wonders for extending the life of an end product.

“I give customers the maintenance sheet that comes with the clear window products and some sample cleaning products,” Elliot says. “But very few customers come back and buy cleaning products. I recommend purely pH-neutral soaps to wash the materials. I tell my customers that if it’s good enough for your hands, it’s good enough for covers and clears.”

Johnson only recommends IMAR cleaning products for Strataglass and Crystal Clear 20/20. He indicates that using Rain-X on Strataglass might look like it works for a while but it will dull the surface of the products. Johsnon warns against using cleaners, polishes, scratch removers or any other product made for regular, uncoated vinyl. And don’t handle Strataglass—or any vinyl—with sunscreen on your hands because it will permanently cloud the vinyl.

Rainier does not advocate using Rain-X on its products, but it does recommend using RainMagic, a similar hydrophobic coating product, which has been approved for use on polycarbonate and acrylic.

Hirsch suggests washing saltwater off clear window products. “Use a non-detergent soap and clean with our M2107 Aqua-View polish monthly,” he advises. “The same is true for our polycarbonate.”

“Cleaning and maintenance of polycarbonate is simple,” Sisco says. “Wash with clean water, a clean sponge and a mild detergent such as Palmolive dish soap. Dry with a microfiber cloth and finish with a quality polish, such as Mermaid Plastic Polish.”

“You can buff scratches out of clear extruded vinyls using microfiber cloths,” Ritsema says. “Most customers don’t know that, so I tell them not to get discouraged if they see scratches because they can be buffed out.”

Elliot recommends soft cloths for cleaning and polishing clear windows. “I recommend chamois and a microfiber cloth to maintain clears,” he says. “Dedicate them purely for the clears. I recommend wiping clears with a chamois every time you get back from boating. I’ve seen the life of the product last 10 times longer.”

Storage plays a role in how long a clear window product can last. “I tell my customers to use covers over the outside of clears as much as possible,” Elliot says. “I sell a cover for the clear as an extra with my new products. Some of the flybridge customers use a cover too. I tell customers they’ll get 10-years plus out of them if they use covers.”

Hirsch agrees that storage affects the lifespan of clear window products. “They must always be clean and completely dry before being stored to avoid scratching and discoloration,” he says.

Being knowledgeable about the clear window products available on the market and providing the options to your customers can set your canvas shop apart from the competition. Educating your customers on what’s available will help you make the right decision for their needs.

“The truth will set you free,” Erickson says. “Don’t get caught by a desire to get the job. Make sure you’re honest with how the product will perform.”

Kelly Frush is a Minnesota-based writer and editor.

The Interlux Waterfront Challenge returns in 2012 and will award a total of $50,000 to organizations that create sustainable waterfront environmental improvements in their communities. A five-judge panel of marine industry professionals—with the help of boaters voting on Facebook for their favorite projects—will select seven regional winners to be awarded $4,500 each and a grand-prize winner to be awarded $20,000.

“We are pleased to be able to continue with the Waterfront Challenge in 2012,” said Elenor Ekman, Interlux North America’s marketing manager. “Some outstanding waterfront improvement projects were recognized by our judging panel last year and we look forward to supporting even more sustainable projects this year.”

The application deadline is Aug. 31, 2012. Awards will be announced at the Ft. Lauderdale International Boat Show in October.

Marine Fabricator | May 2012

By Maura Keller

Marine fabricators have one thing in common: a desire to maximize their shop layouts and rack space to optimize profits, inventory and shop efficiencies. For many fabricators, breaking away from the “buying bulk” philosophy means streamlining production processes. For others, having plenty of stock on hand may mean higher degrees of product selection for their customers. This balancing act of supply versus demand is an age-old tenet that works in different ways for different fabricators.

Inventory know-how

For Jeff Viehmeyer, owner of Alameda Canvas &Coverings in Alameda, Calif., being located near the distribution centers for some of the largest suppliers allows him to obtain needed materials and supplies on short notice, even same day for many items.

“We can keep on-hand inventories relatively lean,” Viehmeyer says. “We plan a material run each week or so based on the shop schedule for major projects, and pick up general shop stock as needed on those runs.”

The key for Jay Hanks, owner of Allerton Harbor Canvas, Hull, Mass., is to keep an inventory of the commonly used items and for all employees to monitor inventory of labeled bins and clear drawers after using the item.

“They write on a supply order sheet when the quantity falls low,” Hanks explains. “Some items have their own order sheet and orders are batched together to save on shipping. It is important that you align vendors that have overnight shipping or may have a weekly van delivery. Most of our fabric is ordered by cut yardage and normally is delivered the next day.”

Some critical items do require longer lead times, so the Alameda team keeps sufficient stock of those items to cover normal small-project needs for longer periods.

“We have noticed an increasing tendency for suppliers to be out of stock on important items, or not to have all parts of an assembly available at one time, so we adjust our shop stock upwards accordingly,” Viehmeyer says.

“We stock ‘wide and shallow’—a little bit of everything, especially hard-to-get items, so we can get going on almost any project immediately if needed, obtaining the additional material while commencing work. This also allows us to have samples of many items on-hand for customers to see and touch, so they can decide and formalize the project plans.”

Tom Matson at Afton Marina & Yacht Club in Afton, Minn., generally stocks the items that they use on a regular basis: clear vinyl sheets, zippers, fasteners, webbing, hook-and-loop and thread.

“Most of these items are generally stocked in black or white, so they will work on most jobs,” Matson says. “We order the fabric for each project on a per-job basis.”

Seasonality and region play a big role in inventory methodology for many marine fabricators. “We work on smaller boats, and our season is really short so we are a volume-type business, doing as many as we can in as short an amount of time as we can,” says Mike Charpentier at Paul’s Custom Canvas in Denver, Colo. “We keep just about everything that we use daily in stock. This includes materials because we try to turn most jobs within a week. If a boat comes in and the customer wants a certain color, we want to have that color in stock so we can get their boat done within the week.”

Inventory tracking tools

When it comes to embracing inventory technology tools, Viehmeyer finds that the time required to set up items, establish appropriate stocking levels (which vary by season), enter substitutions if available, and track usage is greater than the benefit received.

“We would have to be running a big warehouse or distribution center for the payoff in time to be worth it,” Viehmeyer says. “A simple mininum/maximum system for most items, posted on the storage container, works just fine for small shops.”

Hanks agrees. “We don’t track most of the items due to the fact that there are so many low-price items and the process of inventory would be a drain of our product time,” Hanks says. “We do track our larger tool and fixed assets through QuickBooks, as well as all purchases.”

Being part of a large marina, Afton Marina & Canvas has access to a marina management software program called DockMaster, which allows them to create purchase orders, receive inventory, and enter the inventory into each work order.

“We do not utilize PDAs or tablets,” Matson says. “I do use an iPad for customer estimates and sales presentations and I also have one of our supplier’s catalogs on the iPad.”

Ed Skrzynski, owner of Marco Canvas in Marco Island, Fla., says that for software it is garbage in and garbage out. “If someone takes an item out but fails to record it, the software is none the wiser and you soon find your nice inventory software is not accurate,” Skrzynski says. “Software-managed inventory is only accurate if you tell it what is truly happening and the only way that works is by hiring a full-time stock room manager to log items in and out. But that is just adding costs that smaller fabricators cannot handle.”

So Skrzynski and his team use KANBAN, an unattended system that is so simple everyone will use it and it saves them time and money. “KANBAN means ‘card signal’ in Japanese,” Skrzynski says. They set up an inventory rack and locking cabinets and use blue parts bins with plastic bin dividers in the middle. The front of the bin has a picture or taped sample item on the front to make the item easier to locate.

“The front bin has what is called ‘active inventory’ and that is what the fabricators use as needed,” Skrzynski says. “Once that supply is consumed there is a ‘reserve inventory’ behind the active inventory. That reserve inventory is still just a small amount that is in a box or bag that has a laminated KANBAN card on it. When the reserve is needed, the fabricators must remove the card to get to the inventory. The card is placed in a dedicated box and the reserve inventory is moved to the active inventory. At the end of the day, we pull the cards and reorder the supplies. Our cards have all the information needed to reorder so we don’t waste time trying to identify what it is and whom we should buy it from. Information on the card includes supplier name, part number, grade, how much to order, our retail price (in case we get someone off the street wanting to by the item), and the stock location, such as cabinet letter, shelf number and position.”

The cards also have the supplier’s part number in bar code so they can go right to their website and scan the part number to further reduce human entry error. They then use the card as receivable confirmation. When the items are shipped, they match the cards to the items to ensure they received the correct item and amount and then place the card back on the box or bag.

“Using the stock location ID on the card tells us exactly where that item needs to go and so it gets put back in the ‘reserve’ bin and the cycle repeats,” Skrzynski says. “So we always have a small amount of each item, about enough for one or two jobs, and never run out and shut down a job, never over spend on buying too much, reduce our time and costs to reorder supplies, and we do not need a dedicated person to manage inventory. We do not track our inventory per se, but we do know what we use and we know that we actually spend less as the 11 staff no longer hoard inventory as they know we will always have what they need to get the job done.”

Denver-based Paul’s Custom Canvas uses the old-fashioned paper and pencil method of monitoring its inventory. “Because of our short season, we just can’t spend the time taking an ongoing inventory,” Charpentier says. “We definitely keep track of what we are using, but we also use Microsoft Excel to know what we’ve purchased in previous years and what we will need for our season.”

Purchasing parameters

The purchasing activities of shops—both large and small—play an important role on their inventory management and storage solutions. One of the key factors in purchasing decisions lies in the effect inventory levels have on cash flow.

“Inventory cost can be a significant drain on cash flow, especially if expensive items are unused for extended periods or get damaged,” Viehmeyer says. “We pay for the materials needed for large projects from the 50-percent deposit we receive up front when taking on new projects.”

Skrzynski says buying in bulk means sitting on your cash for a long time and he simply doesn’t condone such methods. “I tend to like just-in-time deliveries of what is needed,” he says. “That said, as shipping costs go up due to fuel costs, we have made arrangements to change from smaller daily orders to larger weekly orders and have negotiated shipping costs to place one order a week versus daily for many items. This helps both us and our suppliers reduce costs.”

Overhead costs are fixed and are not typically a variable cost like inventory and labor, and as such, do not weigh much on purchasing decisions for Marco Canvas. “However, if we know that sourcing a particular item will consume administration labor time, then we add a small amount into the job to cover sourcing costs,” Skrzynski says. “Other than that, I urge companies to learn and separate fixed from variable costs and once you do you can then understand what your burden rate is. Your burden rate then should help determine a shop rate so that you are covering overhead costs, variable costs and desired gross profit margin versus just your variable costs.”

What’s in storage

Inventory management goes hand-in-hand with the practice of storing supplies and materials.

“Shop rental is expensive in our area,” Viehmeyer says. “We work to have shop layout be as efficient as possible, utilizing every square foot in a flexible manner.” At Alameda Canvas, material rolls are labeled for the job and stored in upright drums, as are windows. Shop perimeter walls are all lined with pegboard for in-process tools and small supplies or storage shelves for larger supplies and tools, utilizing the cube as high as possible to the ceiling.

“This frees the shop interior for working space,” Viehmeyer says. “Work tables and sewing machines are all on wheels, the same height, so they can be reconfigured or separated as needed according to the workflow in house.”

Hanks keeps his supplies organized and reminds his team to participate in watching for low levels. “Anticipate what you will need and order in time for the start of the project,” he says.

Where you store inventory can make a big impact on your productivity. That’s why Skrzynski has dedicated different parts of his shop to produce different items. “For example, for enclosures, covers and upholstery, core materials for each are mostly different,” Skrzynski says. “So items that are used for each department are stocked near that department. Items that are shared by both are in a centrally located stocking position. This keeps the supplies close to where they are used and reduces labor, time, fabricator’s frustrations and your costs.”

Skrzynski says employee buy-in to inventory management is critical. If they fail to use the systems then items can be found without stock.

“If you don’t have buy-in from your entire team, you could be fighting a losing battle,” Skrzynski says. “It is best to get them involved up front. Show them the problem and then, as a team, come to a solution.”

Maura Keller is a freelance writer and editor based in Plymouth, Minn.

Florida collected nearly 10 times the projected sales tax revenue after new maritime provisions were signed into law, according to a study by the Florida Yacht Brokers Association and the Marine Industries Association of South Florida. The new law put an $18,000 sales-and-use tax cap on boats purchased or brought into Florida. Research indicated that Florida’s marine industry was losing sales to nearby states and foreign countries with lower or no sales taxes. The cap generated in excess of $13.46 million in direct sales tax revenue for the state.

Prior to July 1, 2010, all boats sold and/or delivered in Florida were subject to a 6-percent sales-and-use tax, unless specifically exempt. Small-business owners argued that it provided an incentive for Floridians and non-residents to purchase and maintain boats out of state.

Collisions between powered and non-powered personal watercraft and sail or powered craft are a serious concern for both professional mariners and recreational boaters, according to a study from the United States Coast Guard.

The study ranks collisions with a recreational vessel as the leading primary marine accident type. Operator inattention and improper lookout were leading contributing factors to marine accidents.

The Polyurethane Foam Association (PFA) published a comprehensive discussion of the U.S. flexible polyurethane foam industry related to production issues, solid waste management and recycling of post-consumer foam products that may contain flame retardants. The paper, “Flexible Polyurethane Foam Waste Management and Recycling,” was developed in response to an invitation from the United Nations Industrial Development Organization.

Miami Corp., a distributor of automotive and marine trim products, plans to open a new branch in Arlington, Texas. The branch allows the company to reach the majority of the United States within one day from one of its four locations. Miami Corp. is based in Cincinnati, Ohio, with distribution centers in Albany, N.Y., and Jacksonville, Fla. The company will host an open house in Texas in the fall of 2012.

The National Marine Manufacturers Association (NMMA), with the support of an additional 22 organizations, signed a letter urging senators to voice opposition to the “Open Fuels Standard.” If passed, the amendment would mandate that 80 percent of gasoline-powered light-duty vehicles be tri-fuel vehicles capable of running on any combination of ethanol, methanol and gasoline beginning in model year 2018.

The National Marine Manufacturers Association (NMMA) proposed legislation to address two threats to the recreational fishing industry: attempts to ban lead fishing tackle and loss of access to public lands.

The Sportsmen’s Heritage Act of 2012 seeks to ensure that any future regulations on fishing tackle are established based on scientific fact. The act would also increase access to angling, hunting and recreational shooting on federal lands by prioritizing these activities within agencies’ land management plans.

SureShade launched the SureShade Dealer Award Program to help recognize boat dealers that sell or install the company’s retractable shade systems. Boat dealers will be evaluated based on sales performance, installation expertise, customer service and co-marketing efforts.

SureShade is also engaging end-user boater participation to help determine the winners. Private boat owners are asked to nominate dealers they feel are deserving of the award based on their overall customer satisfaction.

Designed to withstand tough marine environments, Snap Down Marine Carpet is made from solution-dyed fibers that resist sun, salt and moisture. The AquaLoc backing is designed to sit on top of fiberglass for strength, durability, and slip and skid resistance. The carpet is available in three patterns (Sailfish, Gulf and Seashore) to match existing carpet or to create a new style. Rolls are 144 inches wide and 5 yards long.

SOURCE J. Ennis Fabrics

J. Ennis carries three untreated canvases including #12 Duck, #4 Duck and 12-ounce single fill. The 100-percent dye-free cotton canvases are suitable for a variety of applications from boat covers and tarps to totes and tents. Shrinkage is approximately 7 to 9 percent. Canvas is available in 10 colors. Rolls are up to 50 yards long and 60 inches wide.

SOURCE J. Ennis Fabrics

Deck Master 3rd Edition from J. Ennis Fabrics is now made from Eco-fi, a polyester made from 100-percent post-consumer plastic bottles. The carpet easily cuts to any shape for easy glue-down application. The non-woven fabric will not fray or unravel, and a latex backing provides structure and dimensional stability. The carpet features a soil- and stain-resistant finish. It is also resistant to chemicals and heat and provides excellent colorfastness and UV protection.

Deck Master has a plush, uniform appearance with no linear pattern and is available in 10 colors. Rolls are 50 yards long.

SOURCE J. Ennis Fabrics

Eliminate bobbin winding, increase production and produce less waste with the pre-wound Star Ultra D92 G-Type bobbin. Constructed from 100-percent bonded polyester, the bobbin has excellent sewability and a precision wind. The UV-resistant, mildew-resistant and pre-wound thread is treated with liquid resin, cured and lubricated. Bonding prevents fraying at the cut end and helps resist untwisting. Bobbins are available in black or white.

SOURCE J. Ennis Fabrics

Zipper stop

Marine Fabricator | May 2012

Zipper Stops easily shorten a finished zipper or a continuous chain zipper. They install with the Zipper Stop Pliers to keep zippers from sliding off the top of a cut zipper. Stops are constructed from 316 stainless steel. The #10 stop fits YKK #10 Vislon, #10 Derlin Lenzip and JEF Brand #10 Derlin zipper chain.

SOURCE J. Ennis Fabrics

Marine Fabricator | May 2012

By Mark E. Battersby

Most business owners know whether their business is profitable. Not all of them, however, are aware that some customers simply don’t make money for them, or not enough money to warrant the amount of services demanded, or provided.

The solution is simple on the face of it: make those customers profitable, or cut them loose. Improving a customer’s value to your business isn’t always easy, but it always begins with learning just how much a customer costs, as well as how much he pays.

Keeping tabs on costs

The often repeated “80/20” rule states that a large majority (80 percent) of any business’s earnings come from a very small number (20 percent) of customers. Those who don’t necessarily buy a lot, but who also don’t demand a lot of service, may be good customers. Others may buy more but require so much assistance that they’re actually costing you money.

The best way to evaluate the profitability of a customer is to keep track of all interactions with that customer over a period of time. One week is obviously not enough, and a year is too long for most types of businesses. Gross profit margins are the most commonly used factor, but you can’t assume that a customer is not profitable simply because that margin is below average. That’s where other factors, including costs, come in.

Many businesses allocate some portion of their overhead costs to customer service. More often, however, costs reflect only the cost of the product sold or the services performed. Missing from this measurement is the time, support, effort and ultimately the total cost required to meet the customer’s needs. Analysis that reveals the total cost by customer, rather than by product or services, often produces startling results that will shift the focus of profitability discussions.

“Cost accounting” is the process of allocating all of an operation’s costs associated with generating a sale or performing a service, both direct and indirect. Direct costs include things such as the total wages paid workers, the salaries of supervisors and supplies expended. Indirect costs are all of the other expenses associated with keeping the operation going.

Establish systems, create goals

An analysis of customer profitability compares the costs of all of the activities used to support a customer or group of customers with the revenue generated by that customer or customer group. Various costing techniques can be used to determine the profitability of customers—and to estimate the cost of doing business with particular customers or with groups of customers that require similar service levels.

It’s not usually practical to identify the profitability of individual customers, unless there are only a few of them. Customers may be grouped by size, market or types of products.

To set up an effective cost accounting system, the help of an accountant or CPA might be advisable. It can get complicated. The money invested in professional guidance should be well worth it, leaving only the question of what to do about any “bad” customers.

From bad to profitable

The first step to turning unprofitable customers into valuable assets is determining whether the relationship can be improved. Any business owner who believes in holding onto every customer, no matter what the cost, may never see his or her business reach its maximum earning potential.

No one wants to lose customers, but there’s no clear rule of thumb on how to “reform” a problem customer. Each situation is different. If the problem is one of slow payment with a small customer, for example, shipment could be postponed until they’ve paid. The same approach may work for larger customers if the business has enough leverage. As an alternative, a price increase to offset the higher cost of extending credit could be implemented.

Worried about the customer going elsewhere? Sometimes that’s a good thing. Problem customers become problems for competitors.

Keeping profitable customers

In the past, the importance of focusing on customer retention was not as important; “stickiness” came naturally. We had, in many instances, a personal connection with our service providers. That has changed. Vendor relationships are often impersonal, customer loyalty has vanished, and large corporations and virtual storefronts regularly (and usually electronically) ask crowds of straying customers why they’ve moved on. Keep in mind that it is five times more profitable to spend marketing and advertising dollars to retain current customers than it is to acquire new ones. There is a solution—and once again, it involves costs.

Do you know how much of your business’s resources you allocate to marketing and new customer acquisition? Most importantly, do you know how much you should be spending, and at what amount it becomes a losing proposition?

Many small businesses use a combination of guesswork, perceived funds available and gut feel to set their marketing budgets. Understanding the lifetime value of new customers allows business owners to take a longer-term and more realistic view of attracting new business to make their companies more efficient and profitable.

Customer acquisition cost is calculated by dividing total acquisition expenses by the total number of new customers. Simple enough; but not surprisingly, there are different opinions as to what constitutes an acquisition expense. For example, rebates and special discounts do not represent an actual cash outlay, yet they have an impact on cash flow (and presumably, on the customer).

The specific calculation depends on the nature of the customer relationships, which are often divided into two categories. In contractual or retention situations, customers who do not renew are considered “lost for good.” The other category involves customer migration situations, in which a customer who does not buy (in a given period or from a given promotion) is still considered a customer because they may buy at some point in the future.

To compute the cost of acquiring a customer (CAC), the operation’s entire cost of sales and marketing over a given period, including salaries and other related expenses, is divided by the number of customers or prospective customers acquired in that period. CAC calculations must also account for the cost of turning prospects into customers.

In order to compute the Lifetime Value of a Customer (LTV), the gross profit margin expected to result from that customer over the lifetime of the relationship is computed. Gross margin would take into consideration any support, installation and servicing costs over the projected life of the customer relationship.

Solutions and more solutions

There are a number of strategies for resolving the “Best Customer/Least Profitable Customer” conundrum, including:

• Increasing the profitability of already profitable customers.
• Identifying unprofitable customers and realigning them to better manage costs.
• Pricing products and services more effectively.
• Improving internal processes and establishing a reliable method to predict the impact of business decisions on total system costs.
• Improving negotiation processes with customers (discounts, quantity of deliveries, order size, payment terms).

The one thing that many business owners often ignore is whether their best business decision may actually involve “firing” some of their worst customers. It may seem contrary to basic business practices, especially in a bad economy, but having the wrong customers can be costing a business in unexpected ways and holding it back from real success with the temptation of short-term revenues.

Stuck in dealings with minimum profit margins, your ability to service new and more profitable customers could be compromised. A business can also experience increasing employee turnover due to burnout from servicing abusive or demanding customers, adding the additional expense and time of recruiting and training new workers.

Part of the challenge faced by many business owners is how to extract the operation from those relationships without burning bridges. Often, simply communicating new credit or service policies clearly and openly as a business decision (and not just to one customer at a time) will cause problem accounts to look elsewhere. Make it a policy, not a reaction.

Accounting for costs means more realistically pricing goods and services to ensure that costs are fairly covered by revenues. Cost accounting can prove invaluable when it comes to determining real profits and finding out what a particular job actually costs. If detailed enough, that cost accounting can also reveal what your “best customers” actually cost you and your business, as well as the revenues they bring you.

Mark E. Battersby, based in Ardmore, Pa., writes extensively on business, financial and tax-related topics. Email him directly at MEBatt12@earthlink.net

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