Are Commission Sales A Thing of The Past: Could Hourly Wage take its place for Salespeople

the reason I ask this is. A lot of the people that apply to our ads are people that get paid by the hour.

When we tell them most of their income is based on commission sales that will strike fear into them.

They think no sale no money. Now what I propose is a pay plan based on a hourly wage that is based on the number of units sold. EXample: 1-5 units =$7.50 per hour / unit 8= 10.00 per hour /

10 units=15.00 per hour/ 15 units = 20.00 per hour / 20 units= 25.00 per hour this is all retro back to the first hour. Again, john sells 10 units at 15.00 per hour his pay is 45 hour 675 x 4 wkeeks

=$2700.00 for the month based on sales of 10 units. Put together what you think of how it could work and let me know. Thank you

0 members like this

Replies to This Discussion

Permalink Reply by Mark Feazel on January 20, 2011 at 9:34pm

Interesting concept, but it wouldn't go at my store. We are a high-volume store and while our commissions may be on the low end per unit, we have a big bonus plan.

I have also had applicants run away when I explain the pay plan. But to be honest, I'm not real interested in these people anyway. Let's be honest - we are looking for go-getters. If they are willing to go out there and get a customer, our T/O system will get them the sale and they will get to a bonus level.
-Feaz

Permalink Reply by Robert E LEE on January 21, 2011 at 5:46pm

We pay $15.00 per hour and give them bonus money on units sold.1-5=$50 6-10=$75 11-15=100 and so on. Bonus money is retro to first unit. We have hired 8 on this program all 8 have stuck, going on the 9th month so far. Hired 8 more that start next week. Most of the first 8 are now looking at coming off hourly and going straight commission.It gave them the stability and confidence that they could make it before going commission based only.Works well for us may not for others.

Permalink Reply by Craig Lockerd on January 21, 2011 at 6:58pm

That Mr. Lee are impressive results!

Robert E LEE said:

We pay $15.00 per hour and give them bonus money on units sold.1-5=$50 6-10=$75 11-15=100 and so on. Bonus money is retro to first unit. We have hired 8 on this program all 8 have stuck, going on the 9th month so far. Hired 8 more that start next week. Most of the first 8 are now looking at coming off hourly and going straight commission.It gave them the stability and confidence that they could make it before going commission based only.Works well for us may not for others.

Permalink Reply by Craig Darling on January 22, 2011 at 11:41pm

I know that hourly wage is the newest thing. I am watching a group of dealers that has been doing that for the last 4 months. They have also adapted a process that eliminates finance producers as we know them. Interesting, more than happy to keep you updated if you wish. However, when ever I sold 25 cars in one month I made sure to was earn more than 25 bucks an hour.

(The groups low volume import store became number 1 in the state the 4th month of this process.)

Permalink Reply by Joseph M Bonincontri on January 23, 2011 at 1:32pm

I would like o follow this group of stores, everyone needs good people so, this pay plan may be worth trying

Craig Darling said:

I know that hourly wage is the newest thing. I am watching a group of dealers that has been doing that for the last 4 months. They have also adapted a process that eliminates finance producers as we know them. Interesting, more than happy to keep you updated if you wish. However, when ever I sold 25 cars in one month I made sure to was earn more than 25 bucks an hour.

(The groups low volume import store became number 1 in the state the 4th month of this process.)

Permalink Reply by Donna L. Harris on January 23, 2011 at 11:52pm

Hi, I'm Donna Harris with Automotive News. I'm interested in the salary plans. But I'm especially interested in that plan eliminating the traditional finance person. Who is doing the finance? The salesperson? A sales manager? AutoNation is testing a few different models in an effort to reduce headcount. Lithia already evaluated and reconfigured its staff, with some stores combining finance manager with sales manager. If you know of other versions of this that are working (or that didn't work, which is interesting, too) please let me know. I'm doing a story on the future of the finance office for the March F&I section. Please contact me about those plans or let me know how I can contact you. I am new to Dealer elite, so I'm not used to all the features.
540-668-7295
Thanks! Hi, all, I'm Donna Harris with Automotive News.

Permalink Reply by Kurtis Johnson on January 24, 2011 at 9:25am

Dealers that believe that they can continue to do things as normal are really kidding themselves. Look around you, in every area of a dealership the customer is taking more control and the economy is dictating the staffing. Here in Florida with unemployment at 12.6% I can understand why people are fearful of commission sales. If they take the job and it doesn’t work how much time and effort have they sacrificed for no money. They can be on unemployment and make $300 a week without working 60 hours on the floor at a dealership! In Rhode Island Unemployment is $600 a week.

The other question is how many really good sales people are still out there? We all live by the 80/20 rule 20% of your people make 80% of the money. That is a fact that will never change so how do you get the average Joe to sell more cars! Give them the security they need. The security of knowing at the end of the week they can feed their family and pay their bills. That’s why this hourly program makes since.

Unfortunately, the majority people are this way, pay me enough to live on and I will be yours for life! Something to think about!

Permalink Reply by Craig Darling on January 24, 2011 at 11:01am

Donna, I will ask the dealer if he wants to talk to you for your article. Craig.
Donna L. Harris said:

Hi, I'm Donna Harris with Automotive News. I'm interested in the salary plans. But I'm especially interested in that plan eliminating the traditional finance person. Who is doing the finance? The salesperson? A sales manager? AutoNation is testing a few different models in an effort to reduce headcount. Lithia already evaluated and reconfigured its staff, with some stores combining finance manager with sales manager. If you know of other versions of this that are working (or that didn't work, which is interesting, too) please let me know. I'm doing a story on the future of the finance office for the March F&I section. Please contact me about those plans or let me know how I can contact you. I am new to Dealer elite, so I'm not used to all the features.
540-668-7295
Thanks! Hi, all, I'm Donna Harris with Automotive News.

Permalink Reply by Scott Langton on January 24, 2011 at 11:33am

If you can not pay a real sales person, you will not get one..

Enuff said..

Permalink Reply by Ryan Mills on January 24, 2011 at 11:36am

What about the sales persons draw? I have always seen a draw that the commissions pay against. If the saleperson cant clear thier draw after some training and time, well maybe its just not meant to be. At least this way they are getting a check.

At our store (one price) the SP get a certain amount per unit with unit bonuses and finance and accessory spiffs. Thier per unit price increases if they are above 90% CSI also. Works well for us.

Permalink Reply by Mark Proctor on January 26, 2011 at 3:54pm

If you do not pay a salesperson; another Dealer will. Usually after you have invested the time, energy and lost income opportunities to train them. Replace any six order-takers with 3 properly trained and motivated salespeople and then compare results. Don't just look at what you are selling... look at what your missing and why. A few simple changes in policy and procedure will add the elusive "extra unit a day" we look for. The basics have not changed; we have.

Permalink Reply by Rick Bryant on January 26, 2011 at 8:46pm

In my opinion this would work well for the scared green pea but would also chase away the really good salesmen looking to make the real money.