Sales Pay Plans

Chris K Leslie

Are current sales pay plans antiquated? Is there a need for restructure in how we pay people? 

I'd like to see some changes to the one I'm on! 

Jason Stum

Here's a wacky idea @Chris. Back in 2006 I was selling computer systems at a retail store. Our commision % for for the quarter was based on the average dollar amount of "attachments" that we sold with each computer system the quarter prior. Attachments were considered extended warranties, printers, software, mice, etc - essentially anything additional to the sale that wasn't the desktop or laptop system itself. 

Now these aren't the #'s themselves (as I can't remember them) but if you averaged $0-$100 in attachments per system sale, your commision rate would be 1%.  $100-$200 would be 2%. $200-$300 would be 3% so on.

After I got into the car biz in 2008 I always thought a commision system that rewarded a sales person for what else they sold besides the car would work well. It would encourage people to sell more service contracts and accessories not because they were getting a small commision on those items themselves, but because it would affect their earning power overall for each vehicle they sold the next quarter.

I wonder if something like that could work in the dealership today, or if we're headed down the road of non-commissioned sales staff.

I think the real question is: Does the pay plan your store has make sense for the market that its in? If you work at a small dealership that only has a small percentage of the market and averages 70-80 cars a month, a draw against commission would probably be the death of your career lol. Now if you take that same pay structure and apply it to a high volume dealership, a salesperson could actually make a decent income and not be forced to work 50 hours a week.

Matt Lamberth

I would like to see an end to the conflict between sales and management pay plans.  We should all be equally motivated by our pay plans to START working and to KEEP working through the end of the month. 

Craig Ness

I actually like that Jason. Being a small dealer that's looking into hiring their first "Saleman only" position. I'd be interested in hearing different pay plans. What do you like about them...and what don't you like. Employee and manager responses please....I'd like to hear both sides of the story.

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