Have you forgotten the bonuses for number of sales per month, etc, that the salesman gets, plus what the dealership makes on financing, extended warranties, etc? Otherwise, why would Jeff and Polar Bear, and their dealerships and many others, routinely be selling for under invoice?
I have no problem with people making a profit. I certainly want to do so in my profession. However, you lose me when you grossly distort the financial truth.

 

Perhaps polarbear and I grew up in a different place and time. I was taught "you can't pay a K-Mart price, then expect Lord & Taylor service." I remember when "sales" were really that, and you gave up something (service, warranty, perfect finish, etc...) because you were getting a discount. Perhaps retail pricing then was more reasonable to begin with (does ANYONE buy jewelry at JC Penney today and NOT get at least 70% off?), but there had to be a REASON to get a discount, not just because it was the normal way of doing business. I'm not talking just about the auto business, but retailing in general. And when it came to luxury cars, one simply didn't negotiate price. It sounds crazy in our "grind-'em-down-to-nothing" present-day world, but part of the prestige of buying a Cadillac was being able to confidently walk into that showroom and pay what was on the window. You knew you'd "made it," and you wouldn't humiliate yourself by trying to get a discount; it was just tacky to do so. As the old saying goes, "if you have to ask how much..." I know things have changed, but you have to realize how we were raised and how that affects our values.

The time-vs-cost analogy is an interesting one. I've come to the conclusion that a $99 airline ticket is NOT a good deal when it means I have to spend half a day sitting in a particular southern airport that is incapable of getting even ONE airplane off the ground on time. From now on, if an extra 40 or 50 bucks means I can avoid that bottleneck, I'm spending it and not looking back. My time (and sanity) really is worth more than a few bucks. Another old saying: fools know the price of everything, but the value of nothing.

 

I can't speak for Jeff, but I have a unique payplan. Part of that has to do with my management status. Many stores will pay a "mini" for an invoice or less deal- usually $25 or $50 out here. Ours runs quite a bit higher- $100, and it doubles for a 60 day unit. My bonuses are hinged on store volume, which is a little different story than for an individual salesperson.

As far as FTE goes, the basic theory is that this is business- and customers- that we routinely would have never seen. That puts the whole profit-structure question in a different light.

 

Isn't it true that the manufacturers also pay bonuses, per unit, etc., to the individual salesperson. For example, 5 Fords sold, in a month, and salesman gets $X?
Once again, I think salespeople should make money, and it is not my business how much; but, don't insult my intelligence, as mamasford did, by claiming to make less. In other words, don't lie to me and then expect me to trust you.
Feel free to tell me something is none of my business, such as your income; but, if you choose to answer, you should be truthful.

 

I've never been comfortable discussing intimate details of my income and/or pay plan in public (few people are), but manufacturers sometimes offer what we call "spins," which are cash bonuses that they pay directly to the salesperson. In November and December, during the "Keep it Simple" program, Ford attempted to reimburse salespeople for the money they would have made if they hadn't chopped prices (nearly all dealerships pay a commission based on the profit of the deal; if Ford eliminated any chance at that by cutting prices to the bone, the salesperson would be lucky if they got $50). The original deal was $100 for each vehicle delivered, and if you sold 5, then Ford would send you an additional $500. Within 2 weeks, Ford pulled the $500 bonus, so we got a flat $100 per, regardless of how many you sold. That is all history, but right now they'll pay us a flat $150 for a 2005 Mustang (no, I'm not laughing), or a variable amount on a 2006 Focus.

These bonuses come and go at the whim of the Ford incentives department, so you can't count on them as part of any stable income. But it is nice to get a check every now and then.

 

Got it.
Thanks.

 

You get spins, Jeff? I'm listed as a Sls Mgr, so mine go to the sales department. Which is OK, really- got to feed the troops, ya know?

I can't speak for anyone else. In my own situation, it's not about the money- if it was I'd still be at home trading stocks (and driving Mrs. Bear bonkers ). Superior service has been, and will continue to be the cornerstone of this dealership's business model. We're fifth in sales volume for all Ford Stores in the five-state Northwest Region, Fourth for Chevrolet, and scored In the top three of all GM dealers in the 11 state West Coast Region in CSI scores. First in Corvette volume for the Northwest Region- for over two decades straight. Go ahead, tell me what we're doing wrong?

edit: those numbers really take on meaning when you consider Sandy is an outlying semi-rural town of 4,500 people, and Portland/Seattle/Spokane/Boise (big metro areas) are all in our region.

 

Yeah sure sometimes you might get some kind of spiff from the mfger or dealer, but they are not common from the mfger and dealer spiffs are carrots on a string. Free gasoline for 2 weeks wouldn't exactly break the bank on your bottom line for the month. I once won a trip for selling a certain number of cars and trucks of a specific type in a specific period, a nice little perk, but rare to be sure. Those things are not exactly dependable income and bonuses for number of cars sold don't add up to much if it is paid as a percentage of the after invoice net, which some dealers do. Flats and minis of 100$ are great when you need one or two more cars to make quota or bonus, but if 12 of your 13 units are minis that is a pretty sad state.
My point is not really money but value for dollar as many have said so far. Forrest_F150's point is understood and his expectation is very realistic, too bad so many mini customers are not in the same realm of reality when they come back and expect so much for so little.

 

What's missing here is the definition of a "good" deal. A good deal is the one you and the dealer are happy with. Whether it's $1000 over sticker price,or $500 under invoice and free gas, if you're happy, guess what... it's a good deal!