I used to run one of the main branches of eBay Motors (2000-2002) when it was first getting started. I am still very thankful that they gave me that opportunity.

Back then we were focused on proving the viability of the Internet as a whole as a remarketing or retail venue. We didn't have access to template companies that allowed the ease of listing vehicles that is available now. In other words, it was a pain.

We were experimenting a lot and signed pilots with major leasing companies and banks to remarket their vehicles online. We would do so under the premise that we would sell the vehicle quicker and bring the same or more than Black Book Wholesale Average. At that time, most of these companies would sell these vehicles for around 95-97% of BBWA. Our goal was to get more and do it quicker than typical "auction" means.

We did just that! We were selling vehicles that we never seen, started or inspected for just over BBWA, with no information and some pictures taken in the dark. Seriously.

The reason I mention this is because I feel that I can harness the power of eBay about as good as anyone. After I left, I tried it in multiple applications over multiple companies and the results where o.k. in that it generated a lot of traffic but the results as a "retailer" were difficult to substantiate.

eBay is the best online "auction" out there. People go to auctions to find those rare gems and/or to get a deal. Our goal was to get BBWA and I am sure most dealers want closer to retail.

Plus, to add to that, the fees and time invested to do it right can kill you. In addition to this there is arbitration, seller mis-representations, non paying bidders, scams and challenges when people want to use Paypal.

So, I am very happy for eBay and this milestone. eBay will continue to dominate in regards to unique, exotic, hard to find vehicles and to the eBay addicts.

They will also do well with the sub $5k vehicles and the bargains.

Listing all your Tauruses, G6's and Sonatas, unless you are a price leader will result in my opinion in poor ROI.

BTW, Rob Chesney is a great guy and always seems willing to listen to suggestions as to how to get better. Give him your feedback if it isn't working for you or your model.

Two points, first - the number one most hit automotive website is eBay Motors. Is it wise to ignore the one place online where more folks go then anywhere else? If you have eBay Local, make sure you take your monthly reports and graph the results against your AutoTrader, Cars.com, etc - I think you will be surprised. Second - of all my lead sources online, eBay leads are the trickiest to work with, though we have found the closing rate for our eBay Local leads to be one of our top providers. I believe most dealers struggle with eBay, so they write them off as quick as they can. My two cents is that dealers must rise to the challenge and learn how to work eBay well, as their presence online cannot be ignored. Kevin Frye/eCommerce Director Jeff Wyler Auto Family

I was a featured speaker for Ebay Motors at NADA 2004 in Vegas.

My $0.02.
Ebay use to be a selling bonanza (details below). Today, Its viable if you have the right inventory, you're located in the Ebay sales sweet spot and... you're are not in NY.

Ebay Opportunity #1
Ebay retailing sweet spots are found within a 1-2 hour drive from a major city (i.e. NY, Bost, Atlanta, Jax, Dallas..hell any where in TX for that matter!, Chi, Denver, etc..) Not only do you have the zllion buyers in "your" megalopolis to sell to , flights in are easy, cheap and often direct, PLUS, shipping options are far easier to execute.

Ebay Opportunity #2
A Vacation Destination. Fly in, drive home.

Lemon Law.
NY retailers are bound to honor NY's very rigid Lemon Law. If you follow the letter of the law, Reconditioning costs are very high.

Why Ebay lost its luster...
Part1.
As I recall, back in 03-04, Ebays rate increases shook out the millions & millions of hobbiest / part timers that amused themselves with all things on ebay. Take those "players" out of the game and we were left with shoppers that didnt have a clue what a reserve was. We sold 99% of our ebay sales over the phone.

Part2.
All the late bloomers in the auto dealer retail world finally woke up and started agressively marketing on the net. The early adopters lost their advantage.

just my 2 pennies.
Joe

eBay is awesome for squirrels. And no, I don't mean the bushy-tailed customers, I mean the squirrelly cars: inexpensive "wholesale" units and the rarest of the rare stuff. Highline works very well, but only if it is stuff that isn't easily attainable to everyone: ie. 1,3,5,7 Series BMW's and that sort. However, the occasional M cars can do okay....when you honor the eBay price

We've tried eBay but unless you are willing to pay $50 to sell a vehicle on eBay, which will ultimately require a dealer to give up any chance of profit, and throw away all your hold back, and ungodly follow up time - go for it. It's not a marketplace for new cars! I have had more success with Craigslist in the past 3 months, than the last 8 years with eBay. Wholesale cars seem to be the niche for eBay, and with hundreds of millions of them on the road, it's nice to see seller find some success through eBay.

Oh and I would chose craigslist since it is free

Selling $5000.00 and under autos works great on ebay,
however with our dealership we have a very successful buy here pay here program and we have to resort to ebay to buy vehicles in that price range. Auctions have become a breeding ground for exporters and deals on buy here pay here inventory have become non existent.

I'd be interested in hearing the DR dealers' points of view on this topic. I'm frequently asked by clients and prospective clients what my thoughts on eBay are. I have two thoughts on the matter:

First, from personal experience selling probably 5 or 6 cars on eBay over the years, it seems to be a marketplace where final prices end up between wholesale and retail. I know there are dealers out there who don't just dump aged units on eBay, but they list everything on the lot. What seems to work best in these cases? Or do you treat eBay as more of a lead generating service for in-market shoppers? I know eBay seems to bring better prices for the rare stuff like classic cars or exotics, but what about the average $20k car?

Second, from a reach perspective, eBay has done a tremendous job of getting the shoppers on the site. Ask 100 private party sellers where the best place to sell a car would be and I bet half of them say eBay. As a dealer it's tough to beat the kind of targeted exposure that eBay offers. How do you as a dealer handle the high number of shoppers who are looking for cars $5000 below book?

It is wonderful to see a success story like this amongst all the doom and gloom we read and hear about. True to form the affect the Internet has on the industry's sales as well as posting prices and information about the vehicles. So much for dealers who still think it is smart to not show price and inventory on their web sites, “Make em come in” school of sales management”

The amazing thing is that the phenomenon is just beginning. Yahoo’s new format for selling cars on line as well as Google’s new plans will add to this growing number.

Another great piece of news is The Beijing Auto Show http://www.china-autoshow.com/index.asp and China's auto market is making a statement this week. We will be a major factor in the automobile industry as consumers and OEMs.

This show is unbelievable and has only just begun. The excitement is unbelievable as the old feelings about the industry are rekindled with enthusiasm, anticipation and excitement. Not only are there more cars in this show to make it the worlds largest the women are unbelievable gorgeous and there are sooooo many.

If we think ecommerce is big in the US wait until you see what they are doing here. Yahoo, Google, ebay and many others are all looking for the opportunities.

This show runs through 28th. With 900 vehicles on display this event is expected to attract more than 600k visitors, hmmmm, do not want to be here the last two days. Car sales in China are up 21.4 percent over last year, 2.5 million cars sold in the first quarter. Total sales are predicted to reach 10m vehicles in 2008.

Just two years ago, the Beijing auto show took place in a small cramped space in Beijing’s city center. The show alternates with Shanghai’s show, opens this week for six-days. Last years show in Shanghai was impressive and this year is a real WOW, God only knows what they have planned for next year. The Auto Show China 2008 is the first show in the new International Exhibition Centre; it must be the world’s largest certainly the most impressive, tech wise you got to love it here. Ecommerce is alive and well as there are thousands of kids all working the angle to make their first million this year. We “make way” for the men and women who boldly push past us on their way to their fortune.

I would be very interested to hear comments about experiences with third party leads through a manufacturer

I think someone should revive this thread so we can compare and see if any real improvement has happened with each third party source over time!

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Leads is a business that I've been contemplating getting into for years.  But I've shied away from doing it.  My business is a post for free, or pay for top priority in the inventory lists kind of site.  No commission on sales, and is generally free to use.  if anyone would be interested in purchasing leads from me or setting up some type of relationship, check out my site and let's talk.  Hot Auto Deals dot com is the site.  Check it out and let me know...

This is surely one of the well read posts. The concepts provided and shared are really helpful for both dealers and buyers.

A Lead Generator's Perspective:

First and foremost, I'm an Internet marketing guy who likes cars, not a seasoned car guy by any means. I've been involved with Internet marketing since 1999 and have piloted new technology with MBUSA back in the day when the Internet was just supposed to be a fad.

I do have a unique perspective in the sense that I've experienced the full spectrum and life-cycle of a lead by working with a couple of local dealers and analyzing leads and data at the BDC level and from writing ad-copy for nearly 1 million keywords to generate the app.

I think there is plenty of blame to go around and this is why I lament on some days about lead generation at http://leadinreview.com - Auto dealers and lead generators have created the monster that is third-party lead generation today.

Here are some of the things "pure" lead generators deal with on a daily basis:

- PPC fraud on all the major search engines
- PPC abuse from competitors
- Un-predictable traffic spikes from major search engines.
- Form fraud
- Server attacks
- Brokers & lead aggregators post rejecting and stealing our data.
- Never ending criteria changes for leads
- Bogus or phony lead returns
- Non payment from lead brokers and aggregators
- Non payment from retail customers or direct auto dealers
- Complaints from customers because dealers never call

For every lead we generate that gets submitted across the network, that same lead can be offered to the same aggregator 100 times in a matter of seconds due to lead overlap or coverage overlap. There are just too many entities trying to get in the middle of the process. This is why we are looking to work directly with auto dealers as an arm or extension of their lead generation and marketing.

Why are third party lead generators still needed? Because for "real" or "pure" lead generators - companies that actually generate the lead and not simply try to resell, we can generate the lead more cost effectively and efficiently than an auto dealer.

Lead generation is hard work and extremely competitive if you are going to use any type of PPC.

As mentioned in a previous post above, I believe dealers need to start looking at ROI as it is the primary indicator as to how effective a particular lead source might be.

Lead providers that cannot demonstrate some measurable ROI for a dealership should be dropped.

Got a question on third party lead generation? Drop me a line and I'll be happy to answer as best I can.

I want my third party leads to have more serious buyers. I want my third party lead providers to put a disclaimer on their sites to tell customers not to submit a lead unless they are really shopping for a car or are in the market? I do not want to pay for garbage leads. Now in no way am I saying not to buy them because we need third party leads to supplement out lead count. If the leads are worked right they bring in more deals every month. Focus on generating your own leads before spending money on others.

Steve,

One of the best ways to market your website outside of search engines is to promote your site to your existing customer base via email campaigns and POS material in the store.

Make sure all employees are collecting email addresses at all times. A great way to email using a soft sell approach is through regular newsletters such as IMN Loyalty Driver. Hopefully, this helps...

Just reading these comments, it's amazing how a discussion of third party lead providers turns into a crusifixion of Auto trader, and it's justified. Truth is that the autobytels, autousa and dealix's of this world are no longer viable looking at ROI which is the bottom line determinate.

As to Autotrader, that's a dog and pony show that has run it's course. Cars.com is still doing well on our ROI reports because of it's much lower cost.

Our own website is the mainstay of our business development center and we are working on situations that convert to hits on our own website. It seems like the more we market the website via TV, newspapers, the better we do.

I am open to any suggestions for marketing our website.

Steve from NJ

JL..."Not sure about you, but my mother always told me "if it sounds too good to be true..." and I'm sure you know the rest. If you are holding out hope that a new start up is going to come along and advertise all of your vehicles with customized video presentations, secure credit apps that integrate with your CRM and, hell, detail all of your cars before they take 47 photos of them and all at no cost to you because they "need" your inventory, I'm going to suggest that you don't hold your breath. That makes as much business sense as a dealership giving away cars to build brand loyalty.

You have points but you need to understand that looking at this is an "inherently lazy" approach and "they can do all" look at it.

Custom video? slideshows are not video! and looks still like crap and DOES NOT SELL ANYTHING but can entertain and "maybe" get to the next step of calling for more info or to test drive.

Secure apps? be real about that one because this is not a buy it now checkout for a pair of sunglasses and credit leads are what they are mostly GMD's or the deal was made and now its time to apply securely for the loan online(fax the app still works as well)

Detail your cars? when did porters/detailers becomes part of advertising or lead providing?

Giving away cars? happens everyday...price leaders

Anyway you cut it the only stat I count is if the rep has spoken to the client after the lead. Is there a deal to be worked or appoint to come in and demo? Until then any correspondence is still a hello how are you I was e-driving by and not a customer yet.

Cars, Autotrader and others are not by my definition lead providers in the primary, they are a marketplace to display your vehicle in a collective virtual setting and the lead is a by-product that you get sold the "sizzle" not the steak by cars.com and autotrader.

When is the last time you invited someone to cook your dinner in your own home. It's kind of expensive and that is my point and do agree it may not become totally free but a lot cheaper when someone does offer a much better service that truly is an ad content provider of your merchandise.

Why do you think Cars.com is getting into the website business?

I apologize in advance if this is a bit of a fragmented opinion/response...
Pete

Here is what I want.
1.Exclusive real leads that are actually in the market,not submitted by some unknown gimmick
2.Coversion with metrics reporting to justifly the cost of the product or seervice
3 review of reporting with best practices in this ever changing section of the market.
4. a company that is on the cutting edge ie leads,video,blogs to optimize seo and sem to stay out front of the competition not duplicating it.
Just a Thought!!!

Frank Wrote:

"If you take a real hard look at third party lead provider's I think you might agree that we are competing for the same leads on the web as the providers we purchase from. So what happens here is we perform SEO and SEM then we turn around and purchase leads from providers that have advertised our products for less money than we want to sell them for such as carsbelowinvoice.com who buys those leads? I know, do you? Try this, type the name of your dealership into Yahoo such as Jim Glover Chevrolet. You should not see Jim Glovers name being used although I am having a hard time with Nextag.com they sell those leads to? So what is happening is these lead providers are using our names of our dealerships to entice consumers to their websites right next to ours. Then we pay them up to how much a lead, (better if it is scrubbed right) So what I want from third party lead providers is to stop advertising on the same plat form as I am advertising on, but with no wakeup call from all dealerships I do not see that happening. Think about it, why pay for someone else to advertise right next to us on the same venue? Makes no sense does it? But we have all been doing it for years, yet who has woke up to the facts?"

Amen. Another reason why I don't and haven't used them for awhile. Put this in any other venue and you would say that it doesn't make any sense. So why do we support them? Afraid of missing the market on something?

Either way, well put Frank.

Well I weighed in awhile ago and can't believe the traffic this thread received. In reading some comments, I guess this can be broken down a couple of ways.

One-

Lead providers are those that provide leads. I would usually define that as a purchased lead, including but not limited to; Dealix, Carsdirect and Cars.com's NewLeadsplus. These leads are supposed to be scrubbed, proprietary leads from some unknown source in Leadland.

What I want from them is along the lines of what Jeff said. I want what you are claiming to be selling to me. I want real leads with a chance of conversion. "Scrubbed" has to be the most abused, subjective word in our business. I want one company (or more) to step up and deliver (yes, like the good ole fax days).

Problem is; I think this model is going to be obsolete soon. People don't just hit one source. So even though they might apply for something and it isn't being sold by another lead provider, doesn't mean that they haven't or won't fill out more inquiries elsewhere. Too many unique lead providers means none of them are unique anymore. I could be wrong, but I think this is going away.

Two-

Leads that are derived off of our inventory. I have been doing a lot of thinking on this lately and still stick with my first comment. However, I would like to add a bit more clarification.

Yes, seeing page views is neat and could provide some point of reference. I still firmly believe it is not indicative of true performance; both internally and externally.

I believe that there is still no way to track all the people that simply walk in, view a map, or don't get tracked at a showroom level. Therefore, it should be treated just other advertising and not held to a completely different standard.

I think a fix would be change the format completely. Maybe make the browsing only available by creating an account. Integrate RSS feeds for vehicles they want. Do targeted marketing and allow Dealers to buy specific ads. Send a summary of people who actually clicked on your ads for the month or create a neutral tool that will cross reference it with your DMS sold vehicles. Give premium placement to the dealers with the most photos, prices and custom comments. Allow the good dealers to shine.

You know what they say, "The definition of Insanity..."

I am the General Manager for www.duPontREGISTRY.com. We are not a lead provider, but rather an online advertising media. Our niche is putting our affluent marketplace to work for highline dealers. I know that this may not fit in the current discussion but I would like to ask a couple of questions that I think may apply. “How important is your relationship with your account executive,” and, “What do you want/expect from them?”

Thanks

A little background on me, I have been involved with automotive internet sales for over nine years now and I have dealt with I think every vendor out there including special finance vendors etc.

If you take a real hard look at third party lead provider's I think you might agree that we are competing for the same leads on the web as the providers we purchase from. So what happens here is we perform SEO and SEM then we turn around and purchase leads from providers that have advertised our products for less money than we want to sell them for such as carsbelowinvoice.com who buys those leads? I know, do you? Try this, type the name of your dealership into Yahoo such as Jim Glover Chevrolet. You should not see Jim Glovers name being used although I am having a hard time with Nextag.com they sell those leads to? So what is happening is these lead providers are using our names of our dealerships to entice consumers to their websites right next to ours. Then we pay them up to how much a lead, (better if it is scrubbed right) So what I want from third party lead providers is to stop advertising on the same plat form as I am advertising on, but with no wakeup call from all dealerships I do not see that happening. Think about it, why pay for someone else to advertise right next to us on the same venue? Makes no sense does it? But we have all been doing it for years, yet who has woke up to the facts?

I have not purchased third party leads this last year, instead I have taken that money and put it into NAME BRANDING, or direct advertising, We enjoy a great amount of quality leads, and better name branding for the store. Now what are you going to do?

Also Come on, Autotrader and Cars.com are NOT third party lead providers unless you purhase new lead plus from Cars.com Autotrader and Cars.om are advertising venues, we dealers pay to advertise on these sites..

Just an opinion of another Internet Director

McCoy,

Your scenario sounds great for that 1 out of every 100 that goes through it. Realistically speaking, that doesn't happen an overwhelming majority of the time.

My background is Marketing and eCommerce, not cars. I handle those duties for 2 large domestic dealerships. I'm hourly analyzing my website traffic, phone traffic and walk-in traffic to better understand where these customers originate. I'm actually an employee of those dealerships and not a vendor.

Only had one of those dealerships a short time so will use the one I have the most information gathered.

I currently get in the neighborhood of 30,000 unique visitors per month, 18k of which are pre-owned. I used several different sites to drive and track our website traffic. I used just one to pick up traffic from cars.com and autotrader.com so it's fairly easy to see what they do regarding referrals.

cars.com is well behind autotrader in page referrals 242 - 88.
that's real numbers, not in hundreds.

granted, we spend more money with autotrader and I see spikes with spotlights.

unique phone calls are 43 - 12, again for autotrader.

I sold 2 cars.com customers last month.

My website visitors just on one site, nothing but SEM/PPC no SEO. are 8,000+ uniques.

My unique phone calls off that same site are 472 email leads are over 300

When I said I was there because my competitors were, I really meant that. I get nil to nothing off of those sites. With pricing, especially Autotrader going the direction it is, I'm soon going to stop thinking "it's so little money we have to be there"

Obviously, the koolaid tastes better to you because it pays your bills.

At this point, it's just another bill to me without ROI