Stories from the Sales Frontlines

nortsr1

att: Chuck:
I can assure you of one thing. Employee Pricing (in the case of Chryslers new announced plan) is NOT the best price. I have to agree with you. I wouldn't doubt that Chrysler will probably increase sales during this promotion,however; before the promotion, I was offered a PT Cruiser Limited for $2000.00 UNDER invoice. There was a $1500.00 rebate and a $500.00 mfg. to dealer incentive.
When I read in the Detroit Auto News that Chrysler was coming out with "Employee Pricing" I said to myself that I would "WAIT" and really make out...however...they did away with the $1500.00 rebate (I don't know it they continued the $500.00 mfg. to dealer incentive)...but I doubt it)).
To make a long story longer...with the new Employee Pricing and the rebate now $500.00...The same PT would cost me almost a $1000.00 MORE.
I will now wait until July 31st (supposedly that is when this new promotion will be over) and "HOPE" that they reinstitute the old rebate and incentive.
Moral of the story:
"He who hesitates is lost"!!! (or, in this case, loses money)!!!!!!

graphicguy

british....those factory owned stores are few and far between. You may find one here or there, but in general, franchise laws prohibit the ownership of a store by the manufacturer.

Ford will take over a "troubled" franchise, or they may contracturally be able to take over a store if the terms of the franchise contract aren't met by the franchisee.

They did that to a local store near me. It was owned by the former NFL player, Mel Farr. He got into trouble when he started selling cars to the "sub-prime" market. Through high loan defaults, poor inventory management and several other personal issues caused him to run astray of the franchise agreement with Ford. They closed some of his stores and took over others for a time....until they could find another franchisee to take over.

Ford, in particular, tried to set up corporate owned stores a few years ago.

Threat of franchise law litlgation caused them to drop that plan in short order.

graphicguy

Locally a few years ago, Carmax had a franchise in southern OH, where I live. It didn't last long. But, I was able to visit there once.

For those who didn't want to go through the negotiation process, they offered a compelling alternative to buy over the more traditional dealerships. Low pressure, good selection, easy transaction. Plus, while the buyer may not have gotten the absolute best price on any given vehicle, they didn't pay the highest price, either.

It didn't play where I live, but it certainly has played out in other locales.

snakeweasel

From the consumer end, it's about expectations. I don't expect to walk into Tiffanys and get a discount on that $30K diamond ring.

And why not? Trust me at the $30K price Tiffanys is making a bundle of that ring so there is plenty of room for them to come down and still make a tidy profit. Many situations where people wouldn't even think of haggling they should and it will many times pay off big time.

snakeweasel

That makes no sense...what business / industry assures people they are getting the best price?

Many do, I know a few places nearby that if you bring in an advertised price on something that you bought within the last 30 days thats lower they will refund the difference.

snakeweasel

The main difference why it works in other industries is that consumers learned through experience that if Smith from across the street came to the same store at the same time to buy that TV, they'll almost certainly get the same price the said consumer.

What, you never negotiated a lower price on a TV or a refrigerator or what not?

snakeweasel

But that situation can't occur unless the manufacturer limits supplies to equilibrium levels.

In a free and open market supplies are always at equilibrium levels. What you mean is that it cannot occur unless the manufacturer limits supplies to keep prices high.

snakeweasel

Try to find a 2 liter bottle of soda (Sam's brand) for .58 cents anywhere else....

Sorry but many house brands like Sam's brand, isn't worth what they pay for it. Man I would drink Pepsi before I drink Walmarts brand.

snakeweasel

Like someone held a gun to their head and made them sign the paperwork.

Hey thats how I ended up in Boot Camp. :P

socala4

What you mean is that it cannot occur unless the manufacturer limits supplies to keep prices high.

Or, more to the point, that the manufacturers limit supplies to keep retail prices high.

The problem for the salespeople is that in this respect, their interests and those of the manufacturers are not quite aligned. They have to work in a market in which most of the products they sell are produced in large amounts, so they need to rely on sales skills, not supply constraints, to command higher prices.

corvette

...but I stood firm and it was mine for almost an extra $200 off their sales price. All for just asking.

If Best Buy were a car dealership, they might print your price ($1350) in next Sunday's circular, put your stock number with an asterisk next to it, and say there is only one available at that price.

cluedweasel

We used to do a lot of those newspaper specials. They were always genuine cars at a really good price. Typically, we would mark an older stock G35 down to around $26K from $32K, usually with the car ending up at $3K or so below invoice. No etching, wheel locks, etc. Two things would happen. Either no one believed the car existed so it would get sold to someone who hadn't even seen the ad or someone would see the ad, come in and still want to negotiate on the thing.

mikefm58

" and say there is only one available at that price. "

I actually found a Toyota dealership that ran a Sat. morning ad with the advertised price available on only one vehicle. The buyer could not take delivery until Monday so they could leave that vehicle for others to see. It usually was a stripped down model in an unpopular color. But it was a legitimate ad.

When I bought our 04 Highlander, I got it for a few hundred over the advertised Highlander which was identical and had a sold sign on it. The salesman said if I wanted a RAV4 or a 4-Runner those vehicles were still available. It was about 10 AM and they opened at 9 AM.

It was such a pleasant surprise to see how this Toyota dealership did business that I also bought an 04 Tacoma from the same salesman a couple months later.

chuck1

"Sorry but many house brands like Sam's brand, isn't worth what they pay for it. Man I would drink Pepsi before I drink Walmarts brand."

That's your view and your certainly entitled to it. I am not ashamed to admit that I shop Walmart due to their low prices. And I can tell you first hand that many, many, Sam's brands are excellent products.

And again, low prices rule.

So to stay on topic, here is a corporation that has low prices, and advertises it.

chuck1

"It was such a pleasant surprise to see how this Toyota dealership did business that I also bought an 04 Tacoma from the same salesman a couple months later."

There is a local Toyota "mega dealer" owned by a former football star here in the "Inland Empire" area of Southern California. I have purchased four cars/trucks from them (Three Toyotas -1 new and 2 used, one used Mercury). Why? Yes, they play all the games all the other dealers do. When I go there, I don't even mention I have purchase from them in the past. It doesn't matter. Due to my negotiation skills, (I am in in Industrial sales) I know I am going to get the best possible price. THE ONLY REASON I shop here is because I know these guys will do whatever it takes to make a deal and will do so for very little profit. If I knew I could get the best price without the games, it would be all for the better.

prosa

Trust me at the $30K price Tiffanys is making a bundle of that ring so there is plenty of room for them to come down and still make a tidy profit.

Retailer markups on jewelry are horrendously high, probably the highest of any major retailing industry.

graphicguy

From the consumer end, it's about expectations. I don't expect to walk into Tiffanys and get a discount on that $30K diamond ring.

And why not? Trust me at the $30K price Tiffanys is making a bundle of that ring so there is plenty of room for them to come down and still make a tidy profit. Many situations where people wouldn't even think of haggling they should and it will many times pay off big time.

Snake....don't disagree with you that many places do indeed negotiate the price of big ticket items. Tiffanys isn't one of them. Yes, their markup is high. But, it's generally recognized that Tiffanys carries the highest quality jewelry in the industry. I don't have enough knowledge of jewelry to know if that's true or not. Ask any female though and she'll say that it's true.

I have successfuly negotiated on the price of a TV and other major appliances.

Again, it's about expectations. In most car stores, you expect to negotiate the price. Some, you can't, however.

Scion is an example of that. You pay the price on the MSRP sticker.

snakeweasel

I am not ashamed to admit that I shop Walmart due to their low prices.

I don't shop Wally world for one simple reason, I don't think I have ever been in one that has been open for more than a year that wasn't filthy. Isles tend to be cluttered shelves dirty and the store looking not much better than a flea market (I have had others state the same thing). I tend to shop at Meijer or Target as they are much cleaner and their prices are on par with Walmart (higher on some things, lower on others).

snakeweasel

Tiffanys isn't one of them.

You would be surprised if you talked to the right person.

But, it's generally recognized that Tiffanys carries the highest quality jewelry in the industry.

Personally I couldn't tell you about Tiffanys, but I know a few smaller chain ones and a few mom and pop places that have exceptionally high quality jewelry. As high if not higher than Tiffanys. Just remember with Tiffanys you are buying a name.

isellhondas

I walked into a Wal-Mart one time. Made a K-Mart look like a Nordstroms.

I don't care how cheap they sell their stuff for. I felt like I needed a shower afterwards.

british_rover

That is true although I have noticed the Wal-Marts up here in Yankee land tend to be much nicer then the wal-marts down south.

The other thing I have noticed is that after sam waltons death the Sam's choice products have really gone down in quality. Years ago the sam's choice cola and some of their candies were very good now they are crap.

audia8q

the threat of litigation over franchise laws was the one thing that got the manufacturers to drop their plans for manufacturer owned stores.
It went well beyond plans, they owned dealerships in many markets...in some markets they owned all of them. Salt lake, rochester, OK city, etc...
They bailed because they were losing billions of dollars on their factory owned stores. The dealers loved the factory stores, they didnt have any idea how to run a retail business and the factory owned stores got crushed by local dealers...that is why they got out of the dealership business.

audia8q

Many do, I know a few places nearby that if you bring in an advertised price on something that you bought within the last 30 days thats lower they will refund the difference.

Nothing new...pick up the saturday newspaper. You will see quite a few ad's with dealers hawking lowest price gurantees. It's usually goes like this...."we will beat any price by$xxx or we will give you $XXX.." This is very different than assuring the consumer they have the lowest price. Which is what I was addressing.

Also to the guy who mentioned wal-mart. They don't assure anyone they have the best price...Our local newspaper did some comparison shopping between wal-mart, k-mart and target. Wal-mart did not have the lowest prices, nobody was the best price king. Turned out that you had to shop each and every individual product to find the lowest prices.

snakeweasel

they didnt have any idea how to run a retail business and the factory owned stores got crushed by local dealers

I find that hard to believe. They are running a manufacturing business they should have the brains on how to sell them. Plus they had a price advantage over independent dealerships. My guess is that manufacturers got out of the sales game due to regulatory pressure. The same reason movie studios were forced to sell off their movie theaters.

socala4

My guess is that manufacturers got out of the sales game due to regulatory pressure.

I'd say it's for the same reasons that most product makers don't operate retail stores of their own -- they lack the resources and expertise to do it properly. With the current model, the manufacturer locks in a decent wholesale margin and allows both the automaker and the dealer to do what each knows best. Manufacturing and retailing are very different businesses, and the skills needed for one don't necessarily translate to the other.

The current business model also offloads some of the automaker's business risk onto the dealer. If the automaker builds a white elephant that nobody wants, the dealer effectively helps to subsidize it because the dealership will accept relatively low margins to unload them off of the lot. For every Solstice smash hit that ends up fetching sticker at a Pontiac dealer, the dealer will have far more dogs to dump at a discount, cushioning the blow for the automaker's product mistakes.

snakeweasel

I'd say it's for the same reasons that most product makers don't operate retail stores of their own -- they lack the resources and expertise to do it properly.

Not having them and being unable to get them are two different things. It would be easy for an automaker to outfit their own dealerships with people that have the skills to run one. Business's do it all the time, they hire people who have the skills. It is my understanding that they do it in Europe, so why can't they do it here.

However the American government frowns on one company having complete control like that. When a company has to much control over the manufacturing, distribution and sale of an item the government either controls them or breaks them up. Thats why Howard Hughes had to sell TWA, can't make airplanes and own an airline. Its called anti trust laws.

Trust me if manufacturers owned all the dealerships the Feds would have forced them to sell them a long time ago.

audia8q

I find that hard to believe. They are running a manufacturing business they should have the brains on how to sell them. Plus they had a price advantage over independent dealerships

Remember, mfg have a captive audience. Its easy to sell cars to dealers when they don't have another supplier...selling retail is very very different than selling wholesale. Ford wasn't stated last week, they knew all regulations in every market. They would not have spent 10 billion dollars buying dealerships without knowing the regulations. Consumers just didn't buy cars from them....they purchased from the outskirts dealers who clobbered them on price. They had a one price model that was easy to figure out. They also found out that cars get sold not bought. They tried selling cars like it was toothpaste....big mistake.

they had no price advantage...they had to purchase all those dealers from the independent owners who owned them for years...they had to buy each dealer in each market at the going rate plus in every market. Dealers knew what ford was doing and they held out for all the money. they also still had the same expenses as every other dealer to run the operations..advertising, overhead, salarys, floorplan expenses, etc..Where was the price advantage? My ford store was involved in the buyouts...We were one of the last markets..but it failed before the deal was completed.

chuck1

"I'd say it's for the same reasons that most product makers don't operate retail stores of their own -- they lack the resources and expertise to do it properly."

Yep, they lack the expertise to hold your car keys hostage, to bring sales person after sales person in to the sales room to wear you down, to misrepresent what they said they would do, to give you a price, only to deny they gave you that price the next day, to tell you the "ad car" was there and to "come on down" even if it has been long since sold, to sell you a factory backed warranty for several hundred dollars more than you can buy from another dealer via the internet. Yes, they lack the "expertise" alright!

mirth

I find that hard to believe. They are running a manufacturing business they should have the brains on how to sell them. Plus they had a price advantage over independent dealerships. My guess is that manufacturers got out of the sales game due to regulatory pressure.

Wrong wrong wrong. Sorry. OEM's have no clue how to retail, with Dell computers being the exception that proves the rule. Remember the Gateway stores? Don't see too many of those these days. The OEM's have all they can handle just making the dang cars, forget retailing...

isellhondas

Good idea. then they could control the market and fix prices.

And they probably wouldn't have the patience dealing with customers who would want to try to grind down their fixed prices, try to dump trade-in cars that were dogs, lie about their credit history, want to test drive five different models on a busy Saturday.

They might even try to make a (gasp) profit!

grandtotal

Why do you always (gasp) before the word profit. I think you should (gasp) after you write the word profit. Otherwise the sentence might read

They might even try to make a (gasp) grilled cheese sandwich!

You have no way of knowing if a (gasp) is in order or not.

I don't have a problem with dealers making either.

lemko

You can get a Sam's Club soda out of the machine for 25 cents, but you get what you pay for. As for Walmarts, the older ones near me are much nicer than the newer ones. I went inside a newly built Walmart on Roosevelt Blvd. in Philly last year. I felt as if I was in a third-world country surrounded by the dregs of humanity. The other shoppers made Jerry Springer's guests look like patrician characters from "Masterpiece Theatre." You could actually feel the poverty. Merchandise was stacked in sagging crushed boxes along the walls and in the aisles. Clothing was scattered all over the floor and hanging askew on the racks. I got out of there in a New York second. Target is much cleaner and orderly.

jlawrence01

What does the condition of a WalMart store have to do with vehicles??

british_rover

Walmart was going to sell used cars like carmax at one point but they deal fell through.

Kirstie_H

Although I'm a bargain-lover, let's stick to vehicles... unless, unbeknownst to me, Wal-Mart or Target have started selling cars and someone can share a story from that particular "Frontline." (and no, lawnmowers don't count)

(addendum: british_rover & I simulposted. who knew?)

british_rover

I took a very nice lady for a ride in our 1959 Series II Land Rover today.

Started it up on the second turn of the starter after not being driven in about a month. Pulled it out for her let it warm up for 15 or so minutes and then off we went. We drove around for about 15 minutes or so and she drove it better then I did my first time. She has a collection of older british vehicles and is looking to possibly add the Series II to her collection.

I have it pulled outside now and there happens to be a 1997 Defender in for service I am going to try and get pictures of them side by side loaded up to car space later today.

mac24

I've got a soft spot for the SII and SIIa. They ride best when they're used both off and on road, as the off-road work out keeps the spring leaves from binding. Four solid leaf springs can lead to sore kidneys on the highway.

I'll be looking for the pics later. By the way, just curious, what's being asked for it?

british_rover

Well it is on consignment to us from the owner and he is asking 24,000 dollars. It has been about as fully restored as you can without doing a full frame off restoration. I already have some pictures of it in my car space but I wanted to get some more of them next to the defender. Kind of like a Grandfather and Grandson theme.

tidester

(addendum: british_rover & I simulposted. who knew?)

<GASP!!>

tidester, host

mac24

........he is asking 24,000 dollars. It has been about as fully restored as you can without doing a full frame off restoration...........

Glad I was sitting down when I read that! If it makes that sort of money we'll have to look at importing a few. A full mechanical and cosmetic frame off restoration (usually with a replacement frame) should be available for well under the equivalent of $10K.

That one looks very correct, and is very nice cosmetically with lots of new trim and good paint, but judging by the underhood pics there's probably plenty of mechanical reconditioning required to bring it up to the condition of the rest of the vehicle.

british_rover

All of the exterior trim of the vehicle is actually original. The inside was completly re done in new rhino hide vinyl with the exeption of some of the rear vinyl trim. The engine runs great and always fires up on the second turn but is not much in the looks department.

The funny thing is when I tell people he is looking for 24,000 most of them are stunned at how little he wants. Most people seem to think it is a bargin and we have had some serious buyers in the past month or so. This woman in the morning was the most serious and she said she would get back to me later on in the week.

isellhondas

Why?

Because some people here seem to think it is immoral or somehow wrong for a car dealership to make a profit.

snakeweasel

No its just that some of the things dealerships do to make or increase that profit border on immoral (if not outright immoral).

isellhondas

In the case of some stores I don't disagree.

My post was,of course, in response to one that was dripping with sarcasm and was tongue in cheek.

I have seen customers that were guilty of the same thing.

british_rover

Loaded onto my carspace so check it out.

I have shots of the Series outside, parked next to a defender and on our display rock.

grandtotal

Please go back and read my post again, but this time give me the benefit of the doubt. Hopefully the sarcasm has disappeared (because I didn't write it that way). It was a serious comment about your (gasp) placement with a feeble attempt at levity. Sorry you didn't get it.

robr2

Series II - my uncle in Brazil had one of those. IIRC, it was the same putrid green color as well!!

socala4

Because some people here seem to think it is immoral or somehow wrong for a car dealership to make a profit.

I'm reading through these posts, and I can't find anyone claiming any such thing. Care to point out specifically to whom you're referring?

british_rover

That would be the traditional Rover Jungle green of the day. The majority of them were that color or the creme color that the tropical roof is.

mac24

Very interesting pics, especially comparing the SII with the Defender...........and just a small point, the body color is Pastel Green, and the wheel rims and Tropical Roof skin are Limestone. As you say, Limestone was also a popular body color, as was Bronze Green (a dark green) and Marine Blue (a mid-blue).