Community

Share your automotive expertise

2 Write a Blog Post

Filed in: New Car, General Mgt

Sales department compensation for selling accessories

By Bryant Gibby on Feb 23, 2013

I've talked to several sales managers at other stores and all of them have been pretty shocked to find out that we get no compensation from selling accessories.

Our accessories department pre-loads full accessory packages, bed-liners, tints, clear bras, and other items all the time on our new inventory. We get billed full retail to the cost of the car on any accessories that they put on the truck. We can't really mark those accessories up and create some profit for ourselves due to the fact that they are charging us full retail. So we sell all of these new cars that they have accessorized and don't get a dime for any of it (not even a thank you!). Also, in a lot of cases the trucks that have full accessory packages end up aging since they cost so much money. When they age, we take a lot skinnier deal with regard to gross and they get the same full retail that they charged us for the accessories. Doensn't really seem fair to me...

As I mentioned, both sales managers and sales people don't get any percentage of the gross made by the sell of these accessories. I was just wondering what the standard  in the car business is and see if anyone is willing to share that part of their pay plan with me? Let me know your thoughts.

Comments

It has been customary for years, that accessories are installed on inventory for a few of reasons. (1) To get rid of overstocked accessory inventory. (2) To build gross for the sales department. (3) To pretty up an ugly unit. Retail on accessories is an issue you must be involved in. If you are asked to submit a stock number for an accessory install, you should be aware how this will affect your profitability. I have never been a fan of pre-loading accessories, unless it is for display purposes only on one vehicle. Next time, do not allow this to happen, unless you are able to appreciate the profitability it adds to the unit. In today's market, the consumer does not believe the retail on these items anyway. So, you usually do not make more gross profit on the deal. A suggestion would be to, add a process that takes place before F/I, to sell add on accessories. Then add to we-owe or due-bill. Then you will get the gross credit for the additions. Now, if you get paid on the bottom line including the retail of these accessories, just chill out. You are still getting paid, your sales people aren't.

Feb 25, 2013

As a past Sales manager and now a sales person (thankfully) I have been hosed both ways. I can see accessorizing 1 or 2 "show cars" for the showroom for salespeople to sell off of, and have an accessory botique nearby with other items shown, then everybody wins. I know that parts is a Dealer's/GM's focal point and for some reason once they get to that level they don't give a shit about salespeople, or sales managers, but when the sales department out grosses parts and service 10 to 1 in any month maybe it's time to stand up to the "factory guys". Remember the best quote ever made-"We are from the factory, and are here to help you"

Feb 25, 2013

This is why most dealers fail to successfully sell accessories. As per the best practices from the most successful dealers selling accessories a dealership should not only pay 7% to 10% of the retail value of products sold, the commission should be paid separate from the car sale commission to build value. Sales managers should also be paid 5% of the retail and here again it should be paid separately for them to appreciate accessory sales. It is although difficult to do this on pre-loads as most of the profit is negotiated away.

Feb 25, 2013

I am intrigued by the comment, "Next time, do not allow this to happen, unless you are able to appreciate the profitability it adds to the unit." In many cases that decision is being made by the man or woman whose name is on the building so the only way to "not allow" it to happen is to "not allow" yourself to work there anymore. Just a thought.

Feb 27, 2013

Sounds Familiar, except we get Full Retail on Recon for our Used Cars, we get Charged $130.00 an Hour Full Retail for example tires that vehicle needs, but I will say the Accessories on our New Inventory if Custom Wheels & Tires Set are $1050.00 Cost, the Dealer Adds $200.00 for just writing the PO for it!!

Apr 26, 2014

Accessories are usually not run at full service rate for install, especially if you are effective at selling accessories. Their are two ways I think accessories should be added: 1.)(most cumbersome) but split the profit with the three departments equally. 2.) Have an internal price. Retail maybe 25% on part and 50 an hour, internal would then be 10% and 35 an hour.

The first option, if sales sells the accessories at a discount everyone partakes in moving the product. the second option. We have consistent pricing for all departments and sales can decide if they want to make money on the accessory or discount them and give up their gross.

You will never get rich off of accessories but it can make a big difference if everyone works together. Don't be shirts against the skins, at the end of the day the owner has the same profit, but you can all be rewarded for what you do.

*David. Used car should be charged full retail, you don't pay that amount the customer who buys the car does and service and parts shouldn't have to make less money just so you can show more profit on your side.

6 hours ago

Comments 1 - 6 of 6

You must be logged in to comment

Login Create an account

Add your comments:

   

Bryant Gibby's Recent Posts

Related Posts

  • Using Recalls to Your Advantage

    A recent article in Auto Remarketing reports how Penske Automotive Group is using recalls to increase their service business through recall work, but also as an opportunity to sell more vehicles. “I think recall business is good,” Penske Chairman Roger Penske, stated. “We welcome it. I think that’s why we’ve committed to the large fixed operations that we have in order to be able to handle it as it comes in. And I think it also gives us the chance — think about this one — it gives us the chance many times to see vehicles which we haven’t seen. So, it gives us the chance to connect with a customer with an older vehicle and in many cases we’re converting those into used-car or new-car sales.”   Penske makes a great point. However, the very first thing to get an effective handle on is how to connect with these recall customers in the first place. How do you get through to them and inform them of the recall so that you can connect and get their service business? W...Read post

  • First-Ever Women in Automotive Convention to Debut in 2015 – Industry Pioneer named as Keynote Speaker

    Orlando, FL – The inaugural Women in Automotive Convention will take place this summer with the purpose assisting the automotive community in recruiting, retaining and developing female employees and leaders. Women make up just 17% of employees at auto dealerships according to NADA – and organizers of the conference are working diligently to raise this number, beginning with this event. The conference is set for Tuesday-Thursday, August 18-20 at the Ballroom at Church Street in Downtown Orlando. The three-day conference includes speakers, breakout sessions, workshops and booth displays – all centered on the goal of educating and inspiring women in all areas of the automotive industry. Keynote speaker, Lisa Copeland, has been a pioneer in the field of automotive marketing and management for more than 25 years. She is currently Managing Partner of Fiat of Austin, the top Fiat retailer in North America since the brand’s return. “The topic of women in the automotive industry h...Read post

  • CRM Decisions and Disasters - Part 3

    Now that we’ve covered the problems with CRMs, possible solutions, what to look for in a new one and how to prepare your team, this part will cover getting ready for your launch and making sure it’s properly structured. Let’s get started! A properly structured launch will make, or break the outcome of how effective the tool is used, along with how much damage in dollar loss is incurred during the change. I will continue to trumpet the fact that no loss of down time or money is needed if it’s done right. Money invested in doing this correctly will result in quicker acceptance and use by the staff. Read post

  • Why Technicians and Service Advisors Need Marriage Counseling

    Life in the retail automotive industry is taxing. Managers and employees work long hours and, in many cases, are with their co-workers more than they are with their families. Miscommunications, tension or arguments can detract from the efficiency of the dealership, and thus decrease overall profitability.   Technicians and service advisors work very closely together. Communication between them needs to be smooth and efficient. A company culture filled with friction can easily prevent a dealership’s service department from living up to its full potential.   A recent article in Ward’s magazine does a really good job of covering the need for improved relationships between technicians and their service advisors. Technicians are paid by how efficiently productive they can be. The more work they can complete in a day, the more money they make. Service advisors, on the other hand, are paid primarily on commission. According to the article, this can cause problems between the two g...Read post

  • Dealer Currency Helps Grow Gross Revenue on Every Sale While Retaining Customers

    I recently had the pleasure to work with a very innovative dealer who implemented the concept of “dealer currency” in his dealership with great success. Dealer currency allows you to eliminate cash discounts on sales (in both Variable & Fixed Ops) by instead issuing a form of “dealer dollars,” redeemable anywhere in the dealership for the future purchase of parts, service, accessories, or towards a future vehicle purchase.  This creates a true “win-win.” It satisfies the customer -- as they feel they have received the value of the discount. And the dealer -- because it ties the customer to the dealership for future purchases, without having to give away any profit up front in the deal.   For example, instead of discounting a vehicle sale as follows: Selling Price $20,000 $40,000 $60,000 Purchase Discount $750 $1,500 $3,000 Adjusted Selling Price $19,250 ...Read post

  • It's All About Experience

    Consumers expect more out of buying a car. Other industries from ecommerce to boutique shops have made buying and shopping easier. Those changes impact the car industry as those same consumers come to buy a car, and those expectations are only going to intensify.Read post

  • Auto/Mate Receives Platinum Award in Auto Dealer Monthly's Dealers' Choice Awards

    ALBANY, N.Y. – May 18th, 2015 – Auto/Mate Dealership Systems (http://www.automate.com) announced today it has received a Platinum award in the 2015 Auto Dealer Monthly Dealers' Choice Awards. This year marks the second time that Auto/Mate has received a top ranking in the publication's annual award program, which recognizes the industry's best product and service providers. Winners of the Dealer's Choice Awards are selected exclusively by dealership personnel, each of whom has to manually enter their partner companies' names.    "Our number one priority at Auto/Mate is to be the top DMS provider in customer satisfaction, and we have achieved that with a 97.5 percent customer retention rate," said Mike Esposito, President and CEO of Auto/Mate. "Our customers appreciate us because we make an effort to hire people who have worked in dealerships so we know what our customers are experiencing, and we empower our employees to take care of our customers first."   “This year’s a...Read post

  • Hiring at Dealerships: 12 Tips for Spotting the Right Resume

    We’ve all heard this before: If you really want something, you have to be willing to work for it. Not everyone takes this old saying to heart, but for those who do, you’ll always notice. If you’re a hiring manager, then you know that the same can be said while looking at resumes. If an applicant really wants to get a job, then he or she is going to do the research and put in the appropriate time to compile a good resume—one that speaks to the hiring manager and highlights his or her work experience, as well as personality. However, this doesn’t always happen. (I know I’ve given minimal effort while drafting my resume before!) But like I said, you can tell when someone’s giving his or her best effort. So, how can you tell? To better understand what to look for in a resume at your dealership, I talked to Hireology’s Director of Talent, Melissa Ely. I asked her what were some warning signs, as well as positive signs, to spot on resumes. Here’s what Melissa had to say: Red Flags 1.) Gaps in employment - gaps in employment can mean someone was either let go, or left a role without another position lined up. Both are red flags. 2.) Several short-term (less than one year) jobs listed on a resume raise the red flag of job stability, and make me question if the candidate is a job hopper. 3.) Lack of specificity with job responsibilities - more than anything this shows that little time or thought went into creating your resume. A great resume is tailored to the role you areRead post