If you make a deal, do you stand by it?

[dm]

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Originally Posted by FinanceDude I would amazed if the guy who made the mistake is still working there. Most owners do everything they can to screw salespeople. This would be an easy way to get rid of a salesman that either doesn't sell enough or is a PITA..........have seen this very thing play out before........

I got a call from the salesman last night, so it's been a week and a half and he's still there.

[FinanceDude]

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Originally Posted by Emeritus Who in their right mind would ever negotiate with a person without authority?

Salesman have authority to sell, they have guidelines to work with. We used to have deals like this:

Most cars have a 9-12% markup, perhaps 14% on options. We'll assume an 10% markup, or $2500. Mot if not all salesmen can sell that car anywhere from sticker down to $100-$200 over invoice without going to a a manager. The manager appraises the trade and gives the salesmen the numbers, and he goes to negotiate.

The salesmen's job is to MAXIMIZE profit because that's how he gets paid. That is NEGOTIATION. Let's say the customer's car is worth $10,000 wholesale to the dealer. The salesmen knows that too. Of course, customers think the salesmen should discount more and that their trade is worth more, etc. Again, negotiation occurs. So, the salesmen might show you $9500 for your car and $1000 off the new one. That's his offer to you. You know, some folks take that deal.........most do not. That's where negotiation occurs.

If the customer wants $5000 off the car and some huge number for the trade, that customer would get turned over to the manager. Its then up to the manager is decide how serious of a buyer that customer is. If its clearly not going anywhere, the manager lets the customer go. Some folks are unrealistic no matter what the real numbers are........

Many customers want to negotiate directly with the managers. At abusy dealership, that's not always possible. The salesmen's job is to get an OFFER from the potential buyer. If there's no offer, there's no negotiation. The dealership almost always gives a first offer. They are not going to go into holdback and overappraise a trade based on a "non-offer" from a customer that in many cases didn't even drive the car they want to buy.........

[Emeritus]

Quote:

Originally Posted by FinanceDude Salesman have authority to sell, they have guidelines to work with. We used to have deals like this: Most cars have a 9-12% markup, perhaps 14% on options. We'll assume an 10% markup, or $2500. Mot if not all salesmen can sell that car anywhere from sticker down to $100-$200 over invoice without going to a a manager. The manager appraises the trade and gives the salesmen the numbers, and he goes to negotiate. The salesmen's job is to MAXIMIZE profit because that's how he gets paid. That is NEGOTIATION. Let's say the customer's car is worth $10,000 wholesale to the dealer. The salesmen knows that too. Of course, customers think the salesmen should discount more and that their trade is worth more, etc. Again, negotiation occurs. So, the salesmen might show you $9500 for your car and $1000 off the new one. That's his offer to you. You know, some folks take that deal.........most do not. That's where negotiation occurs. If the customer wants $5000 off the car and some huge number for the trade, that customer would get turned over to the manager. Its then up to the manager is decide how serious of a buyer that customer is. If its clearly not going anywhere, the manager lets the customer go. Some folks are unrealistic no matter what the real numbers are........ Many customers want to negotiate directly with the managers. At abusy dealership, that's not always possible. The salesmen's job is to get an OFFER from the potential buyer. If there's no offer, there's no negotiation. The dealership almost always gives a first offer. They are not going to go into holdback and overappraise a trade based on a "non-offer" from a customer that in many cases didn't even drive the car they want to buy.........

This is not "authority to sell" Its not "negotiation " to talk with a person who has no authority to sell. Talking to a (pick word to fit in here here) who has no authority is a waste of my time. I tell the sales person to get the "busy manager" to give the sales person authority to sell the car. I have authority to buy the car.

[FinanceDude]

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Originally Posted by Emeritus This is not "authority to sell" Its not "negotiation " to talk with a person who has no authority to sell. Talking to a (pick work to fit in here here) who has no authority is a waste of my time. I tell the sales person to get the "busy manager" to give the sales person authority to sell the car. I have authority to buy the car.

Seems we found an area you are not an expert in...........

[Texas Proud]

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Originally Posted by Emeritus Do you want to discuss the concept of a quasi-monopoly? One of the classical examples is the tying of cellphones to networks in the USA. In Europe it's unlawful and all phones can be fitted to work on all networks. GM and its dealer networks are quasi monopolists for warranty work. You can't just get it anywhere and bill GM. The law protects consumers form some of the worst anti-competitive activities of monopolists and quasi monopolists.

Yes... I wonder why we are different... but we started out that cell phones were a luxury... so the network was not set up by a consortium... but by a business that wanted to sell you something... they made the investments...

Now, it seems that we have gone past that stage... and should open up the network... kind of like the internet... or electricity (at least where I am at.. I can buy from many companies... almost all the same price.. but hey)....

But the other side of me says.... look, they did the investment... they should reap the rewards... go figure...

[Emeritus]

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Originally Posted by Texas Proud Yes... I wonder why we are different... but we started out that cell phones were a luxury... so the network was not set up by a consortium... but by a business that wanted to sell you something... they made the investments... Now, it seems that we have gone past that stage... and should open up the network... kind of like the internet... or electricity (at least where I am at.. I can buy from many companies... almost all the same price.. but hey).... But the other side of me says.... look, they did the investment... they should reap the rewards... go figure...

The antitrust and similar laws are limitations on the "tactics" investors can use to reap rewards. Thomas Edison invented the practical movie projector and was entitled to a patent monopoly on the sale of projectors. Made lots of money no problem. Then he tried to "extend" the monopoly by claiming that you could only show movies made by his studio on his projector. He had no patent on the movies or films. That extension was unlawful.

[Emeritus]

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Originally Posted by FinanceDude Seems we found an area you are not an expert in...........

Since your post has no content, no reply is needed.

[Texas Proud]

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Originally Posted by Emeritus The antitrust and similar laws are limitations on the "tactics" investors can use to reap rewards. Thomas Edison invented the practical movie projector and was entitled to a patent monopoly on the sale of projectors. Made lots of money no problem. Then he tried to "extend" the monopoly by claiming that you could only show movies made by his studio on his projector. He had no patent on the movies or films. That extension was unlawful.

I know the issue of tying... and I can easily see the one in your example.. but there is a big difference when you have to have a lot of cell towers to get a network...

As we both know, there are many monopolies.. such as your gas company and your electric company (well, it used to be)... there was no way for you to get your gas, water, electicity without the costly infrastructure that they paid for.... now, if they say... if you want water, you pay us... it is not allowed that someone else can sell you water and say... hey, I will just use this other companies water lines to your house because they can not tie water purchase with water delivery...

Or even package delivery... why is pesky FedEx and UPS tying the delivery of packages to their planes and trucks... why can I not start up my own company and force them to carry my packages on their trucks? I mean, they are tying the delivery of the package to their infrastructure...


You can go overboard with this... the big question is do you change it when it adds value to society... like electrcity... they split up the delivery from the production... I have only one choice of delivery to my house... I have many for production....

[bbbamI]

YouTube - Sanity Clause

[Emeritus]

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Originally Posted by Texas Proud I know the issue of tying... and I can easily see the one in your example.. but there is a big difference when you have to have a lot of cell towers to get a network... As we both know, there are many monopolies.. such as your gas company and your electric company (well, it used to be)... there was no way for you to get your gas, water, electicity without the costly infrastructure that they paid for.... now, if they say... if you want water, you pay us... it is not allowed that someone else can sell you water and say... hey, I will just use this other companies water lines to your house because they can not tie water purchase with water delivery... Or even package delivery... why is pesky FedEx and UPS tying the delivery of packages to their planes and trucks... why can I not start up my own company and force them to carry my packages on their trucks? I mean, they are tying the delivery of the package to their infrastructure... You can go overboard with this... the big question is do you change it when it adds value to society... like electrcity... they split up the delivery from the production... I have only one choice of delivery to my house... I have many for production....

Its always a rule of reason analysis, but some of your analogies are not appropriate.
E.g. you can form a company to collect packages and deliver them to FEDEX centers. If they refused to carry your packages it may be a violation.
The cellphone towers for example may justify the multi-year contract, but not tying it to the telephone since that suppresses competition in phones.

[Texas Proud]

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Originally Posted by Emeritus Its always a rule of reason analysis, but some of your analogies are not appropriate. E.g. you can form a company to collect packages and deliver them to FEDEX centers. If they refused to carry your packages it may be a violation. The cellphone towers for example may justify the multi-year contract, but not tying it to the telephone since that suppresses competition in phones.

But you can use another phone on their system.... it is just very difficult... you can also use one of the many companies that we talk about having cheap service... like Virgin.. who does not have their own network..

Seems a bit like Apple and thier various products... you have to use the Apple store to get what you want... (not really, but mostly)..

[ERD50]

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Originally Posted by Texas Proud But you can use another phone on their system.... it is just very difficult...

Sometimes it isn't difficult, but it makes no financial sense. Most of the plans include a 'discounted' phone, the cost is built into the plan (and a 2 year lock-in in most cases), and there is no BYOP (bring your own phone) deduction. It's not good for people who might need a plan above pre-pay, but who don't care to get a new phone every two years. You pay for it if you use it or not.

I wish Emeritus would sue those guys (and their stupid text plans also) , but what I'd really like to see is more competition somehow (the infrastructure does create real barriers to entry), so they were really fighting for my business rather than their 'take it or leave it' plans.

-ERD50

[lets-retire]

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Originally Posted by Emeritus Let me quote what I wrote "In one case he came back with it signed, and asked what I had. I pulled out a certified check for about 80% of the price and said my wife would bring the balance in cash when we had a deal. Then we negotiated. Great fun" I said nothing about price but I only negotiate with people with authority to sell. Who in their right mind would ever negotiate with a person without authority?

The "authority" you are talking about is an illusion. The manager signed a piece of paper, so what. The salesman can not negotiate any more or less than he could before. He has a lower limit of what the dealership has decided is reasonable to sell the car at, the same as before. If he goes outside that range he loses his job, whereas before the sales manager simply wouldn't sign the contract. So just like before you wasted time to get a signature on a sheet of paper, any deal that is "close" to the bottom limit will be passed through the manager.

[Emeritus]

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Originally Posted by lets-retire The "authority" you are talking about is an illusion. The manager signed a piece of paper, so what. The salesman can not negotiate any more or less than he could before. He has a lower limit of what the dealership has decided is reasonable to sell the car at, the same as before. If he goes outside that range he loses his job, whereas before the sales manager simply wouldn't sign the contract. So just like before you wasted time to get a signature on a sheet of paper, any deal that is "close" to the bottom limit will be passed through the manager.

And in which state are you licensed to practice law? In the states where I am licensed, I am now dealing with a person who can make a deal. I deal I can enforce. They know it, I know it. If the salesperson refuses to make the deal, I just walk. Its much simpler

[FinanceDude]

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Originally Posted by Emeritus And in which state are you licensed to practice law? In the states where I am licensed, I am now dealing with a person who can make a deal. I deal I can enforce. They know it, I know it. If the salesperson refuses to make the deal, I just walk. Its much simpler

Like I said, I am sure you have been walked out or told to leave many times. Life is too short to deal with folks who spend their life acting condescending to everyone they meet........

[kumquat]

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Originally Posted by emeritus and in which state are you licensed to practice law?

ianal, r u, p i

[lets-retire]

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Originally Posted by Emeritus And in which state are you licensed to practice law? In the states where I am licensed, I am now dealing with a person who can make a deal. I deal I can enforce. They know it, I know it. If the salesperson refuses to make the deal, I just walk. Its much simpler

In the last state I was a local officer, I was authorized to shoot someone who reached into a car and stole a CD. That does not mean shooting was the best course of action. The same goes for the salesman. They might be able to seal the deal without the manager's approval (because the manager already gave approval), but that does not mean they shouldn't pass any deal that might be questionable past the manager. If I were the manager I'd sign the sheet then tell the salesman to pass any offer through me before he signed the contract or it was his job. OOPS, there goes his ability to make the sale.

I haven't had to negotiate a car deal in almost 10 years. I go in tell the dealership what I want get anywhere from 5K-10K off the sticker price and walk out with a new car. That simple, and I don't have to be an arse to get the deal.

[FinanceDude]

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Originally Posted by lets-retire I haven't had to negotiate a car deal in almost 10 years. I go in tell the dealership what I want get anywhere from 5K-10K off the sticker price and walk out with a new car. That simple, and I don't have to be an arse to get the deal.

Most domestic car companies have rebates that big anyways, or dealer cash plus rebates, so definitely possible. Tough to get that deal off a Camry or Accord..........

[lets-retire]

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Originally Posted by FinanceDude Most domestic car companies have rebates that big anyways, or dealer cash plus rebates, so definitely possible. Tough to get that deal off a Camry or Accord..........

The 5k off is for the more popular cars, the 10k for the lower popular. Unfortunately I don't fit into the Japanese cars too well. I haven't for a very long time.

[kcowan]

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Originally Posted by FinanceDude ... If the customer wants $5000 off the car and some huge number for the trade, that customer would get turned over to the manager. Its then up to the manager is decide how serious of a buyer that customer is. If its clearly not going anywhere, the manager lets the customer go. ....

One other aspect to the car sale.

If it is the last Saturday of the month at 5:30 pm, you might get the benefit of the volume clip levels that the dealership is getting. It might be possible to get your car at a loss to the dealership if the result of getting to the next discount level is more than their loss on your deal.

Granted this is an unusual situation, but I like buying then just in case!