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!!

April 26th

Comments 1 - 5 of 5

You must be logged in to comment

Login Create an account

Add your comments:

   

Bryant Gibby's Recent Posts

Related Posts

  • Changing Your Dealerships Culture.

    In Greek mythology Sisyphus was compelled, as a punishment for deceitfulness, to roll a boulder up a hill, When it almost reached the top he would witness it roll to the bottom and then would repeat this action over and over again for eternity. Sound FamiliarRead post

  • How important is a job title?

    My dealership firmly believes in a culture of *teamwork* - and by not having a title - I can be the utility player on the team.Read post

  • Use Your Talent & Develop Your Skill

    Use Your Talent & Develop Your SkillRead post

  • How Simply Getting the Job Done Can Be a Bad Thing

    Working at a car dealership often takes its toll on employees. The demands of a fifty, sixty or seventy hour work week often leaves the employee exhausted, mentally and physically. Generally, these employees are not clock-watchers, they are your commissioned sales people, your technicians, your management staff and they are the bread and butter for your dealership.  Are these long work hours the expectation that has been set by the organization, or it is part of the genetic makeup of these employees? Is their heart into it? Or are they only a cog that helps turn the wheel? Also imagine the full-time, forty-hour per week receptionist, service cashier or parts counter employee that repeats the responsibilities of their job for eight hours a day.  They take their breaks and probably sneak in a couple more to grab a cigarette or run an errand.  Their lunch hour is regimented so that everyone knows where to find them at half past twelve. They are critical employees to your franchise, ...Read post

  • DSU Live to offer interactive & personalized session prior to DSES 2014

    If you're anything like me, you love and thirst for learning. I have always been of the mindset that the more knoweldge I can get my hands on, the more effective I can be.Read post

  • Social Media: When Marketing Becomes Mocketing

    Social media can be a tricky thing. Finding and publishing content that a business’s audience will both enjoy and interact with can be challenging. And as Facebook exposure for business pages is increasingly diminishing, businesses are more dependent on audience engagement than ever for those elusive likes, shares and comments. The type of content posted is highly important as there is a line that can be crossed and turn public perception against you. Sometimes, what may have been a sincere piece of content can be perceived as simply self-promotional.   The reality is that behind every piece of content produced by a business there is a person. Whether that’s one person or a team, ultimately, it can be difficult for marketers to separate personal feelings from their social media content. Take for example the viral campaign to raise awareness and money for the ALS Association named “The Ice Bucket Challenge.” It’s fantastic that individuals are raising money for the ALS Assoc...Read post

  • Consulting Conundrum: “You can do whatever you want, as long as…”

    Yes, this is opinion. However don't take it as fable. It’s the consistent vicious circle in consulting: do it all as long as it’s what is wanted at that moment, backed up by someone else, doesn’t bite back at the factory stance, mostly makes sense and when you can grab the proper attention. And don’t blink because all of that can change with one call or a visit from a nice set of pearly whites with a tan and a low-slung top. In a dramatically fluid world, all of that is a constant. Meeting with a dealer the other day, their factory (only) site has issues, their SEO/SEM isn’t close to completely transparent in work, reporting or results, their new CRM isn’t installed properly or completely and their sales team can’t seem to do their job. And the store is doing, what most would consider, fine. In less than five hours, a solution to every hole that was shot in their operation was provided, a path to resolution (in some cases multiple) was drawn out and improvement benchm...Read post

  • Natural Unselection (It Takes Time…)

    Yes, it is getting more and more difficult for business owners to make decisions today that will positively impact their business, especially in the arena of digital marketing. You might say “bull hooey” and protest that it has become easier. And you’d be half fright… Nothing is more frustrating to a business owner that not understanding something that should otherwise be “easy” to do so. That’s where misguided trust and blind recommendations become so darn appealing. Attend a 20 Group and you just might be amazed as to how eloquent an otherwise inept presenter can be. We live in a world of regurgitated content, many times so prolific that anyone can claim it to be theirs. Car dealers and executive management, typically, know what has been and possibly what is happening now.  They’re still overwhelmingly blind to what is going to happen, even though it’s in front of their eyes. And smartphones. However, the chasm that exists does so simply because the dots aren’...Read post