Stories from the Sales Frontlines

tjc78 · October 2013

"Farmer, he is missing the last component. A new house!

I think he should buy mine. He can have it next June, right after HS graduation. We are in one of the best school districts around here. Sounds like a win-win!
"

Don't give my wife any ideas! I'd like to stay here another 5 years or so, then move into a better school district. The grade schools are OK but not liking the HS.

Big thanks again everyone! To keep this on topic we picked out and ordered the baby's furniture today. Mom bought us the crib, we got the rest. Asked what kind of discount and the guy found a 15% off coupon. Next week is chair rail and painting the baby's room! Right now, mourning the Eagles pitiful play, watching Red Zone and relaxing (IE ... Not spending any more money!)

houdini1 · October 2013

Maybe the thief was a quart low !!

driver100 · October 2013

I think I'll wait to see the movie until it's on TV. I already know how it ends.

This movie is truly worth seeing on the big screen, and I don't say that about too many movies.

Even though you know how it ends the pressure and excitement are still there. I don't think a TV would do the movie justice....but, that's just me.

btw...personally, I was glad I knew how it would end, because I could not have handled the suspense if I didn't know.

stickguy · October 2013

so when is the little car nut due? Must be fairly soon if you are doing all that.

HS, I assume triton? No, not quite up there with Eastern or CHE. I have spent a lot of time comparing school districts (particularly HS) over the years and through band competitions and other activities, have been to a ridiculous number of them personally.

tjc78 · October 2013

He is due in March. We really want to get everything done before the holidays. It will be nice not to be rushing toward the end.

Yes, Triton. Big school, lots of honors/AP classes etc, but serious problems there over the last couple years. Lots of time before we have to think about that and maybe it will get better. In five years I'd be in a great equity position to move into something bigger in a different neighborhood so most likely that will happen.

snakeweasel · October 2013

No, there is no "hidden cash".

Try working as a CFO of a dealership and then answer that question.

jayrider · October 2013

Based on you experience, do you think that mfrs send bonus checks directly to the dealer owner ? Most of these guys live very extravagant lifestyles and seem to be involved with a lot of charities.

isellhondas · October 2013

Snake, have YOU worked as a CFO in a car dealership?

robr2 · October 2013

If there is hidden cash, there is no guarantee that information is being shared with the sales manager never mind with the sales folk out on the floor.

snakeweasel · October 2013

Bonus checks directly to the owners? I seriously doubt that happens. However, as with any other business manufacturers do strike individual deals with dealers that are not published and go above and beyond what "everyone" gets.

snakeweasel · October 2013

Nope but I have been on dealership audit teams. So I have seen financial details that few, if any, in sales sees.

snakeweasel · October 2013

Yep you are right. If you don't think that the dealership owners don't negotiate with the manufacturers I have a wonderful deal for you. These little deals are rarely known by anyone in sales.

isellhondas · October 2013

There are VERY few secrets anymore as a result of the wonderful internet.

Information like that would be spread like wildfire.

snakeweasel · October 2013

Sorry but the Internet is not all knowing. Neither the dealer nor the manufacturer are going to publish these transactions. So how woud such a deal make it out onto the Internet?

isellhondas · October 2013

OK, I give up. Once again, you know more about the car business then I do.

robr2 · October 2013

I think what he is trying to say is that if the manufacturer had a spiff agreement with one particular dealer, that information isn't going to be found on the net.

isellhondas · October 2013

That practice would put the neighboring stores in an uproar!

robr2 · October 2013

Perhaps but that doesn't mean it never happens.

I could see it happening. Around here, Herb Chambers has 4 Honda stores/1100 units in stock and probably gets some special bonuses some months. On the other months it goes to Ernie Boch with 2 stores/700 units in stock. Then the single store guys get something every once in a while. It may not be a cash bonus on sales but it could be a consumer financing discount for taking an extra 100 Accords.

Unless we were privy to the financial statements and manufacturer negotiations of the dealership, we will never know.

jayrider · October 2013

Maybe they all get direct cash -- how much depends on sales factors.

isellhondas · October 2013

I had the inside track at the store where I worked but it's possible and three years have passed too.

If so, I hope that information never gets published or the mooches will want that money too!

snakeweasel · October 2013

We are not talking about the car business we are talking about business's in general. Specifically about the financial end of things.

snakeweasel · October 2013

It's common practice in almost every industry. Why do you think tuft soup in cheaper at Walmart than at 7-11? Do you think that Walmart is paying camp less soup any published price?

isellhondas · October 2013

" We are not talking about the car business"

We're not? You are the one that asked me if I had ever been a CFO at a car dealership?

isellhondas · October 2013

When you tell me what "tuft" soup is maybe I'll be able to answer your question.

I'm sure there are volume bonuses and such but I've never heard of this between competing car dealerships selling the same brand.

That would make the mega stores get bigger and the smaller stores go away.

snakeweasel · October 2013

I wanted to know your experience with financial issues.

snakeweasel · October 2013

Tuft is auto correct gone mad, it should be "that".

Why wouldn't you expect it? It happens between competing stores selling the same products.

Going back to soup. Companies like Walmart and Kroger go to Campbell's and strike deals with them to get better deals than what Campbell's normally gives companies. I'll bet you that if a company that owns 25 Chevy dealerships and moves 200 cars a day through their network goes to GM and says let's talk GM will talk.

jayrider · October 2013

Back in the early 70's I worked with a man who marketed a brand of walnuts in the Midwest. A Chicago supermarket chain told him they were going to give his brand a less favorable shelving spot in their stores. He said he had a meeting with the Executive in charge of such things and was taking $10,000 in cash to appeal the decision. Maybe things have changed since that was sop 40 years ago.

explorerx4 · October 2013

Based on my experience over the weekend, most overrated college band, USC.
Very limited number of songs, but tried to make it up by playing them often.

snakeweasel · October 2013

I'm pretty sure supermarkets still work that way. You have to pay to get good shelve placement.

Michaell · October 2013

Based on my experience over the weekend, most overrated college band, USC.

Reminds me of the old joke in California.

"A Bruin for four years, a Trojan for life"

"Yeah, cuz that's how long it will take to pay off the student loans"

tjc78 · October 2013

You don't have to pay for good shelf placement, you need to have items that sell. Any merchandiser/buyer worth his keep will put the highest selling items at eye level or toward the front of an aisle.

Now if you want to talk about buying placement..... That mostly happens these days when a company offers "markdown money" to place their products by essentially paying you to clearance the other guys products out to make room for theirs.

explorerx4 · October 2013

Considering California's college tuition is pretty reasonable, that is kind of sad.
The trip started out with my BIL and I going out for a game.
It ended up with 9 of us and my wife and I sitting in the first row behind the visiting band.
Now we are thinking, instead of a new car, buy a house for a couple of game weekends, and based on some conversations we overheard, rent it out for the other weekends to cover the yearly housing expenses.

driver100 · October 2013

You don't have to pay for good shelf placement, you need to have items that sell.

Just my experience and opinion;

Most grocery and drugstores want slotting fees and possibly placement fees.
They may put the best selling products at eye level because it makes sense.
They definitely want a payment for end cap displays or special display space.

I believe large companies such as car manufacturers will treat their dealers equally because of competition laws. They could give volume discounts, but, it may be based on volume or some other factors, but all dealers reaching that volume should be given that discount. They may have to ask to get it...but usually dealers would be on top of asking for anything available. Most companies don't want to be caught by an anti-competition law.

isellhondas · October 2013

I used to be responsible for a 30 million dollar P& L but I'm sure no accountant.

Other people did that for me!

isellhondas · October 2013

My memory has faded but maybe I need to read Robinson-Pattman again.

bolivar · October 2013

This has been many years ago, but an indication of how 'the large store' DICTATES to their suppliers.

I worked for a major oil company. They told us - if you want your motor oil on our shelves, you are going to interface with our automated order processing system. Here are the formats and other specs and your will process this information electronically or we will not stock your product.

I've read several stories thru the years where they stock something from a small manufactor, then when it sells well, the manufacter will spend money to increase their production capacity and they will then start telling the company what they will pay for the product. I think this has put some small manufactors out of business.

Michaell · October 2013

Remember, USC is private and UCLA is public.

When I graduated HS in 1982, CA had one of the best higher Ed systems in the country. No more.

snakeweasel · October 2013

Walmart is famous for doing that, you have to be integrated into thier system, packaged a certain way shipped a certain way and delivered at a certain time. Any variation would result in a penalty being assessed to the supplier. Very few who do business with Wally World escape that.

I know someone who started a small company and walmart approached them to buy what they manufacturered. Then Walmart pulled that crap and this guy I know flat out told them that they came to him wanting to put his product in their stores so they had to take it as he gave it to them. Needless to say his product isn't in Wally World.

tjc78 · October 2013

Walmart actually has a printed !manual about how to sell to them. Skid quantities, carton size, markings and, etc etc.

driver100 · October 2013

maybe I need to read Robinson-Pattman again.

I checked that book out. Written in 1999 and itsounds like it would be a great read even today.

One quote;
Many people think that big, successful companies found their prosperity by having big budgets, buying their way to the top. Not true. Great companies are successful because they are smarter than their competitors.

imidazol97 · October 2013

> to get better deals than what Campbell's normally gives companies. I'll bet you that if a company that owns 25 Chevy dealerships and moves 200 cars a day through their network goes to GM and says let's talk GM will talk.

Or Honda...

I just read Arrogance and Accords and about the corruption in the system. I don't recall much national media attention when the exposure came. Lynch explains part of that because of other news events at the time overshadowing the big news about Honda.

snakeweasel · October 2013

And even then not every company has to follow that. I know that P&G basically told Wally World to shove it. They have the power to negotiate that with Wally World and if Wally World wanted P&G's wares then Wally World had to bend.

Pretty much what this guy I know did, he told Wally World that if they wanted his stuff they played by his rules. He had all the business he needed anyway and he didn't approach Wally World, but unlike P&G he wasn't a mega player in his field so Wally World walked. He is still happy.

graphicguy · October 2013

Not unusual to have big companies try to dictate to smaller companies (some call it bullying).

Not all that long ago, I was doing business with Compaz (who was gobbled up by someone even bigger...HP). I was with (actually one of the founders of) a small compay that made specialized (graphics) printed circuit boards for high end computers. Think the computers that creat ditital images and animations for movies, commercials, etc.

Anyway, we were relatively small, and very technical (vs sales and marketing focused). Compaq tried to tell us where to buy our computer chips, what to charge, what margin we should expect, wanted to see our bill of materials and costs associated with them, etc. In all honesty, from a financial point of view, we probably would have been better off following their direction.

As it turns out, we balked. We had our own suppliers (although we didn't have the quantity of scale Compaq was allowing us access to). We had our own cost and pricing structure, and we sure weren't going to share it with anyone externally. The thought process was once we started sharing with Compaq, they'll just replicate what we were doing, and leave us with a small licensing fee.

Initially, we were right. Compaq did try to replicate what we were doing, without our help. They weren't very successful at it. And, eventually they came back to us much later and started buying from us. That was a couple of years later, and we missed those years we could have realized revenue from Compaq. But, we felt we kept our integrity.

HP gobbled up Compaq shortly thereafter, and we only did business with them for a few months, as a result.

oldfarmer50 · October 2013

"...Maybe things have changed..."

They sure have. Now supermarkets tell companies up front what it will cost for the best shelf placement. Choose not to pay? Customers will be looking at your product with their feet.

imidazol97 · October 2013

>Choose not to pay? Customers will be looking at your product...

Judging by how few selections are on the shelves in the big stores anymore for certain items, customers will just be looking FOR you product--it won't be there, not even at your feet.

In a lot of things only one choice is there in food items. However, the stores has 39 choices for dog food, furniture, a liquor store full of choices inside the store (here they bought an existing license of a nearby store to be able to sell liquor at KRogers), a sushi bar, a cheese bar, and wine tasting.

...but only one brand of white beans for bean soup in a glass jar.

bwia · October 2013

I know that P&G basically told Wally World to shove it.

Not really. It is a symbiotic relationship. Some 15% or over $12 billion of P&G's sales go to Wal-Mart. Neither party can be too arrogant because they depend on one another.

imidazol97 · October 2013

>$12 billion of P&G's sales

I quit P&G products years ago. I find other brands are usually better or at least equal.

driver100 · October 2013

I just read Arrogance and Accords

That was back in 1992. Here is a synopsis of that fascinating story.

Arrogance and Accords: The Inside Story of the Honda Scandal is the tale of the largest commercial corruption case in U.S. history. Between 1994 and 1997, eighteen former executives of American Honda Motor Company, along with four other people, were convicted on federal fraud and racketeering charges. The big secret at Honda was out: Over a 15-year period, the gang of greedy Honda officials had received over $50 million in cash and gifts from automobile dealers eager to obtain additional hot-selling Honda cars and franchises.

More details about the book;
http://www.amazon.com/Arrogance-Accords-Inside-Story-Scandal/dp/0965776611/ref=s- r_1_1?s=books&ie=UTF8&qid=1382459924&sr=1-1&keywords=Arrogance+and+Accords

driver100 · October 2013

Initially, we were right. Compaq did try to replicate what we were doing, without our help.

Business was always dog eat dog...but, I think it has become much worse recently, for some reason which I am not sure of.

I think it has to do with a lack of respect for authority, politicians, and a loss of ethical standards. The end justifies the means, and there is little pride in just standing on the merits of your product.

I am so glad I am fully retired, since May, I wouldn't want to be in the rat race these days.

driver100 · October 2013

NEW 2014 Ford Escape S $99 for 24 month lease

2014 FWD FORD ESCAPE S MODEL. MUST QUALIFY WITH LEASE CONQUEST FOR $1000.
MSRP = $23,595. 24 month lease, 10500 miles per year allowable, $.15 per mile thereafter. $2000 due at signing. Does not include sales tax. Does not include registration and acquisition fees. Security Deposit waived. Not all buyers will qualify. Must be financed through FMCC. Must take delivery by 11/01/2013. Prior Sales Excluded.
stock#:FHG40706. mileage: 211

What's the catch......there are lots more at;
http://www.westherr.com/find-a-car/on-sale/?&saleType=Lease

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