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

[Carsten]

@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.

Thanks!

I'm stuck in the chicken and egg situation at the moment. Once I get a few dealers willing to list with me, I can spin up the marketing for buyers.

I'm not using some script I bought off a site. It's totally built up from scratch and all bespoke code. Yes, it has taken longer than expected but it also has evolved into a platform centered around revenue generation and bringing in foot traffic. You are very right about the lessons learned.

I also agree that serving the customer what they want and can use is really the key.

 

[Carsten]

What is old is new again. Nobody has the grocery store magazines anymore? Somebody has to appreciate a good old fashioned publication.

Totally!

I grew up flipping through way too many ads for cars! I even bought them in Japan - the full color nice paper magazines they have are awesome!

 

[Carsten]

Hey @Carsten - Let me start by saying that I don't want to be a discouragement to you AT ALL, but I gotta ask.


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.

Thank you for a such a long response!

Cars, Cargurus, AutoTrader definitely do have a head start on me and their biggest advantage is name recognition and foot traffic and the experience from their mistakes. This is the fun part for me, I can get to reverse engineer what they've done and what they are doing now.

That's interesting that the dealers decided to protect their inventory.
It's hard to argue to a dealer who wouldn't want to listen but I really see it as the way Nation City in San Diego advertises the Mile of Cars. The more people seeing your sign on the street the more likely they will drop in.

1. Back in 2000 I listened to a dealer friend and shouldn't have. I should have built it.
I'm a developer by day trade and love to tackle problems. Plus I love cars. I'm not a car fanatic but I like figuring out the make and model of cars by their tail lights at night and silly things like that.

2. What does VDP mean? I am more like cars/cargurus/autotrader and in some ways slightly different.

3. As a developer, I am looking for pivots and ideas that go beyond the simple lsiting service that lots of the unknown places do. I'm finishing up the build out the main parts fo the platform that focues on revenue and foot traffic.

4. I love it! DISC will be my new mantra for any new feature that I add in.
Less friction is the hard one. Actually, it is part of the reason why I joined DealerRefresh. So many people like you and others have so much knowledge that I would be dumb not spending hours reading and learning here.

 

[jon.berna]

built up from scratch and all bespoke code.

Thats pretty cool and definitely not how most things are built any more. Respect!

 

[BillKVMotorCo]

The double negative has got me confused.

Do you mean, if the listings are free, you would give it try?

I mean no sponsored listings. Let the inventory stand on its own.

 

[Carsten]

I mean no sponsored listings. Let the inventory stand on its own.

Oh, so you mean like no featured listings that push certain paying dealers to the top?

I have toyed with the idea of having promoted listings but decided to stay away from that. Cargurus does this and as a customer I always sorted those out. I really want to stick with the idea that listings are front and center for the buyer experience. So the landing page is the primary listing page. I don't need to funnel buyers around to different parts of the site. Here's the vehicles! Go find one that you like.

 

[Carsten]

Thats pretty cool and definitely not how most things are built any more. Respect!

I should clarify this better.

I did go with the php framework called symfony. I used to live down the street from the Laravel framework guy but symfony really is enterprise level. So, I did cheat with the base block for the engine but all the functionality is built with intent and each feature was decided on my opinionated use cases. I want it simple to use since I remembered my mechanic who could barely print out an invoice for my oil change and for shoppers like my wife who is rather tech savy but really needs it simple.

I did not build it for me the person who taught themselves how to program on ecommerce sites. I love the bling bling stuff .. lol

 

[BillKVMotorCo]

Oh, so you mean like no featured listings that push certain paying dealers to the top?

I have toyed with the idea of having promoted listings but decided to stay away from that. Cargurus does this and as a customer I always sorted those out. I really want to stick with the idea that listings are front and center for the buyer experience. So the landing page is the primary listing page. I don't need to funnel buyers around to different parts of the site. Here's the vehicles! Go find one that you like.

None of the 3rd party sites are customer-centric. I don't care what any of them say. They are dealer-centric. Period. The customer doesn't even know they aren't looking at or comparing the right cars. The 3rd parties KNOW that. I think it's funny that the dealer can't bait and switch on their lot, but that is basically what they are allowed to try to do on the 3rd party sites. Of course, then there is the problem of how you make any money.

 

[JDHigginbotham]

The sentiment in selling along the endemic sites having a large barrier to entry with dealers is absolutely true.

I was there for the inception and growth of CARFAX Used Car Listings. We already had incredible brand equity, a large dealer network, the trust of consumers, and resources to throw at traffic growth.

Still, the initial reaction from many dealers was “that’s cute, good luck”. Price didn’t matter.

What made it successful was finding a specific differentiator we had that filled gaps others couldn’t….then dealers having actual success from that specific differentiator. In addition, being obsessive about the experience for consumers. It took a massive amount of resources and some of the brightest minds in their space.

Jumping in the mix for automotive retail 3rd party listings is no joke. If you’re good enough to get time of day, much more than price will win it. Then, you will be measured with extremely high scrutiny - deservingly so

 

[jon.berna]

I was there for the inception and growth of CARFAX Used Car Listings.

Carfax UCL is a perfect example. I would say that team did a great job also. When dealerships considered adding them or evaluating them after say 90 days there had to be a clear "value for money" benefit. Anyone that saw that roll out, saw how good the value was. It became a no brainer add for most marketers.

This is not a fesh take, but just to state it, when you're new, not only do you have to catch up to your contemporaries you have to be better to convince someone to make a change.

Allowing the customer the ability to search by specific history items and really tailoring the site to help them determine vehicle quality was the inflection point.