GM’s experiment at selling cars in California on eBay has logged 45 sales in its first nine days, reports Automotive News [sub]. After announcing the program to considerable hype, GM is giving initial results a cool reaction. “It’s way too early in the program to have any concrete understanding of what’s going on,” say spokesfolks. No wonder they’re a bit confused: the eBay experiment received 630,000 visits and more than 960,000 searches of listed vehicles in its first week. “I’ve sold some vehicles to people that saw the vehicles on eBay, but they didn’t buy them on eBay. They called, came in and bought them,” says one dealer. Still, without a number to quantify the amount of leads that generated sales, it’s hard to point out the program’s redeeming qualities. Especially considering that GM didn’t receive a single offer for a vehicle at its listed price. Which means either GM or its dealers are missing out on profit on every vehicle sold through the eBay listings.
A GM product selling for (any) list price? Please…that’s not going to happen, especially on eBay! Offer ’em at no-reserve starting at $0 and see how many they can move!
I guess the whole point of eBay is not to pay list price so its not surprising that the bids are coming in below list.
problems:
1. the prices aren’t bargains and it appears that the online inventory only reflects a portion of actual inventory
2. a detailed search/filter function is non-existent. (effin’ check out carmax’s website for the bare essentials!!!)
The whole point of placing your inventory online is that it theoretically makes in incredibly easy to find the exact car you want out of your metro area’s total inventory.
sigh, it’s going to fail….GM’s going to say pushing an online distribution channel is not what the market wants…..when in reality it was a lazy-buttocked attempt in the first place.
Another good strategy spoiled by horrible tactics (probably in part due to dealers’ reluctance, marketing’s lack of balls or intelligence and no one in upper management having gone through the typical car buying experience in years).
For those who will criticize, have all your business ideas panned out? I know that I’ve had some ideas that I thought were great that I either didn’t implement well or weren’t as great ideas as I thought they were. I’ve also had some ideas that were just side thoughts that ended up being profitable.
Remeber, Amazon.com lost money when it first started. Brick and mortar stores have existed for centuries. Mail-order for over 100 years. It’s going to take a while for traditional businesses to figure out how to sell on the web. Frankly I’m surprised that as many folks buy used cars on eBay as they do. It’s a pretty major purchase to make sight unseen.
That just gave me an idea, though I haven’t a clue how to promote it: bonded car inspectors that check out vehicles sold on eBay.
It will fail. There is no incentives to the customer (reserves lower than the invoice) and the franchises would never want it cutting into their profits. GM would not guarantee the difference for lower bid from invoice to the dealers.
So it’s nothing more than trying to get a better price above invoice for the dealers but as the author pointed out the customers bypassed ebay and went to the dealer anyway.
Apologies beforehand if this turns into a grumpy old man diabtribe (not looking to start a flame war).
*For those who will criticize, have all your business ideas panned out?*
Why yes….I’m doing alright enough to waste 30 minutes a day on TTAC. Though this being the internet, I could be a 13-year old living in my mom’s basement in between games of Counterstrike and Victoria Secrets’ catalog derived self-pleasure.
But I’m getting off track, the whole point of criticism is to rigorously exchange viewpoints so that hopefully the original idea turns out for the better. Lack of responding to criticism is what got GM into bankruptcy!
Now on TTAC people criticize not because we are some high and mighty experts but because we have personal firsthand knowledge of X, Y or Z. If there is one thing everyone can agree upon is that a car buying process is antiquated, costly in time and fraught with opportunities in which someone can screw you over.
The whole premise of e-commerce is that the buyer disintermediates the middleman and is able to get the exact product that she wants directly from the source, saving everyone time and money.
Now go find me a red exterior/black interior Malibu LTZ V6 with a sunroof within Orange County on gm.ebay.com. Right now. Seriously. Something that should take five seconds is annoyingly difficult because GM did not included a detailed search feature. (why can’t I make “sunroof” a mandatory requirement in my search?)
http://chevrolet.ebay.com/ga3/search/searchresults?sid=p1468844&pageNo=1&year=Any&model=Malibu&trim=LTZ&color=Red&transmission=Automatic&price=Any&radius=_25&zipcode=92607&sortby=DistanceNearest
This is inexuseable as the same search on carmax is easy.
http://www.carmax.com/enUS/search-results/default.html?APp=50&N=4294967083+4294966942+242+4294967251&D=90&zip=92607&No=0&Ep=homepage:homepage%20Make&Rp=R&PP=20&sV=List&CD=14+190+9&Q=4012ffc5-05cd-43c4-b2b7-4c2fe7da7742
I can diatribe on and on but the gist is this…. it ain’t 1997, lots of mistakes and successes have been made in e-commerce. Hell, the whole phrase e-commerce is antiquated as e-commerce is the expected, default form of commerce. GM doesn’t need to reinvent the wheel. And the more criticism your idea can withstand, the more successful your idea will be.
PS, as for the car inspection services…..check out carchex (it should be a sponsored link) when you google “car inspection services”
Online car sales run into difficulty because dealers will not negotiate digitally. They want the potential buyer’s bum in the showroom where he can be Four-Squared, defeating the entire purpose.
The Financial Post’s Diane Francis suggests carmakers sell automobiles like Dell sells computers. Cars offered, bought and financed online; viewed in generic showrooms with test driving capabilities; assembled regionally to the buyer’s specification; delivered within days to his doorstep; warranty service provided by independent contractors. Efficient, effective, maximum value, minimum cost.
The current high cost, low value system isn’t working. This sounds like a win win.
Typical GM execution: Ready, Fire, Aim.
It would not have been hard for someone, anyone (!) at GM marketing to spend some quality time on competing websites and copy searchable criteria listings.
Hell, look at the ease of use AutoTrader has and copy it!!!
But no, try searching for a G8 GT on ebay. Most of the listed cars are being sold by GM, but close to half don’t even list the color of the car! Good luck searching on moonroof options.
Like I said, another good idea down the crapper due to abysmal execution.
Our tax dollars hard at work…
The consensus here is that Ebay is supposed to prevent the customers from getting screwed? Buying a car online that you know little about is getting screwed. Walking into a dealer showroom and paying the dealer a 5% return on his money,in most cases, is getting screwed? Yea, I think the dealer is getting screwed.
I was going to come in and say that GM could sell all the cars they wanted if they gave them $1 starting prices and no reserve, but someone beat me to it.
Then I was going to comment about how pathetic the search engine they provided was, but somebody beat me to that too.
On the one hand, using eBay was a stroke of genius. They are the single largest online marketplace for just about everything legal. But the pricing model GM used was brain-dead, thereby avoiding the best part of eBay, leaving us only the worst part of eBay (like the search engine).
To the best of my knowledge, none of the carmakers has figured out how to provide the search engine consumers want. A consumer should be able to precisely describe what they are looking for and immediately find every location in the country that has it in stock.
The last time I was considering a new car purchase, I gave up on their pathetic web search interface. I went to my local dealer and told them what I wanted. They pretended to do a search and told me that they couldn’t find the exact combination of features I wanted. In fact, they were lying most likely because they thought they could get me to give up on my feature list and buy one out of their inventory.
So, back at home, I noticed that the online inventory search was based on identifying your local dealer, looking up that dealer’s five-digit dealer ID, and then doing an inventory search on that dealer ID. A little bit of programming and I started a script to send 100,000 requests for every possible dealer ID. That gave me a list of VIN numbers for every vehicle on a dealer’s lot in the United States. I did my preliminary filtering based on VIN, since the VIN code indirectly indicated engine size and trim level. Once I had my list of potential VINs, I wrote a script to submit each one against the database that kicks out a copy of the window sticker. With the windows sticker information, which included all options and color codes, I could **finally** create a list of current inventory in the United States that matched my exact wants, and every dealer that had such a vehicle in stock.
Why the hell did they have to make it so hard?
****Yea, I think the dealer is getting screwed.****
Heaven help the customer who walks into a dealership and doesn’t know the meaning of the four square.
Look, I know that margins on new car sales are razor thin. So what?
If any dealer wants to give up with their franchise, I’d love to round up some backers and buy myself his. I’ll be happy to pay a fair market price for any franchise except the third tier brands (Mitsu./Kia/Chrysler, lol.)
There aren’t too many businesses that enjoy as many governmentally enforced protections from competition as the OEM new car franchisee.
New car retailing ain’t easy but how can they complain when their competition is managed by state law?
slateslate wrote “Heaven help the customer who walks into a dealership and doesn’t know the meaning of the four square.”
I know the meaning of the four square. It means “we have no respect for you and we want to screw you over.”
slatelsate wrote: “There aren’t too many businesses that enjoy as many governmentally enforced protections from competition as the OEM new car franchisee.”
This is the biggest road block to e-commerce for cars. Every state is different and old dogs can’t learn new tricks. Car franchise laws prevent it from happening.
Even though they tried this within one state, California, the dealer’s association had to have all members agree together and set the rules to let GM try this. Design by committee of car dealers? What do you think you would get.
/rant on
The “Guvmint” would need to federally mandate the franchise laws invalid to have a car manufacturer be able to do it the correct way. As mentioned many times here on TTAC, if the dealerships were exposed to fair trade laws of any other business the car buying experience would be much different. There wouldn’t be any need for this “experiment” as somebody would have already done it.
Car dealer protectionism has cursed the industry and ham strung the manufacturer’s ability to try new things. We will have this business model and “Guvmint” bailout for a while.
/rant off
As far as the search capabilities. It is a no brainer as other web sites have done it with ease. This “experiment” wasn’t taken seriously enough by the “design by committee” car dealerships in California.
eBay got me $125 for an out-of-print paperback book I paid fifty-cents for at the used book store.
Twenty-nine bucks for the vinyl LP record costing 49-cents at the store of thrift.
But new cars costing multi-thousands is an entire different game of ball.
Look past the press release, and the idea of GM selling cars on eBay is far from new or innovative. Consider that outfits such as Carsdirect have been selling on the internet since 2000, and consider that many car dealerships have some sort of presence on eBay.
So why did anybody pay any attention to this? I really don’t get it. There’s no news in that story. It’s just another example of Lazy Media Syndrome.
See, there it is again: GM starts a new initiative that neither changes the world, nor instantly revolutionizes the business.
Can’t these guys get anything right? I mean Toyota changed the ashtray in the Camry, and instantly the world was a better place. GM? Not so much.
Can they do anything right?
Ebay is first and foremost an auction site so it stands to reason the cars should have been offered as cheap as GM would dare sell them. Instead it appears GM added whatever profit they desired on top of the price. That’s fine and it’s their right to do so, just don’t be surprised when items don’t sell.
Many of us have sold on ebay before, couldn’t GM have found some ebay sellers in it’s ranks to head this effort up? Surely there are consultants willing to be paid for this as well.
And the lack of a proper search engine is inexcusable today. This is not 1995 and we have everything from Google to straight database query tools at our disposal. Why wasn’t the effort made to create a search engine when so many others have it and GM spends 2 billion a year on advertising in other areas? Take a slice of the money and pay someone to make a search engine.
With all the taxpayer money they have they should be able to afford this. How effing hard is it anyway?
Great notes about the California project.
We welcome all the thoughts … and when it comes to search, we hear you. That’s one reason its called a pilot. Anyone who has ever done a project like this online will invariably get complaints about search. We can and must do better. Since we’re GM, cutting and pasting someone else’s search program is not something that is affordable or practical. Lots of at-home guys do that sort of thing … we have to (and should) play by the rules. Great search comments, though.
A few additional facts to consider:
* Yes, shoppers are actually discounted BIN prices, and they can negotiate lower prices if they would like and the dealer is willing. Many of us like to do that … some do not. Doing it in person can scare some folks, so using the technology to dicker at arm’s length can be appealing.
* 45 sales is misleading. The main goal of the California project is to generate leads for sales and expose the product to people who otherwise might not consider GM. All of the sales are happening at dealerships, so until we can match those results with an eBay lead, we won’t really know the results … it’s not like buying a book or record on eBay where the transaction actually occurs online and is trackable at both ends. We’ve had nearly a million searches of inventory and about 2,400 offers to buy in just the first week, so we’re off to a strong start.
* People have often criticized GM as being too slow or not trying new ideas. We think this is a great thing to try and hope, if successful, we can roll it out nationally.
* It really is about making it easier for customers to do business with us. Is it perfect? Not yet. Can we make it better? You bet. Will we try? Absolutely. It is the nature of new programs to start at the beginning and improve from there.
Again, thanks to all for commenting. Good stuff. We appreciate it very much.
–John M. McDonald
General Motors Company
Detroit
RE: Great News about the California Project
John – very NICELY done!
What I find most refreshing (without a doubt others will too) is that you listened directly to the concerns and issues in the community. It’s clear that you read, re-read, and tried to understand all of the messages in this post at least. This isn’t shameless pandering … if we/I want better search, better strategy, better execution then the first thing that gets us there is someone listening on the other side. Nicely done.
To the points of your lead generation program – rock and roll!!! If there are also training/coaching strategies for dealership internet staff to actively drive those leads then you’re right – it’s off to a roaring start.
Good for you and your GM team. Keep driving!
Ron Morrison
I was reading other auto forums and surfing GMeBay site for some nice deals. But, it seems like experienced buyers are not really happy for some reason. While reading car connections….
Reviews on GMeBay feedback do not seems to be attractive.
one can look at following pics:
http://www.imageneva.com/out.php/i2872_GMeBayfeedbackreviews.jpg
or
http://i27.tinypic.com/11kjql5.jpg
or
http://img5.imagebanana.com/img/crx3z4d/GMeBay_feedback_reviews.jpg
It looks like a joke or funny pic.
[URL=http://www.imageneva.com/show.php/2872_GMeBayfeedbackreviews.jpg.html][IMG]http://www.imageneva.com/out.php/t2872_GMeBayfeedbackreviews.jpg[/IMG][/URL]
Anyway GM and eBay both are very disppointing.
While reading other autoforums, and surfing GMeBay for nice deal. It seems that buyers are not really happy.
Have a look at following pics
http://i27.tinypic.com/11kjql5.jpg
or
http://img5.imagebanana.com/img/crx3z4d/GMeBay_feedback_reviews.jpg
or
http://www.ephotobay.com/image/gmebay-feedback-reviews.jpg
or
http://img.hostmyjpg.com/440188096_GMeBay_feedback_reviews.jpg
GM and eBay both are disappointing.