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 26, 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.

May 22, 2015

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

  • How Having a Good Used Cars Selection Can Help Boost Your New Car Sales

    Some dealerships have found a good way to attract new car buyers to the dealership is to make sure they have a good selection of used cars that draw buyers to the lot which then gives their salespeople an opportunity to sell them a new car. It's a fact. Low prices will bring customers into your dealership. Often when people drive by a dealership and see good used cars at affordable prices they’ll stop in and look around just because they see cars they think are within their budget. Once they're in the dealership, it’s common for many of them to take the short walk from the used car area to the new cars section. That gives your salespeople a golden opportunity to make more new car sales. Another way a good used car selection helps new car sales is by giving buyers a chance to compare good used cars to great new cars. For the average car buyer, the choice is clear. New cars just look, smell, have better features, and drive better than used cars. Once a person is serious about buying a car, if you can show them how they can get a great new car for just a little more than a good used car, many of them will buy the new car. The key is to give them a clear comparison they can see and respond to. Read post

  • Recalls and the Connected Car: Is In-Vehicle Technology the Answer?

    Today’s cars come with very sophisticated technology, including live navigation with traffic and obstacle reports, collision avoidance systems, cell phone integration and wireless connectivity. Automakers are now investigating how they can leverage this technology to communicate any vehicle issues to vehicle owners. The OnStar system already reports vehicle concerns. These are collected from the vehicle itself and relayed via e-mail to both the owner and the dealership. These reports serve as a warning device to vehicle owners that their vehicle needs attention. Typically, these notifications revolve around regular maintenance, triggered by odometer readings, tire inflation pressures and other common indicators. But what if these connected cars could actually serve as notification centers? Or, better yet, receive actual updates to correct problems? The answer is -- they can. Tesla already does this.   One of the biggest challenges in implementing a recall is identifying and noti...Read post

  • Know your Competition! What Independents Are Doing to Retain Customers

    There is a constant stream of advice from industry experts concerning customer loyalty and retention. While most of the advice is on point, a large piece is typically missing in the bigger picture. In order to increase market share, businesses must be aware of what their competition is doing. Turning a blind eye to pricing and marketing tactics of the dealership down the road can easily cost sales or service business. Savvy dealers check out what their competition is doing. But, these mystery shops or research data is usually limited to their franchised competitors, not independent repair facilities, which is a mistake.   A recent roundtable discussion published by Loyalty360 included key executives of some large independent repair franchises. It provides interesting insight into the mindsets and strategies they are using to build customer loyalty and keep customers coming back.   The roundtable included Robert Falconi, CEO and John Wiegand, SVP of Operations with Precision Tun...Read post

  • How Lexus Gets Results Using Big Data

    Big data. Big deal? You bet!! Advertising technologies can enable greater alignment between OEM’s and dealers. That’s not in question. When used correctly, these technologies can create a more seamless, personalized, and differentiated brand experience in a very competitive marketplace. Just ask Lexus.Read post

  • Auto Dealers Spend Too Much on Multiple Marketing Companies AutoLoop Finds

    A majority of auto dealers are spending their marketing budgets inefficiently, according to AutoLoop, LLC. The leading provider of auto industry marketing and customer relationship management solutions found that dealers are spending too much money due to overlap in vendor services. “Using multiple marketing vendors, all with overlapping services and all communicating with your customers, is not a good strategy,” said John Bottone, Vice President of National Sales, AutoLoop. “More importantly, it leads to a frustrated customer base hit with a barrage of redundant and mixed messages.” “Trying to manage and integrate multiple marketing vendors also creates very inefficient dealership operations,” Bottone continued. “Many dealers I know are working with 2, 3, or even 4 (or more) vendors. Each one represents a software product that is communicating in some way with the dealer’s customers, sending multiple, uncoordinated messages. This type of overlap can cost thousands of dollars each month and inevitably results in contradictive messaging.” Read post

  • It’s like 1995 all over again! Do you want beachfront Real-Estate?

    The time has come and we will separate the forward thinkers from the rest! Read post

  • Level the Playing Field

    You’ve worked hard to ensure you have the best professionals in the business working at your dealership, so it makes sense that you’ll continue working hard to give them the edge they need when it comes to connecting with shoppers, creating relationships, and boosting sales. But things move quickly in today’s marketplace, and tools are continuously being updated. Consumers are in a rush to complete transactions, they show up at your dealership more informed than ever, and your professionals are under pressure to stay up-to-date and informed, as well as find new ways to engage and level with shoppers.Read post

  • Women-Drivers.com names 2015 Top Dealership Awards

    Top 3 Dealerships are Acknowledged for their High Review Scores from Women Who made the cut for the Top Dealers in 2015? Women have spoken and the reviews have been tallied. DAY AUTOMOTIVE GROUP is awarded the 2015 Certified Women-Drivers.com Auto Group Dealer of the Year. MIDGETTE AUTO SUPERCENTER is awarded the 2015 Certified Women-Drivers.com Independent Dealer of the Year. DIVER CHEVROLET is awarded the 2015 Certified Women-Drivers.com Dealer of the Year. Based upon the number of reviews received and the aggregate scores of those reviews, these dealerships have consistently demonstrated exceptional trust, respectful and fair experiences towards women when shopping, purchasing and in the service drive. "Each of these dealerships clearly are performing at an exemplary level with this growing buying segment. Over half of all cars are purchased by women and further, women rely on car dealer reviews twice as much as men when buying. Not only are these top distinguished dealership...Read post