Gone are the days of big mark ups on standard products in the retail trades. This used to be the lay of the retail trade whether it was big ticket items like cars, trucks and smaller items like TVs, freezers , sewing machines etc etc.
People it seems “just seem to know more now“. This came even before the advent of the internet and easy access to the internet with its knowledge based riches. Time was when auto dealers made their money and profits “selling cars”. A car or truck was its own model and woe be to the automobile buyer who asked the salesperson – how is this Chevy different than the Ford or even brand new 2013 model. They would get a look of disdain from the auto salesperson “This is a Chevrolet and that is a Ford“. They might of even been shown the door and basically told not to “come back” ( to the factory authorized dealership) again. Not its a case of i will go to your or another dealer’s home page , browse online and not have to talk to you ( the moronic salesperson) ever again.
More objective sources of information such as Consumer’s Reports became widely available and respected. Yet the factories and head office types held on to their belief structures. At one point the talk in the lay press was the answer an auto industry exec gave ( or perhaps disdainful comment) to an auto industry journalist. When asked about the rankings and ratings in Consumers Reports of a major upcoming ( much ballyhooed) product ( from head office) the exec replied that ” those don’t hold much water with us”. It sure does not look like a Ford Escort nor a F150 Crew Cab Truck. The automotive industry sector specialized journalist essentially just gulped.
The point here is that auto buyers and consumers have a tremendous of wealth of information at their quick access. Its hard to make money on selling new vehicles. Used cars and trucks are another story as the price paid is not as certain or the product may be in short supply to the one buyer who is on the lot.
So how can a dealership turn a profit on vehicle sales other than just future goodwill and service down the line. Comebacks are not greenbacks and their no guarantee of future sales , customer loyalty and the truck, car or crossover SUV sitting in the service bay at all.
The answer lies in emulating big box stores. Big box stores may not be able to make money on that highly discounted iPhone ,Apple iPad tablet , or Samsung LCD or Plasma big screen TV. Yet they do make money on accessories including extended warranties. The expression among salespeople is that the first sale is the hardest then it rolls down the road like a brand new shiny 2013 Buick . Alternatively once you got the wallet out or the first commitment its much easier if not a snap to sell the rest of the add-ons . And all at good profit.
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