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Old 01-01-2018, 07:01 AM   #1
mryan55
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Default Open Floor vs. New/Used Sales Departments

Happy New Year, everyone!

i wanted to get a conversation started about opinions on having an open sales floor versus split new and used car departments. We are obviously all in somewhat different markets, and my entire career has been spent in the Midwest, so I'm just curious as to everyone else's experiences when it comes to this subject.

Until the last year I was with a pair of dealership groups that had open floors and in one case, even sales management staff that desked new and used car deals equally, both worked on used vehicle acquisition... the only thing that fell solely on my plate was ordering new vehicles. This actually worked out pretty well for us, but I imagine you have to have a strong pair of managers to not have dedicated new and used managers to make sure nobody feels butthurt at times.

Anyhow, my recent concerns are more focused on the sales staffs. I'm looking at a possible restructure of my used vehicle department going into 2018. The setup, as I inherited it in 2016 and have left with few exceptions is:

New Vehicle Department: 1 manager, 5 dedicated new sales. Average monthly volume of 55.

Used Vehicle Department: 1 manager, 2 dedicated used sales. Average monthly volume of 15.

Finance manager shared between the two departments since volume is still low -- and I will back up the finance manager as needed because of vacations, weekends, and such.

I have a sixth new car staffer starting this week. My thought is to consolidate down to an open floor -- possibly losing one of the current used car staff in the process. As I mentioned before I prefer the open floor. I think it gives a more unified experience for the customer, is easier to manage, and holds used vehicles to a higher standard. I think going to an open floor gives a good chance at increased volume on the used car side. As it stands now I worry that two veteran shortcutting used car staffers just walk customers and push around the manager we have in place.

Used car department current runs in a separate building on our property, but thinking of bringing everything down to the new car showroom since we have room for expansion and I am only stocking ~125 new at this point.

Any thoughts?
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Old 01-01-2018, 08:18 AM   #2
conn02
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One floor is the way to go, unless you are worried about VGP. Your new car guys will soon find out that Used cars are the units that make them money and you might have a switch.
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Old 01-07-2018, 06:07 PM   #3
mryan55
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I am going to give it a try this year. VGP is of course a concern but the change will really strengthen my used car department immeasurably and make us more comfortable adding to the used car inventory. We will see how it goes.
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Old 02-04-2018, 06:19 PM   #4
mryan55
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We flipped to an open floor in the 2nd week of January. So far, so good. More than doubled on January 2016 and 2017 used car performance, and new was up about 25% over January 2017 and we were about 10 units over our top VGP number. Still lots of growing to do for, but having used and new under one roof has made it a lot easier to push used cars forward -- especially since the new car staff is more apt to accept that we have to take shorter deals on used cars from time to time... compared to an 'old dog' used car staff.
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Old 02-05-2018, 03:59 PM   #5
XDCX
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I'm a bit late to this thread but think it's a great topic.

On the West Coast the vast majority of Dealerships run with the Open Floor concept for both the sales staff and management. Maybe I'm biased because Open Floor is the only thing I have experience with but I think it's the best solution from a staffing and profit standpoint.

I agree with conn02 that there's a risk that the sales staff will gravitate toward used cars because that's where the money is but that can be addressed with pay plans and other incentives. The other downside can relate to the Sales Training and Certification programs your OEM demands and how intensive they are.

From a desking standpoint, I can think of deals where a customer came in on a used car and the desk flipped them to a new car because the rebates and advance structure made it easier to get the customer out of the trade vehicle they were buried in.

In my opinion if you have the right people an Open Floor for both the sales staff and the desk is the best solution to make sure that every avenue has been explored to sell a vehicle to a prospective customer.
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