So the salesman made $300 on that one sale, which is a snapshot of time - what about all the other time he or she spends at the dealership? There may be days when the only "customer" that comes through the door is one who chews up a bunch of time and has no intention of buying. And lets not discount the time spent boning up on the product, which I suspect Frantz does, or trying to find a home for the oddball trade the dealership took in.

 

Yeah boiler, but if he only makes 1 sale in 12 hours...

 

Moreover, most people don't come to the dealer with all the info ready to go on a sheet of paper. They have to kiss a lot of frogs. I just wish they knew a lot about what they were selling.

 

Talked to him three times by text message since 12/1.... mabey 10 minutes of his time total... he has other compensation and perks
not just a commission salesman.

I guess that's why you're not a car salesman if
$300 commission only profit isn't up to your standard.

 

After we ordered our truck last year we were visiting family in Texas and had some free time. We went to a dealer just north of San Antonio to look at trucks because we had not actually seen a 2017 Super Duty. A guy walked up and I told him we had one ordered and didn't want to waste his time. He said he would be happy to show us around as long as we liked. Apparently none of the salesmen were on commission they were all paid an hourly rate. Had never heard of such.

 

Agreed.
And don't forget the days where they don't sell anything. Focusing on the 1 hour they make money isn't accurate. That's like seeing someone win $300 at a slot machine and saying "nice payoff for pulling a handle once"... you missed all the other pulls and the time spent sitting there.

I don't get the negativity towards car salesmen. Some are slimy, but you see that in every occupation. I go in with researched numbers and have a great idea of what my vehicle should cost and what my trade is worth. If you are financing, you can find competitive interest rates online. You should also check the manufacturers website prior to your visit to see if they have any new interest rate or rebate promotions where you may qualify.

Beyond that, since I'm pretty well informed, my salesman just becomes a conduit to getting paperwork filled out.

For my mother in-law, who hates the buying process, I worked out an easy deal. I found what she wanted in stock online, called the dealership and said I am offering $250 over invoice and they just need to match the CarMax trade-in value for her trade (CarMax hits you with sorta low purchase numbers). In exchange, no tricks, stress, or tactics. They agreed and it went fairly smooth. The only exception was the green salesman who tried to claim the tax benefit of the trade-in. I got the managers ear and said this guy is attempting to take something we are not giving....wasting his time when there were tons of other people on the lot to sell cars to (it was a busy Sat morning). The manger agreed and told him to knock it off.

Heck, go get a Costco deal, I hear they are pretty competitive. A friend of mine that sells Toyotas said they don't make much on the Costco deals. He calls it a mini...I think that's salesman lingo for low margin.

 

It's a hassle because when someone sits in front of my desk I show them the factory invoice. If they challenge me a single time on that price, I show them the holdback, and say "make me an offer". If I don't have it and it's a order, I treat it like it's in stock. And if I have to locate it I charge $500 over invoice, which makes it even a worse deal for me then in stock in almost all cases (unless you're buying a Fiesta or something), AND I have to locate it, work out that deal, arrange drivers to go get it, all for YOU! You're spending around $60k, and I really don't care if it's for a company's truck or a personal lux truck, and you're concerned with a few hundred bucks as your initial way to sort out dealers? That simply does not make sense to me, and as a type A, I know better than to confront that in person with my reasoning, so I simply pass on their "offer".

With all that, I do avg about $300 commission a sale with a pretty generous pay structure. But I make no salary, so that's it. It's very very very rare that a sale takes only 1 hour. But even besides that, no one pays me to become a subject matter expert, and that's how I earn sales. There is alot of other tasks I do as part of my job that aren't directly tied to a sale, so you paying me a higher amount for that one transaction would still have to be built in if they paid a salary, so to you the consumer it wouldn't make a price difference. Be glad sales folks are commission or else they wouldn't work on your behalf, they just sit around and wait for people to say yes about something. Sales folks working the deal for you while trying to keep some money for themselves actually works to the consumer benefit pretty well. Most special offers you get, or even having a manger come out and talk to you if you're on the floor, are a direct result of your salesman trying to put together a deal on your behalf.

What I find so interesting is always the consumer perception. My dealer is not worlds better than most others, though I think we have an awesome team of people. Most of the sales guys have been here several years, a few over 10 and 1 guy has been here 20 years. We all work together well. We complain about customers but it's almost always over customers giving us bad surveys when we genuinely feel we've bent over backwards for them. I don't think anyone on the sales floor has ever got a bad survey from folks who pay full price, it's the folks you gave everything away too and they still are unhappy that hit you. Yes, the process is built around trying to make money off people, and you come in trying to spend as little as possible. Dealership folks sometimes forget that you're spending $60k, and consumers almost always forget that we're making a grand or two profit for the dealer, and that's before paying out all the commissions (sales, finance, managers are all paid out of each deal before the dealer makes any profit). I think it's because it's a big purchase, and it's a very depreciable asset that causes all this. You spend more on your house, but it hold is value. You lose thousands of dollars a year because of your truck, but it's not the dealers fault, and its certainly not our profit. Your cell phone is a smaller amount, yet they make a much higher profit percentage off you in most cases.

Certainly not! Requesting internet pricing is stupid, looking at TrueCar and dealership websites to compare is golden. The "request internet price" type buttons are pure marketing and go into the consumer hope of "a better deal". You're wasting your time and giving up personal information for such a small gain, or no gain at all. Same with submitting your personal info to TrueCar in order to "secure your certificate". The games you think dealers play are created because consumers respond better to them than straight forwardness. Scratch off mailers, We need your trade in mailers, 25% over value trade mailers, all that garbage works, and works very well. I hate it more than ANYONE on this forum (other than other car sales folks that may not be quite as vocal as me). As an industry we hate it. But if we don't do it, we lose sales to the folks who do! All you need to do is use the internet to determine a fair price point, go into your local dealer you want to do business with, and strike up a deal. Follow through the annoying sales process and just keep sticking to what you know is a good fair price, show them your print outs, keep it in state to compare apples to apples. If you can't get to it, chances are you under estimated what a fair price was, or else you didn't come off as an actual buyer. You gotta buy today, that part is true. Not that you can't get the same deal tomorrow, but today is when you'll get it offered to you. So why shop around when you can make tomorrow today if you've done 5 minutes of online research?

 

The whole thing is annoying, on both sides.

I wish the Saturn model would've worked, or better yet, direct sales.

(No offense)

 

I'm not going to get into the us against the man (salesman) debate. I just want to know how things are working out for Thumper? Did anything get straightened out yet?

 

None taken. I feel confident I could work just as well directly for Ford. There would be a loss of jobs because Ford would put 5 dealers 20 minutes from each other, but the cream rises right?

Direct sales would make the process easier, and folks would be less likely to feel they are paying too much, but I'd be willing to bet my commission that prices would actually be higher! Competition and choice on where to do business is good for the consumer. The dealer portion of the market is very small. If Ford only had to compete on the merits and price of Chevy and Dodge, they wouldn't have to worry about the other Ford shop down the street and would have no incentive to lower their profits. Look how long it's taken for rebates to creep up on the current model year? That's all that Ford is doing, the rest comes from the dealers.

Edit: And the Saturn model didn't work because of much of what I said. It didn't give the consumer the chance to feel like they won and got a discount. Of course, GM switching from a unique model line-up to rebadged chevys didn't help either, but that's a different topic. I'd say it's more the consumer driven response to "winning" that drove that business model out and kept it from showing up elsewhere with success.

 

Agree 100%.

 

The direct sales model is exactly how Tesla operates, and they can't make their cars fast enough to keep up with demand. Remember, they have $0 advertising budget. They offer no rebates or pricing incentives except for occasional offers to current owners to refer people for sales. The price is the price, and you know that every other person who bought the same equipped vehicle as you paid the same price, no matter what. The sales paperwork is done online and the financing is done either with them or with your own sourcing.

Frantz is correct that prices would go up, mainly due to lack of competition, but that is not quite the whole story. There are associated costs that drive the MSRP of any vehicle, which includes costs to advertise, and the dealer associated costs as they are a middle step to the consumer and must generate a profit. So, is Tesla selling at "wholesale", at "invoice" or is Tesla selling at a defined margin of profit. The answer is that there is a defined margin of profit; what that is, no one can really know, but the pricing is probably lower with direct sales than with the dealership model, although only in the sense that the MSRP is the reference price, not what most people get through their interactions with various dealerships and the competitive pricing models that drive the market.

The purchasing side is very satisfying, though, as you either buy or you don't, and the stress of getting the "best deal'" is gone. I honestly don't believe the NADA argument that the consumer is not "protected" by the absence of the dealership model, because that opinion is based on antiquated models and the prior lack of protections that are in place today for the consumer, but that is just my own opinion.

As for me? I'm just enjoying my vacation property right now, and I'll be back tomorrow to see if I have a truck to come home to. I trust that my salesman will advocate for me. He know's I'm serious and I didn't approach him with an attitude of trying to get the truck for nothing. I am paying X-plan - rebates, first responder incentive, military incentives. I am done with most of the paperwork which I did just before I left town. They are contacting me daily with updates to let me know when the truck arrives, but it hasn't arrived as of yet, although it is supposedly nearby and waiting for transport to the dealership. I really like the guys there and I am bringing in two more serious buyers to buy this month (an Explorer and another Super Duty). My confidence was definitely improved after hearing the opinions from many on this board, and from hearing Frantz's perspective.