Replies to This Discussion

Permalink Reply by NANCY SIMMONS on September 2, 2010 at 4:59pm

Hey Bill~ Thanks you so much for your post... I bet for every person out there selling automobiles, there will be as many various ideas as to how sales people should be paid! I know that compensation is not everything to a sales consultant, as opportunity for growth, a great training program, a positive environment, a friendly atmosphere are all very important factors leading to employee retention; however those items do not pay the bills, so to speak! I appreciate your comment and would love to hear some other views on this subject!

Bill Harrell said:

Nancy,
Alot of people probably are not going to agree with me on this. Here is how I feel you keep getting quality people to this industry. A pay plan is very attractive to get someone to work for you. To keep them is a different story. If they know they are going to get paid every payday and they can get up every morning knowing they wont be back home until 9 at night, but still hit the floor with a positive attitude. Then the dealer has succeeded in getting and retaining great talent. There is a store here in Ga. that the average salesperson makes between 7 to 12 k per month.The turn over is crazy due to poor management and moral. Now back to you question. To get great talent you have to pay for it. When they start, put them on a higher commission pay plan 40% instead of 30%, with the understanding that after 90 days if you maintain a certain level of sold units then the dealer will continue the 40% and it gives the dealer a chance to review each salesperson every 30 days thereafter. I never accepted a salary when i was a salesperson all the way to a gsm, I just had a big carrot to go after and it was up to me to grab it.

Permalink Reply by Tim Pendergast on September 13, 2010 at 5:15pm

Dealers are all over the board on this issue.
I once ran a store for a dealer who's pack was 2.5% of invoice and no commission higher than $1500.00 was paid. I tried to explain to him that the salespeople knew when they were capped and gave up negotiating. I lost the argument.

I proposed $400.00 Pack on used $100.00 on new. 25 percent of the front 3.5% of finance reserve and 10% of all after sell, warranty gap etc...He told me I was nuts and it would put him out of business.

I worked for a dealer who paid all salespeople this way and the salespeople made a ton of money and were all happy. We had 5 stores and grew to 20 plus during this time. Along comes a new corporate GM and pay plans were changed. It was a mass exodus! Funny part was statement still read 17% of gross paid to salesman! But salespeople perceived they were being screwed! (if you believe you got a good deal you did, If you don't believe it you got a bad deal.)

Worked for a Large corporate dealer, and we paid up to 3k month salary plus a flat per vehicle. Flats were on a rising scale up to $250.00 per car. Retro back to car 1! Some guys still work in this store after 15 years on that plan, others came and hated it. Our statements read 17.5% of gross paid to salesman.

I don't think there is a right answer! It largely depends on market, store and how the sales force perceives it.

I would think you would have to look at percentage of gross paid to salespeople.
So I ask all the comptrollers and office guru's out there what is the correct or recognized standard a store should be at? I was always told 17% Is that too low or too high?