So you're in the final stage of negotiations and the guest tells you that they'll do the deal now if you throw in a...roof rack, mats, etc. While we always want to make the sale we should also realize how much that freebie really cost us. I know, some of you are thinking "Ed, we have our internal cost of the add on and that roof rack adds $250 to our vehicle cost". But if we approach this from a profit or lost profit standpoint here's what it really cost us.

A benchmark that we always focused on was a net/gross profit of 30% which means that we kept 30 cents for every dollar profit. Now, we throw in a $250 accessorie..... although yes we made the deal...it will take another $833 in gross profit to recover the the cost of that roof rack. I know...."Ed, we made the deal and gained another customer....and that's GREAT! I would never turn down a deal! I do encourage all involved in the process at least look at it from this view and perhaps we would try just a bit harder to not give it all up right away. The more focus on what we really make on a deal helps the store as a whole and when the net/gross stays high it affords the opportunity to add bonuses, better pay plans, and so on.....so before you give it away...take a quick moment to see what the real cost is.