Ford dealers review commissions scheme for smaller cars

Article by Christian A., on February 9, 2011

Salespeople receive small commissions when they sell the Fiesta subcompact and the 2012 Focus compact (which are due in March), which is why many Ford Motor Co. dealers are rethinking compensation plans to keep salespeople motivated to sell them. Ford’s salespeople actually prefer to sell pickups and SUVs, which offer bigger commissions.

They need to be persuaded by Ford and dealers not to ignore the smaller cars. Ford is relying on these cars to reel in the younger buyers and to help widen market share in traditional import strongholds on the coasts.

According to dealers, the typical margin on a truck could go higher than $1,700 while the profit margin on a subcompact such as the Fiesta is only about $300. This means that most salespeople earn about $75 on the sale of a small car but they get hundreds on pickup and SUV sales.

Beau Boeckmann, vice president of Galpin Motors in Los Angeles, said that salespeople have to be “really good…to make an average living.” Boeckmann says that he lost some good salespeople due to shrinking commissions.

Recently, Galpin began sales contests based on customer satisfaction just so that it can supplement those commissions.

Galpin has also started what Boeckmann calls “volume bonuses,” which are paid to those salespeople who sell a certain number of new vehicles. The program allows salespeople to earn extra money even when selling small cars. [via autonews - sub. required]

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