A recent thread on the Proton X50 Community Malaysia FB page asks whether it’s fair that people who introduce buyers for a new Proton X50 should be entitled to a brokerage commission or not, or if this is common practice?
Truth be told, it is a fair question and I’m sure a number would wonder if they could actually make a little bit of money doing it.
Well, it is one of those unwritten rules, which pretty much is dealt with on a case-to-case basis. The truth is, new and used car sellers have used brokers for a long time to form a bridge between the seller and customer.
In some cases, brokers can be persons that are uniquely connected to the right type of clientele, they could be a go-to person for cars, they may be Sales Advisors (SA) that might have left the industry, but maintain relationships with select buyers or a group of buyers, in other cases – it can be also deals between SAs. Brokerage isn’t unique to just car sales but exists in nearly every facet of business.
In many ways – brokers also help sell the car, whether it be educating the buyer about the car, assistance with connecting them to the SA and dealership, sourcing a car that a particular buyer may want, or managing the aftersales for that particular buyer – therefore brokers do play an important role.
However, the crucial difference we feel with the Proton X50, is that it’s a car that sells itself. With over 25,000 bookings to date (and counting) – and more hitting Malaysian roads every day, could some people be taking advantage of a situation, while squeezing the Sales Advisor of his/her hard-earned money?
As a disclaimer, we do not claim to know the job functions or positions of commenters in the thread. Some may be speaking as buyers, sales advisors, or even as observers. We have to exercise caution with regard to claims that some of the responders make, they could be the truth, or not.
Following the thread, left us with three distinct takeaways:
Some SAs don’t mind offering a commission to brokers because they make their sale easier.
Some commenters have said that they have received between RM200 and RM300 for introducing a successful customer. Stating in some cases, the broker may have already sold the idea (or the car) to the buyer and the SA simply has to fill out the paperwork, making the process much faster. In certain cases, the brokers go one step further by collating the required documents of the buyer. One commenter also encouraged people to register as an official broker to learn the processes so that they can successfully seal deals. Some others have said they have received brokerage fees without even having to ask.
Other companies give brokerage fees, why not SAs selling cars?
Some commenters have said that other businesses, such as water filter and phone companies are happy to offer introduction or brokerage fees – why not car companies which sell their products for tens if not hundreds of thousands of ringgit.
While this is true, we should understand that selling a car versus selling a water filtration system is quite different. With massive competition amongst car brands (especially the mass-selling segments) – car companies are forced to work with razor-thin margins to keep their prices attractive to the customer. This is why between the manufacturer, dealer, and SA – it’s a one-time sale, perhaps for the next couple of years, maybe longer. Unlike other businesses, such as water filtration devices and insurance, where profits are earned over a period of time, and therefore tend to operate with better profit margins.
Some brokers are simply too unreasonable
Some of the most vocal commenters say that brokers are simply too unreasonable. In certain cases, the broker is a family member demanding brokerage for the sale of another family member’s vehicle; a husband for a wife, or a sibling for another sibling. In these cases, we feel the brokers are being unfair to the SA. This is because, if a husband and wife both decide to get an X50, then that’s very little in the form of convincing the seller – now they’re simply trying to squeeze the SA in hopes of getting a better deal for themselves.
Now, we understand that everyone wants to get a good deal, but buyers must also understand that beyond principal and dealer offers, rebates, or discounts – SAs have to shell out cash from their own pockets to “sweeten the deal”. Sometimes this may include offering tinting packages, Touch’n Go cards, and a full tank of fuel, to even free umbrellas. It’s not much, but it's still cutting into the SAs salary.
Customers must also understand that SA commissions vary based on KPI targets, brand, and model – and they’re normally a reflection of how tough it is to sell the car. Sell a BMW 7 Series and you can bet commissions are handsome, sell a Perodua Myvi though, and commissions are surely much lower. In certain cases, SAs also have to sell a prerequisite number of vehicles before they hit their KPIs and see a decent payday, and this doesn’t happen all the time.
Therefore, taking away what little profits they make, does seem a bit harsh, as one vocal commentator says, customers will never know how tough things can be for SAs until they walk in their shoes.
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