Automobile salesperson (United States)

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The automobile salesperson (or salesman) is one of many sales professions. The automobile salesperson is a retail salesperson, who sells new and/or used cars. Unlike traditional retail sales, car sales are usually negotiable. This article pertains mostly to salespeople who are employed by new car dealerships. Other salespeople can be found at used car lots, where the sales dynamics, career outlook, and terminology may be different.

1 Types of salespeople
2 Negotiation
3 Career advantages
4 Disadvantages
5 Steps of the sale
6 Terminology
7 In the news
8 Popular culture
9 Notes
10 External links

[edit] Types of salespeople

A salesperson negotiates deals with private buyers and corporate buyers who represent small businesses. An internet salesman or manager may handle advertising and leads that come through the internet, or distribute leads to floor salesmen. The fleet manager markets to corporate or institutional customers who buy several vehicles at a time at a discounted, set price, and does not deal with the general public. A closer is often a senior salesman who assists in negotiation. The floor manager sits in an office which usually has a sales board listing appointments and recent sales activity by salesman. The salesman brings offers to the manager who can accept or make counter offers. The manager makes decisions as to what final negotiated prices will make business sense under current market conditions.

[edit] Negotiation

The price of a car, unlike many retail sales, is often negotiable. New cars will have a factory window sticker called a "Monroney" listing equipment and options, and the suggested retail price. A second window sticker is sometimes used which lists dealer-added equipment and any additional markup. Some scarce popular models may readily sell for prices above suggested retail, while some dealers claim that they are friendly by not having any second stickers. Few buyers will pay the asking price without negotiation. The dealer will rarely sell a car at a price near or below the cost charged by the manufacturer, or paid for the used vehicle. The salesman is paid a commission, rarely a fixed salary but usually based a percentage of profit, so a deeply discounted price results in a very low commission for the salesman, some of whom may sell fewer than a dozen cars a month. Some buyers are limited by the monthly payment they can afford, others are limited by the total price of the vehicle. Depending on circumstances, a lease arrangement will provide a better car for a given monthly payment, or may provide tax advantages compared to paying interest on a loan and taking depreciation into consideration. In such a case, the salesperson proceeds to explain the leasing options to the customer.

[edit] Career advantages

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 growth potential. High school diploma is accepted, though college degree may help. This is also dependent on the position in the dealership. Some dealership owners have started as salesmen.
Employee discount - employees of a car dealership are usually entitled to a 'set-rate' pricing, which is non-negotiable.
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 are too low, salesman have option of changing to another dealership, or may be fired for lack of sales if s/he only earns minimum wage.
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.
Turnover in the industry is very high and most do not last more than 6 months.

[edit] Steps of the sale

There are many variations to these steps, such as the "eight step process":^[2]

Meet and Greet
Determine "wants & needs"
- Establish budget, wants, needs
- Qualify customer. Is s/he a shopper, buyer or just wants to test drive the vehicle?
Choose car, get keys
Walk around
- 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
- 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/herself as an owner.

Test close (If we can get the figures agreeable...would you like to own this vehicle?)
Go over figures
- 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 alternatives.
- Financing often available through dealer at competitive rates, but better to shop first to establish what is competitive.
Negotiate final deal
Finance

Go over optional warranties, rustproofing etc.

Deliver car
Explain car features (recap of presentation going over controls and switches)
Affix temporary license
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.^[3]. In some cases, dealer auction history reports are given more weight because it tells a dealer what they could buy a similar vehicle for or what they could at least get for it by auctioning it off if it doesn't get sold on the lot.
Dealer Invoice: A sheet of paper itemizing distinguishing features of the vehicle and the price paid by the dealer (without rebates or holdback.) Sometimes "Invoice Sales" are done where the vehicle invoices are openly displayed for all the customers to see.
The Tower or The Desk: For Control Tower, where the sales manager sits^[4]
Green Pea: Inexperienced salesman^[5]. Dealerships like to hire green peas because most new car customers like working with them. They have a more innocent, easygoing personality and customers feel they are too new to hurt them.
Puppy Dog; Dehorsed: Car taken home on loan for evaluation^[6]. Like a stray puppy, when you take it home for one night you don't want to give it back.
Conditional Sale or Temping a customer: selling and delivering a car to someone with borderline credit on the condition that the finance department is able to get them approved later while calling the banks and asking for exceptions or favors. If not approved, at least the customer was taken out of their current vehicle and off the market so that the salesperson is able to sell them a different, newer car the bank will be able to approve them on when the customer comes back.
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 or stripped down with a manual transmission, no air conditioning, no radio, or power windows. 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. Salespeople are typically paid a percent of the gross as commission.
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 per car even if the calculated gross profit is near zero or negative.
Flat: A separate way of paying commission different from paying a percentage of the gross profit. A salesperson is paid a set amount per sold car regardless of the amount of profit made on the deal. The flat commission typically increases with the volume (amount of cars) the salesperson has sold that month.
Draw: A minimum amount of pay (usually minimum wage) the salesperson is paid if they don't make any commission. This non-commission pay is usually paid back the dealer with future commissions.
The D List: A list of people not making their draw in commission that is kept an eye on.
Second Sticker (also called an "addendum sticker" or "bump 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. Salesman is not paid until vehicle is delivered.
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.
Salisbury: A Salesman who climbs on deals to make a living, gets kinky when hungry
Upside-down (also called "Negative Equity", "buried", "tanked", "flipped"): 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: Unsolicited Prospect. A customer that has just walked in. May also be used as a verb by salespeople as in "to up someone".
Phone-Up; Phone Pop: 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.
In-Transit; Happy tag: Temporary paper license used in some states that indicates driver has just bought a new car. Also known as a TRIP Sticker.
Middled out: First and last salesman on a deal split the commission. Any salesperson in between does not get a commission. Often a point of contention and hard feelings between salespersons.
Burning ups: Talking to and dismissing several customers in a row without giving other salesmen an opportunity to close.
Spinning ups: When a customer quickly spins onto the lot and off the lot without the salesperson slowing them down, getting their name and contact information, finding out what they want, and proceeding with the sales process.
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 or Turd: A customer with a poor credit score. Salespeople come across many of these people since they often go from dealership to dealership trying just to get approved for a car. Salespeople try to spot these people early so they don't waste too much time and effort selling a vehicle they may not get approved for.
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 traditionally was 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).
Stroker: Customers who want to go over the entire process without a final commitment on a purchase. same as "tire-kicker", "Jack-off", "Jack". Also someone who test drives cars with no intent to purchase them. Entering a dealership and asking to drive multiple vehicles gets one labeled as a stroker immediately.
Skate(ing): A salesperson that knowingly takes another salespersons customer without telling that salesperson.
Snake: A salesperson with a reputation of "skating" deals from other salespeople or just simply a salesperson that is not to be trusted.
Blow out or blew out: A customer who becomes mad or aggravated by the numbers and decides to leave. Also used if a salesperson leaves, quits, or gets fired
Pounder/younder: when a salesman makes a gross profit over One thousand dollars (ie 4 pounder would be a four thousand dollar profit.)
Roach (also commonly referred to as a "bogue," stiff, or turd): A person with bad credit.
Bogue: a person with Bad Credit or literally a "bogus" customer.
Flood the Floor: a dealership practice of hiring extra salesmen causing each salesman to receive fewer ups and hence fewer commission dollars.
Buying the toaster: Mentally or physically spending a commission earned on a vehicle before the deal has posted (been approved by the bank and paid to the salesperson. Can backfire when deal falls through leading to the phrase "Don't buy the toaster"
Cream puff or Cherry: A used vehicle that is in great condition with low miles that would be easy for a salesman to sell.
Unwind: A deal that falls apart after the delivery of the vehicle has taken place so that the customer must return the new vehicle to the dealership.
Spoon: A deal handed out normally by a manager where the deal is either already done and just has to be delivered or is a sure fire sale.
On top; Front-End: Being the first person on a split deal. On a new car would be the person to receive the manufacturer "spin".
The Desk: Another term for where the sales manager or "Desk manager" would sit.
Bells: Also known as "bell to bell". Normally associated with the practice of management making salespeople work open to close with no days off for the remainder of a month due to low sales for the dealership that month. Can be common-practice in some dealerships whether sales or low or not towards the end of a month.
Blacked-out; Twisted: When a salesperson is depressed to the point of not being able to sell cars because of a bad run of customers. Can be used as a verb "to black somebody out" when other salespeople deliberately try to destroy a salesmans morale for their own benefit. Either to make them quit and increase their own number of potential "ups" or for various other reasons. Also, "ratted out."
House deal: A deal that is not attributed to any salesperson that still counts towards the monthly totals. Employee deals and deals worked by managers for friends or family would be examples.
House mouse; Spoon Fed: A salesperson that would be the favorite of the sales managers and is "spooned" all of the "house deals" giving them an inflated number of sales per month.
Pencil: The payments sent down with the salesperson to present to the customer. Commonly structured sequentially ie "First Pencil", "Second Pencil" etc as the deal is negotiated between the sales manager through the salesperson to the customer. "Laying down first pencil" would be when a customer agrees to the first payments or price presented by the salesperson.
Be-back: A customer who returns to the dealership for a second or third time over a period of time.
BDC: Short for Business Development Center also known as "the dungeon" or "chicken coop" in the back of the dealership where salespeople telemarket relentlessly to make sales appointments in an effort make up for a lack of customers at the dealership.
Holdback: Money the manufacturer pays back the dealership for each new vehicle sold, usually 2%-3% of the MSRP or invoice (depending on the manufacturer), to reimburse the dealership for certain expenses (salesperson commission, interest accrued on vehicle loan, etc). This tactic inflates the invoice price and lowers salespeople's commission. This is not the same as rebates, which are openly advertised reimbursements.
Pack: An amount of money the dealership itself takes out of the gross profit on every sale (usually used car sales) to reimburse a specific cost of theirs. It lowers the salesperson's commission and drives the prices of the dealership's vehicles up.
Hammering a Customer: Selling a car to an unsuspecting customer for several thousand more than they could've bought it for (called a "four-pounder" or "five-pounder") to land a much higher commission. Sometimes done on the back-end too with aftermarket items and padded interest rates. Often a cause for loss of sleep or job resignation for new green pea salespeople.
Part-timer: a snickering comment made to a salesperson who only works the minimum 40 or so hours per week, since most successful salespeople work a lot of extra hours.
Puke: close a deal by giving discounts to a customer.
Flop; Boxed: when a customer makes a purchase
Get-me-done: also, G.M.D.; a customer who is more interested in financing approval than details like price, payment, or car.
Rat: An automobile, particularly one in poor condition.
Pancake: customer's shocked reaction to bad news such as high price, low trade value, etc. (liken to "hitting the ceiling")
Home run: a very profitable transaction for the dealership and/or salesperson
Mind Salad; Brain Damage: a deal being worked with a customer that is unlikely to be consummated into a finalized sale.

[edit] In the news

In 2007, 11 auto dealership employees in Seattle were accused of milking a mentally ill man out of $100,000^[7]

[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.