What Profits Do PWC Dealerships Withhold On New Jet Skis?

The most common question I get from new owners is about the cost of the watercraft.

The dealerships will vary greatly in pricing and practices, with some haggling and others not.

This post aims to provide insights into markup, assembly costs, and potential fees when buying a PWC. It’s important to note that the exact details will vary by location. This information is helpful for people looking to buy, from new riders to a PWC rental business and everything in between.

Dealership Markups

Let’s get right to the point, you can expect average margins of 4% to 8%.

Some people assume margins as high as 40%, while others think they’re as low as 1%. In reality, the answer for most is closer to 6% on average.

Here’s what’s interesting: this margin doesn’t include things like freight, prep, taxes, and other costs. Even more surprising is that many of these fees and taxes can’t be hidden in the price, which makes paying over MSRP a common occurrence.

Now think about it, if your state has a 6% sales tax, it would be nearly impossible for a dealership to sell within reasonable terms and still make a profit if the margin is only 6% or similarly small.

The More Expensive…

The more expensive the jet ski, the more the dealership will make.

If numbers are equal, a unit that costs $16,000 will have more wiggle room than one that is $8,000.

So don’t expect to get a great deal on a budget model compared to the top of the line model.

Fees & What They Mean

Every dealership will have some kind of fees, either from the manufacturer, state, or the cost of doing business.

To fully understand how all this works we need to do a made-up example, let’s assume a PWC price of $8,000 and it has a 6% markup.

$8,000 * 6% = $480 Profit

But we’re not done, there are still…

• Taxes
• Registration
• Freight
• Prep
• Doc
• Trailer, if you get one

There can be even more fees depending on where you live. Let’s break down each fee to help you better understand why they exist.

I’ve also made a jet ski pricing calculator that gets all these factors in and allows you to play with the numbers to see how much you can afford.

Taxes

If your state or country charges sales taxes, you’ll have to pay that when you buy your PWC.

Some states have a sales taxes that are greater than the profit they would make off the sale. So, they can’t hide that charge in the price of the unit.

You also can’t avoid paying taxes, the tax man always wins. It’s something that many businesses, like PWC rentals, understand quite well.

Registration

Taxes are not the only thing you need to pay, but you must also pay and register your boat with your state’s wildlife center.

It may go by different names all over the world, but in many places you register your boat (PWC) and get assigned vessel numbers.

Think of it as a license plate for your boat.

You also have to renew it every year or whatever interval you pay for, some can go multiple years.

Not keeping up with this can result in you being pulled over by the water patrol and getting a ticket.

Some dealers may not do the registration for you, some do, but overall, you’ll need to have it in many places.

Freight

Freight can be a sore spot for some buyers, but it is a cost.

The PWC needs to get to the dealership somehow, and that is by truck. Shipping is not free, even though some online stores don’t charge for it, they actually do as their markup is just better.

And a PWC is not that small, with most being 12 feet or longer, they take up a lot of room on semi-trucks. They are put into crates, so they can be stacked, but mostly two high.

What manufacturers do is average out the cost of shipping. So those many dealerships located further from the factory are not paying more.

While some think this fee can be negotiated, in a lot of case it can’t. The honest truth, you’re paying this fee even if you’re not. Unless the store wants to lose money.

Freight is not cheap, it can vary, somewhere around $500, and it keeps going up every year due to inflation and shipping costs going up.

Prep

As covered in the freight fee, PWCs come in crates, which means they need to be assembled.

I’ve had a few people give me the line that they can assemble it themselves in an attempt to save money, but the reality is that they cannot.

Even if you’re skilled and have all the right tools, you still lack the software from the manufacturer to program the machine. Without that software, you have an expensive canoe.

The manufacturer isn’t doing this to force you to pay for prep, but instead to cut down on theft. Until the unit is programmed by the dealership and activated, it’s useless. Taking it to another dealership to get programmed won’t work either, as the stolen unit go in a database.

With prep, you also have the cost of the battery, fire extinguisher, gas and everything else that is needed to get the waverunner going. The dealership will need to add these things to make sure it runs fine, so it’s best to pay the prep charge.

The good news is that every dealership prep (put the thing together) fee is different, so you can use that to your advantage.

Doc

The doc fee is short for document fee. Every dealership will have a different amount they charge.

Not paying the document fee can be tricky due to DMV laws, which apply when buying a trailer to haul your PWC. Some states even have a limit a dealership can put on the bill of sale and charge.

Negotiating the doc fee will be hard, it’s best to Google your state’s regulations on doc fees and get multiple quotes to fully understand.

Backend Money

A car dealership can (and often do) sell a car at cost and still make money, as the manufacturer has holdbacks.

This is not a thing for skis, at least in the way you think. A dealership that is trying to sell units at cost will go out of business very soon.

PWCs are a want, and not a need, so the cut-throat business that comes from car sales is not something that shows up here. Sure, there is competition, but the car dealer tricks are not a thing here.

Most often, the price is the price.

No hokey-pokey and turn yourself around like with car dealerships. There may be promotions from the manufacturers that lowers the price, but most of the time they have a warranty offer that is better value if you ask me.

Where The Real Money Is Made!

Selling new PWCs is not as profitable as many think, and the real money is made in accessories, service, and used sales.

If you want to get the best deal possible…

—Always haggle over the accessories and services—

They’re selling the ski to get you to the gear you’ll need, and often need routinely.

If you want to know what accessories you need, I have a post that goes over that here.

Selling At A Loss

The dealerships may (in a blue moon) sell at a loss when demand is low or units sit on the lot for too long, costing them money.

Unlike cars, PWC don’t have frequent auctions, so unsold units remain on the lot until sold or transferred. Units that have been sitting for a while offer the best deals.

The Price They Say Vs. The Real Price

I’ve been price shopped a lot, and it’s okay, but it’s always interesting seeing some deal’s aftermath.

I’ve noticed a trend with some dealerships that they just want you in the door. So the price they give you is not always what you end up paying. There are so many tricks that are played that it could be its own article

You’ve got to be careful when pricing shopping; I go over many tips for buying a new PWC here.

What's interesting to me is the kamikaze deals. One dealership says a super low price, you agree to buy, but when you show up the price changes because of this or that, and now you're put off from buying a PWC from anyone. It was a win-win for the dealership that is selling at the super low number. They either sell a PWC for more or got you out of the PWC market and the competition doesn't make a sale. Imagine the customer who spent weeks or month researching the perfect PWC and found the perfect price after talking to several dealerships, then it all comes crashing down. Some do end up paying more as they're ready to be done with it, and the others move on to something else. 

Supply And Demand

PWCs suffer from supply and demand, just like most things in the world. No matter if the margins on a PWC and boat are low, prices can be whatever the PWC market dictates.

They are also seasonal, everyone wants one in the summer months, but not so much in the winter.

It’s important to keep this in mind when buying, as the season and how hot the item is currently can affect the price. In 2020-2023 we saw many selling for way more than they normally do, but they were in high demand and supply could not keep up.

Expect to pay more during the busy seasons for PWCs that are in demand.

Don’t forget the price of ownership, the costs don’t stop after making a purchase.