Topic > Case Study Summary: Car Dealership Incentives

Car Dealership Incentives were the bonus they would receive from Chrysler for meeting their monthly quota. In October they had to sell 129 cars. They also had to meet individual quotas to receive a bonus, which were at least 15 cars each. This means that they will do everything to sell their individual quota and to reach the dealership quota. Salesmen and women sold cars to customers well below the price paid to the manufacturer. This was in an attempt to ensure they closed the sales. If they felt they were going to miss out on a deal, they would talk to Freddie who would tell them to do whatever it took to make the sale as it had been a slow month. They were not making a profit on these cars. In reality, they hoped to reach the quota because the bonus would make up for the money lost on these sales. At first, this didn't make sense to me. The point would be to profit from the cars sold and reach the bonus quota. After listening to the entire audio case, it started to make more sense. The money they received as a bonus would “keep them out of the red”. So even though they were losing money on certain sales, they were still making a profit. This is where these sellers actually make their money. In my opinion, sales is not an ethical business. The goal of sales is to sell as much to customers as possible. Most sales people work on commission, which means they have to make a lot of sales. They also have sales needs that can hinder or help their position within the company. To reach these quotas I would feel lost and stressed. I am not a salesman and I know this from experience. I worked in retail. We had quotas to meet for signing people up for store credit cards. I personally didn't like asking people why they would be angry. The incentive wasn't enticing enough to make me ask people. So there were days when I asked everyone who came to my register, and there were days when I didn't ask anyone. I think it would be important to try to profit from every car sold each month. However, I understand why Freddie started pushing people into deals even if it cost them money for a car. The incentive was too good. If they lost money, but met their quota, the money would be recovered. I think if I were forced to meet a quota to receive a bonus like that, I would probably make the same decisions as him