So it’s an estimate, as we always do with those types of programs. But it’s significant and we think it will encourage retail buyers to order and that’ll filter through to additional dealer orders to restock their inventory. So that’s the idea. So it’s just a little more normalized. It’s not outsized. It’s not huge. It’s really more normal. If you go back kind of pre-COVID days.
Mike Schmit: Yeah, I’ll just add that, to kind of answer your other question. It is a combination of both. There’s incentives to both the dealers and some that flow through to retail, but it’s called a Float Your Boat incentive, and you can read more about it on our Robalo and Chaparral websites. There’s a lot of information on those websites about it.
Brandon Rolle: Okay, great. And just given where inventories are at in the current retail demand, I guess, how much destocking do you feel like needs to take place in the industry to really get back to normalized production levels?
Ben Palmer: That’s a difficult question. I’ll just answer it by saying, I mean, to quantify it is difficult. What we do, our process is, we work with our dealers, we have periodic order points during the year that go to our dealers. They’re looking at their inventory levels. And together with us, we decide what’s an appropriate number of boats that need to be delivered over time so that they have sufficient inventory to meet their retail demand, right? Nobody wants to miss out on a sale. So you need to have, it helps to have inventory on hand to be able to meet that — the buyers that walk in the door that are ready to execute. So we’re working with the dealers. We’re obviously watching the boat shows. We’ll have another order point coming up in the next few weeks.
We’re getting some early indication that says they’re pleased with movement in their inventory. So we’re very disciplined in that regard, in terms of making sure that we’re aligning production with actual demand and dealer inventory. Certainly, you have to make a projection about what you’re going to need in the future, but it helps if sales accelerate. And right now, we’re seeing some of that. So that should be positive and we would expect and hope to be able to increase production again later this quarter to be able to support some spring and summer sales as well to bring inventory even down even further.
Brandon Rolle: Okay, great. And then —
Operator: Your next question comes from the line of Craig Kennison with Baird.
Ben Palmer: Operator, Brandon may have been cut off there. Can you check?
Operator: Oh, sorry. My apologies. One moment. We’re going to take a question from the line of Craig Kennison with Baird. Craig, the floor is yours.
Craig Kennison: Oh sure, thanks a lot. [Multiple Speakers] Good morning. Thanks for taking my question. Yes, I wanted to touch, I guess, on affordability in a different way. You mentioned some of the promotions that you’ve got, but I’m wondering if you foresee any changes to product mix or just any change in the product itself in order to target more affordable prices. How important is that?
Ben Palmer: Well, I think it’s a great question. At this point in time, we’re not taking any definitive measures, always trying to create the best — the balance between the best quality and the features and the benefits and the cost of the boat. That’s always a challenge and something we’re working on. But if you go back to — we in the past have been responsive to those kind of shifts in consumer demand, arcing back to kind of the 2008, 2009, 2010 timeframe. We came out with the H2O series, which was a lower cost unit. We were able to go through and do some sign changes and work with our vendors and we were able to come out with a product that appealed to the consumer at that period of time and in that point in the economic cycle.
At this point, we still feel that we have sufficient demand on the products that we have, but we’re certainly watching that closely and we’ll make the adjustments as necessary. But right now, today, we’re not doing anything in particular. Of course, we have a fairly wide range of boat sizes and features and benefits. And to answer the question another way, we’re still seeing our more expensive boats carry the most weight with respect to our results. We do sell a lot of our — we do sell a high volume of our smaller boats, which do, obviously, carry a lower price point, but at this point we are not — we don’t believe that we have the need or we’ve not seen the need to try to adjust the product configuration or the options and that sort of thing to lower the price.
But it’s a good question. At some point, that may occur.
Mike Schmit: Yes, I’ll just add really quick, too. We haven’t really seen a decline in any of our input costs. In fact, on the contrary, they still kind of going up slightly. So you’ve seen a little bit of margin erosions. So we hope now that supply chains are stabilizing that things will work down, because that’s the tough thing too with the supply chain and the input cost of boats has really increased. So the higher price of boats have really reflected that in the whole industry.
