Topic: Re: Etching and Nitrogen Fees

[johngenx]

I had a chance to chat with Peter Pocklington was back when he was in the car business.  He explained that the dealer didn't generate a lot of cash.  What it did do was give him an operation that allowed him to take up a bunch of real estate right at the edge of a growing city.  Eventually, the land appreciation was massive.  He folded the dealership, and made a killing on the land.  His ROI on the entire venture ended up north of 20% annualized.  Would I do that?  Nope.  A business needs to stand on it's own.

[tooscoops]

the shoes are funny... if you go to nike.com, i believe you get sent to sport check to buy things. which, yep.. same price. nike themselves DO NOT determine the price. and you can return shoes. i wonder how many shoes get returned for being the wrong size...

i totally get comparing prices. in these days, it makes sense. but i will still pay a premium for the proximity of the store (i see the value in using the store i purchase at as my service station), the comfort of the dealership and perhaps the actual stock of the correct vehicle so i can see/touch/drive it. i'm not sure i see where that has much to do with sales staff though.

[toolatecrew]

I had a chance to chat with Peter Pocklington was back when he was in the car business.  He explained that the dealer didn't generate a lot of cash.  What it did do was give him an operation that allowed him to take up a bunch of real estate right at the edge of a growing city.  Eventually, the land appreciation was massive.  He folded the dealership, and made a killing on the land.  His ROI on the entire venture ended up north of 20% annualized.  Would I do that?  Nope.  A business needs to stand on it's own.

Many dealers I deal with:

The actual profit on sales of new cars is a drop in the bucket.
Sales of "auxiliary products" like rustproof warranty etc that have massive markup are a bigger part of profit.
The recurring service business that results from new car sales a huge part of the profit
Many operate large body shops that are fed from their group of dealers and that's another big source.

A new car sale is one transaction. If people being their car back to the selling dealer for service even while just in warranty its probably 20 repeat transactions. If you get in an accident you have a great chance of getting the job back into your shop as people feel comfort in returing to "their dealer".

In many ways new car sales is like selling those razor blade holders..the ones that come with a handle and two blades of $5.  They may make next to nothing on that $5 pack. But if you keep buying the $20 5 pack replacement blades month after month to fit that handle you make a lot of money. Same thing with Sony selling PS3 consoles essentially at a loss. The real money is after sales support.

[toolatecrew]

the shoes are funny... if you go to nike.com, i believe you get sent to sport check to buy things. which, yep.. same price. nike themselves DO NOT determine the price. and you can return shoes. i wonder how many shoes get returned for being the wrong size...

i totally get comparing prices. in these days, it makes sense. but i will still pay a premium for the proximity of the store (i see the value in using the store i purchase at as my service station), the comfort of the dealership and perhaps the actual stock of the correct vehicle so i can see/touch/drive it. i'm not sure i see where that has much to do with sales staff though.

I pulled mike.com out of the air.

My bad. How about http://www.shoeme.ca/ :-)

[tooscoops]

fair enough!

also forgot your question, people would prefer i don't desk my own deals, but i do on occasion if it is necessary.

i find this is a smaller store.. that happy medium.. where we sell enough to get away with selling a few losses to get new business, but small enough to actually work a deal for the individual. only issue is that every employee has to wear a lot of hats... luckily, i've been trained in every department and have a history in finance so i can handle most of it.

and you are spot on with the profitability in sales... which is why i always find it funny... people will fight tooth and nail over a skinny 500 profit deal on a 20000 car for that last 100... then they proceed to hand over thousands of (profit) dollars to them later... ah well.

[rrocket]

I've never met a salesman who knew more about his product (cars) than me. Ever.

They are indeed useless.

[Noto]

just to "shed light"... our dealership is small... in fact AP, you have seen it, so i'll let you judge its size. it's not a tiny country lot

we sell roughly 40 cars a month new, and maybe 20 used during good months. usually 40-70 in total avg. assume a 1200 profit on each... because yes.. we do lose on some.. both new and used. but we also get 3000 on some.  (that's total profit on the car including admins, etc.)

1.5 million in sales to make under a hundred grand. before costs/overhead.

Thanks, tooscoops - I knew I was off with the number of vehicles moved.  Hell, I almost never see a deal-in-progress when I walk into a dealership (which is kind of why I strut into dealerships as if I'm 'the sh!t' when I do intend on buying, because all focus should be on ME ME ME!!!).

I suspect that dealerships vary in their success based on a bunch of factors.  I can't speak for dealerships in general because the front-lines are the salesmen and women.  I don't disagree about paying for value-added services, but when I deal with the idiots (of which tooscoops is the opposite, I'm assuming ), it makes me wish for the ability to purchase a car online.  Idiotic things like failing to listen to a customer, failing to be realistic, and failing to show me that you care about your products.

I had one salesman admit that he was relatively new, in a Toyota dealership that, at the time, had a lineup of 27 vehicles with countless trims available, plus dealer-installed accessories.  So, yes, I did know more than he did, but he at least had a hand-written cheat sheet.  He didn't bring the brochure with, he brought very intricate details.  I think that's fair and he did work very hard for us.  That person was, indeed, Philip, and he did get our purchase.  He listened to us.  The general manager said "NO" to our request for a trunk mat.  Philip said to him "come down here and talk to them.  They want to buy, but this trunk mat remains an issue.  Let's talk it out."  The GM came down, listened to us, and we got what we wanted and the GM made a sale for similar money to what he was expecting to let a Corolla go for.  Philip worked for us.  He was a good guy.  He deserved WAY more than $250 for an admin fee (not that he gets to pocket it, no matter what the profit was - we didn't pay an admin fee at all).

I testdrove the Fusion Hybrid when it first came out in 2009 (as a 2010).  The salesman took 30 minutes to locate the keys, got us into one that had never yet been filled - and promptly stalled, and took another 20 minutes to get us into one that did have gas.  He didn't know a thing about its specs.  He didn't try.  He said "I'll give you a brochure and you can figure it out."  It's morons like him that hurt the dealership experience.  It's morons like him that give 'admin fees' a bad name.

All, let's give tooscoops a break here - not everyone is that same moron who I refer to in this post.

[blotter]

Good examples NoTo,

it's fair to say most of us should have similar examples.

I've had great service and people who really worked hard to make me happy and total tools.. 

One particular tool was a Subaru sales person.   The sad part is I was a Subaru owner who wanted another Subaru.  I had a good relationship with Service but this sales guy just blew it all.

I'm always honest in terms of what I'm comparing and nothing, absolutely nothing pisses me off more than a sales person saying, well brand A or car B sucks... this is way better.   
Not only did I have to stop the guy from talking and say, don't tell me why your competition sucks, tell me why you're car is BETTER.    That was strike one.    Strike two was trying to sell me a car I didn't ask about.   I'm looking at the Outback, he says hey check out this cool Forester demo that's been lowered with aftermarket rims....... ya, no thanks.   Strike 3... oh you can take the car for the weekend (since you're wife needs to see it) yup, yup....... oh let me talk to my manager.    Oh, I need you to put and $1000 deposit and sign if you want to take it home.     

sadly, Subaru lost a sale because of one crappy sales guy.  But it wasn't just a sale.  It was all my service business too. 

[Noto]

sadly, Subaru lost a sale because of one crappy sales guy.  But it wasn't just a sale.  It was all my service business too.

Hilariously enough, when Lady Noto and I test drove the '14 Forester, the salesman wasn't particularly smart and, whether flirting or something else, consistently mocked and teased her.  We left promptly, without trading in our Forester, and I wrote a very, VERY strongly worded letter (on my firm's letterhead ) to the GM.

...and then from the same guy, I helped my brother buy his Crosstrek.  Go figure.  I'm too forgiving.

[Northernridge]

I acknowledge the potential for awful service from a sales person but if I have my mind set on a make/model no way I'd let some d-bag prevent me from getting the car I want...I'd go to another city if I had to. I've concluded that the onus is on me to lead the process and it's worked out pretty good...never had to leave in a huff.

[johngenx]

I'd go to another city if I had to.

Bought my C230 in Calgary.

[blotter]

..I'd go to another city if I had to

almost did.   Problem was the local dealership had folded so I'd been dealing with the next one which was 45 minutes out of town.    Going to the next dealership would push that drive to an hour.
That's a far drive for service or warranty issues.

[Noto]

I acknowledge the potential for awful service from a sales person but if I have my mind set on a make/model no way I'd let some d-bag prevent me from getting the car I want...I'd go to another city if I had to. I've concluded that the onus is on me to lead the process and it's worked out pretty good...never had to leave in a huff.

Oh, I agree - but I didn't NEED a car.  I just like upgrading.  The salesperson could have pushed me over the edge to grab a new model, but instead he prompted me to buy out my lease and not consider a new Subaru for quite some time (unless it's a second car...hmm, WRX for Noto?  ...back to this again?)

[blur911]

I'd go to another city if I had to.

Bought my C230 in Calgary.

A friend just did that, they wanted a Versa with a 5-speed,  Tony Graham Nissan in Ottawa told them there were no manuals anywhere in Ontario or Quebec, tried to sell them everything else they had on the lot and  kept them on the line for a week.   

Then, they contacted the Kingston Nissan dealer who found 6 cars in the area and got one in a few days for them.

Don't believe what any dealer (not just cars) tells you about availability of product, call around.

[johngenx]

Both dealers in Edmonton basically refused to sell me a car.  Hyatt Auto Gallery in Calgary was amazing.  Shameless plug.

[blotter]

I'd go to another city if I had to.

Bought my C230 in Calgary.

A friend just did that, they wanted a Versa with a 5-speed,  Tony Graham Nissan in Ottawa told them there were no manuals anywhere in Ontario or Quebec, tried to sell them everything else they had on the lot and  kept them on the line for a week.   

Then, they contacted the Kingston Nissan dealer who found 6 cars in the area and got one in a few days for them.

Don't believe what any dealer (not just cars) tells you about availability of product, call around.

my wife wanted a very specific trim and colour combo for her Fiat.
at the first signing the sales guy said it shouldn't be a problem getting the car (they didn't have it)
he called two days later saying he couldn't get one.   Offered a slightly better discount on any alternate colour.   

My wife freaked out!!!!!   Told him "YOU SAID..."  (I actually felt bad for the guy)
they ended up having to get the car in Montreal.

[Noto]

Similar to my brother's Crosstrek.

"For sure we can get one in Black."

*ring ring* "How's grey?"

"da fuk?  NO, I said BLACK."

"Tangerine?"

"Excuse me, Sir, but you're crossing the line."

"well, we can get you a black one, but it'll be 5 months."

"I told you I'm moving to a different city in 3 weeks.  You said Black, in the dealership, NEXT WEEK."

"yeah, but..."

"oh, I'm telling my mom!"

....and so our mother walked into the dealership every day, had a coffee, and bugged the GM until he did a daily search to find a Black Crosstrek.

...fast forward 6 days, "Mrs. Noto's Mom, you win.  There's one on a train from Vancouver, it'll arrive in 4 days, it's his.  While it's been a 'pleasure' having you in here, we're running out of coffee."

[Northernridge]

^^I've always been skeptical about a dealer's enthusiasm for finding me the car I want at another store. I've thought that the better choice (unless I'm factory ordering) is to just go find it myself. I have no evidence but have assumed it would cost me more than buying a unit out of inventory.

[Noto]

^^I've always been skeptical about a dealer's enthusiasm for finding me the car I want at another store. I've thought that the better choice (unless I'm factory ordering) is to just go find it myself. I have no evidence but have assumed it would cost me more than buying a unit out of inventory.

I think you're very correct on that one, but how does one find that out?  Is there public access to city-wide inventory, or you check each dealer's inventory stock on its website?

...doesn't tell you if the car you want is en route though.

[tooscoops]

the only way is pretty much to be there in person to tell... i've had too many customers get screwed by toronto dealers saying they have it in stock on the phone only to have it "sold just that morning" bv the time they get there...

the system dealers use to locate vehicles is WAAAY better than the other systems as it's updated with sales numbers to the factory. the problem is that not all dealers will trade with all other dealers.

i have lost two sales in the last month due to the other dealership not being willing to trade me the particular car i'm looking for. in both cases, i spent a few days attempting to sell other options/colours, but after enough of that, i realized how set they were, so i told them where it was. they went and bought it there. it happens. as a salesperson, i owe it to me and my dealership to at least try and keep the deal together... but at a certain point, you are just going to have a customer with a car they will always feel was a second choice.

in the end, "sorry there are none out there" can mean;
       there are none out there at all
       there are none out there close enough in distance
       there are none out there at dealers who will work with us
       there are none out there that i want to sell you (take what's on our lot)
       i didn't even look because what you want doesn't exist
       i didn't even look because i'm lazy

i'm sure there are others... but those are the primary ones... although i like to think i'm a decent sales guy, i'm not gonna lie.. i've probably used all of them at some point in the last 15 years.