Automobile salesman
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The automobile salesman (or salesperson) is one of many sales professions. The automobile salesman is a retail salesperson, who sells new and sometimes used cars. Unlike traditional retail sales, car sales are somewhat negotiable.
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[edit] Types of automobiles salesmen
There are many types of car salespeople. The traditional car salesman is called a 'floor salesman.' A floor salesman is usually the salesperson who greets a potential buyer, and proceeds to negotiate a retail type of deal. An internet salesman provides, free of charge, quotes on an automobile, via the Internet. In this respect, and internet salesman finds lead sources via the internet, and does not solicit prospective clientele. The 'fleet manager' also sells vehicles, albeit new vehicles, for the most part. The job of a fleet manager is to sell mass quantities of cars or trucks (usually 10 or more) at a set price, and like the internet salesperson, does not deal with the general public.
[edit] Advantages
- Employee discount - employees of a car dealership are usually entitled to a 'set-rate' pricing, which is non-negotiable.
- Often no prior experience is necessary. Although many car dealerships 'prefer' experience, there are many that adhere to the doctrine of tabula rasa, as they would rather train an inexperienced individual, than 're-train' one who has been taught by another dealership.
- Low barriers of entry, high school diploma is accepted, though college degree may help. This is also dependent on the position in the dealership.
- Successful, experienced salespeople develop clients who provide business through referrals.
- Some dealerships provide "demos", or cars owned by the dealer that you can drive for your own use. Once common, now rare.
[edit] Disadvantages
- Commission typically based on lower of minimum wage or commissions on sales. If sales is too low, salesman has option of changing to another dealership, or may be fired.
- The most successful salespeople can make six figures, but many drop out after making little money.
- High turnover among both salesman and managers.[1]
- Hostile competition between salespeople in some dealerships.
- Usually work more than 40 hours a week and work weekends.
- Sales force is usually dominated by men, though many women succeed.
- Some cars are very hard to sell.
[edit] Steps of the Sale
There are many variations to these steps, such as the "eight step process":[2][3]
- Meet and Greet
- Consult about needs
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- Establish budget, wants, needs
- Qualify customer. Is s/he a shopper, buyer or just wants to test drive the Ford GT
- Choose car, get keys
- Walk around
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- Open up hood, doors, trunk
- Show unique features, such as hybrid system, turbo charger, dual batteries, ABS brake, anti-intrusion hood catch, crumple zone creases, insulation, etc.
- Demonstrate and show switches, features on dash
- Test Drive
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- Make sure parking brake is released, and all doors are closed, 4WD is not locked.
- Salesman should pull car out of parking spot, and drive car out of lot
- Exchange drivers at neutral location
- If traffic permits, have freeway available. For hybrid, a slow, level downtown can demonstrate drive on electric power. A gravel parking lot can demonstrate 4WD with locked wheels. An empty parking lot can demonstrate performance.
This is the step where the value of the vehicle is to be justified. The customer in many cases will visualize him/herslf as an owner.
- Test close (If we can get the figures agreeable..would you like to own this vehicle?)
- Go over figures
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- Manager knows cost, market conditions and profit margin. It is salesman's job to negotiate, sometimes given to experienced closer or another manager.
- Some dealerships have scripts and systems for going over financing alernatives.
- Financing often available through dealer at competitive rates, but better to shop first to establish what is competitive.
- Negotiate final deal
- Finance
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- Go over optional warranties, rustproofing etc.
- Deliver car
- Explain car features (recap of presentation going over controls and switches)
- Affix temporary licence (sometimes called a "happy tag")
- Enter trade into inventory
[edit] Terminology
Auto sales personnel have their own terminology which has evolved from the early days of car sales.
- Blue Book: The Kelley Blue Book of used car values, which tells what the market will pay for your used cars. In some cases and for some cars in some markets, dealer may pay as high as retail, though rarely.[4]
- The Tower: For Control Tower, where the sales manager sits [5]
- Green Pea: Inexperienced salesman [6]
- Puppy Dog: Car taken home on loan for evaluation [7]
- Ad car (also commonly called a "price-leader" or "loss-leader"): Car advertised in newspaper, often with a long list of special discounts that most buyers do not qualify for. May be car with unpopular combination of equipment. May be a good car that is snapped up within hours of publication. Used mainly to draw customers into the showroom. Commonly called a "loss-leader" when the advertised price is set to an unprofitable level.
- Gross: Gross profit, which some people would call "net". Elusive on most new cars which are not in high demand. Can be much higher on some used cars, but not always.
- Front-end (Front-end Gross): Refers to the profit from a car deal that a salesperson's commission is based on. Typically the "front-end" consists of the mark-up on the vehicle itself as well as dealer-installed accessories.
- Back-end (Rear-end or Back-end Gross): Refers to the profit from a car deal that a salesperson's commission is not based on. Typically the "back-end" consists of the profit made by the Finance and Insurance (F&I) department from securing financing for customers (which can usually be marked-up by the dealership) as well as selling extended warranties and insurance.
- Minimum commission (also called a "mini" or "mini-deal"): Varies from $25 to $200, a minimal commission even if calculated profit is near zero or negative.
- Flat: A set amount to be paid to a salesperson for the sale of a car regardless of the amount of profit made on the deal.
- Second Sticker (also called an "addendum sticker"): A marked up price different from the Factory sticker affixed on a window at the factory. Sometimes these are placed on all vehicles, requiring negotiation on all sales, or they are placed only on vehicles that are in high demand, such as a new class leading model. Sometimes called "ripoff charge" by customers.
- Custom order: Customer orders a car to be built with specific options rather than select one off the lot.
- Dealer trade: Salesman searches inventory of nearby dealers for suitable car, but he must usually drive to the other dealer to exchange the car.
- Laydown: Customer walks in and pays asking price.
- Upside-down (also called "Negative Equity", "buried"): Occurs when a customer's loan balance on their trade-in vehicle exceeds the trade allowance given by the dealership. Often this is a result of trading too early or frequently or driving excessively high mileage. Depending on the customer's credit, they may either elect to "roll-over" the negative equity onto their next car loan or lease (thus financing the agreed price of the new car plus the negative balance from their previous loan/lease) or simply pay the difference out-of-pocket.
- Up: A customer that has just walked in. May also be used as a verb by salespeople as in "to up someone".
- Phone-Up: A potential customer that telephones the dealership. The policy regarding the handling of phone-ups varies from dealership to dealership.
- Open Floor: A dealership policy that allows any available salesperson to "up" customers on a first-come, first-served basis. This is in contrast to having a fixed rotation.
- Turn-over (commonly abbreviated as a "T.O."): Introduce another salesperson or a manager into the sales process with a customer who may have a different approach, or better relate to a customer because of language or culture.
- Happy tag: Temporary paper license used in some states that indicates driver has just bought a new car.
- Middled out: First and last salesman on a deal split the commission. Any salesperson in between does not get a commission. Rare.
- Burning ups: Talking to and dismissing several customers in a row without giving other salesmen an opportunity to close.
- Split deal: First and last salesman on a deal get half of commission.
- Landing a customer: Finding a car customer wants to buy.
- Closer: Experienced salesperson who is brought in to close a difficult deal.
- Grinder: Either a negative or positive pejorative for a customer. In the positive sense, it can be a compliment for a tough negotiating customer. In the negative sense, it refers to a customer who spends hours haggling over (in the salesperson's eyes) a minuscule amount of money.
- Mooch: A customer that wants to purchase a vehicle at a price that is either minimally profitable or entirely unprofitable for the dealership.
- Bump(ing): Refers to either an attempt or a success at increasing a customer's offer for a vehicle.
- Spot (also called "spotting" or "spot-delivery"): Delivering a car to a customer immediately after concluding the negotiation. May not be possible in all jurisdictions depending on state laws.
- Broom(ing)or Flush(ing): also known as "Launching" To interrupt the sales process and dismiss an undesirable customer. Usually this occurs early in the salesperson-customer interaction. Salespeople are often chided by their managers if they broom too frequently or indiscriminately.
- Stiff: A customer with a poor credit score.
- Spiff: A flat bonus paid on a vehicle's sale to a salesperson on top of their normal commission. Spiffs are commonly offered either by the dealership or by the automobile's manufacturer itself.
- Spin: A variable bonus paid on a vehicle's sale to a salesperson on top of their normal commission. Usually automobile manufacturers offer spin incentives to help generate interest in new designs or for vehicles with flagging sales. As the name implies, a salesperson bonus is randomly "spun" (as if on a game-show..though usually just using a random number generator) and the salesperson is awarded a corresponding amount (depending on the cash offered, usually several hundred dollars).
- Jack: Customers who want to go over the entire process without a final commitment on a purchase. same as "stroke", "tire kicker", "Jack-off".
- Skate(ing): A salesperson that knowingly takes another salespersons customer without telling that salesperson.
- Blow out or blew out: A customer who becomes mad or aggrevated by the numbers and decides to leave. Also used if a salesperson leaves, quits, or gets fired
- Pounder: when a salesman makes a gross profit over One thousand dollars.
- Roach (also commonly referred to as a "bogue"): A person with bad credit.
[edit] In the news
- In 2007, 11 auto dealership employees in Seattle were accused of bilking a mentally ill man out of $100,000[8]
[edit] Popular Culture
The automobile salesman, particularly the used car salesman, has often been a source of characters, often negative, in movies and television shows and cartoons.
- In the Muppet Movie, Milton Berle plays Mad Man Mooney.
[edit] Notes
- ^ Motley Fool "The turnover at most dealerships is high, with the average salesman lasting only three or four months".
- ^ "said they use an "Eight-step process" for selling cars"
- ^ Automobile Sales Training and Tips From The Pros by Douglas Hensley
- ^ The Real Blue Book
- ^ He sits in a raised desk commonly known as "the tower."
- ^ [1] Edmunds confession
- ^ [2] Confession
- ^ [http://seattletimes.nwsource.com/html/localnews/2003532586_webscam19.html Seattle Times 11 auto dealership employees accused of bilking mentally ill man out of $100,000 By Jennifer Sullivan]
