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What are you talking about? I said we might use some of edmunds calculators. Used car evaluator!
As for a buyer negotiating a trade seperately there is nothing wrong with that. Tell me why don't you want a buyer to negotiate a trade seperately? Enlighten us from a dealers point of view! Come on Butch I really want to know because if I agree with you then we will approach it another way.
If you ask me it only saves you time and headaches! I would rather sell to an educated buyer than one who just wasted three hours of my time when I could of been out there making another sale.
Information doesn't write checks, so its only good for...information.
First haven't overcome the 3 challenges from an earlier post of mine. Only way I can see it working is charging the consumer between $50-100 deposit ( refundable?) towards the car. As Rich said then the dealers could factor in the fee they pay you into their bid.
The big one is the Trade in. From being on these boards over a year I admire your goal on educating the consumer to separate the transaction but IT'S NOT GONNA HAPPEN. People either have a wildly overinflated estamation of their trade or the bid will get screwed up if the dealership has to roll negative equity into the new vehicle which would have to increase the bid.
Give your plan a shot. I sincerely hope you can work through the issues and succeed but I'm not putting any money on it when I'm in Vegas later this month. :-)
Duncan
You still haven't answered the $6 Million Dollar Question ....
What's in it for the dealer?
You describe a method that basically turns a sale into a commodity product reducing the slim profit already inherent in new car sales. No supplier in their right mind will do that.
I really doubt that you are going to see too many completed deals as the dealerships will be unable to meet the expectations of the customers on trade-ins and other issues.
This sounds suspiciously like a B-school project more than a viable business model.
you are providing a dealer with no service, all the service is to the customer, which is fine, but the dealer isn't going to pay for that... the customer may???
trade-in's... I agree with the gentlemen before me, you can't price a trade-in accurately without seeing it in person. Generally, the customer always thinks his vehicle is worth more b/c Edmunds, Kbb, NADA, Galves, Black Book, whatever, says it is... well, throw the books out the window b/c they are guides, thats about it. At any given time, Kbb may be close on the number for one vehicle, or Edmunds may be close... but when the customer looks at 2/3 of the different guides, they ALWAYS get the bigger number stuck in their head.. not to mention they can't figure out their 1998 Ford Taurus with 125,000 miles on it with just 3 small dents on the driver door and a few scratches here and there, otherwise looks, well, ok vehicle is rated what they call Excellent condition b/c they figure excellent for the year. Well, I have yet to see a vehicle with 100+k miles in excellent condition.
I understand you may be new to the biz, you may have 5 doctorate degrees for all I know, great, but there is something to be had for "real world experience", and your getting some great advice by a few long-timers in the biz here... take it or leave it, that's up to you....
I have tried to think from your angle, why would a dealer need this.. I honestly don't know, sounds like another "Lose 125 lbs in 10 days with these...." info-mercial. I just don't see it, maybe I'm blind, but I just don't get the "MUST HAVE" that would make a dealer pay for it.
Let's say I live in your metropolitan area, there are 5 Honda dealerships in this area. Me, as a typical consumer, will know there are 5 in the area b/c I will shop around to all 5 for the lowest deal. If you've only got 3 hooked up to your site, I will inevitably visit the other 2 to get their prices to see if they can beat whatever price I have been quoted... Or, from another angle, I like dealership A in the area b/c they have taken care of me and my service needs in the past, but dealership C bid the best price.... I can guarantee I'll pay a quick visit to dealership A to see if they beat the price.... all this will do is create more shopping around for the next lowest price. I don't think your proposition will help in striking many SOLID leads for any dealer...sorry.
You do it everyday! Its called your internet sales department. You turn a gross profit unit into a slim profit. And you would do it until you turned blue.
Here's the bottom line! Then I am out for good! Wasting my time here. Bottom line is a car dealership (the owner) not the salesman will be making the profits on the units that was bought by people led to them by using our service! And if they don't sell any well then they have the opportunity to ADVERTISE outside of their region without breaking your dealership advertisment pack agreement. This site could very well make the OWNER alot of extra cash flow. As for the salesmen I have to agree! Sell a low profit unit and you don't make but pennies on the dollar. The owner on the other hand keeps the holdback plus whatever else turning a nice profit on each sale as long as the unit is on the lot for 90 days or less. Maybe you need to find a different job if you don't feel like your not getting paid enough. Maybe guys should look for other avenues to sell a car rather than simply waiting around for someone to walk in so you can MAXIMIZE your profit off of ONE car sale!
Bill
** $6 Million Dollar Question by Bill100 .. **
Here's your 6ct answer: Reverse auctions aren't new, they been using them at Churches for yeeears .l.o.l...
Bill: either your slick (or, you think your slick) and your trying to put a "new" spin on something old, and make a quick buck for yourself and *fortunately* you ran into a pack of well informed people .. -Or- your friend, boss, manager, neighbor, leader, whomever has you convinced this is the new cure for cancer and your that nieve .... this has been "tried" 4/5 times that I'm aware of, once by the largest Chevy dealer in the country in 99 and by the second largest Ford store in 01 and it "flopped like a mullet" in about 9 days ...
I'll make this reeeal simple .. Ebay has a 22% kill ratio on 5/10% profit deals, why would anybody devote 30++ hours a week on a 2% kill ratio on 1% deals, then have the deals evaporate when the trade hits the lot, or bad credit, or downpayment, or mom says no, etc, etc, etc.com .... have you tried Kirby vacuum cleaners.? .. you will have a much better future.
PS: "Your talking to the wrong party here" ... read my profile.
Terry.
Duncan
Duncan
Dillydill
<SOAPBOX>
Guess what? The nature of buisness is to make a profit. In my line of work (gov't defence consulting) we look for 7% of revenues. We take ethics very seriously. But the tag line for the ethics is good ethics is good business. In a nut shell, the ethics are important because it allows the customer (Federal Government) to trust us.
Turn it around to the car dealer: Treating the customer right is important because it helps sell cars -- possibly at a higher margin. And happy customers tell there friends; more customers.
In my last two car deals, I tell people to avoid one dealer (Koon Tysons Toyota) and to go to a different dealer (KJ Springfield Toyota). This, in spite of the fact that I work walking distance from the first, and 20 miles on very congested roads from the second.
</SOAPBOX>
Come on and post almost continiously. I do not recall the earlier screan names. But, I wonder....
The guy said "All I want to do is make a profit". That's mostly right. How can I keep people paid and renew inventory if I don't?
Like I said, though, a sales manager's job is to maximaize profit on every deal - you only get what you ask for. Some deals, you'll make a good bit. Some, you'll make $50, but on those deals, you tried to make all you can and were limited - and that's OK, for the most part, as long was you didn't lay down and give everything away.
My great Grand-daddy used to say: "You would argue in a empty room" ...
Terry.
terry...too bad you got here a little late...i had a BLAST with that guy!
I slept on it thinking I would wake up and see the light!!!! After all that deliberation, I still don't get it....
As a consumer, I am looking for the best value (not nessisarily the best price). Only I can define what best value means to me.
For example, when I bought my house, I could have purchased a similar house 10 miles away for 100K less. However, that house would add 30 minutes each way to my commute and the schools were not has good.
-Dan-
only way this will work is if 95% of both buyer and seller like the idea.
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For the record, I am not a dealer. In fact, I am a consumer who is extremely PRICE oriented. I shop around before making ANY purchase.
These folks aren't really going to be able to deliver what they hope to promise.
Quite frankly, buying a new car is not the most economical way to go, but that is a topic that has been discussed ad nauseum.
I'm trying to make the most money, and you understand that, and respect that - you're trying to spend the least money, and I know that and respect that.
Of course, it's strange how we still end up closer to the buyer's starting number than mine!!
I can't really remember anyone making a bigger fool of themselves in these forums. Did he come for advise or to advertise?
Kinda reminded me of a newly minted Amway Distributor. Gonna strike it rich!
By the I am originally from OKC but I currently live in about 2000 miles away! US Armed Forces full time!
Ok Terry,
I will keep this simple since I do respect your knowledge and advice that you have wrote many of times on these boards.
1. First I agree that Reverse Auctions have been around for some time and people probably have tried this method of referring clients to your dealerships before.
- Does not mean that we can't make a better reverse auction that could work right here in my area. Not saying it will but you don't know if you don't try! From the response that we are getting in our area I have a really good feeling it will work just fine. By the way have you been over to Mycar lately? To date they have done almost 4000 auctions. We paid our 19.95 to see if it would work and I recieved 8 bids on my auction. And I have to tell you they were from all different dealerships close to each other and the price was right on the money even according to Edmunds TMV system. Please don't tell me it can't work because it CURRENTLY is working! Sure I agree that some reverse auctions have flopped in the past. And I also understand there is some issues we need to resolve and we are working on them and that is why I came in here is to get some advice from professionals such as yourself. Like I said before I already have five dealerships signed on and one of them owns 11 different stores. We didn't even try and landed those dealerships. We had connections in those dealerships and went to ask about what they thought about our service. Plus between my partner and I we have over 30 yrs of automotive experience. Myself as a internet salesman only which by no means makes me an expert! My partner was a GM for 13 yrs in the same store until he was bought out by a man who only cared about maximizing his profit to where he PO alot of people including his own workers. My partner has a total of 25 yrs exp and he is still currently in the bus. And just like you he travels the country hopping from auction to auction. The store went belly up 14 months later after my partner left. While he was there they sold the most cars in his region. I did it part time because I was in the military but let me tell you I was pretty good at it. I could suck them just like I have done with your followers here!
2. I am not advertising! Have you guys seen a link that I posted to my site yet? Or have I posted any info that could lead you to my site? Now that would be advertising!! For a bunch of pros it sure it strange you guys can't figure that out yet.
3. Ok Terry, you own 7 dealerships right? Bottom line is your a owner and your mission as the owner is to move inventory and make money. Well like I said before I can see a salesman point of view about not wanting to participate in a reverse auction for the simple fact it hurts their bottom line. But you Terry! Your making holdback off the deal plus any other profit that is included in the deal. Don't sit here and tell me you make pennies off these sales. I know better! And I also know you as a owner will try or do almost anything as long as it moves your inventory and makes you money and it doesn't hurt your image!
4. Terry do you pay out bird dogs to people who has referred a sale to you? If so how much? Someone in here said yea we pay them to people who has bought from us then sends us another qualified buyer. Ok I agree half way! I have sent many customers to dealerships where I have never bought a car from and was paid bird dogs each and every time!
Also, do you have a internet sales department? Do you respond to email price request? If you do well then our system will only give you an EXTRA alternative to make even more money. We will have it set up where you can log in your account and view makes and models that you only sell. The bid process is going to be kept simple to! You will get a email anytime someone beats your bid. If you want to rebid you will have the ability to do so right from your email. Pain staking isn't it? Ok I agree your internet sales guy will have to responde to an extra email or two! We will find you qualified buyers with a credit score of 650 or higher. Its up to you to close them once we get them into your door.
Terry this system is free to you until you actually make money by selling a car that we refer to you!
Well you get the point now. My system is not a get rich scheme. I see it as a possible opportunity! If it fails oh well atleast we tried!
Bill
Dang, and I wasn't going to respond to you. You still don't get it - I give up.
Hosts? Can we interject some new topic information here??
you may be the next bill gates or just another guy entering a business that will go belly up. who knows?
from the way you argued your position, i have to assume your mind is already made up and don't care what anyone thinks... so why did you come here besides trying to make believers out of everyone?
i have to agree that you were trolling for business.
I offer to buy them lunch at a nice restaurant if they are still doing it a year from now.
As someone once said..." It's better to attempt something and fail, then to attempt nothing and succeed"
Still, when the odds and history are so well known against success, it's better to heed the advise of those who have the experience.
Also you want to talk about insults!!! Come on now. You guys started the insults. I agree there is no need to get nasty. So if you guys want to lay off I will do the same.
Ball is in your court!
you said it eliminates the salesman, and makes the owner more money. this creates 2 more problems:
1. the owner/GM/SM doesnt have time to prep a car, do loan documents (you have to pay the F&I guy too), go over warranty information, tour the dealership, make coffee, do a point-by-point delivery (go over the car), make sure the car is inspected, etc...
in other words, they HAVE to pay someone else to do all this.
car deals are relationship-based, for the most part. the salespeople are the ones to accomplish this. do you think that terry deals with customers directly? of course he does...but for the most part, only the ones with problems that drop his name to the SM.
2. go check "your auction" and see how many of the 8 dealers actually HAVE the car. i would bet that only 2 or 3 have it if you are lucky. so what happens when you get a low-ball dealer that bids to sell a car he doesnt have?
the negative...he loses a deal he never had in the 1st place.
the positive...he gets a customer PHYSICALLY through the door after "winning" the auction.
you might say "well, they can dealer-trade it.
if im bidding on a deal, and i lose to dealer x, and he calls me for the car i just lost the bid on...guess who DOESNT get the car...
do you think you can argue with dozens of intelligent people, some are experts, and others are not...but ALL see serious flaws with your "idea".
Exactly....and a dealer needs to pay for your service for.....???? the consumer/buyer may need your service if they don't want to do the proper research and dudiligence, but I dont' think the dealer does....
It's always an Altima/Maxima/Taurus with a specific preferred equipment group, plus this option, and that option, and I don't want those tires, and...
The chance of a dealer having THAT car just became slim.
Wouldn't his time be better served actually launching the service and then sitting back in his recliner counting the Benjamins as they come in through the internet?
Since he obviously has done plenty of research and has a bullteproof plan, why doesn't he go execute it? Then, in a year's time, he can come back and show all the non-believers how right he was. He can create a new website to catalog all the homes and yacht's he's purchased with the profits from his incredibly original, never-been-done-before idea.
Won't you all feel silly then? I volunteer to bake the humble pie.
what closing percentage is considered exceptional?
however...
the superstars generally only deal with referrals and repeat business, which is MUCH easier to close than the average lot traffic.
dealing with ONLY lot traffic, a 20-25% rate is acceptible.
This site is a lead generator! It refers customers to you. Now once the customer decides to get in your door then its UP TO YOU to close the deal. There is no site out there that will do all the work for you. And if that customer happens to have problems in his or her life or you have problems securing the deal with him or her then so be it. Happens in the car business every day!
You guys are sitting here saying this and that but let me tell you your talking jibberish that you already deal with on a daily basis. This could happen that could happen. Of course anything can happen.
And I never said it ELIMINATES the salesmen. What I said was it hurts the salesmens bottom line. They simply don't make as much. The owner on the other hand will be the one to profit.
Again my site generates LEADS for you. Its a practice that you guys already use on a daily basis. Its called your website or whatever else lead generators you might use to secure extra business! Of course you don't have to pay for your own leads that comes through your website due to people finding you through advertisments and tv but I know very well that all of you have paid for leads in one way or another to a person or a company.
So please give it up. There is flaws in every lead whether it comes from my website or someone elses. Its up to you to take a chance and see what that lead could do for you.
You guys talk like you have made a sell on every lead that ever came your way! BS!
Its that simple folks!
Also, in my last 5 purchases, I accepted the first offer 3 times. That is because I set the guidelines up before discussing price. Like I know what the TMV is, etc. Then, the salesperson presents a number. And often, I accept it.
The two exceptions were one dealer, where I was looking at three different vans (same make, just different options). In that case, we negotiated a 'fair profit', which was $200 over invoise (there was a $300 processing charge, which is average in Virginia).
The other one was very unpleasent. I will not go into it.
Maybe this is why I like buying cars: it is not a hassle for me.