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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.

May 22nd

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