I know Carmax's sales structure, in the end the salesman's gets 15 to 25% of what the total profit is.
If you are a non club member you get $150 for car $100 for warranty
Directors club $200 and $125
President's Club $250 and $150 (then president's club goes up from there, but that takes a good amount of time.)
On my 3 years as a part timer (14 days a month) I averaged 8.5 cars a month with 4.5 warranties. I was either President's or Director's club for all but 7 months of my time there.
We had 6 really good career salesman that were making in the 80-100 range. Just like a regular dealership. You get the BS out of the way you can sell more cars. The salesman looked at the volume too. We liked it.
Carmax's goal was $1000 to $1200 profit on every unit. Some more some less. But that is the company goal for an average. Now mind you they had numbers for everything, so the only thing not accounted for in that profit was Uncle Sam. They are a very well done dealership. They are trying to make it the Wal-Mart of cars.
That statement alone should get me flamed! LOL
"They are trying to make it the Wal-Mart of cars."
I've visited the CarMax in Memphis, and visit their website at least a few times a week. I wouldn't set foot in a Wal-Mart. Wal-Mart wants to control the market for anything and everything, I never had that feeling at CarMax.
Wal-Mart seeks to wring THE lowest possible price out of it's suppliers so it can (supposedly?) pass the savings on to it's customers. To be honest, I don't know what CM does to it's "suppliers", but it doesn't look like they are following Wal-Mart's "credo".
When comparing 2 car that to me look the same (for example 2 Toyota Corollas) I am amazed at why they can be priced so differently by CarMax. Similarly, CarMax doesn't seem to take into account the fact that some cars have ..."less brand, cache?" than others. A Corolla will be priced about the same as an Elantra or Spectra.
While I realize CarMax is PRIMARILY a used car network, one of the things I DO appreciate about them is that there are no goofy fees that seem to have been made up as an excuse to further fleece buyers.
In reply to FlightService:
I am surprised their profit would be that low. I've always figured I can find what CarMax has at a normal dealer for at least $1K less.
In reply to Datsun1500:
I've bought two cars from the local Lexus dealer that has a $489.50 processing fee. I hate the idea of it, but I just figure it into my calculations.
Carmax lost a lawsuit in SC about the doc prep fees, even though they put it in the price they still lost it, so they are now starting to phase it out in areas of vagueness.
Remember I said a $1000k after EVERYTHING (they know how much electricity that it will cost them to run the building, commission rates for consultants, property and facility depreciation, I meant EVERYTHING). Carmax is one of the best managed stores in the market.
As for the Wal-Mart reference, it was an inference to the ability to walk in find 90% of what is in the market and walk out quickly. Not an implecation to the lack of service or professionalism that Wal-Mart shows.
Carmax "beats" up their suppliers as well, that is why a good condition car will only get an offer of fair condition value. They also are LOVED at auctions, they know they have money and will slam the gavel quick for them. They tend to get a car a little cheaper than a traditional dealership because of it.
It is a good system. I haven't found a price at Carmax I couldn't beat but it takes work to do it.
