As we all know, there are as many pay plans as there are dealerships. If you’ve ever heard me speak, you know I’m not a big fan of having buyers out on the streets running around buying cars and trucks.
My evidence is most of the time the units that end up aging on you are those that you purchased from the auctions by your buyers or those units brought to you by “Bubba,” the wholesaler. Those are always your biggest wholesale losses.
The odds of you being successful with these purchase units would go way up if you used my lifecycle management process. But, that’s not the subject of today’s article.
The subject today is that if you’re going to have outside buyers, what’s the best way to pay them?
Most outside buyers are paid based on so much per unit purchased. If you are of that mindset, here’s my suggestion:
The buyer only gets paid when you retail it at a profit or breakeven. They get nothing for buying the unit. They only get paid when you retail the unit.
Trust me, here’s what’s going to happen:
A. At first, your buyer isn’t going to like the new plan. To make it a little easier to swallow, up the ante on what you’re now paying your buyer. If you’re paying $200 a unit, make it $300.
B. Your buyer is going to take an even more serious interest in every unit that’s on the lot that’s in his/her inventory.
If it’s tied up in service, your buyer is going to be pushing it through.
If it’s dirty, they are going to be getting out the washrags.
If it doesn’t have fuel, they are going to get fuel in it.
If its photos are lousy, they are going to start taking pictures.
If the pricing isn’t getting changed, they are going to be having a conversation with the price changing person.
I would further suggest that you add the fee to the cost of each unit that’s purchased. Thus when you retail it and pay your buyer, you’ve already expensed your acquisition cost.
You can apply this concept to a company employee/buyer or a true outside buyer.
If you’re gonna have a buyer, turn them into a retail buyer. That’s all I’m gonna say, Tommy Gibbs