Analysis of Average Car Salesman Income and Other Sources of Revenue
Introduction:
Car salesmen play a pivotal role in the automotive industry, bridging the gap between dealerships and customers. Their success largely depends on their commission, but what exactly is the average income for a car salesman per sale, and are there other sources of income beyond commission?
Commission-based Income and Its Variation
The commission earned by a car salesman can vary significantly based on the dealership where they work. For instance, at certain dealership chains like Carmax, the average commission per car sale is approximately $200 for a standard domestic brand. This figure jumps to a range of $300 to $600 for luxury brands like BMW. It's important to note that these averages can fluctuate based on the specific car and sales scenario. For example, a high-end model like an M car from BMW might earn a commission of $500 to $1000.
Income Sources for Car Salesmen
Independently Operated Dealerships: In smaller, independent dealerships, the income sources for car salesmen can be limited. Apart from the commission, salesmen may receive a monthly unit bonus if they're lucky. Beyond this, a weekly salary might be available, along with occasional bonuses referred to as "spiffs." Spiffs are typically offered by dealerships on weekends through morning meetings to encourage last-minute sales.
Franchise Dealerships: Dealerships affiliated with major manufacturers provide a wider range of income opportunities for their sales staff. Besides commissions, salesmen can earn "spins," which are bonuses directly provided by the manufacturer for selling specific models. The finance department also offers back-end bonuses for warranties and unit/gross bonuses. Yearly bonuses are another common feature, and in some cases, a fixed salary can supplement the income.
Some independent dealerships might offer more aggressive commission structures, allowing salesmen to earn a substantial income purely through commissions without the need for additional sources such as those found at franchises. This varies based on the dealership's policies and customer base.
Annual Earnings Potential
Based on the commission structure, car salesmen can easily earn between $100,000 to $125,000 annually. This figure can significantly increase for those with a robust customer base and repeat business. In fact, some exceptionally successful salesmen can earn much more.
Conclusion:
The income of a car salesman is a complex mix of commission, bonuses, and salary. Whether working for a franchise or independent dealership, understanding these sources can help salesmen maximize their earnings. For those interested in a career in car sales, a thorough understanding of these income structures can be invaluable.