• Stop being a LURKER - join our dealer community and get involved. Sign up and start a conversation.

How much do you spend on marketing for 3rd party market places?

Carsten

Boss
Jan 7, 2024
234
58
Awards
4
First Name
Carsten
  • Like
Reactions: Jeff Kershner
Could it be cheap enough that you would be willing to do so?

There are more websites than leafs in the Amazon forest. A low price has no value.

All dealers want to know what you will do for them. As a marketplace you are paid to deliver traffic that resonates with your dealers. You will be paid on this ability.
 
I am wondering how much do you spend on marketing for 3rd party market places?

More specifically, how much would you be willing to spend on a new marketplace? Could it be cheap enough that you would be willing to do so?

Breaking into the car business is not easy! Most dealers only wish to do business with a nameplate they know. I totally get why you're asking your questions.

For established brands like Cars.com and Autotrader, dealers spend $2,000 to $5,000+ per month. You've got to be an incredible deal to get their attention and be in the market with success stories to compete with the larger names. I'm sure you know this already.

Most new listing sites have focused on a single geographic area to get started. They have offered free listings to strategic stores in that area while physically visiting dealerships to expand within that market. And 98% either fail or pivot to a new idea... most commonly advertising. If you can build a good vehicle listing, there are many other paths than going up against Cars.com and Autotrader.
 
@Carsten Alex is dead right this is a massively difficult thing to develop. There are a lot of lessons in building a platform that lists cars, that may steer you in a new path. Most customer facing applications in auto are really just a variant of a listing site bundled with a specific focus.

It seems you have a skeleton, now try to find a way to get customers to interact with it. Think about getting a narrow customer audience and focus on understanding how to serve them.
 
Hey @Carsten - Let me start by saying that I don't want to be a discouragement to you AT ALL, but I gotta ask.
Disclosure: We're building a marketplace... page 2 warned against doing what we are doing.

The guys above nailed it. I've worked for Cars, CarStory, and Vroom in my time in auto. All featured a "listings marketplace" in some form. They devoted tons of resources and even more cash to audience creation and optimization of the listings to generate a consumer action that helps sell a car. The entrenched endemics are just one of the competitive forces you'll face.

A few years back dealers really began to protect their inventory as an asset. The thought process was "if consumers visit marketplaces to see inventory, why am I paying a marketplace to list MY inventory? I'd rather have the consumer on my site. Am I giving away my competitive advantage in search?" I'm not suggesting that this is always the right thought process, but I think it is a headwind you will face if you don't have a strong value proposition for your dealer partners. Dealers may see your startup as competition rather than an asset.

No need to respond here. I just want to give you a few more questions to chew on while you chart this course:

-What is it about creating a marketplace that has you excited?

- Is there a specific improvement to the VDP that you have tested that improves capture or action? Is that an improvement dealers can deploy on their own sites?

-Can you channel that excitement to solve a different problem for dealers or make a material improvement on a process?

Last thought: Dealers are incredibly savvy business people. They are always searching for improvements. They will try "new things." But as Uncle @joe.pistell likes to say, the ultimate thing that will define your success is DISC... Does It Sell Cars. You may find that applying your skills, talents and efforts to a derivative of your marketplace concept may meet that objective with less initial friction.
 
There are more websites than leafs in the Amazon forest. A low price has no value.

All dealers want to know what you will do for them. As a marketplace you are paid to deliver traffic that resonates with your dealers. You will be paid on this ability.

Thanks! Once I get past the chicken and the egg business, your statement about driving business to the dealers is going to be a great tool to explain my platform and why they should list with me.
 
Breaking into the car business is not easy! Most dealers only wish to do business with a nameplate they know. I totally get why you're asking your questions.

For established brands like Cars.com and Autotrader, dealers spend $2,000 to $5,000+ per month. You've got to be an incredible deal to get their attention and be in the market with success stories to compete with the larger names. I'm sure you know this already.

Most new listing sites have focused on a single geographic area to get started. They have offered free listings to strategic stores in that area while physically visiting dealerships to expand within that market. And 98% either fail or pivot to a new idea... most commonly advertising. If you can build a good vehicle listing, there are many other paths than going up against Cars.com and Autotrader.

Thanks for the numbers. Combined with Uncle Joe's comment that makes a lot of sense.
Also, thanks for the information on how others have started.

I have a developer back ground and my team is the same. I'm thinking all the time of feature expansion or possible pivots as exit strategies.

Could you clarify by what you meant about,
And 98% either fail or pivot to a new idea... most commonly advertising.
They enter the advertising business??