Accessories / To Pre-Load or NOT to Pre-load

[FixedOpsGuy]

Accessories / To Pre-Load or NOT to Pre-load

Does your dealership pre-load accessories on new vehicles that are in inventory or does your store wait to install accessories based on what the customer ultimately purchases?

What are the "pros and cons" and what's worked best in your experience?

Originally Posted by shwngo

This is what Kia is "asking" us to do as well. Mud guards or whatever on every car or at minimum 20% of what we are selling..

I was going to create a new thread but found this old one that happens to touch on the same concerns. This IS A HOT topic at every dealer in the nation at one time or another. "To Pre-Load" OR "NOT to Pre-load" and then, decide if you will order the accessories from the FACTORY or perform "In-house".

This is not only a HOT topic, but it's also deep rooted in the culture of many sales managers, GM's, and of course F&I managers.

Depending on XDCX thoughts... please convert to a new thread depending on if you think more "hits" to this page will happen or not.

I would like to know what each dealer is doing about the accessory topic. And, more importantly... WHY? Why is it the culture at your store?

Here are my quick thoughts.... plain and simple:

First, a GREAT sales manager is confident that his team will not only sell the oldest unit on the lot, but will also make superior gross on that unit. That being said, he/she is also confident that they can train the sales staff to sell... anything, they are confident of their product knowledge, confident of the F&I products, the process, the menu, any everything else.
Second, a GREAT sales manager is also eager to make the TEAM win, and understands that each department can contribute to more gross for the dealership above and beyond the front and back money of a deal.

And, A GREAT dealer installs most of their own accessories, holds gross in parts and labor. Books the parts and labor out either at a discount to sales or at full retail. Has a spiff/rewards program in place for the sales staff to promote accessories. Pre-loads a percentage of units with accessories. And, the F&I manager is so confident in his sales skills that he/she never lets an accessory sale deter him from additional gross in F&I.

What is your store's process and why?

Thanks!!!!

[XDCX]

Originally Posted by FixedOpsGuy

Depending on XDCX thoughts... please convert to a new thread depending on if you think more "hits" to this page will happen or not.

I'm tight on time at the moment but I'll create a new thread and feature it on the home page as soon as I get a chance. I think it's a great topic and I'd be curious to hear what other dealers do when it comes to pre-loading accessories.

[XDCX]

I finally got a chance to create a new thread for this topic and listed it as a Featured Thread.

[zep33]

Funny how this would be brought up today. Our GSM also buys aftermarket accessories and ships the vehicles down the street cutting both service and parts completely out of the equation. No amount of my complaining has changed anything.

Only real factory accessories going on things here are the LPO items the sales department orders when they order the vehicle.



A few years ago, I recommended we dress up a truck and park it in the showroom. I ordered everything, we installed it all - chrome mirror covers, bug guard, chrome tail pipe tip, toolbox, wheels and tires, chrome door handles, chrome gas tank door and maybe a few other things - pretty much anything that was available.

The truck sold in 2 days. Guy didn't want the toolbox and wheels but everything else he wanted. Sales made $, service made $ and parts made $ - just the way it should be.

Could never get cooperation again to do it. I brought it up again and again and then about a year ago, i brought it again in a manager's meeting and the new GSM shot the idea down immediately with some bull**** excuse that a truck is too big for the showroom and he couldn't see the whole showroom from his office if a truck was parked there - yeah he really said that.

Fast foward about 8 months and dealership has a consultant here (first to improve sales and has now moved on to service and parts) Our first meeting, he asked for some ideas to increase parts sales. My first answer was accessory sales and threw out the idea of dressing up another truck. Of course he thought it was a great idea. He wanted to see it done and once again, shot down in flames. Even with a paid consultant wanting it done, still nothing. I was given the option of accessorizing a truck and parking it out in the lot if I want to. That's how it was left.

I, and anyone else with common sense, need the truck in the showroom to not only be seen by the potential buyer but any one else walking around in there to see what kind of things they can add to their own truck.

Oh well, to make a long story short, we don't sell **** for accessories and until we finally get around to redoing the dealership the GM way, I don't have anywhere to display anything.

[FixedOpsGuy]

Originally Posted by zep33

Funny how this would be brought up today. Our GSM also buys aftermarket accessories and ships the vehicles down the street cutting both service and parts completely out of the equation. No amount of my complaining has changed anything.

.

It sounds like you have some serious concerns there... And, you have some deep rooted beliefs inside your sales managers.

I'm sure that if you do some undercover work, you may find that the accessory installation vendor that your dealer uses may be offering rebate checks to either your sales managers, sales staff, or dealer principles. If it's the Dealer Principle, then there's nothing you can do... he made the business decision. But, IF THERE ARE REBATE CHECKS, I can't imagine that the value of the rebate out-weighs the net profit made from parts and service by becoming self-sufficient and installing your own accessories.

The reason I mention these rebate checks is because I have had a version of this scenario play out may times. Typically, it's the sales staff that receives a spiff check for every referral to the aftermarket installer, and the sales manager gets an over-ride at the end of the month.

Be careful even asking about if these rebate checks exist...

Good Luck and tread lightly.

OK... enough of that....

If I were you, create a business plan and present it to the GM/DP...
A true business plan with samples, net per unit, net per month...
Additional hours generated in the shop, additional gross, parts and service.

And, make sure you touch on the fact that parts may not have these in stock... so, make sure you have a game plan for parts expediting.

[mryan55]

I am always one to shy away from pre-loading accessories on stock units. If you're a dealer with any amount of fleet business and might have a take a net deal and reinvoice and unit and all, the something as minute as a $140 cost window tint or splash guard on a truck might be the difference between staying just positive or just negative in terms of gross.

Or if it's a more expensive item like wheels or tires you may end up swapping them around countless times before you actually sell them. I have been there, done that before, and it was on some stupid wheels that nobody but service made a penny on for swapping them 10 times. Haha.

[zep33]

Originally Posted by FixedOpsGuy

It sounds like you have some serious concerns there... And, you have some deep rooted beliefs inside your sales managers.

I'm sure that if you do some undercover work, you may find that the accessory installation vendor that your dealer uses may be offering rebate checks to either your sales managers, sales staff, or dealer principles. If it's the Dealer Principle, then there's nothing you can do... he made the business decision. But, IF THERE ARE REBATE CHECKS, I can't imagine that the value of the rebate out-weighs the net profit made from parts and service by becoming self-sufficient and installing your own accessories.

The reason I mention these rebate checks is because I have had a version of this scenario play out may times. Typically, it's the sales staff that receives a spiff check for every referral to the aftermarket installer, and the sales manager gets an over-ride at the end of the month.

Be careful even asking about if these rebate checks exist...

Good Luck and tread lightly.

OK... enough of that....

If I were you, create a business plan and present it to the GM/DP...
A true business plan with samples, net per unit, net per month...
Additional hours generated in the shop, additional gross, parts and service.

And, make sure you touch on the fact that parts may not have these in stock... so, make sure you have a game plan for parts expediting.

I have no doubt that takes place in some form or another. I know the ADI spiffs the hell out of salepeople. I get the monthly newsletter announcing the spiffs. It's no wonder I get 8-10 sets of sidesteps in a month that parts has to acknowledge, store and handle for free.

[FixedOpsGuy]

Originally Posted by zep33

I have no doubt that takes place in some form or another. I know the ADI spiffs the hell out of salepeople. I get the monthly newsletter announcing the spiffs. It's no wonder I get 8-10 sets of sidesteps in a month that parts has to acknowledge, store and handle for free.

I know that the majority of members on this site are front-end... And, if you have a program similiar to the one I mentioned below, then I am sure that a business decision was made that warrants using on outside company to provide accessories as well as installation.

I was sitting in bed last night thinking of a solid reason why a dealership would choose to use an outside company to perform those tasks. I could really only think of a couple... The sales staff has lost faith in the service and parts depts ability to provide timely service... and, the only other solid reason... the service department is at full capacity and bringing in any extra work would put the entire dispatch area in a mess.

Since the second logical reason, "the shop is too busy", is not a concern at the majority of dealers, I would have to say that option number one, "lost faith in the fixed ops dept" is the only viable answer.

If I am stepping on toes mentioning spiffs and reward programs through our member base... I am sorry. But, I am sure that if the front-end and the back-end of the store got together and committed themselves... additional gross for all departments would be greatly enhanced.

[zep33]

Not really the case at all - he wants everything basically at cost is what it comes down to. I know for a fact he tried/did the same thing at his last job. Nothing had a markup higher than $50 no matter what it was where he came from. He bragged about that quite a bit when he came here. DP said no way. One trick he told me the parts department "pulled" on him was sell wheels individually at a $50 markup each instead of $50 for the whole set.

Another example was a set of mouldings he ordered for a truck from his old dealership. They were delivered to us unknown that they were coming. I got the stock # and billed them out. A week later he barged into parts, accused me of gouging him that those mouldings were a set and not individual. It wasn't the case. They were sold individually to us and were billed out per company policy. Perhaps he should have left it to us to take care of if he didn't know what he was ordering. I'm sure if they weren't delivered to parts, I never would have even heard about it or made a dime.

It's just not a 2 way street here. When someone is only concerned with their own department instead of the whole picture, these things happen

[lsx only]

I pre load step bars on just about all 4x4 trucks with lpo's it works for us and my shop tech loves the extra labor.

[zep33]

Originally Posted by FixedOpsGuy

I was sitting in bed last night thinking of a solid reason why a dealership would choose to use an outside company to perform those tasks. I could really only think of a couple... The sales staff has lost faith in the service and parts depts ability to provide timely service... and, the only other solid reason... the service department is at full capacity and bringing in any extra work would put the entire dispatch area in a mess.

Since the second logical reason, "the shop is too busy", is not a concern at the majority of dealers, I would have to say that option number one, "lost faith in the fixed ops dept" is the only viable answer.

Please don't forget the other logical reason. If he can get a set of sidesteps installed outside for $500 and only add $500 to the bottom line versus paying $450 to parts and $100 to put them on, he's of the mindset that he's saving $50. But parts would have made about $50 and service would have made $50-75. That's a win-win but until someone puts the 2 plus 2 together, it's just not going to happen.

There was a great post over on dealersedge on this subject a few years ago that I printed and gave to the DP. It explained the whole reason why things should be kept in house with several excellent examples. He acknowledged it, agreed with it but never followed through with it.

[zep33]

FixedOpsGuy - One more thing to add. I think your scenario likely happened to him at other dealerships and he came here with a preconcieved notion that "they're all the same." I can assure you it's not the case here. This department doesn't screw anybody. Retail, wholesale, internal or anyone else. I/we treat everybody fairly and equally but as earlier stated, it is a 2 way street.

I'm not claiming you are claiming that but just throwing it out there

[steve_biegler]

Easiest fix is to have the Dealer Principal pay EVERYONE on the store net bottom line......no more dept. infighting. He just needs to have the testicular fortitude to show the financial statement to everyone. Does not happen often.

[FixedOpsGuy]

Originally Posted by steve_biegler

Easiest fix is to have the Dealer Principal pay EVERYONE on the store net bottom line......no more dept. infighting. He just needs to have the testicular fortitude to show the financial statement to everyone. Does not happen often.

Absolutely! I could not agree more! There would be no walls separating departments then!

[XDCX]

Originally Posted by steve_biegler

Easiest fix is to have the Dealer Principal pay EVERYONE on the store net bottom line......no more dept. infighting. He just needs to have the testicular fortitude to show the financial statement to everyone. Does not happen often.

Originally Posted by FixedOpsGuy

Absolutely! I could not agree more! There would be no walls separating departments then!

I know the forum's been quiet lately, but I think Steve may have just posted the "Post of the Year."

We all know that pay plans dictate behavior and when managers are paid on the success/failure of all departments they're much more likely to look beyond their area of direct responsibility.

I can understand why Dealer Principals are reluctant to share too much financial information but I think the benefits far outweigh the liabilities in this instance.