Beepi and Vroom and Carvana - will they make a DENT?

[Carluminati]

I'd eventually like to REJECT 3rd party leads, and tell our customers these VENDORS are unauthorized to offer our inventory, they have no permission, so if you want to buy a car, see us direct- and SKIP THE MIDDLE MAN like Carvana, Truecar, etc...

Because the truth is TPL's increase the dealers marketing cost, and lower the profit per unit.

no thanks.

 

[Jeff Kershner]

Because the truth is TPL's increase the dealers marketing cost, and lower the profit per unit.

no thanks.

I'm curious to why you believe they increase a dealers marketing?

 

[ryan.gerardi]

This came up in a recent article by @Stauning titled, “Old School Automotive” where he proclaimed that dealers need (and should want) third-party lead providers because not all prospective auto shoppers are seeking your dealership, let alone able to find you. I think this is a good point. You can’t be anti-TPL. They play an important role.

Can’t help but ask...what do third party lead providers have to do with Beepi, Carvana, and Vroom, one of which no longer even exists at this point.

 

[Ben_Adler12]

I had a friend recently buy from Carvana... she provided some insight when I asked her why:

Typically we go with Craigslist, but Houston just had this massive flood making private party a risky proposition for now. Josh's car was totaled last week so we couldn't really wait, and car dealerships are consistently slimy. We poked around online and found a good deal that happened to be from carvana, so we went with it. We have 7 days to test drive and return if we don't like it. Seemed like a safe bet. So far so good.

 

[joe.pistell]

Some random observations...

• Pro Fixed Price Carvana/Carmax: If you look deeply into the ppl who hate to negotiate, you'll find that they assume they're going to lose before they walk into the store. This 'self-doubting fear' overwhelms them and ruins the entire shopping/buying experience.
• Pro Commission Sales Car Dealer: A fixed price with a no-questions-asked return policy and non-commissioned sales reps is not a hard business plan to copy, but car dealers don't do this because, unlike many other franchised businesses, car dealerships are allowed to discount to steal biz from their brother(s).

There is a lot of room for both biz models. Carvana has a giant long term advantage because it has a far lower cost of goods sold (COGS). Carvana's repeat & referral sales are the canary in the coal mine.

 

[ruggles]

There really is no such thing as "One Price." Its a marketing strategy. Are you really going to walk a deal over $100.?


There there is:

http://www.autodealermonthly.com/article/story/2014/05/no-haggle-no-problem-or-not.aspx

 

[Cullen C]

There really is no such thing as "One Price." Its a marketing strategy. Are you really going to walk a deal over $100.?


There there is:

http://www.autodealermonthly.com/article/story/2014/05/no-haggle-no-problem-or-not.aspx

Yes, CarMax has lost thousands of deals over the years over $100. It is only a marketing strategy if you have poor leadership, training and execution.

 

[jscole86]

it has a far lower cost of goods sold (COGS).

Explain how it is far lower? I know that’s part of their marketing strategy, “eliminating the dealer”, but what exactly is their average spend per vehicle sold and what exactly goes into it expense wise?

 

[ruggles]

Yes, CarMax has lost thousands of deals over the years over $100. It is only a marketing strategy if you have poor leadership, training and execution.

If you say so. I'm sure you believe that. Camax has made may price concessions over the years BOTH monetary and by throwing stuff in. If you monitor social media you'll find Carmax is getting a reputation for high prices AND for being the place to go to sell a car with problems. I guess Tom Hudson's article was difficult to understand.

 

[Cullen C]

If you say so. I'm sure you believe that. Camax has made may price concessions over the years BOTH monetary and by throwing stuff in. If you monitor social media you'll find Carmax is getting a reputation for high prices AND for being the place to go to sell a car with problems. I guess Tom Hudson's article was difficult to understand.

It's not that I believe so, I know it's the case. I worked there for almost 8 years, I opened several new markets where I personally had to let customers walk away as we educated the market.

Making "concessions" happens from time to time in the spirit of customer service to right a wrong. If a car was needed additional repairs and was not covered by the CarMax warranty sure they may choose on a case by case basis to help. If they made a mistake on an appraisal and it was brought to their attention they may choose to partner with another store manager to reevaluate it. I assure you these are not forms of negotiation.

As for the prices they have been higher than average since 1993. This is no secret and it is a testament to the power of their brand and if you want to sell them a car with issues I'm sure they are okay with that too. They make $900 a car in their wholesale auctions.