Stories from the Sales Frontlines

1781012132003

Comments

  • audia8qaudia8q Member Posts: 3,138
    One gentleman came in with his wife and baby...with a budget of $300 a month. He left with a $430 a month payment but seemed happy about it.

    We see this happen everyday...just like the guy who does 4 months of internet research on a Mazda6 only to drive on the lot and leave with a mercury mariner 2 hours later.
  • michaellnomichaellno Member Posts: 4,120
    We did this some years ago.

    At the time, wife and I were driving a '97 Escort LX and a '93 Accord DX. One snowy November Saturday, the wife woke up and said she wanted to get an SUV. The Escort had about 3-4 payments left on the lease, so we went to the Ford dealer to take a look at the Explorer.

    One test drive told us that the Explorer wasn't right for us. The salesman suggested that we take a spin in the Expedition. The wife (all 5'2" of her) took one look at it and thought it was way too big. "Drive it" said the salesman, "You'll be surprised at how nimble it is". So we did -- and it turned out he was right. It didn't feel nearly as large as it looked.

    And, as it turned out, the lease deals on the Expedition were better than those offered on the Explorer, so we got a fairly well equipped XLT for under $500/mo. The only problem was that we had to settle for a color that wasn't our first choice - the one we really wanted was in the process of being sold at the same time.

    So, I can attest that it does happen, but it wasn't quite so dramatic a change in vehicle that audia8q cited above.

    So, a question for the salesmen here .. how often do you get someone on the lot that really doesn't know what they need or want? I mean, I can understand needing a 4 door and looking at the Cobalt, Malibu or Impala (as an example), but are there those who really don't know if they want a coupe, a pickup or a minivan?
  • audia8qaudia8q Member Posts: 3,138
    .. how often do you get someone on the lot that really doesn't know what they need or want?

    It happens alot...the key is a salesperson who actually listens to what the customer is saying. Sometimes they come in saying one thing but their needs are saying something else. We try to sell the customer what they want to buy...but if what they buy isnt going to work we always show alternatives that may work....sometimes its the car, sometimes its the budget that causes the switch.....other times the customer discovers something on the lot they never thought about. A great example of this is the Mazda5. It was launched without advertising and it has no direct competition. so its a bit of a secret to many buyers. Almost everyone we sell is to folks who discover it by accident while looking at something else.
  • corvettecorvette Member Posts: 10,891
    The Mazda5 is one of those hidden gems. I'm a pretty big fan of it!

    I wonder if the Honda Ridgeline is the same way?
  • geo9geo9 Member Posts: 735
    The ridgeline with a puny 53k sold to date not to mention
    their strut issues (read the Edmunds long term tests),
    water leaks, and other nagging problems not to mention
    their possible v-6 transmission woes to come with age
    don't seem to be a wise used vehicle choice............

    There are better more proven used or new vehicles out
    there.................
  • qbrozenqbrozen Member Posts: 33,424
    puny 53k sold to date

    Actually, its 56k, and right near their projected number, so I'm sure Honda is content.

    And please don't tell the other manufacturers 56k is a "puny" number or they will possibly hurt themselves. Heck, Jag and Land Rover can't sell that many vehicles TOTAL over the course of a year. It also beats the totals for the Mariner, Monterey, Mountaineer, Navigator, Aviator, Mark LT, XC70, and XC90 (even combined, those 2 products from Volvo are less than 50k). And that is just part of Ford's family. I'm confident I could find examples across the board if you'd like.

    '11 GMC Sierra 1500; '98 Alfa 156 2.0TS; '08 Maser QP; '67 Coronet R/T; '13 Fiat 500c; '20 S90 T6; '22 MB Sprinter 2500 4x4 diesel; '97 Suzuki R Wagon; '96 Opel Astra; '11 Mini Cooper S

  • mirthmirth Member Posts: 1,212
    I wonder if the Honda Ridgeline is the same way?

    The Ridgeline had a pretty substantial ad budget. I saw a ton of TV commercials and print ads.
  • bdr127bdr127 Member Posts: 950
    The Ridgeline had a pretty substantial ad budget. I saw a ton of TV commercials and print ads.

    Agreed... I've seen a lot of Ridgeline commercials, and also some general Honda commercials that include the Ridgeline along with the other Honda models.
  • isellhondasisellhondas Member Posts: 20,342
    I thought you had gone away...guess not.

    Ridgelines have taken off after somewhat of a slow start...sorry to disappoint you.

    The ONLY "strut issue" I have heard of was one, isolated situation. Who knows what they did to cause that.

    Water leaks? yes, a few of the early production models had this problem. Long ago identified and fixed.

    "Possible" transmission woes? well...I guess anything is possible. Heck, the radios could quit working I suppose.

    Must have driven you nuts when Motor Trend gave it Truck of the Year!

    No need to wring your hands and tell your tales of woe, these are GREAT trucks!
  • geo9geo9 Member Posts: 735
    Perhaps you should READ Edmunds long term test on
    the 'ridge. They blew out 3 of them !!!!!!!!!!!!
    "But they lied!"

    Check out ridgelineownersclub.com MANY strut issue
    posts over there along with water leaks......
    hondas cure is to drill a hole in the rocker panel
    and use more sealant..............
    Also comments from a few multiple 'ridge/ody owners
    with strut problems. I wonder if they use the same
    parts?
    "But they lied too!"

    V-6 transmission issues?????? A simple online search
    will show MANY faliures.............
    "But they ALL lied" :cry:

    heres the link....... http://www.gm-trucks.com/forums/index.php?showtopic=51223&view=getnewpost
  • biancarbiancar Member Posts: 965
    ... is to a GM truck board. Can't see what that has to do with the Ridgeline.
  • isellhondasisellhondas Member Posts: 20,342
    I apologize. I promised months ago to ignore your endless postings where you bash Hondas. I guess I forgot to this time.
  • geo9geo9 Member Posts: 735
    Heres the correct link from Edmunds own Karl on cars........... http://blogs.edmunds.com/.ee903e9?50@@
  • audia8qaudia8q Member Posts: 3,138
    you need to settle down...if isellh dealership didn't see alot of issues with a vehicle it doesn't mean there isnt a problem it just means he isnt seeing the problem...pretty simple. It also doesn't mean the problem doenst exist somewhere. so why do you jump to hysterical conclusions? I didn't see Isellh calling anyone a liar...did you?

    I can find a problems with every car on the planet online...does than mean everyone who posts something positive about a car is essentially calling the people with problems liars???
  • patpat Member Posts: 10,421
    Everyone needs to "settle down" and take a few deep breaths.

    Let's get back to some sales stories.
  • [Deleted User][Deleted User] ColoradoPosts: 0
    Since it's been mentioned here, I thought I'd ask, and possibly break the tension ;)

    On the first episode, they showed the first guy coming in to look for a car for his mother, looked at the PT Cruiser, drove the Durango, but ended up buying the PT. My question is what did the lady sign when the salesman said something to the effect of "coming to terms you'll buy tonight?" Was it something they ask the customer to sign as a good faith promise or was it something actually binding? Just curious...
  • thebillthebill Member Posts: 194
    I always ask for a committment at the time of write up.

    "customer will buy and take delivery now IF all terms are aggreeable."

    It doesnt mean that I wont show them numbers, however, it tests their committment to the product and to me. If I get a signature with no objection, I know I have a car deal.
  • [Deleted User][Deleted User] ColoradoPosts: 0
    Thanks thebill,

    That's what I was thinking, just an assurance that they're not wasting time and energy. I just don't remember ever being asked for that in the dozen or so cars that I've bought. It could have been that I was in that warm fuzzy mode thinking about taking the new wheels home...LOL
  • thebillthebill Member Posts: 194
    Once awhile, I'll get the Good ole' boys who say "well, maybe I will, and maybe I ain't"

    If I get a "No" or "Let's see", I know I have to go to work.
  • audia8qaudia8q Member Posts: 3,138
    to follow up a little further...in bigger fast paced stores like the one feature in the show its all about sales and volume....everything is done to move the customer to a commitment....the more times a customer says yes the easier it is to get the final yes.

    In smaller stores like we have up here in Connecticut we do things that would be considered 'relationship selling' which is geared towards long term customers and long term employees....
  • british_roverbritish_rover Member Posts: 8,502
    Exactly right I have people on my list of customers who I talked to six months ago and we are just now onto the delivery phase of relationship.

    I have sold cars to people who our F&I manager sold their last two cars and our centre manager sold them the two cars before that.

    Side note:

    Is anyone else as slow as we are right now specificly in or around CT? We have sold three cars so far this month and they are all mine. Two used and one new.
  • mazda6iguymazda6iguy Member Posts: 365
    Just wondering...

    I have been shopping for cars with my friend this past weekend. On a few lots, we have seen some brand new 2005 cars. One was a Pontiac Grand AM GT coupe and at another dealer we saw a 2005 Chrysler PT Cruiser Limited Edition. And at another dealer we even saw an unsold 2004 Ford Crown Victoria. How much of a discount can one expect from new when buying a year old car (these cars all had the shipping plastics in place)!
  • british_roverbritish_rover Member Posts: 8,502
    Depends on the type of car. If I was looking at a 2005 that was still new and untitled with either no miles or minimal ones I would look at what real used cars of the same year are going for.

    Just for example on cars.com for a Grand AM GT you have a dealer asking 17,500 for one with about 3,500 miles on it. I would expect the dealer with new GT to be asking about that or maybe a little more. That is of course assuming the 17,500 price is market correct. I would need to do more research to find that out.

    After that I would just negotiate for it like I would any other car. Treat it like a very low mileage used car. You would be willing to pay a premium for that low mileage but only so much of one.
  • thebillthebill Member Posts: 194
    2 bones eh? lol....just messing with ya. Its a little slow in the mid west, we had a record saturday though
  • isellhondasisellhondas Member Posts: 20,342
    Wow...three cars? We are on track for 300 new at this point, not sure about used but we are pretty busy.
  • british_roverbritish_rover Member Posts: 8,502
    How many salesman do you have?

    Our entire sales team is only four people.

    Two sales guides, one F&I/Used car manager and our Centre/New car manager.

    Last month was a busy month for us. We did nine used cars, eight of which were mine, and seventeen new cars with seven of those being mine. One of those seventeen was a service loaner we punched for use so it counts as a sell for Land Rover but no one gets a commission from it.

    When that car is taken out of service loaner duty whoever sells it will get a commission for it but it will not count as a sale towards any Land Rover goals.

    Our Land Rover goal was only fourteen vehicles so we were more then 120% above our objective.
  • turboshadowturboshadow Member Posts: 338
    I wish they'd also disclose the whether or not the deal was a lease, and the length of payments. Down payment and payment are nice info, but not the whole picture.
  • isellhondasisellhondas Member Posts: 20,342
    I couldn't work at your store, I would fall asleep!

    I think 25 salespeople including myself and the other two in my internet department. Five people in Finance.

    It's hard for me to keep up with my leads since I have so many old owners and referral customers to the point I'm about to add another person.

    We often exceed what you did last month in one day.

    Just a different location and a different product.
  • mitzijmitzij Member Posts: 613
    Ugh! I could hardly stand it! My 5 salesmen drive me nuts half the time, I couldn't imagine 5 squared.

    I nearly came unglued on one yesterday. He comes in saying he's got a guy trading in a truck. He'll be here at 5:00 (after 5, we've got 1 tech working till 7 on Mondays). He needs the wheels and tires switched from old truck to new truck (and rotate them), and a bedliner, and splash guards, and, oh yeah, the tailgate latch 'looks funny', so it needs fixed.
    Sure, no problem, AFTER my tech gets his 2 oil changes done (5 and 5:30).
    We got lucky. The customer didn't show until 6:00.
  • british_roverbritish_rover Member Posts: 8,502
    Yeah very different in everyway.

    Do you know what your average front end gross was for last year?

    I would have to go look ours up. I have it written down somewhere. Be interesting to see how they compared.
  • isellhondasisellhondas Member Posts: 20,342
    Oh, I know but I won't disclose that.
  • mark156mark156 Member Posts: 1,915
    What consists of "front-end gross"...??? I don't want to know your number, but what components make up that figure?

    Thanks, Mark156 :)
    2010 Land Rover LR4, 2013 Honda CR-V, 2009 Bentley GTC, 1990 MB 500SL, 2001 MB S500, 2007 Lincoln TC, 1964 RR Silver Cloud III, 1995 MB E320 Cab., 2015 Prevost Liberty Coach
  • british_roverbritish_rover Member Posts: 8,502
    Front end gross is the profit is the gross profit, so before all expenses taken out, that comes from the mark up on a vehicle.

    For example if I sold a used car for 25,000 dollars and we owned it for 23,000 dollars then the gross profit on the front is 2,000 dollars.

    You take the delivery expenses out of that so the break down could look something like this.

    2,000 dollars gross profit
    minus 120 dollars for detail
    minus 450 dollars for safety
    minus 300 dollars for pack(pack is the made up number all dealerships subtract from the gross profit to recover some expenses before the salesman is paid)

    So I get paid on what is left of all that. Our commission is 20% for used cars so I get 20% of 1,130 dollars or 226 dollars.

    Net profit after all expenses would be...

    1,130
    minus 226
    minus whatever you pay the managers and however you pay them.

    Managment pay scale might be based on your overall gross to net ratio with bonus levels for holiding a higher ratio or putting out more volume. Wholesales losses might also play a factor in how they are paid as well.

    minus overhead for the sales department which will include a lot of things.

    and after that I am getting more onto full out accounting which I do not want to do.
  • mark156mark156 Member Posts: 1,915
    :D
    2010 Land Rover LR4, 2013 Honda CR-V, 2009 Bentley GTC, 1990 MB 500SL, 2001 MB S500, 2007 Lincoln TC, 1964 RR Silver Cloud III, 1995 MB E320 Cab., 2015 Prevost Liberty Coach
  • raybearraybear Member Posts: 1,795
    Minus $450 for safety? And you're paying too much for detailing too.
  • graphicguygraphicguy Member Posts: 13,991
    Craig:

    I've always read your posts and enjoy them. Just curious though, why wouldn't you disclose your front end gross? It certainly would be helpful for some to know how to make an "easy" deal. Most here aren't in your geographic area or know the dealership you're working for. So, I wouldn't imagine the competition would benefit at all either.

    It would just be helpful on the consumer side.
    2024 Kia EV6 GT-Line AWD Long Range
  • qbrozenqbrozen Member Posts: 33,424
    Minus $450 for safety? And you're paying too much for detailing too.

    I believe the "safety" money is to actually make the car safe to drive ... meaning maybe new brakes, maybe new tires, etc. Some cars would need more, some less.

    $120 is not too much for a detail ... for a private party. I paid $125 for a full detail just a couple of weeks ago. I would expect, however, that a used car dealership would have someone on staff. It would certainly make good sense. I would think, however, even if you were paying a 3rd party, as a dealership, you should be getting some sort of volume discount ... maybe $100 a pop?

    '11 GMC Sierra 1500; '98 Alfa 156 2.0TS; '08 Maser QP; '67 Coronet R/T; '13 Fiat 500c; '20 S90 T6; '22 MB Sprinter 2500 4x4 diesel; '97 Suzuki R Wagon; '96 Opel Astra; '11 Mini Cooper S

  • jipsterjipster Member Posts: 6,252
    Thats right Craig. This discussion is called, "Stories from the Sales Frontlines"...not "Front End Gross Secrets from the Backoffice"

    Besides, we all here know how to keep a secret. :P
    2020 Honda Accord EX-L, 2011 Hyundai Veracruz, 2010 Mercury Milan Premiere, 2007 Kia Optima
  • snakeweaselsnakeweasel Member Posts: 19,577
    I would expect, however, that a used car dealership would have someone on staff. It would certainly make good sense.

    Yep usually a high school kid high on something, Oh wow man what a flashback :P

    2011 Hyundai Sonata, 2014 BMW 428i convertible, 2015 Honda CTX700D

  • biancarbiancar Member Posts: 965
    I'm curious as to why knowing a dealer's front-end gross would make it easier for you to make a deal?

    For new cars, invoice price, hold-backs, average price paid, all that sort of info is pretty easily obtainable on-line. If you can see that car X is generally selling for invoice plus $200, who cares how much profit the dealer is making off that? A dealer in that situation who continues to ask for MRSP would certainly lose the business of any customer who had done their homework.

    In reverse, a hot car that's really selling at MSRP, well, the customer has to decide if it's worth it to pay that much, or do they want to look around for perhaps a different car or wait six months until the fever dies down some.

    A dealer who shows "ADM" on their price list on the car would certainly lose my business, probably others as well.

    But the exact dollars? Who cares how much the dealer makes - what matters to me is how much I'm prepared to pay, after having done my research. A dealer who accepts my offer has a deal, a dealer who won't, doesn't.
  • british_roverbritish_rover Member Posts: 8,502
    Yeah I just pulled the safety number out of the air but it could be much higher then that depending on the car. If a Range Rover needed tires and brakes all around the safety charge might be 2,000 dollars or more.

    The 120 dollars is about average if they car is really dirty inside they might charge us as much as 220 dollars and for a car that does not need much it might be as low as 60 dollars.

    What the real cost of the detail is of course much lower. The detail shop here is part of our autogroup but just like parts, sales and service is opperated as a seperate business unit. Everyone gets paid on comission here so even the detail guys make a comission on every car they detail. I don't know what their comission is but I am sure it is much less then my 20%.

    So to reduce payroll expenses it makes sense to shift as much profit away from the front end to other parts of the business where the comissions are less. The sales department only gets a 15% discount off the full retail price of parts and a similar discount off the price of labor.

    Shifting that profit to parts and service reduces the payroll costs since they have lower comission rates. Same thing happens on the detail side. It makes me mad but what are you gonna do? The only way to make real money is to break into the bonus round for volume sold then the percentage increase in your comissions and the flat bonus you get for selling so many cars out weighs all the accounting tricks.
  • qbrozenqbrozen Member Posts: 33,424
    AH, i see!
    I'm, unfortunately, very familiar with this type of "business" (referring to a subsidiary that is part of the same larger company your subsidiary is and having to pay them for services). Seems like it inevitably hurts the employees, but I'm sure your employer is quite happy with the arrangement.

    '11 GMC Sierra 1500; '98 Alfa 156 2.0TS; '08 Maser QP; '67 Coronet R/T; '13 Fiat 500c; '20 S90 T6; '22 MB Sprinter 2500 4x4 diesel; '97 Suzuki R Wagon; '96 Opel Astra; '11 Mini Cooper S

  • british_roverbritish_rover Member Posts: 8,502
    Yeah it is all accounting. By running things this way it reduces payroll costs considerably, which if it was my business I would be trying to do the same thing, and it makes parts/service/detail look much more profitable then they really are.

    Sales is generating a large portion of the revenue for all three of those operations. The real cost of that 120 dollar detail is probably only 60 dollars, could be less could be more but I bet that is an ok guess , but sales gets charged the full 120. The general public is of course charged 180 dollars for it though so the sales department is of course getting a generous discount. ;)
  • corvettecorvette Member Posts: 10,891
    A dealer who shows "ADM" on their price list on the car would certainly lose my business, probably others as well.

    They'd lose my business as well, or, more accurately, never get the opportunity to earn it. I'm also very leery of dealers that put $1000 of tacky, useless, and/or overpriced dealer-installed accessories on all of their cars.
  • isellhondasisellhondas Member Posts: 20,342
    Back when I was a high level manager for a very large company I was privy to a lot of confidential information. I learned the value of keeping one's mouth shut.

    For one thing, it's really none of anyone's business and certainly nothing a professional person would publish on a forum such as this.

    And, there are a LOT of people who know who I am and where I work.

    It doesn't matter anyway. Cars sell for whatever the local markets dictate.
  • isellhondasisellhondas Member Posts: 20,342
    Well, we have a "second sticker" so you probably wouldn't like it here. Still, cars sell for what they are worth.

    Sometimes when people are buried in a trade in we NEED that second sticker!

    I totally agree with everything you said in your post.

    If you offer enough for the car you will be a buyer. If not, you won't be. It's that simple!
  • [Deleted User][Deleted User] ColoradoPosts: 0
    Is the "second sticker" the little one to the right with stuff like ADM, undercoating, etc? If not, could you explain what it is? Thanks
  • corvettecorvette Member Posts: 10,891
    My thinking is, if I want an accessory, I'm willing to pay for it, and I'll ask for it.

    Installing a spoiler and mudflaps on every car on the lot makes it difficult for me to get a car without them. Installing a pinstripe that I'm going to ask you to remove wastes your time, and presumably my money as well. It's not dishonest, but I do think it's shady. Accessories should be offered, not shoved upon the consumer.
  • patpat Member Posts: 10,421
    My understanding of ADM (additional dealer markup) is a dealer add-on price to the consumer over MSRP because of what the market will bear - not for any dealer-installed options. And I'm pretty sure that's what isell meant when he said his store has "second stickers." It's usually only applied to cars that are very hot, but "very hot" depends on the local market.

    But he will correct me if I am wrong.
  • british_roverbritish_rover Member Posts: 8,502
    When I bought my MINI the dealership had ADM stickers of 699 on all their cars. At the time that is what the market would bear in that area and the fact that nearly every MINI was a order it and wait for it kind of deal proofed it.

    I lucked out and ended up not having to pay for it cause I went to college with the F&I manager's son.
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