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

Comments 1 - 4 of 4

You must be logged in to comment

Login Create an account

Add your comments:

   

Bryant Gibby's Recent Posts

Related Posts

  • New Research: 1 in 6 Car Buyers Skips Test-Drive; Nearly Half Visit Just One (Or No) Dealership Prior to Purchase

    DMEautomotive study provides fresh evidence that dealership avoidance is a new car buying “normal” DAYTONA BEACH, Fla. – April 15, 2014 – It may be the second most expensive purchase of most people’s lives, but new research from DMEautomotive (DMEa) reveals that a growing number of Americans are bypassing test-drives – and making strikingly few visits to dealerships – in their car-buying process.   The latest survey of roughly 2,000 automotive consumers1 found that, before purchasing, 16% took no test-drive, and 33% test-drove only one car. And more than two-thirds (68%) reported that they visited only two dealerships or fewer before buying - with 40% visiting only one dealer.   The survey also measured consumer trust of dealer salespeople, and the results were sobering: only 21% claimed they perceive them as “trustworthy,” a lower trust rating than reported for lawyers, mortgage brokers and insurance salespeople.   “This avoidance of physical dealerships ...Read post

  • What can you learn from Subaru of Wichita?

    “Look at the ways a dealership can be prepared for this situation at any given time. It’s that media readiness that really helped us move quickly, adapt and draw from who we are this was just an amplification of who we were to begin with,” Wirtz added. Read post

  • Fallon Chooses Ford amongst Controversy & Salespeople Humiliation

    Last month, I wrote an article on how Jimmy Fallon announced during “The Tonight Show” that he was in the market for a truck. Manufacturers immediately took to social media in attempts to convince the popular talk-show host that he should choose them, including Ford, Dodge, Chevrolet and Nissan. Fallon announced last week that he had chosen to purchase a 1015 Ford F-150 King Ranch. He then further announced that, while he had chosen the truck, he had not decided who he was going to buy it from. A cooperative effort between Ford and “The Tonight Show” conjured up a contest they named “Fingers on a 4x4,” in which 10 salespeople from around the country would participate for the opportunity to sell Mr. Fallon a truck, by putting their hands on a Ford F-150 located on the aircraft carrier U.S. S. Nimitz. The contest being that any salesperson would be eliminated from the competition if they removed their hands from the truck. The last person with their hand on the truck would ...Read post

  • Facebook Confirms Reduced Page Exposure Is Because Your Content Sucks

    It’s been widely reported by social media experts that organic reach for Facebook pages has plummeted in the past 6 months; from as high as 15%, to the current 1-2%.  As a public company, Facebook has a need to appease its shareholders by monetizing its platform as much as possible. Facebook knows that there is a fine line between delivering relevant content that users want to see, and paid ads. Many brands are obviously upset with these changes. One in particular has had enough. Last month, Eat24, a popular food site with 70,000 Facebook likes, wrote a public letter to Facebook. The letter accused Facebook of luring brands into using their platform, then slowly reducing these brand’s exposure to fans and making it a ‘pay-to-play’ model. Eat24 argued that their fans want to see their content. And that by withholding content, Facebook is forcing brands to pay for the additional reach. Eat24 then boldly said goodbye and stated that they would be shutting down their Facebook p...Read post

  • Why have Gary Vaynerchuk keynote Presidents Club 2014?

    Gary Vaynerchuk will be sharing in-depth case studies from his new book, Jab, Jab, Jab, Right Hook, and show us how the world’s biggest brands use digital marketing to build their brands. Gary V. will be outlining actionable and profit-building strategies to build your dealership’s brand with clarity as a leader in your store.Read post

  • 3 Things You Need to Know about Auto Transport

    3 Things You Need to Know about Auto Transport              For most people, the subject of auto transport is a foreign one. It’s usually the final task that most people need to worry about when buying their next classic car project, or selling their finished restoration. There is a common stigma in the auto transport industry about the quality of the companies who may be putting their hands on your vehicle. You can read negative reviews on auto transport brokers and the carriers they hire for hours on end. The truth is that most of this information won’t do you much good. If you ever do find that perfect 1988 Pontiac Fiero or a restorable 1953 Corvette; it will most likely be out of state, and you’ll need to figure out how to get it to your doorstep. You’ll need to find someone to handle the job. When it comes to choosing your next auto transport company, follow these simple recommendations and you’ll come out fine in the end. Who you’re dealing with. ...Read post

  • Making Lemonade out of Lemons-Subaru of Wichita

    While much could be said about why and where this union group is protesting businesses, the most noteworthy part of this situation is how Wirtz and his team handled the adversity. They sprung into creative action, in his words making lemonade out of lemons.Read post

  • Automotive Sales Training: Three Strikes and You are In!!!!

    Normally, a strike as a negative. With a change in point of view, a strike becomes an opportunity to build a relationship with a vendor, prospect or client.Read post