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the simple way to think about it is:
10% lay-down
10% no chance
the remaining 80% are what the salesman is for.
The problem with the reverse auction approach for all parties is that a sale is never really a sale as either side can drop out.
I have a feeling like some previous posts that some dealers may not have the goods but they have "something close" ...
To quote Matthew Broderick when talking to Jim Carrey (his psycho cable guy character) in "The Cable Guy", "I just don't have a place in my life for another friend right now".
And they disappear as fast as they start up.
Bill, I do wish you success. Just be aware of the overwhelming failure rate before you quit your day job or invest a ton of money and effort into this.
If, a year from now, you are still here and are successful I will fe the first to congratulate you and admit I was wrong.
The hardest part (IMHO) is for a buyer to determine the value of the trade. In the DC area, though, we have resources available. In particular, we have CARMAX. They give you a value, and will write a draft -- on the spot.
WHat I do when I am ready to buy is first check KBB and edmunds. Then, I take my car to Carmax. Finally, I go to the new dealer and negotiate. I tell them I will handle the trade seperately...that I got an offer from carmax.
Every time, I got an offer on my car, but ended up selling to Carmax. (Carmax can be 1-2K higher on a car they want to sell).
jlawrence01 - The problem with the reverse auction approach for all parties is that a sale is never really a sale as either side can drop out.
Jlawarence that is a problem with any sale! Regardless of what method you used to obtain the lead. There is no promise that you will make a sale whether you get the lead from tv, newspaper, flyers, reverse auctions, invoice dealers and such.
And I don't know where you got that the reverse auction was a sale! I have all along said the buyer was not obligated. If it was a sale well then the buyer would have to be obligated wouldn't they? Its a lead generator. The winning dealer will get the contact info on the buyer. Works just like any other lead generator.
So, somke dealers will provide lowball's to get the buyer in the door. Then, the buyer is pissed at you (and the dealer).
And, I do not see how this differs from going thorugh edmunds and asking for a price from 5 dealers.
i dont need to pay $125 a lead. even if its only for each sale, that equals or beats what a salkesman makes, and they actually EARN the money with paper and leg work.
if i were you, i would try to go sell cars for about a year or two. learn about the business and what motivates dealers....THEN give it a shot, because as of right now, you have no clue.
We will make our buyers very aware that if they find someone low balling or doing the switch and bate tactic we will take immediate action. Probably ban them from using our service. I personally wouldn't want to do business with people like that anyways. We also plan on installing a way so buyers can rate dealers. If a negative reply comes in we will follow up on each and every one of them.
Again Manamal we are not charging you a price unless you make a sell!
ban one of the eight dealers for lowballing. now you only have 7. the problem is that the dealer you just banned is only the one that was CAUGHT. another will do it, and another...and so on...eventually, you wont have dealers...or many of them, and the process will defeat itself by definition.
And by the way - instead of using "make a sell!"?, why not use "make a sale". Not only is it proper grammar and proper use of the word, you're talking to dealers and car buyers here - let's do it right and not look foolish, OK?
he probably thinks im beneath him or something...
you dont think...
surely not!
could it be...
that he CANT respond?
Sorry couldn't resist. I'm in the same boat in getting a response to my 3 big challenges to overcome as well as the trade issue which I see as a huge problem.
Also on the bird dog fees don't dealers send those on successful SALES not just leads? :-) Here it looks like the dealer has to pay for the lead since neither side was obligated on the sale.
Duncan
As a consumer who at least thinks they know what's the ball park they should pay for a particular model new vehicle, I'd never consider using a 3rd party goofy deal like this. I have trust in my own abilities to arrive at a price satisfactory to myself and the dealer/gsm/salesperson. It also takes the preference of what dealer the buyer chooses to deal with out of the equation too. I think that was hit on about 5 pages ago. I know there are some stores I'd never go near.....
Not to mention the people that sell cars every day have pointed out this scheme basically would force them to spend money to effectively lose money. What would ever cause them to do this? Besides a wish to go bust?
Bill, how many dealers have you been to there in Okie City, or even bought cars from?
Curious, what happens when Dealership A bids the lowest price, but Customer goes to Dealership B to purchase the car. Customer pays, let's say $20 more at Dealership B (just because I like Dealership B better and its right down the street from me instead of cross-town).... do you charge Dealership B for the referral?
How you going to qualify Customers? A dealer will only want VERY warm leads, not "so-so wonder what price i can get this for" lead just by filling this out....its not worth their time to mess around with the 90% of those people who "join" your program.... just b/c you ran a credit report and Customer has 725 score doesn't mean they are qualified to buy my $65k Lexus LS430.....
how serious are you about buying that car?
Answer: It is currently happening.
Curious, what happens when Dealership A bids the lowest price, but Customer goes to Dealership B to purchase the car. Customer pays, let's say $20 more at Dealership B (just because I like Dealership B better and its right down the street from me instead of cross-town).... do you charge Dealership B for the referral?
Answer: Yes
How you going to qualify Customers? A dealer will only want VERY warm leads, not "so-so wonder what price i can get this for" lead just by filling this out....its not worth their time to mess around with the 90% of those people who "join" your program.... just b/c you ran a credit report and Customer has 725 score doesn't mean they are qualified to buy my $65k Lexus LS430....
Question for you! What site or advertising source gives you a promised sale? There is no very warm leads. Your silly to think so. Do you have a crystal ball that tells you this guy might buy but this one is a tire kicker? NOPE!
Wowie.....
Hey I applaud you if you know what your doing. That is great. But a majority of the world stands no chance against sales tactics that has been done time and time again for years.
Plus I am not in OKC. I do not plan on releasing this site there.
dbgindy.....
Do you want me to do the whole deal for you. You can handle the trade sceniorio. Give them an honest quote the first time and they just might buy from you. I do agree though only a few of us realize what your doing. Like I said earlier consumers think guide book values are set in stone. They don't realize you guys only pay out wholesale or current days auction market value.
drift or Mr. Perfect...
I don't believe you for one second.
bowke28....
Absolutely I would ban them even though it might hurt my business. I would hope you would fire idiots like that. Like I said earlier 1 customer telling 10 others turns into 30. Word of mouth will destroy you!
but.... if you are a valued customer, dealership is very customer-oriented and wants your future business, who knows, they may take care of it for you. Let us know!
"also, by the ACTUAL privacy laws, i cannot run your credit without a signature on the original form. i also dont remember more than 1 or 2 times that a cash buyer's credit was actually run.]"
And that's exactly why I wouldn't give you my SSN, bowke. Give you my SSN, when, if the deal is completed properly, it isn't even used? What happens to it then? The recently paroled, 18 year old detailer picks it up off your desk and my 15 mins of fame comes via a Citibank Identity Theft commerical? This has the inklings of the "signed offer" discussion I had with you and drift a while back and all I can say is I think we'll probably just agree to disagree.
Bill,
Jlawrence's point about it flipping from a sales generator to a lead generator is true. You began the discussion by explaining the process, the logical conclusion of which (as described by the very title of "reverse auction") is a sale. It's not entirely different than dealers selling cars on Ebay. Sure, the site draws leads into the process, but after all is said and done, a car should be sold by somebody to this lead. If true, this would possibly be slightly more attractive to me (if I were a dealer or salesperson) than just another emailed lead.
However, with ordinary lead generators (the best of which, quite possibly, is the manufacturer-sponsored, dealer-specific site), you have a potential customer that's interested in your vehicle and someone you can deal one-on-one with, not compete for the last dollar with 5 other dealers (which, you might be doing anyway). This does 2 things: one, it keeps your customer service level high, because it's more personable and no matter what anyone tells you, just because they are "shopping" on the internet, doesn't mean they aren't going to want to be treated nicely at the end; and two, it allows you to preserve profit. You can decide when to stop and not be "sucked" into gutting a price just to move a unit, when some nice person just dropped you an email and is willing to pay invoice + $500, but you missed him because you were playing Battle Royale with a dealer that's 5x as large as you and will undercut you anyway.
Hey, any venture is worth trying, if you think you can make it work. To that end, I wish you luck. But, despite the fact I like internet shopping and have no fears of it, etc--I still prefer to go down to my local dealer to talk turkey, instead of spambotting 5 area dealers to save $100.
"And even the most educated people in the world makes some grammer mistakes. Good to see your Mr. Perfect."
Some mistakes? Bill, I understand many people get upset when they are called on their grammar--they feel those that point out grammar errors are anal, nitpicking, smartypants, whatever. In reality, good grammar is one way I determine how seriously I take a person and I couldn't care less if it's on an internet message board or a Ph.D. dissertation. I can't take you seriously, because in that sentence alone, you have 2 grammar errors and a misspelling. You claim to be well-educated and you might be. But, I know people who have high school educations that present themselves better.
I don't believe you for one second."
Now, you've really hurt my feelings - and just when I was starting to care about what you think, too...
So I googled www.mycar.com. Hmmm...top of the list, but absolutely no chatter under "groups", where everyone and their second cousin would talk about such a site. There should be SOME talk about it, if it's even remotely successful, if no more that the average Joe trying to find out if it's legit. Can't figure out how old the site is. Any internet geniuses here capable of some research?
Somethings not right here.
-Dan-
1. Allow buyers to restrict the bidding dealers to a specific geographic area, so they don't get stuck driving three hours to save $100.
2. Set a reasonably high minimum discount increment, say $250, so that buyers aren't going anywhere for trivial differences in price (related to #1).
3. Require consumers to put in a max price they're willing to pay (i.e. I want the Blahmobile LX with packages X, Y, and Z, in Ticket Me Red, and I'll pay $18,900, max). This means buyers won't be trapped into a deal that they don't like by #4.
4. Require buyers to put up a large deposit, say $300 - if a dealer makes an offer that's below the max price the buyer gave in #3, and the buyer doesn't go through with the deal, the dealer gets the deposit for their trouble.
These modifications will ensure that dealers get well-qualified leads, and that buyers get attractive offers.
A well-designed site could even make things better for all involved - allow dealers to input into your system the minimum they'll even consider for a particular car, so that they never even see requests from someone who wants to buy a Tahoe for $10k. From the buyer's side, you need only show them the winner's name, but you can show the whole bidding process (i.e. dealer X bid $18,500, dealer Y bid $18,250, etc.), so they can see all the benefit they got from using your service.
If you can make your site a way to deliver real leads to dealers, leads that are as legit as someone standing in the showroom, then you've given the dealer real benefit, and you have something for which the dealer is probably willing to pay.
jratcliffe....
Thank you for the ideas! I sincerely appreciate it. I will run them across my partner.
Bill
-Dan-
Otherwise, someone else hit it, the whole thing reeks of the "easy money" Amway distributer. I have a buddy like this, and he's basically ruined our friendship because he won't shut his mouth trying to get me "on board" his "business". Maybe I'm old school but I believe a business should provide a service. Middlemen went away with the advent of direct-mail catalogs.
Have you polled any dealers in your area?
Go back and talk with the 95% of the consumers you talked about earlier that stated they would use your service, ask them what sort of fee they would be willing to pay.... I think you'll have better luck there.... your talking to the wrong people.
Its like asking your local water utility to put in-ground sprinklers in my lawn.... "I promise I will use more water and your revenue will increase, all you have to do is pay for installation of them!"..... yeah right
what car DID YOU BUY on the auction site?
I am just trying to imagine though Butch why a dealer would not be willing to pay for a SALE not a LEAD when they are more than willing to pay out bird dog fees for referrals. On average I am paid about $100 a bird dog. As a matter of fact I have a buyer right now I have referred and I should see my money within a couple of days.
Tell me Butch why would they pay me for this referral but not for a referral off my reverse auction site?
I didn't buy it a friend of mine did. I helped him start the auction to see if it would work.
when you get a $100 bird dog, the dealer doesnt pay the entire amount. at most, they are responsible for $50 of it. the SALESMAN pays the rest in most cases. in my case, if i wanted to send out a $100 dog, i would have to pay $75 of it.
also, if you already have dealers signed up, then you must have gotten the ones with new owners that have a car business "hobby", but their REAL money comes from something else...maybe a pro sports franchise.
Whoever brought up the trade in problem is dead on! So the customer drives to the winning dealer only to have his trade appraised at far less than what he "knows" it's worth. After all, he learned it's "value" form the internet and from good old Bill, the middleman.
Nevermind, it's a Volvo with a bad color, no sunroof, cloth and high miles that nobody wants in spite of what the "books" say it's worth.
Bill, I applaud your tenacity but you are "whistling in the dark" on this one I'm afraid!
One more thing, I did buy a bumper to bumper warranty but a ding wouldn't be included in that anyway, right?
I did call him not even 40 minutes after I got home. And funny thing is I left him a message and then he left me a message, but not from his work phone, but from his cell phone. He definitely hadn't heard my message at that point. And like I said, today is his one day off of the week. Should I call and talk to someone else about it, or should I wait until tomorrow when I know he's going to be there (and I'm actually going in anyway to drop off the title of my trade-in).
"mr. buyer, if you dont want to do business with that dealer, it will cost you $xxx to go to the next one."
however...
that STILL doesnt eliminate the possibility of a dealer bidding without the vehicle.
if you wanted the snazzmobile, and i dont have one, then heck! i can sell that for $2000 less than the guy that DOES have it! "c'mon down to the lot, little lady! and be sure not to forget to bring the hubby with you to make the decision!"
regarding the birdie...
because throwing your $125 into the mix while paying the salesman AND taking a loss on the car is not good business. 2 out of those 3 is ok...but not all 3.
Bill
;-)
We have few problems doing this and the customers are happy. If there actually is a problem (rare) we want to make it right.
If you signed such a form you could have a problem.
Isellhondas is correct. If you signed a form you waived all rights. But I would still try.
Bill