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While I support the creative think of GM and the desire to think out of the box there are many problems with this idea of selling automobiles through Ebay. Selling vehicles on ebay will only validate the need for more sales training by auto dealers not less.
1) GM has used Ebay for a year with Certifified so why pilot this new program in California as GM and dealers would already know the results of this program and all the problems related to it. The certified program was a pilot of sorts.

2) The Ebay bidding process will increase not decrease the length of the buying process with people getting into a bidding process rather than a buying process.

3) The bidding process while creating interest in the vehicle and possibly generating traffic is going to make the purchase more price focused while dealers have millions of dollars invested in servicing customers not just delivering prices.

4) What happens to the dealers’ huge real estate commitments of 2-10 acres and $3-10m investments in facilities. Had dealers been told that bidding at Ebay was the direction the manufacturer wanted to take I am certain many of these same dealers would have not made these huge long-term real estate commitments.

5) Who is going to support the buyer in the delivery of the product and all the questions that cannot be answered in an auction. You aren't bidding on baseball cards here or the price of an airline ticket. The automobile is a complex purchase and the second largest investment people make. The amount of due diligence a buyer will have to do in order to make a legitimate offer will create intense strain on the staffs of the dealerships. The idea that ebay transactions will somehow lower cost is not real as staff will still have to support the customer through due diligence, purchase and delivery.

6) I also believe from my 30 years of experience with automobile dealers and manufacturers that a straight purchase using a bidding process on line could prove to be 'the customer satisfaction nightmare of all time'. Great products and customer satisfaction, not lowest prices is the most important ingredients to creating loyal customers and moving products into the market. Notice that GM and Chrysler were the first to offer employee pricing, Toyota and Honda have never offered it.

While I want GM to succeed and I applaud them for thinking outside the box there is no easy solutions in a contracting market. It takes great products, great people, sales training and hard work. Remember that after the events of '911', GM offered employee pricing and sales out the roof but only for a short time. No money down, zero percent interest and easy financing has been offered for years but is no longer available. Gimmicks can no longer be depended upon as they will not provide long-term solutions. American businesses are in the stage of realizing that the old tactics and actions used yesterday are not getting results in the new economy either because they are not available or just do not work. Shortcuts will not be rewarded as there is no easy solutions for anyone digging their way out of this massive economic contraction. The only long term solution for GM or anyone is to build great products, marketing them correctly, restore consumer confidence in the manufacturer and support the dealers on the ground through great sales training to provide excellent service before, during and after the sale.

Grant Cardone, Automotive Sales Trainer and Author
of Sell to Survive
and Closers Survival Guide

Views: 5

Tags: and, automotive, bailout, cardone, ebay, expert, gm, grant, sales, training

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Comment by Keith Shetterly on July 17, 2009 at 8:18am
We work in an industry that was once laughed at by "Old School Horse Guys". ;) The Internet was supposed to change things for dealerships many years ago, but that was too early to be effective--now it has online credit apps, online incentives, SEO/SEM, social networking . . . it's wayyy different.. GM is investigating furthing the market with the Internet . . . and we had better prepare our minds and processes to handle the result.
Comment by Stanley Esposito on July 17, 2009 at 7:09am
I am on the side of GM on this one. Lets embrace this and be positive. I like the way they are thinking out of the box. If it does not work try something else. I do not think they are depending on Ebay to sell all of their cars it is just another tool for the consumer.
Old school car guys always tell me why something will not work. Old school car guys will not cooperate with the internet department. Face it Old School car guys are a dying breed. Generation X has no time for them.
Lets hear how it will work! Teams in the NFL are not using the same offense their coach with thirty years of experience did. Lets evolve a little.
Comment by Kim Clouse on July 17, 2009 at 4:39am
Does anyone remember the cluster Ford created with online direct?
Comment by Keith Shetterly on July 16, 2009 at 1:16pm
I'll take a different tack here. I think this is exactly where it's all going: Direct online sales, eBay and elsewhere.

First, they drop the dealerships via bankruptcy that they couldn't otherwise break the agreements with, reducing field support and rendering a vast improvement in inventory management. Next, they understand that 85%+ of shoppers are on the Internet (and growing), and of those only about 25% contact before coming in--but they will contact if the advantage is seen in pricing and delivery. And the manufs also know that most dealerships still fumble the "Internet Sales Ball" *and* the phone wayyy to much, so central calling centers and heavily-scripted online sales by THEM and not the dealerships is servicing what is still a growing market.

Reputation and price are the biggest enablers of online sales, hence the ebay feedback and growing use of "modern markeing" like social media by all of us. I think the manufs are going to bet on a "bottled up" demand for dependable pricing and delivery on the Internet, and step up to deliver that to shoppers.

The pricing scale is big for some new vehicles ($40k or more), but isn't the ideal for us today to have an Internet shopper pre-apply, make an appointment, and come in and test drive? People like a lot of choice, but after online research these days more and more shoppers aren't visitng more than three dealerships THEY PICKED TO VISIT before buying. If the manuf get behind a direct sale with showrooms oriented to test drives, I think at least they believe they have a market to tap there worth investigating. I think this eBay announcement is just the tip of the iceberg.

I retired from the computer industry in 2001, but the old Compaq Dealer Channel vs. Dell Direct Online and Phone Sales is here with me again. Dell won that one.

I think GM and others plan to win this one.

Just my $.02.

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