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Above Board: How Does Dockwa Make Money?


Post by Becky at Dockwa - Published on 7/8/19 8:59 AM

Human curiosity has helped us grow as a species. When it comes to boater curiosity/skepticism about Dockwa, we're on board: you're not just wondering whether or not this new marina technology works, but beyond that, if it does work (hint: it does), how it could impact your favorite hobby, your passion, your livelihood, your time with family, and, of course, your wallet. 

Dockwa's app and site is free for boaters, the marina management software is paid for on a per-transaction basis, and we don't tack on any hidden/annual fees or mark up prices. Which might lead some boaters to naturally wonder, "What's the catch?"

Healthy skepticism is part of what makes a good boater – it's what prompts you to evaluate your course in a changing weather pattern, quickly size up an approaching vessel's intentions, double check your bilge sensor, and sift through the scuttlebutt for boatyard recommendations. Any boater wanting to know more about how Dockwa stays afloat is a good thing – so let's talk shop.

Click a topic to jump to that section:

How Dockwa Makes Money

1) Dockwa's Credit Card Processing

2) Dockwa Offers Premium Marina Management Software and Services

3) Dockwa Takes on Project-Based Work

 

How Dockwa Does Not Make Money

4) Dockwa Does Not Add Surcharges

5) Dockwa Does Not Influence Marina Pricing & Policies

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1) How Dockwa Makes Money: Credit Card Processing

One thing marinas love about Dockwa is that we make the reservation and payment processes seamless – as in, they don’t have to enter boater reservation details into a computer and then run a credit card separately. Which works out well for us, since that's where we make money. 

Credit Card Processing: Percentage Points

Credit card companies (Visa, Amex, and MasterCard) charge businesses a per-transaction processing fee – a fee that varies dependent upon how much money a given business is processing. Typically the more money a business processes, the better the rate a credit card company will give the business. While a marina might run several or even hundreds of transactions a day, it's not a bad bet to say that with nearly 900 marina partners, Dockwa processes significantly more, garnering a better rate across the board on all transactions. 

Credit Card Rates in Action 

As a hypothetical scenario: Let's say each of our 900 marinas all charge boaters $1000 in one day. Visa, MasterCard, and AmEx would charge each marina a variable transaction fee per transaction, typically around 3.5% (generally between 2.9% - 4.5%).

If those same 900 marinas were all to process the $1,000 in payments through Dockwa's marina management software instead of their individual credit card machines, Dockwa would process $900,000 in that hypothetical day. Because of our transaction volume, we get a better rate. If our transaction fee is, say, 2.8%, we can then charge the marina a 3.5% flat transaction fee – roughly the same as what they had been paying – and we'd make .7% – $6,300 profit.

 

How Does Dockwa Make Money

Added Benefits

With that 3.5% transaction fee that the marina pays – the same if not less than they typically pay running credit cards individually* – the marina also gets marina management software with which they maintain their queue of incoming transient and long-term boaters, communicate with guests, and attract boaters by being included in the world's largest marina marketplace made up of one of the world's largest boater networks.

With Dockwa's flat transaction fee, the marina also gets the highest level of encryption for their boater data and personal/financial information. The marina also nixes the separate processes of reservation confirmation and payment processing – Dockwa handles both seamlessly. No more pen and paper, no more filing cabinets. Marinas increase security, organization, and communication, while streamlining accounting and saving processing time at little to no cost.

*Note: every card type (AmEx, Visa, debit cards, etc.) has a different rate, so the blended fee that each business actually pays can be difficult to measure.

Bonus: Penalty-free Cancellations

Full disclosure can go both ways, so while we're talking turkey here's a fun fact you may have missed: Unlike when paying a credit card company directly, Dockwa chooses to refund 100% of the reservation charge to the boater. We get charged the same transaction fee (it is, after all, a transaction!) but we don't pass that onto the boater or marina. Considering how many marina reservations are impacted by weather, this can add up quickly, and that's just the point: we want marinas to feel comfortable refunding, and hope that this leads to less stringent cancellation policies and thus safer boaters.

Note: Dockwa does not charge a fee on top of the credit card transaction fee. 

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2) Dockwa Makes Money on Opt-In Premium Marina Software and Services

We're often told Dockwa's free "Basic" marina software is anything but.

Dockwa Basic – perhaps a misleading name choice – gives all Dockwa marina partners the ability to:

  • Monitor, confirm, adjust, or deny reservation requests and guests from anywhere, 24/7
  • Embed a reservation form within their website
  • Communicate directly with boaters through our website or app via Dockwa Chat
  • Manage long-term contracts – including automated pricing calculations, contract creation + electronic delivery, and billing follow-up
  • Manage their Waitlist
  • Assign boats to slips
  • AutoConfirm reservations (without relinquishing control)
  • Add on miscellaneous Boat Charges (ice, fuel, ship's store items) to a reservation's Dockwa tab
  • Run accounting reports

Dockwa's Basic software is paid for on a per-transaction basis, so it's free to be listed and use the software apart from processing payment for reservations, Boat Charges, etc. But if a marina wants more – to send custom pre-arrival emails, offer promo codes to bring customers in during slower days or special events, advanced reporting features, etc. – then the marina can (and many have) opt to upgrade to Dockwa Connect version of marina management software for $500/month. If you’re curious to compare the two, click here for an overview of Dockwa Marina Management Software, and click here for Pricing information.

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3) Dockwa Makes Money via Project-Based Work

As you may have noticed on that same Pricing page mentioned above, marinas have the option to upgrade beyond Dockwa Basic and beyond Dockwa Connect to Dockwa Lighthouse. Dockwa Lighthouse has standard features such as website design and detailed reporting, but it also allows us to address that marina partners' unique pain points or revenue goals, which may require specialized engineering and/or marketing attention.

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How Dockwa Doesn't Make Money

 

4) Dockwa Does Not Add Surcharges 

Now you're up to speed on how we make money, here's how we don't.

βœ“ Some booking companies may add a surcharge for using their concierge-type services. Dockwa does not add any surcharge to our partner marinas' rates. (Editor's note: Dockwa is not a concierge and cannot reserve dockage on your behalf; you need to reserve via the app or site. Please do not reply to the newsletter with reservation questions/requests. Email mayday@dockwa.com for Dockwa Support. Xoxo.)

βœ“ Dockwa does not charge boaters to use our online platform in the form of a sign-up fee, monthly or annual fee, etc.

βœ“ Dockwa does not increase a marina's prices from what they would be if a boater were to call that marina to reserve, and does not take a cut of the reservation revenue from the marina on top of the transaction fee (which, as mentioned above, is a similar transaction fee to what the marina would pay if running a credit card not through Dockwa.) 

βœ“ We don't charge on top of the credit card processing fee. If you are quoted a higher rate on Dockwa, if a marina tells you we charge in addition to the credit card processing fee, or if a marina attempts to charge you more to make up for the transaction fee, please get in touch with us ASAP so that we can get on the same page with the marina. Dockwa Support is available by email at mayday@dockwa.com, phone at 401-236-8304, or you can Chat us via the icon at the bottom right-hand side of dockwa.com.

To say it another way: in addition to being a marketing platform and reservation management system for marinas, Dockwa is a payment processor for marinas. That means that a marina pays a credit card processing fee just as it would if processing the credit card payment themselves, and even then, they only pay that fee when they receive or enter a reservation. (It also means that marinas that didn't previously take credit cards are now able to because they use Dockwa, which the majority of boaters seem to appreciate.)

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5) Dockwa Does Not Make Money via Increasing or Influencing Marina Pricing & Policies

Prior to this post's publication, a handful of boaters surmised that Dockwa is the cause for several marinas' decisions to increase their dockage rates. Dockwa does not advise on marina rates or policies. As I shared in one boater forum late last year:

...for any business exploring ways to increase revenue, a pricing adjustment is one of the first and easiest avenues through which to accomplish that goal. Listing your business in/on as many free places as possible (i.e., Dockwa) is certainly an additional way, and the two are not mutually exclusive. It's easy to see why there might be a correlation, but that would not automatically imply causation.

At some point our business model may evolve, as business models are wont to do, but this is as it stands now. If you have questions or want more clarification, please shoot me a note: becky@dockwa.com. Thanks!

 

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Post by Becky at Dockwa

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