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DONNA HARRIS

If anyone can solve pay dilemma, it's the dealer

Donna Harris covers retail issues for Automotive News
I've read the responses to my last blog about a dealer who doubled sales force commissions to rid his lot of aged used units only to pull the plug two weeks later. And it seems a few readers concluded I have a low opinion of car dealers.

Nothing could be further from the truth. I've written about dealers for 20 years, and it's not because I dislike them. No, I have tremendous respect for entrepreneurs in general and dealers in particular.

I also have faith in the ingenuity of dealers to combat tough problems as grosses shrink and sales slow.

Example: 2009 was a horrible year for everyone -- dealers included. They responded quickly, cutting expenses and streamlining operations.

The result? The National Automobile Dealers Association reported a nearly 44 percent jump in the average dealer's net profit in 2009. The net pretax profit as a percentage of sales rose to 1.5 percent from 1.0 percent the previous year.

If dealers can accomplish that much in such a challenging year, they also can apply their creativity to restructure pay plans so that they motivate salespeople without compromising profits.

In fact, I invite readers to share what's worked and what hasn't worked right here in response to this blog.

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