Sales Compensation

Brad Hensley
Stan, At our store which our sales team is on salary + profit sharing. I have them set this way so that they are invested in the losses just as much as the profits. From what I have seen, it helps tremendously on trades and evaluating deals. We are also on a set, no haggle price structure so that may come into play some as well. I was a commissioned only salesman for 8+ years and pushed the envelope on every deal. If we were rolling there were days, that a trade in never got driven. If my sales team thinks they are going to lose money they have checked it out to the fullest. My teams' salaries differ depending on management verses sales however they are all on the same % of profit sharing. I really enjoy this system. It has seemed to create a team environment rather than a Piranha invested sales force fighting over every deal which I was part of for many years. Hope my two cents helps.
Steve Devereaux
Great subject! I was actually going to just do a post about sales compensation! That's a good idea for the profit sharing. We pay commission plus a % of the financing and warranty sales. We have been throwing around ideas of how to change & improve this. Brad, you are an independent like us with a similar strategy. I've been thinking a flat system might work well too. Anyone know what a good guide number is for sales compensation as a % of GP??
Jason Courter
Old addage was 20%...I believe if you compensate well per SP and keep it no more than 25% of GP then you are doing well as long as you dojnt overspend elsewhere. This % should also include spiffs. This is a number based off of true GP from front end or even if you want to combine it but make sure to watch the F/I comp too as that could also creep if you pay off both.

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