Selling Accessories and Parts Manager Pay Plans

Steve Devereaux
We just recently started pushing our sales staff to sell accessories to customers when they are buying a vehicle. This is a good thing to do for a lot of reasons, but in order to motivate them we figured the best way is to pay them a percentage of the gross profit made on the parts sell. Since this is something we just implemented, our parts manager was complaining that he sells accessories too and deserves to get a piece of that gross profit too. We are letting the parts department keep all of the profit. A lot of dealerships split the profit between the sales and parts department. Would anyone care to share their parts department pay plans? Any accessory sales advice would be greatly appreciated too!
Bryant Gibby
How many cars do you guys sell per month? If you guys are a big enough dealership, I strongly recommend hiring a full time accessories manager. Most salespeople don't really care about accessories and won't take the time to learn about them. You will lose a lot of business if you leave it up to them. I full time guy can not only generate more gross, but can also be there to make sure the work gets a done in a timely manner and that the customer has a positive experience. We do spiff programs for our salesguys for the accessories that are sold on their deals and they love it!
Tony Rhoades
Your comments seem to indicate that your parts manager does not currently get paid off department gross. Is this the case?
David Stringer
We work with many dealerships on creating this very process and a pay plan is central to success. I am too confused by the comment "parts manager...wants his share too." Most parts departments make margin on selling the part to the sales department. It sounds like you are doing aftermarket that is going around the parts department? Please clarify. Nevertheless, the best set up we see time and time again is 10% of the gross SALE, not on profit! This is based upon 10+ years of providing accessory sales solutions to dealerships just like yours. Couple of reasons for this: 1. A percentage of gross profit on many accessory items is very little money. Now, if you are paying 50% of gross profit, that’s a different story, but most dealers start with 10% or sometimes as little as 5% of gross profit and sales folks go “hmmmph!” You said it yourself, wiifm? 2. For sales people figuring what their commission is on 10% of the sale is really an easy calculation. If the part is $100 they know they are getting $10. They know what they are working for. It’s much less confusing and we all know about what happens when sales people are confused… Another set up I see is “Cash in Fist” spiffs. The key here though is communicating the spiffs and making it easy. Sell $100 you get X; Sell $1000 and you get Y; and so on. Keep it simple and pay often! We advise dealers to start weekly payouts at sales meetings (like other spiffs); then you can reduce to monthly. Lastly, pay when the job is completed. Make sure the customer is happy and the accessories are on the vehicle before you pay the sales person.
Steve Devereaux
To answer your questions: 1. Yes, the parts manager is being paid off of the gross profit (10%)and he was complaining that his January bonus wasn't a lot, but January is generally a slow month anyway. 2. We're NOT giving any of the profit to the sales department. We are paying the sales people 25% of the gross profit (in case there's a discount for some reason) and we are also telling them that 25% of the gross profit is roughly 5% of the sales revenue of the GM accessory, which it is.
Steve Devereaux
OH and they are GM Accessories, not aftermarket.

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