Car-dealership owners run a franchise. They set up a dealership to sell a certain type of car, buy the cars, and then take a certain percentage when it has been sold. The dealership owner's salary is based on the profit earned by the sales staff. Once the car is sold and the employees are paid, the owner can take a portion of the profit as salary.
The salary for a car dealership owner can fluctuate greatly, since her salary is dependent on how many cars are sold and at what price. A successful business will bring a higher profit, and thus a higher salary. The quality of car, whether it is used or new, and the interest of the local community, all weigh in on the average salary. Dealership owners in a good business can earn an average of $33.73 per hour, according to the United States Bureau of Labor Statistics.
The dealership owner makes the investment in the car before it is sold. This means that the owner needs to choose the right types of cars that will sell quickly. The dealership sales staff is responsible for selling the cars. The only way to make a profit is if the car is sold at above the original buying price. Once the sale is made, the revenue from the sale is split between the salesperson, the other staff in the business and the owner. Some of the revenue is also dedicated to buying new cars and paying bills and upkeep on the business.
Car dealership owners need to buy cars that will sell quickly. The market can change drastically, leaving dealership owners with unbought, unpopular cars. While SUVs were once easy sells, the price of gas and concern about the environment has made smaller, more eco-friendly cars the most buyable. Car dealership owners need to be out ahead of the market so they are not left selling cars for no profit, or even a loss.
The number of jobs in the automobile profession is expected to drop from 2008 through 2018 by about 5 percent, according to the Bureau of Labor Statistics. This is a function of fewer cars being sold and for less profit. People interested in opening a car dealership would be wise to do a great deal of market research to determine if their location has a demand for new or used cars. A location with better public transportation may make the car dealership business more difficult.
- U.S. Bureau of Labor Statistics: Career Guide to Industries, 2010-11 Edition -- Automobile Dealers
- CareerBuilder: Becoming a Car Dealership Franchisee
- National Auto Dealers Association: Future of Auto Dealership Threatened in Wake of Credit Crisis
- Marketing by Appreciation: Is the Used Car Industry Alive & Well?