Accessory pack on car deals

[byoung]

How are car salesmen compensated for selling accessories in your dealership?

I was under the impression at our dealership that when a salesman sold a unit, and added certain accessoris to the car deal, that they were paid a comission on the total deal, vehicle, accessories, etc. Our dealership pays the salesman only for gross on the vehicle.

Do you compensate the salesmen for selling accessories, and if so, how?

I am trying to increase accessory sales, but if the salesman doesn't benefit, where is the incentive?

Thanks,

B Young

[richardwright]

For some strange reason customers have a tendancy to negotiate. One problem you may run into is you may be giving more accessories away than your acually selling. My advice is sell them in the finance office, and don't worry about overloading you Bus. manager with products, if it will make them money they shouldn't object.

[This message has been edited by richardwright (edited 03-19-2003).]

[TATERS]

WE PACK ACCESSORIES PRICE TO N.C.D. OR USED CAR DEPT AND HAVE A SPIFF BOARD FOR SALESMAN.If stock#47505 has $1,000 package we installed-when unit delivers--we let salesperson pull spiff voucher posted on board for that stk. # say--$75.00. The spiff was built in to price charged.I have never seen a greater motivater than to pay a cash spiff at delivery.The parts dept. has to get retail from n.c.d. or used and reward sales mgrs. to go along with this program.

[richardwright]

Taters, so when you have to lower the price is the spiff a part of the unit cost? Is your accesories ever your only profit?

[Ronc925]

What is your dealership pre-accessorizes a vehicle. Let's say you put $100 of accessories on a car at NC dept cost and they sell the accessories for $150.00. Does your salesmen get commision on the $50 profit generated in the NC Department?

Then what if they discount the MSRP of the vehicle and the Accessory ademdum by $1000. Is the first thing written down the accessories to NC Dept cost?

I want to see salesmen get something for thier efforts is selling a vehicle with the acessories. Is a spiff program the only way to go with the way accounting is done on the total car deal?

[jazdale]

The tracking of accessories seems to be the crux of why we don't incent salespeople.

With ADP, you can turn on WE-OWES which can itemize each and every add-on with sale, cost, and gross from reports and the gross screen.
In cases where you sell the add-on at zero sale amount, you can still account for the cost of the product.

I will give you advance warning that setting up we-owes is not a small task. Screens must be changed to accomodate the new fields as well as gross screens and forms.
Its a bit of work, but well worth it in the long run.

I tend to believe that by the time the customer gets in the FI box, its kinda too late to offer wheels, cd players, bedliners etc. (richardW's post). The emotion of settling on 'that perfect car if it had this or that added' would logically happen with the salesperson.

Dale

[piercefield]

I would tell you to have your parts manager put out a spiff to your sales department. Any accessories that they sell would pay them a spiff. The higher the part the higher the spiff. My parts manager thinks that every time the new car dept. sells an accessory that they make money on it. This is only true if you sell it after you have closed the customer on the price of the vehicle.

[scotstrong]

Piercefield:

Your parts manager's perception that new cars makes money on accessories probably comes from the fact that he sells accessories to the new car dept. at cost plus whatever your internal markup pecentage is; and sales gets the difference between that and the selling price. So the gross his dept. gets, often only 10 or 15% over cost is far less than the lion's share of the profit that sales gets IF it is sold at suggested list price.

However, at 10 or 15% he is not even covering his expenses. Try this little calculation -- take the parts cost of sales (using gross less purchase discounts subtracted from sales) and divide the dept's total monthly expenses into that result. This is what parts needs to markup every part just to break even. Rarely is the internal markup adequate to offset this. So, given this fact, why would he want to dilute the little bit of gross he gets from these transactions even further by HIM paying a spiff to the sales people?

Sounds like you have more of a problem with sales people who have the ability to virtually give accessories away to make a deal; and then expect the parts dept. to help subsidize this. Not a very effective way to promote teamwork between these depts.
I would be willing to wager that you are not happy with your front end grosses on these transactions, either.

You have pretty much stated a solution in your last sentence -- "This is only true if you sell it after you have closed the customer on the price of the vehicle". In our stores, we have a seperate aftermarket manager in the sales dept. After the customer is closed on the vehicle, he is then (mandatory) turned over to the aftermaket sales person for accessories or add-ons such as rustproof, paint sealant, fabric protectant, etc. This keeps the sales people from taking the path of least resistance (throw something in) to close a sale. The aftermarket manager pays a spiff to the saleperson whose customer he sells accessories or add-ons to.

Many dealers need to make up their minds whether they want the parts department's role to be to subsidize the sale's depts' ability to sell; or if they want that dept. to be profitable. Rarely can you achieve both at the same time.

Scot Strong

[Hawk]

We had hassles with this issue as well. We created (in-house) an Accessory Catalog with scanned pictures of accessories, an order form, and a commission voucher. We then have the salespeople use the form for any accessories they sell to a customer...either at time of delivery OR after. Salesperson is responsible for turning in commission voucher (with mgr. initials). We pay 5% of the total sale price and have the them priced accordingly. Works well for us.

Tom Hawkins

[mozuna]

I just left a honda store and we preloaded vehicles with accessories. We came up with a chart example - 25 percent of civic dx got rear spoilers installed. When we pdied them we just added the spoiler, wheels, etc... at the same time. This worked great. We then came up with a spiff program for the sales department that parts and service shared in handing out. example. If they sold a vehicle with pre installed accessories - they would get 20.00 for first accessory and more for second, third etc. if they sold a vehicle that had accesorieys installed after the sale they would get spiffed starting at 10.00. It worked pretty good.