BMW 3-Series (E90 E92) Forum - View Single Post

jferrell · 08-30-2010, 09:30 PM

Well to conclude this let me say I left car sales. I've been at it for years and it's an industry that is going in the wrong direction for a sales man.

Here is how a dealership I know pays their people and why it just doesn't pay to play anymore;

Suppose you go to buy an Alpine 328i with automatic trans, premium and value package with an MSRP of 38,050 and an invoice of 35,590 including MACO and training. At MSRP this represents of profit of 2,460. Most dealerships pull out a "pack" probably 1% of cost which means your payable gross is 2104.10. Most highline dealerships have a flat 20 percent and sell say 8 or more units and make 25 percent of that amount. So at MSRP that 328 pays you $420.82. Suppose you work 40 hours a week and do this twice a week and your hourly wage is 21 dollars an hour. Awesome.

Except reality hits. We have a flat of $300 we get paid if the profit drops below a certain point or in this case $2000 profit(how many people settle for $460 off a 3 series).

At this point the industry is pretty much earning you flats as we've pointed out people don't want to pay 6 to 7 percent profit margins(you'd be pissed to know you pay more profit dollar amount wise in a TV then a car sometimes, I used to run a big box retailer for 8 years) So let's say you sell 10 cars at flats, $3000 grand that's awesome right? Well if I was 21 years old and could wait the 90 plus days it takes to build enough clientel to sell 10 cars a month and make that that's fine but the truth is you'll probally put more like 60 hours a week in average around 12.50 an hour.

I have a wife, a two year old and one on the way so I just decided it wasn't for me. The people who were the biggest pain in the ass when it came to price still believed we made four or five thousand in profit when in reality we may have made hundreds and then they would do what we call nibbling, light bulb, a second detail, my windshield looks kind of scratched, etc..

There are those of you that say why not sell all your cars at the cost the customer wants to make the flat. Let's evaluate;

20 cars at flats is $6000 plus whatever bonus is out there at the time, make sense to me I'd do it.

Except sales managers aren't idiots. When salesman start shafting them to make their own pay higher your deals stop being approved and you get weeded out because as with any business you thrive on profit and if you're salesman is cutting that just to get the unit it doesn't make sense to keep him or paying him the sale amount.

I worked in midline sales for a while that had a pay plan like this, for every unit you sold the percentage you took went up one percent i.e. 5 cars, 5%, 12 cars 12%, 20 cars 20%. It was a volume dealership and you could probably sell 10 to 20 cars but it was midline and people want to know how far below invoice you'll sell so if you were lucky enough to sell 20 cars and make a bonus you may be around 2000 to 3000 dollars, plus also remember they take out the min. wage they've already paid you.

The pay will get lower and lower and the older salesman even the ones worth a damn will leave, a younger more inexperienced crowd will come in the same ones flipping burgers the week before and you'll hate their apathy and general ignorance of the product and the cycle will perpetuate itself. In 3 to 5 years you'll order cars like you order the books from Amazon and while that's fine for most forum go'ers it's not for everyone. Engineers, Programmers and web designers bitch about outsourcing and the indians, brazilians and chinese undercutting their pay and salesman bitch about people not wanting to pay the profit. The only ones not bitching are the ones we are all working for, unless you're self employed, but even the sales managers and GM's are feeling the pinch.

Let me tell you what kind of finished it off for me, the guy who sat behind me had been in the business five years, he has three kids and is getting his masters in divinity, a overall good guy. He had a 23 year old kid call him and ask for a particular car for 506 a month with 4500 down. He cut the money factor, did this, did that and the kid came in. The kid said, wait a minute I'm only going to pay $500 over invoice, I won't pay a doc fee or a markup on the money factor. The guy said but I got you the 506 a month with 4500 down and the kid cared more about the profit he was paying then the payment he asked for.

Let's just be honest we hate sales man because they are trying to make money for themselves but isn't that we're all doing, screw whoever we can to get whatever we can and bitch when we don't get as much as we wanted? I've been lied to by more customers then salesman.

I've managed or been in sales for 10 plus years, sales isn't a job that can be outsourced so people like tony20009 will try to squeeze the profession to as little pay as possible by paying as little as they can I hope the world reciprocates your outlook on however you earn your money. To jw95275, if I give you 500 over invoice is that the "best price" it's such a relative term, and everyone will beat everyone until they can't. If I give you 500 over, someone will do 450, 400, 300, 250 until they can't go lower because they are at cost. Why do people insist on buying cars as close to cost as possible. I suppose it's the advice "buy as close to invoice as possible" that bothers me, what do you care what the cost is so long as it's within you're budget. If I want to buy a consumer electronic and can't find it cheaper then I'd like I don't buy it or buy used, the cost of that product may be cheaper but I don't call each retailer and ask for their "best price".

And guys just so you know people's general ability to care so little about car salesman wasn't hurting me like oh should I lease a 328 instead of a 335 it was more like 45 bucks a week for food for three people and never going anywhere with my family. There are very few Rolex wearing car salesman anymore and those that are, are screwing their employer by working them and maximizing bonuses and flats. It'll work for now but when the flats go down to 200, and 100 they'll be right where I am, driving a Mazda.

08-30-2010, 09:30 PM	#38
jferrell Private 2 Rep 82 Posts Drives: 2004 Mazda3 Join Date: Jun 2010 Location: Raleigh NC iTrader: (0)	Well to conclude this let me say I left car sales. I've been at it for years and it's an industry that is going in the wrong direction for a sales man. Here is how a dealership I know pays their people and why it just doesn't pay to play anymore; Suppose you go to buy an Alpine 328i with automatic trans, premium and value package with an MSRP of 38,050 and an invoice of 35,590 including MACO and training. At MSRP this represents of profit of 2,460. Most dealerships pull out a "pack" probably 1% of cost which means your payable gross is 2104.10. Most highline dealerships have a flat 20 percent and sell say 8 or more units and make 25 percent of that amount. So at MSRP that 328 pays you $420.82. Suppose you work 40 hours a week and do this twice a week and your hourly wage is 21 dollars an hour. Awesome. Except reality hits. We have a flat of $300 we get paid if the profit drops below a certain point or in this case $2000 profit(how many people settle for $460 off a 3 series). At this point the industry is pretty much earning you flats as we've pointed out people don't want to pay 6 to 7 percent profit margins(you'd be pissed to know you pay more profit dollar amount wise in a TV then a car sometimes, I used to run a big box retailer for 8 years) So let's say you sell 10 cars at flats, $3000 grand that's awesome right? Well if I was 21 years old and could wait the 90 plus days it takes to build enough clientel to sell 10 cars a month and make that that's fine but the truth is you'll probally put more like 60 hours a week in average around 12.50 an hour. I have a wife, a two year old and one on the way so I just decided it wasn't for me. The people who were the biggest pain in the ass when it came to price still believed we made four or five thousand in profit when in reality we may have made hundreds and then they would do what we call nibbling, light bulb, a second detail, my windshield looks kind of scratched, etc.. There are those of you that say why not sell all your cars at the cost the customer wants to make the flat. Let's evaluate; 20 cars at flats is $6000 plus whatever bonus is out there at the time, make sense to me I'd do it. Except sales managers aren't idiots. When salesman start shafting them to make their own pay higher your deals stop being approved and you get weeded out because as with any business you thrive on profit and if you're salesman is cutting that just to get the unit it doesn't make sense to keep him or paying him the sale amount. I worked in midline sales for a while that had a pay plan like this, for every unit you sold the percentage you took went up one percent i.e. 5 cars, 5%, 12 cars 12%, 20 cars 20%. It was a volume dealership and you could probably sell 10 to 20 cars but it was midline and people want to know how far below invoice you'll sell so if you were lucky enough to sell 20 cars and make a bonus you may be around 2000 to 3000 dollars, plus also remember they take out the min. wage they've already paid you. The pay will get lower and lower and the older salesman even the ones worth a damn will leave, a younger more inexperienced crowd will come in the same ones flipping burgers the week before and you'll hate their apathy and general ignorance of the product and the cycle will perpetuate itself. In 3 to 5 years you'll order cars like you order the books from Amazon and while that's fine for most forum go'ers it's not for everyone. Engineers, Programmers and web designers bitch about outsourcing and the indians, brazilians and chinese undercutting their pay and salesman bitch about people not wanting to pay the profit. The only ones not bitching are the ones we are all working for, unless you're self employed, but even the sales managers and GM's are feeling the pinch. Let me tell you what kind of finished it off for me, the guy who sat behind me had been in the business five years, he has three kids and is getting his masters in divinity, a overall good guy. He had a 23 year old kid call him and ask for a particular car for 506 a month with 4500 down. He cut the money factor, did this, did that and the kid came in. The kid said, wait a minute I'm only going to pay $500 over invoice, I won't pay a doc fee or a markup on the money factor. The guy said but I got you the 506 a month with 4500 down and the kid cared more about the profit he was paying then the payment he asked for. Let's just be honest we hate sales man because they are trying to make money for themselves but isn't that we're all doing, screw whoever we can to get whatever we can and bitch when we don't get as much as we wanted? I've been lied to by more customers then salesman. I've managed or been in sales for 10 plus years, sales isn't a job that can be outsourced so people like tony20009 will try to squeeze the profession to as little pay as possible by paying as little as they can I hope the world reciprocates your outlook on however you earn your money. To jw95275, if I give you 500 over invoice is that the "best price" it's such a relative term, and everyone will beat everyone until they can't. If I give you 500 over, someone will do 450, 400, 300, 250 until they can't go lower because they are at cost. Why do people insist on buying cars as close to cost as possible. I suppose it's the advice "buy as close to invoice as possible" that bothers me, what do you care what the cost is so long as it's within you're budget. If I want to buy a consumer electronic and can't find it cheaper then I'd like I don't buy it or buy used, the cost of that product may be cheaper but I don't call each retailer and ask for their "best price". And guys just so you know people's general ability to care so little about car salesman wasn't hurting me like oh should I lease a 328 instead of a 335 it was more like 45 bucks a week for food for three people and never going anywhere with my family. There are very few Rolex wearing car salesman anymore and those that are, are screwing their employer by working them and maximizing bonuses and flats. It'll work for now but when the flats go down to 200, and 100 they'll be right where I am, driving a Mazda.
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