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Pulling the vendor trigger for my new dealership, advice?

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DakanGK

DakanGK

Lot Lizard
May 23, 2013
8
4
First Name
Glen
#1
Hey all,

I have been coming to this site for months now and really appreciate the wealth of information available for new and existing digital dealers, you all certainly know your stuff and I have learned a great deal as I write my business plan. Just wanted to run my IT package choices by you veterans before I pull the trigger.

I am just getting out of active duty Navy after flying for a decade and into the reserves and am preparing to launch my small broker/dealership. It is planned to start mom and pop and is in "alpha" testing mode currently with me partnering with a local Kansas City used car dealer to buy and sell my first sport-lux niche cars as his agent.

I am prepping to go into beta mode and get my own license and small place, and I know with that comes all of the overhead, learning curve, reputation establishment, etc. Long story short, I am specializing in the enthusiast sport luxury late-model pre-owned niche. I aim to source from midwest auctions and sell certified pre-owned nationwide. Small inventory to start (2-4 cars) and then scale with outside investment.

After a lot of research from threads here and from reviews on DrivingSales, I am in final talks with Dealer eProcess for my custom site, hosting, SEO, advanced analytics, basic video, live chat, and SEM through their former Google gal.

The other services I am selecting are in partnership with Homenet for their Inventory management IOL and eBay and Craigslist services. I will be working with a local KC startup who specializes in video to produce quality finish walkaround videos for my Youtube channel.

Advice needed: Are all of these services a bit much to start for overhead purposes? Any you would not recommend or anything I haven't selected, given my retail price points around $50k?

Are these vendors the best for what I need to do, i.e. would you select them for a ground up small dealership?

I haven't found a better "one stop solution." I am tech/social savvy on the user side (no coding!) as I also run a lean tech startup, so the Dealer eProcess A/B testing and optimization of calls to action for lead generation impressed me.

Thanks in advance,
Glen
 
#2
Glen,

Love your plan, have some food for thought.

Not sure how well funded you are, but, if you were like me, I was 99% energy and always under funded (read: loonnng hours). When you're under funded, there are many times you'll give away product to survive another day.

If you're funded well, I LOVE your game plan.

If not, then there is a world of learning ahead (read: flush cash down the toilet). If this is the case, think crawl, walk, run.

In either case, your advantage is product knowledge and passion. Go big creating the best pics and descriptions on the planet AND get your personality into those pics and text and videos. Folks like to do business with folks they like. GET YOUR FACE IN THERE! make it personal!! ;-)

Make that phone ring.
Look into craigslist and carve out your place there. If the car is right, consider eBay. Consider local newsprint classified websites and be sure to study Cars.com and AT to see if your pricing is low enough to be seen on a low to high price sort.

PPC can be a GREAT source of traffic, but, it's easy to ramp up spending and all your ROI can dissapear. It's important that you know your PPC reps game plan and have them slowly ramp up spending and keywords to find that "sweet spot" (max ROI).

Everyone here at DR will be looking forward to your adventure! Best wishes!!

Joe
 
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#4
Sounds exciting. No matter what happens keep the thread updated with how you're doing!

After a lot of research from threads here and from reviews on DrivingSales, I am in final talks with Dealer eProcess for my custom site, hosting, SEO, advanced analytics, basic video, live chat, and SEM through their former Google gal.

The other services I am selecting are in partnership with Homenet for their Inventory management IOL and eBay and Craigslist services. I will be working with a local KC startup who specializes in video to produce quality finish walkaround videos for my Youtube channel.

Advice needed: Are all of these services a bit much to start for overhead purposes? Any you would not recommend or anything I haven't selected, given my retail price points around $50k?
Click to expand...

I'm going to make a bold statement here, but IMO it's true. No matter who does your website... it's going to end up like the rest of dealers in your area. Structure and design wise anyway. Don't make them a one stop shop. For example, I'm sure all the local dealers in your area all have (or have access to) basic video, "advanced analytics", and live chat.

I don't fully understand why you are paying for any of this:
Website: You could probably create a simple site if you really wanted to for pennies on the dollar. Why pay for for a setup and monthly hosting fees?
- Inventory provider: If you only have 3-4 cars then why get caught up in a hosting tool? You could easily manually upload these to your website daily. If you sign up for anybody like Autotrader or Cars.com then you can just manually put them in their backend or upload with a csv file.
- Live chat - same deal .. cheap if not free options out there.

... Assuming you don't follow this at all and just want the "one-stop shop" for ease of solution. Lets jump to some more stuff:

SEO - I'm not saying you don't need an "SEO Product", but what I am saying is you do need an SEO Solution. What I'm getting at is you have an awesome opportunity so make your dealership shine. If I go to your site I want to know all about your background as a Navy guy and what brought you into the car biz -- especially luxury cars. Make sure your love for this stuff is expressed in not only text, but also video .. and updated often. You can use this stuff to not post on your website, but cross post on facebook, youtube, and other social media platforms.

Customers DIG this stuff.

Video Walkaround - Ah, I'm not against it for a luxury dealer, but I know people tried this like 4-5 years back for chevy,ford, and dodge dealers and lets just say it wasn't exactly lucrative. Not to mention, some weren't professionals and could barely shoot let alone edit the video if needed.

Just make sure the walkaround is a VIDEO ... not a slideshow of pictures :\

PPC - Yes, please hop onto this, but make sure you have a solid understanding of it before you pay for a vendor. You could drop some serious money on this stuff if you go with a company and they don't have the same motives as you. Or you'll just end up getting skewed results

Example: "Look you got 100,000 impressions last month! That's 100,000 opportunities we brought to your dealership!"

Just make sure you have a good understanding of CPC, CTR, and tracking conversions - And how much you are willing to pay to get what you want.

Craigslist - Def do this. A no brainer. You can post all your cars daily with the amount of inventory you have for free. So why not do it.
eBay - Hell, couldn't hurt, if you have the inventory this could be a huge lead provider for you.

All I ask is please don't get caught up in a vendor trap -- In the next year you are going to come across a lot of vendors ... Just try and make the correct decisions.
 
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#5
ewalraven said:
I'm going to make a bold statement here, but IMO it's true. No matter who does your website... it's going to end up like the rest of dealers in your area. Structure and design wise anyway. Don't make them a one stop shop. For example, I'm sure all the local dealers in your area all have (or have access to) basic video, "advanced analytics", and live chat.
Click to expand...

I agree with the point about the website. If the dealership is brand new, the website should represent this.
Don't go with a provider using templates that are 2-3 years old when the dealership just opened. Pay a small company to design something custom for you and implement a simple inventory structure until you can take the time to go bigger than that. If you're smart about your small inventory, you can make this work much better than out of the box sites made for stores with 50+ vehicles.

I've heard good things about even using Wordpress. If you're inventory is that small, you could setup a Custom Content Type for inventory and just make do for $0 + the cost of the original design/development and you can avoid monthly costs on that front.
 
#8
My thought is dont overkill/over spend time and money on the site just yet. I would put time and energy into the following initially...

- Good Inventory
- Good Merchandising
- High Visibility for the consumer (Craigslist, autotrader and cars just listing inventory)
- Online reputation
- telling your story

Content is only as good as your audience.... That being said content in our online world will create an audience (SEO/SRP, etc). While starting up you will be limited for content by inventory and as Joe mentioned time....

I would suggest focusing on merchandising - photos, descriptions and painting the picture online and getting these cars on third party sites where the reach will be dramaticly larger compared to spending energy on your website.

That being said everything circles back to inventory..... Even doing all the prior things you still have to have a desirable vehicle (according to the market)

As you grow it may be worth while to check out Vauto to manage your inventory, if nothing else to hear out their pphilosophies in how to handle inventory.

As inventory and online reputation grow I would suggest at that point to really dial in your website and activate additional marketing to drive traffic to that site....Just to clarify not saying that Dealer e process/dealer.com/ or custom vendor is the right way to go, just saying when it comes to online.....becareful over investing time and resources in your website while launching.

Good Luck Glen and Thank You for Your Service!!
 
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#9
Many thanks for the straightforward advice, and great to see this boards heavy hitters coming out for my first post :) Quick aside, after being a part of web forums (and before those in the bulletin boards @ 14.4k, remember BBS?) for 20 years I am impressed at this community, both as a lurker and now poster. One day I promise to give back when I'm not as green.

Summary responses to your excellent ideas and some more background for further discussion:

Joe: My thoughts exactly for telling my personal story and branding the dealer from day one, it is good to hear specific guidance. On your advice I will further work my passion and story into the promo and explanatory videos that I have been scripting out with the local video startup. They and I have some cool ideas involving planes and cars.

Better is to hear that my model doesn't sound off the wall since I wasn't able to find anyone doing it well: my business plan says something like "this specific niche is either not a good business space or has some other barriers to entry unknown at this time." Much like you I am data driven so a perspective on the overall model I treat as a plus vs. a random hunch that it might work (The Lean Startup view). My pricing so far is driven from a large spreadsheet I compiled with a goal to always be below the bottom 25% national pricing for a specific trim and lowest in local area (200 miles?) for comparable clean car.

As far as funding, I am luckier in that front with current sources and room for investor growth with a "proven" beta model. That should help to tackle the issue of scaling with continued cash inventory purchases and get me more into the realm of "dealer" and away from 2+ car broker, which is self funded.

What cars do you see as right for eBay? I have done as much reading on here on ebay best practices and my similar space large inventory competition are doing ebay well.

Doug: Several elements of that model seem to parallel my plan, I want to decrease reputational risk/overhead to start by sourcing cars w/ remaining factory warranty and in the 1-2 year low mile sweet spot that only need wear items and light cosmetics. A great example is one I currently have for sale in a '13 Grand Sport Corvette that was certified with no extra costs with only 9k miles.

Eric and Craig: On the whole I can't disagree with any of your thoughts and enjoy hearing more about vendor packages and selling. I understand they will sell you as much as you "need" yet have had an excellent experience w/ the two I have been in touch with so far in not overselling.

For more background, the main reason I am seeking a one stop, ground up package is because I do not intend to stay in the 2-4 car range for long, just for the completion of my alpha pilot for 1-2 more months as I lease/buy a space for this and my other business. All of my pictures, detailing, listing, etc are done by me for now and I agree can continue w/ low inventory. Depending on my fund raising abilities (as always), I anticipate to rapidly scale in increments of 9 cars at a time as I fund the rest of the business; I anticipate inventory of around 18+ by years end and staying staff lean. Now I understand I probably wont get to 36-50 cars in a vendor contract year, but my main fear is spending more time attempting to cobble together solutions such as a wordpress template site (I have just recently built one w/ my startup team and it took twice as long as it should have to look barely good) and supporting products that do not have the auto specific optimization, fit/finish, front and back end usability that an (admittedly) overpriced vendor solution would have, especially when peddling high dollar cars to discerning buyers as a new brand. I plan to use Wordpress for my blog and continue to wish I could code :)

Bottom line as I see it: Chicken or the egg on all of this: up front investment to fit in with the expected highline service level or compete to grow on something like price w/ low overhead? Great thoughts on C/L and ebay and PPC, which I have some experience with and am looking for the auto industry specific best practices as I am running my own optimization experiments. Everyone can agree the money can get away from you!

Yago: I have learned you certainly know c/l from reading here. What do you think is a good c/l tool? Are they dead with the ghosting and manual the way to go, especially while small? Thoughts on ebay local classifieds?

Victor: Thanks, I am still in the reserves but it's going to be more boring than flying. I agree with inventory and that is something that I have always wanted to center on, if nothing else because I know the niche and know it is a popular one. Who doesn't like the M3 haha. However, I know I need to get more educated on popularity and scarcity and getting inventory that will move fast, as inventory turn time is one of the metrics I want to optimize.

I like your ideas about just using the listing tools and marketing, however it comes back to my brand appearing legitimate to higher end buyers without a good landing page, which I addressed above in other options. I understand the best auto vendor pages can handle listing and site easy uploading, is auto shopper optimized through above the fold CTA, A/B testing, etc. I think there is value in having two sources of lead generation, from a auto specific site and the listing sites. Yet I don't know if I want to pay monthly for it now. Perhaps holding off as an experiment but that is about what I am doing now in my current partnership, with less than stellar results.

Looking forward to your advice.

Regards,
Glen
 
#10
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