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now, lets try this from a dealer's perspective:
1. buyer from 250 miles away wants the snazzmobile.
2. i win the bidding by $50 over a dealer thats 20 miles from the buyer
3. the buyer buys from the local guy.
now im going to yell
WHAT ON GOD'S GREEN EARTH WOULD MAKE YOU THINK THIS IS WORTH MY FREAKIN' TIME?!?!?!?!?!?!?!
so i PAY you money for the RIGHT to bid on a deal that MIGHT happen.
dont you see flaws here, dude? not only am i giving something away, but i have to pay for it too?
the margins arent going to be thousands. the 3 lowest bidders probably wont be more than $100 apart, and at least one will be close to the buyer. if im in the boonies, ill lose every time. not worth paying you.
if im in the city, i have 5-10 competitors to deal with. NOT worth bidding in the first place...let alone paying for the RIGHT to bid.
sorry, pal. you lose.
Seriously? I missed that one... What's the purpose again?
I need some of what he is smoking... lol...
Which may not be such a bad thing ...
I don't see how this is ever going to work practically ... unless you live in a remote region and only have one dealer to work with.
then you are only bidding against yourself...boy..THATS smart!
Since you haven't said anything to the contrary, I'm gonna assume there's no federal requirement to provide a SSN other than the cash reporting form mentioned earlier.
If there is, a simple link will shut me up :-)
Oh heck, here's a link that says you don't have to provide a SSN to buy any goods or services. (the State DMV may require it, but I don't have to use a dealer to register/title/pay taxes on a car).
Steve, Host
SM1: "We'll do 20500, but not a penny lower"
SM2 (on the other side of the floor): "20400"
SM1: "Well, maybe we can go down to 20250"
SM2: "Dangit! OK, we'll low-ball that other dealer -- 19995!"
And so on....
Bill 100- interesting thought but as several of the car pros have pointed out it does have flaws. You wanted feedback and I'd say you've gotten it. I think it sounds great for consumers ( especially if they have nothing on the line) but I also don't see it as that profitable for dealerships on what for the most part would be very low margin deals, I'm not in the biz just making observations as a semi knowledgeable outsider.
Last thought on this (and bill100 this is meant constructively). Speed kills. I can tell by your posts that you really believe in this and that's great,but your exuberance is a little over the top. Most of the posters who've commented on this are very upfront pros trying to tell you they've seen these kinds of things before and it hasn't worked for them. No amount of excitement is going to change their history. Only when you have a proven track record of sustained success that make it very worthwhile for them will most dealerships get in.
Just my .02
Duncan
All you guys are really missing the point. I appreciate all the feedback.
You guys have provided alot of good feedback and some that really doesn't make sense but that's besides the point.
Bottom line is this...NONE of you would give a good reason why almost ANY dealership will pay a person a $100 birdie fee for a referral sale.
I have been paid this fee numerous times.
NONE of you will answer me on my question what is the difference between following up on email/invoicedealers.com type sites request compared to what I am doing. I see no difference. We are simply asking you to place a quote to a buyer just like any body else would. Then we give you the option to beat the lowest quote at your leisure if you want. You don't have to. Almost always a internet sales manager will come straight out of the shoot and offer a buyer a great price at or alittle above invoice for the simple fact that MIGHT be the ONLY chance they have to land a deal with the buyer. Atleast with our auction service you have mulitple chances!!!
Now having the dealer pay a monthly fee was just an idea. We are also looking at having the dealer pay a per sale fee. That way if a dealer looses then he doesn't owe a dime!!!
And for the 100th time now get off the 250 mile idea. Its getting old. I told you guys this service will be offered by major city local only.
Well thanks again.
Bill
Question for you? Why is it that dealerships nationwide will sell you car over the internet at a low margin any time day or night. I have seen it over and over again. I tell you why its because that is what people expect nowadays. And dealerships knows now that if they want to keep in business well then they must move some units at a discount. So why not use a reverse auction to help you do just that? Same thing as selling through email! A smart shopper has emailed several dealers. Obviously the lowest dealer will get looked at first. Our system gives the dealer a second chance to earn that person's business. The tradional online method does not and that is why most of the time a internet manager will quote such a low margin profit deal the first time!
So what the heck do we (dealers OR consumers) need your service for if this is already working just fine? This idea may help consumers (since they have nothing to lose), but there is NO WAY that it'll increase gross profit. Even if someone bids and wins, there's always someone who can sell it for $20 cheaper, and you've lost the deal. Gross profit is NOT part of your equation.
If a dealer can't increase business AND gross profit, the idea doesn't work.
Also, if we don't agree with you (and we don't), then "we just don't get it"? Who says you're right? I have 15 years of experience - your idea doesn't even have a track record!
1) Their low margin goes to almost nothing because of bidding against other dealers. Granted they don't have to bid low but if they don't there is no sale and no money for you or them.
2) Buyer has no stake in it. I can seriously see people with nothing better to do waste time doing this ( and then brag on Edmunds that they could've gotten the car for X price). No gain for you or the dealer.
3) if the dealer has a low profit margin anyway wouldn't this disappear after paying your fee? I have no doubt you've collected bird dog fees from referalls. I'm also willing to bet that those deals were good deals for both your referalls and the dealers not the no profit deals on most vehicles that I could foresee.
Just my thoughts ( for what they are worth:-)
Duncan
"With our service there is no obligation on the buyers part only the dealer. The dealer must hold true to his or her bid 7 days after the auction ends"
1. no obligation from the buyer
remember, dealers sell cars, not bid for them. Without a committed buyer you will lose many potential dealers. I have a good chance of selling somebody in my showroom. why should I waste time chasing a no profit deal for a maybe who might be a kid, not a real buyer, somebody who is looking to keep their local dealer honest, etc..??
2. hold true for 7 days.
How can I do that? If I have 30 civic's in stock I may hold a price for a week, but what if its on a car that we have 1 or 2 in stock? how can I hold the price if I sell the car? I can't hold a car for a maybe a week from now.....I get the feeling the people who are interested in buying by using a bidding process are looking for hot cars that are selling at or near MSRP...not the ones that anyone can buy at invoice or a couple bucks over.
I applaud your efforts, and anyone who has an idea that will increase my business is OK in my book....but I think your idea has some issues that need to be addressed. first, you need a buyer who is financially committed to buying. This is a very important factor to get dealers attention. Also shorten up the buying/bidding process. Dealers work on a month to month basis. What if the factory incentives change during that week? I can't hold a price if that happens. ford and Lincoln, for example, often change incentives daily...a week is way to long.
How would you gross profit on internet deals? I don't see it happening. I can see increasing sales but grossing out profit? From what I see almost anyone can buy at or alittle above invoice simply by using your internet sales department. You guys are to blame because you have people use to using internet departments now expecting low margin deals. My site is just like any other. We are there to increase your business. The more cars you sell the more profit you will make in the long run. Go ahead sell a couple at gross profit then sell the same model at a discount to another. You better hope their not family or friends! Because now you just earned your self bad feedback! Lost potential customers and much more. My site is not designed to gross your profit. My site is designed to send you extra business. And there is a difference. Just like I said again and again my site offers you a second chance to land a car deal. Other sites don't you only get that one chance. It just sounds to me like your only interested in maximizing your profit and not making your customers happy. If you wanted to maximize your profit on all car deals well then you should of stayed away from low marginal deals. And you know I am right on this one.
Again why is it dealerships are so willing to pay a $100 birdie fee for referrals?
I sincerely appreciate it.
Bill
Duncan
Internet deals are usually not high profit deals - they're not designed to be - they're designed to sell cars with minimal hassle to the consumer and the dealer.
Vehicles like Powerstroke Ford 4x4s, Corvettes, Honda S2000s and others don't get sold for $100 over invoice, whether it's an internet sale or not.
"My site is not designed to gross your profit"
Exactly, so why pay a fee when I can cheap sell cars all day long to local folks, right in my own internet department? Volume only goes so far when you're doing loser deals on new units!!
It just sounds to me like your only interested in maximizing your profit and not making your customers happy
There you go again with your insulting, biased, and non-educated assumptions and generalizations. How would you ever think that I don't care about keeping my customers happy? Without happy customers, you have NO business.
On the other hand, it's a sales manager's job to ensure MAXIMUM PROFIT ON EVERY DEAL. That's how we stay in business. Sometimes maximum profit is a deal that's into the holdback - it was maximum for THAT deal.
If you don't understand the car business (at all) (and you don't) how can you possibly market a plan to increase sales? How can you sell the idea to a dealership when you don't even know how a dealership works? You have to understand the sales manager's job before he'll even consider talking to you about a program.
I was going to give up on this line of discussion, but with folks condemning (successfully and rightfully) every idea you've brought up, I'm just trying to figure out how your plan could possibly work!
"And you know I am right on this one"
No, you're wrong - you're wrong because you have no idea what you're talking about. If you did, your wild assumptions and accusations wouldn't be your first reaction when challenged by people who KNOW what they're talking about.
There's no "win" in this deal for me.
Releasing the identity of the lowest bidder to the buyer does no good, since the buyer now has a NUMBER, and no commitment, in any fashion, on the part of the buyer. They can shop that number for days, take their sweet time, then come back to you. The dealer has to wait, patiently, for 7 days, with a unit gathering dust (that they could have sold last Saturday) for someone to decide if they can beat the price by $20.
You've just given them "your best price" (something I avoid at all costs) and my experience says you'll never see them again or hear from them.
strike three.
not only is it flawed...but its flawed just like all the rest.
also, regarding your last post...
release only the ID of the lowest bidder??? do you want to keep customers? if not, then go for it. i can just hear it:
"mr. bill, i paid GOOD MONEY for your service!!! and now you only give me a dealer that i dont like. i want my money back!"
also, what about markets like louisville, KY? we have a metro area of about 1 million, but there is only 1 of the following manufacturers here:
volvo, saturn, mercedes, lexus, BMW, jaguar, audi, saab, porsche, land rover, and infiniti.
there are only 2 of these:
lincoln-mercury, honda, cadillac, mitsubishi (both owned by the same dealer group), mazda, hyundai, kia, jeep, buick, GMC
you actually think people will pay for a "local only" service when there is only 1 or 2 bidders on the car they want?
Bill
what happens if the customer has a trade-in vehicle? Ewwhhh.. this could really get fun!
Is your goal when selling a vehicle, other than the obvious of making the consumer happy and picking the right vehicle, to make as much on the deal as possible?
If the answer is "no", that person won't be in the car business past next Friday.
Like I wrote, but you didn't obviously read, sometimes, max profit on a particular deal is a loser deal that's into the holdback - that's way it goes.
Do you think that ANY retail business would stay in business if they didn't sell their products for as much as the market would allow? Discount stores make a profit by competing with each other, but they still make a profit!
They may sell a gallon of milk at a 20 cent loss, only to make a 50% margin on the loaf of bread and box of Pampers that go with it.
Go back to school, take some business or economy courses, understand retail profit and loss, come back, and we'll talk some more.
I'll teach you what it means to "put some old boy in the weeds with a 4 pounder"...
Chevy Chase said "I was driving on the LI expressway and realized I needed change for a toll - I saw a National Change Bank sign, went through the drive-thru, and they gave me 4 quarters for a dollar. Those folks are great!"
Jane Curtin spoke as a manager - she said she was asked how teh bank makes a profit only giving change and not charging money for loans and checking accounts.
She said "Volume".
Volume without profit costs a business in many ways - without decent profit, high volume will ruin any sales business, considering the increase in overhead costs for staffing, rent, utilities, etc.
...like clipping these darned toenails!
see you all tomorrow
And remember, 75-80% of the car deals today have a trade, and 80% of those are buried vehicles - big negative equity.
What's your answer then?
Again I will say it! I know you can't sell at a low profit margin on ALL deals. Yes I agree you can't stay in business. But I still find it hard to believe that you don't pay for any type of referral. What is your secret? How do you get everyone in your market area to shop at just your dealership? That is incredible. Can you teach me?
a big part of the game is customer service, something drift has been speaking of... if you can't understand that, well.... we can all end this conversation.
But first, I am all so very curious on what you do when the customer has trade-in?
Bill
Sounds like the customer wants you (so you say with your initial surveys), sounds like you have a lot to offer, I am sure some of them will pay for your service. I honestly, seriously, don't see very many dealers, if any at all, paying for your service when you provide all the service to the consumer. If you want me to pay for something, you have to provide me with something and make it worth my while, make me need it.... something I just can't see.
oopss... just blew up. I can see it now, Billy Car Sales Web Guru said it was worth $5,000... really! as the customer stands by a 125,000 mile 1998 Ford Contour with bullet holes down the left side, McD's fries under the front seats and a few snicker wrappers stuck to the dashboard... really.
In my opinion, trade-in's can be the toughest part of the deal... How are you going to deal with them?
Butch is a very respected guy around here, and since you can't even use grammer properly (using "your" instead of "you're"), I doubt your allegation on the college time...
"We will educate buyers to negotiate the trade seperately"
Yeah, teach 'em and encourage 'em to play games with the dealers that are paying YOU - as soon as you sent me a buyer playing games like that, I'd never use you again, if I used you in the first place.
"Are you trying to say your dealership does not pay $100 birdies for referrals?"
Of course we pay bird dogs - who doesn't - paying a known customer that I've already done business with makes good sense - I'm not paying some fly-by-night idealist a fee for a maybe deal. And bird dogs are paid AFTER the deal is done - we don't pay anyone for a "what if".
"But I still find it hard to believe that you don't pay for any type of referral"
Where did you get this stuff? Did you make it up? Did you write it yourself?
I said, I think, that I wouldn't pay for YOUR referral. Not ANY referral!
ok, i'm done after this one. its useless. Can't wait till Terry gets back and catches up here, he'll fall out of his chair. I have yet to see Edmunds write a check for a car they quote! If your buddy (sorry, expert) has been to so many auctions and purchased so many cars over the years, you'll know exactly what I mean...
Good luck with your venture. Please come back once its live and let us all know how successful you are!