Whats a fair dealer profit margin ??

For every customer like you described above that you help out and get settled into a new set of wheels, that they want and need, I salute you and agree that is not an easy job. I got no problem with a salesperson making fair money when they help people who need help.

 

I have a feeling that this response is not worth writing because we will butt heads either way but here we go.

unfortunitally every once and a while I have to deal with customers like yourself who are very close minded to the amount of work that can actually go into a vehicle sale. You seem like the type that knows it all (not saying your now knowledgable but its all in how you come across) and will not be happy with any service that someone provides you.

There are actually customers that walk into the dealership and have alot of unanswered questions. Maybe you have just chosen poorly where to do your business.. or maybe you know everything im not sure.. I dont claim to know everything but I believe in the Salespeople I work with..

Sorry everyone else for getting off topic

 

I bet it's only the type of gear heads that hang around web sites like this whom actually have a clue when they step onto your lot.

I've added the 4Runner heated/turn signal mirrors upgrade to my mod wish list and my wife overheard me talking about it. She asked more about it and I said "it'd be nice to have heated mirrors like your car" (she has a Honda Pilot). She then responded, "I have heated mirrors?"

 

Ross,

I see you're 23. If you don't mind my asking, how long have you been selling cars/trucks? And what other life/job experience do you have? I'm interested because I want to understand your perspective...

 

OK, I'll try...

I'm 53 and have purchased 4 times as many vehicles in my life. And I can tell you...purchasing vehicles in no way qualifies one as an expert on sales. Or provides any clues at all.



Probably the best clue I can offer you:
Never assume anothers profession is as easy as it looks. And never assume your profesion is above theirs.

>>There is a man out there digging ditches for a living better than you could ever dig a ditch...and he's so good at it he makes it look easy. Give it a try sometime...you may gain a new respect for ditch digging!

 

We can all go around and around a million times, but the fact is that the truth lies somewhere in the middle.

It is in the best interest of the dealer and sales person to sell the car for as much as they can and it is in the best interest of the consumer to find the best deal.

P.s. no sales person on here as answered weather they would deny a customer who wanted to pay $3,000 over msrp for a vehicle.

I know I would never deny a dealer to sell me a vehicle for $3,000 off msrp

 

because no customer pays 3K over MSRP, unless the vehicle demand allows it. then, it's not the sales persons decision.

secondly, If a customer appears to have another 3 grand on the table...a good sales person would sell the customer a 3 thousand dollar more expensive car.

 

Exactly my points - it goes both ways. If other toyota dealers are willing to sell the trucks at $3k below msrp then it is the consumers best interest to take that deal. It is the free market. Plain and simple.

Dealers and sales people are not victims of brutal customers like they have been portrayed on this thread.

 

Fair amount for dealership to make on each vehicle or fair amount for salesperson to make?

Been using the Internet .for the last 5 vehicles I’ve bought. Had a good conversation with one dealership Internet guy. He said he starts at $100 below invoice. Doesn’t need to make any profit on each vehicle as all the money comes from Toyota based on quantity of vehicles sold.
He said be sure to just walk by the salespeople on the lot and ask for him

As Internet buying becomes even more popular, I think the car salesman is out of luck, will just be there to show the car & provide a test drive.

I used to buy Honda’s…. First time I went in to dealership I got a really nice no push salesman. He told me I would get the best deal he could give me. He said if I was happy with him and the deal, I would tell others and I would also come back and buy from him again. Well, he was right, I ended up buying 5 cars from him over the years, and told a lot of people to go buy a car from him. I don’t think he made much on each deal,, but he said it was quantity that was important. He has worked there for a long time, so he must be making good money.

 

That's been me. I wanted a Colorado for my previous truck and drove a couple before settling on the exact one. The Tacoma was used and I saw it on the dealer's site. I wasn't actively looking but just keeping an eye open since I was nervous about the Colorado (it just needed half the engine replaced), and when I went to see the Tacoma it was what I wanted.

 

Hey Joe,

I started my sales career at a used car lot, where I received no training whatsoever, I was there for 6 months, when I decided I needed some training.

I then went to Nissan, where I got exactly what i was looking for, I spent 15 months there, I got really tired of sales, dealing with so much rejection was making me bitter.

I then tried something new and went to a bank, within 3 months I was missing sales, because it can be a lot of fun, and if you're willing to work hard, it can be prosperous. I've now been at Okanagan dodge for a month, and plan to stay here for many years, it's a great fit for me!

Previous to auto sales I was doing mundane jobs that I never liked, stocking shelves in a grocery store, working up north with my brother in law as a welders helper. Mostly retail sales in a few different board shops.

I guess to sum it up, I've done all kinds of crappy boring jobs, I find auto sales to be a lot of fun, I like to work hard and bring home a good paycheck because of my hard work.

 

great testimony.

keep up the good work and you'll be sales manager soon.

 

The profession is filled with extreme highs and extreme lows. It has relatively low barriers to entry (no real sales experience need or college education) and there is a lot of money to be made.

With that being said, there is a lot of BS like the rejections, hours, managers etc etc etc. That is why I left. But it can be very rewarding if you stomach the BS and there are a lot of good people in the business.

 

Pricing is determined based upon your regions demand for said vehicle.

Therefore when people like yourself walk into my dealer and tell me "Oh well I can get a Brand new 2012 Camry for $19,xxx in Southern California why are your prices so much higher? My first response to them is, "That's great, so what are you doing shopping here sir? I'll be honest with you, that price is not going to happen here at this store because of a couple reasons. A. This is a one price store being a Sonic Automotive store, so there is very little mark up and fair and honest pricing in each and every one of our vehicles here on the lot. Finally B. Pricing is set based upon the current demand for the vehicle, realize it or not you are shopping one of the hottest selling vehicles that Toyota has been selling for the past 15 years + .... the demand is much higher here in Northern California then out in Southern California obviously. Sometimes you have to go out of your way or even go out of state to save a buck. You just have to determine how much your time is worth. That right there is your bottom line dollars and cents.

Some people like that response, and some don't. I have lost some sales I am sure because I am brutally honest. I tell you what you need to know and answer all of your questions as honest and as true as I possibly can. I don't know everything, but I don't claim to either, I am a human being just like you who is just trying to make a living and do my job as best and efficiently as I possibly can. Unfortunately, sometimes that involves dealing with unreasonable or dishonest people. Customers lie just as much as some dealers can sometimes. If you don't like that I usually see some of them later anyways because you will had been lied to by someone else at other dealers.

In regards to how much sales people are making for the cars $ an average of $350 is not true. I used to work at a crappy CDJR store and their "mini" (minimum) was $200 a vehicle. The Toyota store I am at now is based upon units sold only. I get paid a fixed wage and if I sell a certain amount of vehicles the $ amount per vehicle sold goes up.

Sales is a long and tedious job. Some people drag you out for hours on a certain vehicle because they are back and forth. When people are out shopping the market I highly appreciate when they are honest with me. It keeps things simple and it helps me gauge in my mind just how much time I need to spend with them. It's when they start lying to me that I lose the interest of wanting to do any kind of business with them.

I realize a car is a big purchase to many people, but cash or finance makes absolutely no difference in price. The dealer is going to get their money one way or another weather it be from the buyer or the bank. The way I explain things to people is that hey if you want a car (Toyota in my case because I sell them) you gotta pay to play. Nobody WANTS to pay $23,xxx for a car, hell nobody event WANTS to pay $5000 or a car.. Unfortunately, everyone needs a vehicle and at some point you have to pay whether you like it or not.

Hang on, did I read that right? You said in your post that you didn't buy from some salesman, but later on you said your salesmen treated you very good?

I agree with you. What matters to me the most is that survey not profit, because I am not commission based. I am VOLUME based, therefore the way I operate and treat my customers is a little different which sometimes throws people off because they are expecting HIGH pressure. Sometimes I have to tell people to relax because I am not going to rape them on price at all.

Also between you and me, internet went and fucked it up for everyone. If you are in internet sales you get ALL the leads and the floor sales team gets all the leftovers which is typically crumbs. Not only that but they have much much more at their disposal as far processing customers is concerned all I have to use is a iPad, which isn't going to process all your papers all the way to the back now is it? I would hardly call that fair. The difference between internet sales and floor sales is typically 10 cars if not more at my store. Which I would hardly call fair. We are a 300+ volume store but where do you think the majority of those numbers come from? It's like fishing with dynamite, they have the dynamite and the net. We have a reel of line and some hooks. The fact of the matter is that you can't have a car transported to your house via internet, you still have to go in and see and deal with a salesperson except you've been talking a dialogue with him. That's the only difference between me and the internet sales guy.

Look, to you and Rab89, between all of us CDJR has a crappy business model and it reflects within it's employees. A lot of unhappiness all over its company and how do I know? I worked there for a couple months. Minimum wage and $200 minimums per vehicle sold is a shitty way to live life, especially in a low volume selling store.

One more thought to keep in mind:

When I am selling a car to you, my job doesn't end with you when I walk into that sales office. I also have to sell myself to the manager as well. So in all reality I am doubling selling myself which is very draining on the mind. Keep this in mind next time you are at a car dealership and you will do pretty well. I understand most people are about saving a buck, as am I but like I previously stated in one of my previous comments you gotta pay to play. No games from me, just facts.

A very fantastic quote I might add. I heard something like this a while back and just couldn't remember how it went exactly.

Exactly, nobodies job is as easy as it seems. They have just been doing it long enough to be efficient at it and MAKE it LOOK easy. IS easy and LOOKS easy is two different things.

Selling cars falls into the not easy category. You deal with all kinds of walks of life on a daily basis and you have to be able to adapt to their style for them purchase the vehicle. Its like I told someone a long time ago. It's like getting my ducks lined up, or in other words, all I can do is plant the seed. If they aren't buying today but they like me all they can do is come back if I have been helpful and nice enough to them. Following up, however, seems to aid in expediting that process because they won't remember at the dinner table 4 days later unless I did.

I wouldn't LET someone pay $3000 over MSRP because my corporate policy dictates that every vehicle on the lot regardless of whether or not it has a TRUE PRICE hang tag on it, I HAVE to sell for TRUE PRICE pricing. Which is typically thousands below MSRP.

 

On one car I bought via internet, they drove it over 200 miles to my house and we did the paperwork at my kitchen table!

 

Admittedly, I haven't read every posting here, but I like the topic. My experience over the past several years since retirement is this: I research the internet for the vehicle I want without regard to price. I use the Costco buying service for the last eight buys. They put me in touch with a named salesman, the last ones e-mailed me copies of invoices and my price. When I bought my truck 13 months ago, the entire thing was done over the phone and internet. When I arrived at the dealership, ready to sign the papers, he insisted that I at least drive the truck before signing, so we drove it three miles, signed the papers, and I drove home in just over an hour. Sure takes the stress out of buying.

 

You can always do that but that won't be done unless 100% absolutely necessary.

 

Hey rotorheader, same here, drove 150 miles, the car was freshly washed, full of gas, 45 minutes after arriving we we on our way! Oh and they gave us a $100 bucks off the agreed upon price to pay for gas, called a couple days later to see how things were, called 18 mos later to see how things were. No stress, no bs, salesman did everything except the final paperwork.

 

My "worst" case (where I felt I needed a shower) was on a a car about a year old & 12,000 miles. Chick wanted it, my sales manager would have shoot any of us had we tried to up sell, and the gross on this (slightly) used Corolla was more then $3,000 (not 3k over asking). Used cars for us had better margins but boy I sure didn't feel good about the deal even though it paid well.

 

Thanks for the good answer.

Sure you don't care but, don't want you (or others in your career field) to think I'm just giving car sales people a hard time.

I am a fan of the free market concept. If you are in a career that allows you to work and earn excellent $$$ great OTOH, if you're in a field that doesn't pay as well then I don't think anyone is entiteled to make a certain amount....example just a given $600 on a product jusy because it's a $40,000 product.

I somewhat followed your path during my college days. I only made average money for the time and though I didn't find the job hard, I did have to put in some hours.