gyrase321

Interesting thread. I have a related question. How much does a Lexus dealership make on average per year? How does one own a Lexus dealership? What are the capital (and other) requirements? Perhaps this belongs to a new thread.

FastTags

No idea. You could maybe figure out a gross sales, say there are 20 sales people, each avg 4 cars a week, profit avg $1000. But it hard to say as there are bonuses, servise is what the dealership makes the most money on, not sales!

A
To have a small dealership is easy, get the dealer license, office and parking lot, bond, thats it.

mmarshall

Before or after taxes? Federal taxes, of course, on a business, are pretty much uniform nationwide, but can vary quite a bit state by state.

spwolf

you have to buy some existing dealer... it costs a lot. They dont expand the numbers often.

mmarshall

Another significant cost of opening up a dealer-franchise, of course, is having insurance both for the buildings themselves and for all of the new and used vehicles out on the lot. If a tornado, hailstorm, or other severe storm comes by and wrecks a lot of the cars on the lot, you as the buisness-owner could be facing financial ruin if you don't have business insurance to cover it. Also, though I myself am a reasonably careful driver when I go to a dealership and/or review or test-drive a vehicle, some drivers aren't......a carjacker could forcefully make off with a new vehicle (one reason why IDs are often checked and drivers' licenses copied before test-drives), or some idiot trying to drift or drive at the car's limits could wrap it around a tree or hit another car. I've met salespeople, BTW, who have personally been victims of carjackings on a test-drive.

Wandl

Just adding my thoughts on this, having been on the dealership end of the business before (and knowing a good few at Lexus dealerships currently)

Average car salesperson $60k-$100k, tenured ones who have repeat customers upwards of $200k assuming working in a luxury brand like MB, BMW, Lexus. Keep in mind most salespeople would also get a portion of the finance profits (more on that below)

Finance managers $80-$120k in a luxury dealership because, as some has attested, gross margins on new cars aren't much, it usually is in the finance office. One of my last deals was a CPO Cadillac that grossed $2700 on the front end (difference between cost of vehicle and sales price) and $3400 on the back-end (financing incentives/kickbacks, GAP insurance, warranty).

Glassdoor is a great source (looked up Glassdoor salaries for high end dealers like Sewell or Park Place for me here in the Dallas area). Also keep in mind your service advisors also are "sales", they too have quotas and their compensation plans are more complex but they have numbers to hit....

spwolf

insure is actually pretty low cost... problem is that you cant just open a dealership... most brands are not adding new ones, but they are actually lowering the number of dealers.

LexBob2

I agree. Around here, and elsewhere, most of the Lexus dealers own other stores as well. Many of them have big Toyota dealerships and/or are part of big groups with multiple brands, So it's unlikely that someone can come in off the street and scoop up a dealership.

tzu911

60k a year for "average car sales"? That's cute. I have respect for any and all hard working individuals but that is a manager and not a sales person's salary lexman83. A little simple math will support the assessment. 60k yearly= 5000 monthly income. How much foot traffic is the lot getting per day? Some sales also work with other sources (exports). Closing ratio, average closing time, how many cars would need to be sold in a month to support that kind of commission and income of 5k a month? Let the data do the talking.

http://www.bls.gov/iag/tgs/iagauto.htm#earnings
http://www.bls.gov/ooh/sales/retail-sales-workers.htm

If I had to work 12 hours a day for 6 days a week I would rather devote that 72 hour week in a skilled profession.

tzu911

Full of wins, a man with industry experience. Three thumbs up.

tzu911

Excluding "I'm gona start my own business- you would need the networking and knowledge, which you won't get unless you've done your cubicle or road time for the said industry," What makes an above average, steady income? Speaking from personal experience: a demanding degree/ certificate and an organization large enough to support it. (I had worked many odd jobs including sales and food service. Now I'm a manager at a world class health care brand). This is a good thread, I'm always fascinated by the subjects of self transformation and self promotion. It's the requisite of achieving the AMERICAN DREAM.

Lexman83

@FastTags:
A TON of that info was wildly inaccurate. Two cars a week? 45K per year? $800 was your biggest check???

No wonder you're in the biz anymore...

FastTags

It is what it is. What else can I say. The numbers are avg. having sold 2 cars a day is for a guy who worked no longer than 0-2 month. Rarely guys under 3 month avg 4 cars aweek.Also, if you read my post, in the northern states, winter is big factor, and very much efects the sales!!!
If you think otherwise, god bless you,this is from my experience from about 8y ago, living in upstate NY

Lexman83

WTF are you talking about? Where do you guys get this crap

FastTags

If you think about it, most new car dealerships dont sell that many cars M-Thr. Maybe 5-6 a day. So most of the sales comes on friday and Saturday. How many on avg cars can a salesman sell in one day? Well, it takes 3-4hr a person, so in. 12 hr day maybe 3 cars for a top sales guy!

Ofcourse there are huge dealership like Toyota of Katy, where they have 2 stories building with caferia and around 50 sales personal.

But an avrg new car dealership will have maybe 10-12 salesman, working 9-9 M-Th and Saturday.