Salespeople are trying to make a living. You’re paying them on gross. What else would you expect?
My first management position was as a used car manager a very long time ago. I had a sales person working for me that was about as one-way of a person as you can ever imagine. He also wasn’t very good at telling the truth.
Let me tell you what he was really good at; he was really good at selling the freshest pieces that came into our inventory. Talk about doing a trade walk. Every morning he scouted the units that came in the night before. He knew what he could sell that would make him the most money.
During his tenure, I don’t recall him ever selling an older unit. He wasn’t there to help us. He was there to earn a living and feed his family.
It stands to reason why you have salespeople walking around your inventory. They can’t make any gross on those older units. They aren’t stupid, and though they may be team players, the team they are really playing for is the “home team.”
I’ve asked this question before and I’m going to continue to ask it. Does it make any sense in today’s market to keep paying salespeople on gross profit? They certainly don’t have as much control over it as they once did. You’re already setting the bar with the price you’ve put on the Internet.
The only way moving to a volume-based pay plan works is to be a one-price dealer or have a “well-disciplined management team” that’s not going to let them give the unit away.
And now you know why the management team walks around the pay plan issue. That’s all I’m gonna say, Tommy Gibbs