REAL DEAL AUTO BLOG

The monthly cycle of dealer sales; fact, fiction, or both

Posted in Uncategorized by wolferadio11 on October 7, 2009

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Sometimes it is frightening what creatures of habit we actually are.  The car business is no different.  50% of dealer sales occur in the last 10 days of any given month.  Let’s revisit that statistic for a moment.  So if a dealership does 100 sales on the 20th, that means the stage is set for a 200 car month.   How and why would a place of business do 50% of it’s business during 1/3 of it’s business days?  Over the years, I have heard many opinions answering this question. 

              ‘1st of month bills take people out of the shopping mood, salesmen are lazy until panic time, deals are better at the end of   the month’, or some think factory incentives do not become public knowledge until mid month which public reacts on.’  I say phooey on all of those opinions, but I still don’t have the answer. 

The first several years in the wholsale auto business, I heard about this cycle, but called BS on it.  Not until I owned a dealership of my own did I see first hand how accurate this law of averages really is.  YES, it’s true.  If a store is tracking 50 on the 20th, then they need to have their goal set at 100. 

If I had to pick one reason for this occurance, I would go with the salesmen theory.   That theory being, that salesmen get paid their bonus within the 1st ten days of the following month,  and don’t start selling hard until they realize they don’t have a check made (around the 20th).   I know dealers that have attempted to break this cycle by scoring their months from the 15th through the 15th, and noticed the cycle readjusted itself around those pay periods.  I also know dealers that said to hell with the ‘month to month’ system all together, and recorded sales results bi monthly.  Then there are stores that literally measure by the day, some by the half day.  Those micro measures are typically more successfull btw. 

With that, I am under the influence that the dealership’s staff is creating this self fullfilling prophecy.  Which would mean that this cycle has nothing to do with the publics habits.  If you have an opionion, please share below, I am sincerely interested in what you have to say.  This doesnt just relate to car business, it relates to all activities that measure success.  Sports seasons, all business, fund raising, you name it.

 

JCFW

One Response

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  1. Russ said, on October 8, 2009 at 7:24 AM

    My take is that the sales managers have a role in this just as much, or maybe more, than salespeople. Beginning of the month thinking about grosses and an eye on numbers later. Mid month, screw the grosses and shoot for the numbers because in many stores their pay is 90% based on both numbers and gross. They are more motivated than salespeople. IMHO

    Oh, thanks for this blog, I’m glad I found you.


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