Comments for http://www.dalepollak.com Wed, 23 Jul 2008 17:40:27 +0000 http://wordpress.org/?v=2.5 Comment on Read the book - now a question on Commission structure by dpollak http://www.dalepollak.com/2008/07/21/read-the-book-now-a-question-on-commission-structure/#comment-179 dpollak Tue, 22 Jul 2008 15:08:03 +0000 http://www.dalepollak.com/?p=153#comment-179 Dave, Thank you for your question. You are quite right. The new market calls for a new approach to variable compensation. The enlightened dealership understands that it is all about total gross rather than average unit gross. I'm not saying that you shouldn't expect healthy average grosses, but they're going to be derived by high velocity turn rather than people paying more than they need to. The bottom line is he/she who has the freshest vehicle, purchased right, can sell for less than the guy down the street with an old unit. This means that variable compensation program should be based on unit volume rather than gross. There is also clear justification for bonuses based on the types of things you referenced in your question. This last weekend, I was fishing with a very successful dealer buddy and we were talking about his compensation program. He pays his sales people a flat salary between $1,800 and $2,300 per month based on the average unit volume over the last rolling 12 months or 90 days, whichever is better. He then pays approximately $200 per unit up to 7 units, and then an additional $100 per unit 8 and up. He also pays an extra bonus for selling a repeat customer and/or aged units. He also told me that his total variable comp comes in at 28%. I really appreciate your question and would like to hear from others with their plans and opinions. -Dale Dave,
Thank you for your question. You are quite right. The new market calls for a new approach to variable compensation. The enlightened dealership understands that it is all about total gross rather than average unit gross. I’m not saying that you shouldn’t expect healthy average grosses, but they’re going to be derived by high velocity turn rather than people paying more than they need to. The bottom line is he/she who has the freshest vehicle, purchased right, can sell for less than the guy down the street with an old unit.
This means that variable compensation program should be based on unit volume rather than gross. There is also clear justification for bonuses based on the types of things you referenced in your question.
This last weekend, I was fishing with a very successful dealer buddy and we were talking about his compensation program. He pays his sales people a flat salary between $1,800 and $2,300 per month based on the average unit volume over the last rolling 12 months or 90 days, whichever is better. He then pays approximately $200 per unit up to 7 units, and then an additional $100 per unit 8 and up. He also pays an extra bonus for selling a repeat customer and/or aged units. He also told me that his total variable comp comes in at 28%.
I really appreciate your question and would like to hear from others with their plans and opinions.
-Dale

]]> Comment on Thank You Dale by Minnesota book dealers directory http://www.dalepollak.com/2008/07/09/thank-you-dale/#comment-177 Minnesota book dealers directory Tue, 22 Jul 2008 10:09:33 +0000 http://www.dalepollak.com/?p=123#comment-177 <strong>Minnesota book dealers directory...</strong> [...] I was probably around ten years old. Rooting around on my dad's bookshelves, or maybe in one of the boxes of books he had in the attic, looking for something to read. I had no idea who Tom Godwin was, had never heard of [...]... Minnesota book dealers directory…

[…] I was probably around ten years old. Rooting around on my dad’s bookshelves, or maybe in one of the boxes of books he had in the attic, looking for something to read. I had no idea who Tom Godwin was, had never heard of […]…

]]> Comment on Do profit margins really matter? by wholesale automotive parts http://www.dalepollak.com/2008/05/09/do-profit-margins-really-matter/#comment-176 wholesale automotive parts Tue, 22 Jul 2008 00:01:42 +0000 http://www.dalepollak.com/?p=75#comment-176 <strong>wholesale automotive parts...</strong> This is such a wonderful and informative way to reach others. I will be more than glad to share this site.... wholesale automotive parts…

This is such a wonderful and informative way to reach others. I will be more than glad to share this site….

]]> Comment on Top 10 Used Car Showroom Lies… by T dog http://www.dalepollak.com/2008/07/14/top-10-lies/#comment-175 T dog Mon, 21 Jul 2008 18:34:30 +0000 http://www.dalepollak.com/?p=135#comment-175 "I paid more because this one is the nicest one out there" “I paid more because this one is the nicest one out there”

]]> Comment on 45 to Thrive by ruggles http://www.dalepollak.com/2008/07/11/45-to-thrive/#comment-174 ruggles Mon, 21 Jul 2008 04:37:45 +0000 http://www.dalepollak.com/?p=128#comment-174 In my travels I often hear from both Dealers AND Managers that they don't want to "take a hit" at the auction by liquidating over age inventory. Don't the realize that they have already taken the "hit"? I hear some really lame reasons for holding on to inventory. Only one might make make sense... "I don't want to send my bank into cardiac arrest and lose my floor plan". The lamest is, "I have already paid commission to managers and sales people on the gross from those "too high" appraisals". In my travels I often hear from both Dealers AND Managers that they don’t want to “take a hit” at the auction by liquidating over age inventory. Don’t the realize that they have already taken the “hit”?

I hear some really lame reasons for holding on to inventory. Only one might make make sense… “I don’t want to send my bank into cardiac arrest and lose my floor plan”.

The lamest is, “I have already paid commission to managers and sales people on the gross from those “too high” appraisals”.

]]> Comment on Dealership Dysfunction by ruggles http://www.dalepollak.com/2008/07/16/dealership-dysfunction/#comment-173 ruggles Mon, 21 Jul 2008 04:29:06 +0000 http://www.dalepollak.com/?p=152#comment-173 To the consumer, the showroom is now the monitor of his/her PC, and our inventory is parked next to our competitor's. This might even be a line from Dale's book. As I visit dealer websites I am appalled by the lack of professional caliber inventory photos. Poor lighting, cluttered backgrounds, and on and on. The same Pre-Owned manager probably has his front row perfectly aligned. As I attend one technology conference after another, I see evidence that the most advanced dealers will soon be using video for their inventory, with a trained spokesperson doing a walk around. U-Tube is revolutionizing the real estate business and the auto business won't be far behind. To the consumer, the showroom is now the monitor of his/her PC, and our inventory is parked next to our competitor’s. This might even be a line from Dale’s book. As I visit dealer websites I am appalled by the lack of professional caliber inventory photos. Poor lighting, cluttered backgrounds, and on and on. The same Pre-Owned manager probably has his front row perfectly aligned.

As I attend one technology conference after another, I see evidence that the most advanced dealers will soon be using video for their inventory, with a trained spokesperson doing a walk around. U-Tube is revolutionizing the real estate business and the auto business won’t be far behind.

]]> Comment on What in the world are you thinking? by gm pickup trucks http://www.dalepollak.com/2008/06/05/what-in-the-world-are-you-thinking/#comment-172 gm pickup trucks Mon, 21 Jul 2008 01:09:11 +0000 http://www.dalepollak.com/?p=96#comment-172 <strong>gm pickup trucks...</strong> Sounds interesting but not for every one.... gm pickup trucks…

Sounds interesting but not for every one….

]]> Comment on 45 to Thrive by zkcvohqm http://www.dalepollak.com/2008/07/11/45-to-thrive/#comment-170 zkcvohqm Sat, 19 Jul 2008 06:43:47 +0000 http://www.dalepollak.com/?p=128#comment-170 <strong>zkcvohqm...</strong> zkcvohqm... zkcvohqm…

zkcvohqm…

]]> Comment on Top 10 Used Car Showroom Lies… by scottgunderson http://www.dalepollak.com/2008/07/14/top-10-lies/#comment-169 scottgunderson Sat, 19 Jul 2008 00:43:05 +0000 http://www.dalepollak.com/?p=135#comment-169 "That is my social security number, I dont know why the bureau report says I am dead!" "I got married in LasVegas, but I am not really married!" "I dont want to be the Buyer, I want to be the CoBuyer" “That is my social security number, I dont know why the bureau report says I am dead!”

“I got married in LasVegas, but I am not really married!”

“I dont want to be the Buyer, I want to be the CoBuyer”

]]> Comment on Top 10 Used Car Showroom Lies… by dpollak http://www.dalepollak.com/2008/07/14/top-10-lies/#comment-168 dpollak Fri, 18 Jul 2008 22:26:39 +0000 http://www.dalepollak.com/?p=135#comment-168 Scott, You are truly a guy who's seen it all. Thanks for the great contribution. Scott,

You are truly a guy who’s seen it all. Thanks for the great contribution.

]]>