New car listing site?

[milehimike]

Hello refreshers,
I am new to this forum. Just signed up to seek your advice about a new car listing site.

I was recently in the market for a used car. The last time I purchased a car was about a decade ago, and I have not noticed a big difference in my online car search / research experience. It was just surreal. I am a "full stack" software developer, and have helped launched several state of the art web/mobile products and am quite surprised that dealers (and consumers) are putting up with inferior products. (I do agree that some new websites are good looking, but they don't have nearly the same functionality as the more established ones, and their business practices seem to be despised by dealers in general)

I think I can do better than what's out there and at a lower cost (well free for car shoppers, and substantially cheaper for dealers). I don't think a dealer should have to pay upwards of $500 for a auto listing site in thuis day and age!

If I approach a dealer with the following offer, how likely am I going to get a positive response?
- Sign up to my site for FREE
- Let my site pick up dealer inventory (listed on dealer's own website). So no additional work for the dealer.
- start receiving free sales leads from me.

I understand I will start out as yet another car listing/classified sites, but there are several reasons why dealers and consumers might want a new website:
- A better product
- prevent consolidation in the online car listing space. If a handful of online websites control the online market it won't be good for dealers)

I have been reading up on the auto industry and dealer practices to understand the business in general. Lot's of useful stuff online in forums like refresh but hoping to get your insight.

Thanks,
Mike!

 

[jase]

Hi Mike,

A great idea and one that I've been pondering for a while. I think the industry is "stale" and is in desperate need of a new, fresh way of doing things. From what I can see (after many months research) there is a massive opportunity in what you are thinking but it needs to be done right. I have over 20 years industry experience and would love to discuss this with you further. My contacts are in the USA, Australia and Europe. We could help one another with this. PM me if you're interested.

Cheers, Jason

 

[joe.pistell]

Mike,

Your biz proposal to car dealers is "I scrape your site, & you get free leads". There are a 100 sites that do this, no one does this better than CarGurus.com. What is your Unique Value Proposition to car shoppers, then to car dealers? Where is your prototype and it's results?

 

[milehimike]

Thanks Jason!

Joe, you are right. There are a number of sites that do this, but none too effectively. I am operating under the assumption that a better product will result in a "winner take all" type situation. This is how it has been always in the tech/internet market. Yahoo, Alta Vista, Lycos, Ask, and a host of others already "had" the search market when google came along. Google just did things better (I mean far better), and took the market. Until then people just didn't know what they were missing. Same is the case with the mobile phone market. Prior to the iPhone, the flip Razor was the hottest phone in the US market. Some Nokia brick-like models were hot. They had everything (including camera, text, browser, even high speed internet), but along came iPhone and well the rest is history.

Along the same lines, I think the online auto shopping experience has not been disrupted yet. It's ripe for some disruption.

Value to shoppers:
- better "shopping" experience.
- Better = better looking / easy on the eyes
- Better = faster
- Better = intuitive
- Better = some new innovative tools (that integrates a multi-platform experience: Mobile+Tablet+PC)

Even if I offered no additional value to shoppers, I feel there is room for one more. The vast majority of internet car shopping traffic is now cornered by cars.com, autotrader.com / kbb(approx 30 million unique visitors each), edmunds, while cargurus only reaches at-most a third of those. So this means even if I am just as good as cargurus and no better, there is still the remaining 2/3rds traffic from the main guys to compete for. Plus if you add in the traffic to all the junk scraping sites, the potential is immense. While cargurus is decent, it is no way the best in this market. Truecar is good, but I believe they have poisoned their relationship with dealers, so much so that IF there is an alternative, dealers will (IMO) abandon them.

Value to Dealers:
Initially (while the website is still capturing consumer mind share)
- No cost to sign up
- free leads
- free lead management software
- free market pricing tools

longer term
- This could becoming the Google of car shopping websites. (well you can laugh right now ....yahoo laughed at google, the big 3 laughed at the Japs....). If that happens you may be able to substantially reduce your online subscription fees.
- For small and medium sized dealers this could act as a great equalizer with the big guys.
- prevent consolidation (this contradicts step 1) but "one more" website will ensure that the online car shopping experience is not cornered by one or two websites.
- Less focus on individual leads (or number of leads) and more focus on actual sales. (I won't disclose how ...but I think I have a solution).

 

[joe.pistell]

Mike,

All you've spoken about is the opportunity.


This quote is quite telling.

Even if I offered no additional value to shoppers, I feel there is room for one more.

Have you made a prototype yet? You prototype should do all the talking.

 

[Chris Cachor]

Mike, while I'm sure there's room for improvement, the market is already pretty saturated. Theres only a handful of sites getting major traffic. I'm a full stack developer as well and I've studied this industry quite a bit. In this industry the software part is dead simple. It's the selling part that is difficult and requires a great deal of resources.

 

[joe.pistell]

And what of Google's SERP hard coding of the top 10 results? What's your battle plan here?

Here's how CarGurus did it (DR post 5 yrs ago): http://www.dealerrefresh.com/look-out-autotrader-and-cars-com-theres-a-new-guru-in-town/

 

[yagoparamo]

Hasn't this been tried before?

Don't underestimate the colts of running this nor the support needed (whether is free or not).

 

[milehimike]

Mike,

All you've spoken about is the opportunity.


This quote is quite telling.


Have you made a prototype yet? You prototype should do all the talking.

Joe, certainly didn't mean it that way. I was only illustrating that even a product just as good as what is already out there has an opportunity. So something better has an even better chance.

I do not have a prototype. I have starting researching this business opportunity just recently. There is no one gotcha idea here. We are talking about around 30-35 user experience enhancers that when put together with a traditional car classifieds site can yield a viable product.

The plan will be to list organically in Google's SERP. I researched cargurus after you mentioned them. My analysis indicates that they are using "black hat" SEO techniques that will result in getting blacklisted from Google. I am surprised this hasn't happened already. While not a bad looking site, let's face it, it's not the best in town. It looks and feels like a "web scraper".

 

[milehimike]

Mike, while I'm sure there's room for improvement, the market is already pretty saturated. Theres only a handful of sites getting major traffic. I'm a full stack developer as well and I've studied this industry quite a bit. In this industry the software part is dead simple. It's the selling part that is difficult and requires a great deal of resources.

Chris,
I am not sure I agree with the software part being dead simple. Yes, if you were entering the market 10-15 years back, it may have been simple. Now, we are approaching near "big data" levels of info to process. The goal at a high level are:
- What can I do to enhance customer shopping experience. (Many sites obsess over price, but that is only one of the several things a shopper is looking for)
- How can I help a dealer (Close on a lead and maximize sales dollars). Note, the emphasis is NOT to maximize the number of leads that I send to a dealer, but to provide leads that convert, and do so well. Can I beat industry average?

If you attempt to answer the above questions, and factor in the fact the big guys get all the traffic right now, you will hit upon a complex (possibly a very complex) problem. The algorithmic solution that will enhance both the customer experience (without giving away the keys to the kingdom so to speak) and dealer profitability will be a winner.

The problem I see is that the interests in the current market are not aligned well.
- cars.com / AT.com / 3 rd party sites want to sell leads, and lots of them. This is their metric. A dealer however might want to purchase fewer leads, but ones that actually convert.
- truecar.com is even worse (well they have gotten better after the firestorm raised by dealers), but they have a fundamentally antagonistic relationship with the dealership model.