Often when I’m speaking to dealers I come across as being against packs. I’m not against packs. I’m really not. I always say if they are working for you, by all means stay with them.
I don’t have any facts to back my numbers up, but if I were guessing, I’d guess that 75% of new car dealers around the country are using hard packs, soft packs or both.
Of the dealers still using them, I’d guess that 25% are using them in such a way that they are having some success and improving their bottom line.
The other 75% are hanging on for dear life and actually hurting themselves, if for no other reason than the psychological damage it does to the sales and sales management team.
In order to do volume in used cars you need to have a “costing advantage.” By “costing advantage,” I mean what’s added to the car once you own it, which includes packs and reconditioning.
For most dealers when they pack cars they are creating just the opposite.
If you know your history, you know that the reason dealers added packs and charged full retail from the service department to the used car department was because sales managers worked from cost up.
This is no longer true, as your sales managers don’t have control over gross as they once did. That’s why dealers are more and more becoming one-price dealers and saying “no” when the customer shows up and wants a discount.
So, without saying they are a one-price dealer, many dealers are taking a tougher stand as well as changing sales people’s pay plans to match their new-found pricing and marketing strategy.
Remember, as we move more toward a one price concept, the skill and pay level of the “desk managers” will be much lower than in today’s market. There will be more effort made to sell the store and the product with less effort on “penciling the deal.”
I like packs, but only if they are working. I question whether they are working as well as some dealers think they are. That’s all I’m gonna say, Tommy Gibbs