GM DEALER...CANCELLING ZAG
Greetings everybody....
I own a GM dealership in a metro area. Overall, we run a good store and have NEVER EVER had problems with honesty, lawyers, compliance, etc. We're over national CSI, and usually #1 or #2 in the state for our brand's volume.
ZAG has brought us to our knees. True, they don't "force" us to discount, but when they feature the "top 3" best prices, they know that us idiot dealers will fight each other to the death, like Gladiators in Rome just to be in that "top 3".
Transparency? ZAG? Excuse me, but via the INTERNET, dealer invoices, incentives, trade-in values and finance rates were handily available to customers. ALL manufacturers have internet selling systems, and their dealers respond to customers, and many times QUOTE PRICES and most of the time, those prices are nowhere close to sticker price!
ZAG is charging US DEALERS for the privilege of losing money.
In my store, staff for the 1st time is demoralized. Certainly we weren't selling for MSRP before ZAG but now, our margins are totally depressed. And if ZAG thinks that's a victory they are wrong....a dealer cross town from us has now ENDED free oil change and loaner programs for ZAG customers. Another dealer has made it a rule to truly try and "switch" ZAG customers to other vehicles and raise the price, and it's a RULE that a ZAG customer will be put thru the rigors....on his trade, finance, etc...it's like the 80's for a consumer...when it should be EASY for them now. Now, dealers are going to raise their DOC FEES also, it's a done deal, trust me...mine is going up $100 next month.
And if I sell a car for a NET LOSS...how can I provide the staff, facilities, and amenities a customer wants?
Let's see, the average car I sell is around $32,000. Pre-Zag, my average GROSS profit, including holdback and doc fees was around $2400.00. Considering all my overhead, my community participation, the jobs I provide, is an 8% gross profit so bad? Am I gouging? I think not.
My biggest competitor DROPPED ZAG 2 months ago. His 1st month, business dipped. But in that 1st month he diverted ZAG money to other advertising.
Last month, HE BEAT ME, even though I sold 6 ZAG deals. And guess what, his CSI score is up. His sales staff is again earning a living, vs begging for payroll advances during the ZAG days.
He proved to me that there is life after ZAG.
Why am I spending $6,000 + per month, just to get 6 deals that I'll LOSE MONEY, or make nothing on?
To boot, ZAG dictates that "manufacturer to dealer incentives be passed to the consumer". 1st off, we were doing that much of the time BEFORE ZAG. But why is that their business? Why doesn't ZAG pass along their hefty profits to customers also?
Folks, many of us dealers are women-of-ill-repute. We'll take cash in a back alley and ...well...you know, do our dirty duty. IT'S WRONG. Why are we risking our life savings in order to let a 3rd party dictate our business to us, AND charge us for it?
"Oh...but you'll get service business from the ZAG customers". Really? These cars don't need tune-ups, trans-services and 30k services anymore. So yeah, I'll make $5.00 on an oil change, and $10 on a wiper-blade maybe. BIG DEAL.
Within 30 days, I am OUT OF ZAG. I'm going back to more conventional advertising where I can at least note LOSE money on sales. I'll make a small profit, but my customers will continue to get personalized service, including loaner cars on demand, and a staff that's been here 10 years.
Dealers, WE ARE LETTING ZAG DESTROY US. At McDonald's, none of us can even get behind the counter whereas with ZAG, we've allowed them into our computer system!! Excuse me?
Every single day I stay in ZAG I am betraying my staff. I'm betraying my little baby daughter at home.
No more.
I'm ending ZAG. And yeah, if you're the dealer who gets my 6 units per month, god bless you. You'll make enough money to buy a movie ticket and many times, your customer will be from my neighborhood so I'll get his warranty work...if I decide to let him service his car here.
I welcome the transparency and honesty the internet has brought. I love new practices to save customers time and anguish. But...at my business nobody pays sticker price, unlike MOST businesses. I'm going back to earning an honest 8% profit.
You know what? With my 1st month's ZAG savings....I'm holding an extra bonus plan for my staff.
And in the end, I'll be back to making an honest 8%. And it'll be ME continuing to support the local homeless shelter at Christmas, it'll be ME supporting the local little leagues.
No more foreign invasion of my business.
Feels GOOOOOOOOOOOOOOD.
Those of you who remain in Zag, I congratulate you. You'll sell a few more cars than me.
But you are not your own business owner.
I am.