Accessory pack on car deals

[scotstrong]

mozuna:

My first question to you would be what dept. gets what gross profit when the accessories are preloaded? Does parts dept. get ALL of the gross for the accessory when the vehicle is sold so that they can afford to pay commission out of their gross? If sold internally to the sales dept. and booked against the cost of the vehicle, what was the internal markup percentage?

Again, if you are only making 10-15% internal markup, how can you afford to pay commissions out of this? If you use 15% internal markup and the cost of the accessory is $100.00, then obviously the parts dept. only made $15.00 in gross profit.
How do you afford to pay $20 for the first and escalate thereafter without the gross profit to pay it out of?

Scot Strong

[mozuna]

Scott Strong
We charged full retail pricing to the sales department. The salesman did not get comissions on the accessories. I am looking at a 20 group report and we were running 34 percent gross profit on internal accessories. The General Manager was really strong on accessories and service. I also widened the pot and put aftermarket accessories in the system. We did vary the spiffs from time to time - that was up to me as the service and parts director. Every once in a while Honda would give away some kind of prize for the most accessories sold like race day dickets or something. I always used that as a incentive for whoever sold the most accessories if we won, they would get that. I actually made a list of accessories that were able to get the spiff. Most of all anything that had labor involved. We always paid out more for a car that has the accessories on them already so it would incentive the salesmen to sell the loaded vehicle first. The cap was 160.00 - example: the General Manager would always load his accord with every accessory we could find even aftermarket momo wheels and - and aftermarket exhaust sometimes. when a salesmen sold that vehicle he would get the max parts and service spiff of 160.00 - The salesmen loved it they would tell me when we were getting low of vehicles that had accessories and I would get with the new car sales manager to add more. Honestly sometimes I had to get with the GM.
Miles

[scotstrong]

Miles:

WOW! That is an outstanding arrangement for the parts department. One can certainly do some creative incentivizing when one has the gross profit to work with. You have managed to make allies out of the sales staff.

Unfortunately, yours is a rare success story. It is not very often that you could get a dealer, general manager, sales manager to go along with such a program. I applaud your success.

Scot Strong