Welcome to Nightly Affair with Trumpy Bear, a series in which Trumpy Bear, America’s most fearless plush bear with blonde hair and a red tie, ponders automotive topics, usually very late at night.
An issue I’ve noticed across the automotive industry is dealerships paying their employees on commission alone. Though there is a “draw” ($1,500 or so per month) if that amount isn’t met with commissions, it still seems problematic.
I understand the idea of working hard to sell, but a commission plan seems to cause more issues than help. First of all, salespeople will seem more desperate to sell than if they had a base pay or a salary. Salespeople will be more inclined to offer services that may be a waste to customers in order to make extra money. This also creates salespeople that are agitated because a customer is “wasting their time.” The dealership is the best place to go to see new inventory; if a customer wants to spend four hours checking out the cars updated for 2021, a salesperson should be glad to help instead of thinking of the customer as a waste. If there was a pay already attached, this time spent with the customer would be far from a waste. Rapport could be built, and if that customer wanted to buy in the future, they’d be more likely to come back to the guy who spent four hours showing them the cars.
A big factor, too, is the inability to close and customers who can’t buy. Especially in low credit areas, it’s hard to get an approval. Following the selling process, staying in touch, and building potential rapport with these low-credit customers may seem ridiculous if you’re straight commission, but it’d be valuable if you’re already paid. They may have a 400 now and $0 down, but six months away, they may have a 500 and $5,000 down. They could also be connected to a customer with a 700. If a low-credit customer is treated poorly and complains to their high-credit friends, these well-qualified customers may not buy from you.
Finally, the job market is tight. Getting a job is great, and it’s better to know that it’s financially secure. Even something small like $10/hour says “I came in, I called some people, I followed up with customers, and I followed the process with some showroom ups who couldn’t buy. No sales, unfortunately, but I’m walking out today with $80 instead of $0.” Though the commission creates an incentive to work harder, it also creates a problematic mindset. If dealerships have money to pay $500 commissions for sales, why can’t they just pay $300 for the commission and convert that $200 to a base pay? It may sound socialist to some, but even the easiest people take some time to close.
Back in my job search again, I’m glad that most of the inside sales jobs I’m finding have a base pay with commission. This is how car sales should be, and I believe the experience as a seller and a customer would be better without straight commission.
What are your thoughts?