Since the [tag]NADA [/tag]show early this year, [tag]eBay Motors[/tag] has been rolling out their new product [tag]Local Markets[/tag]. This is in a basic sense, an eBay Store for [tag]car dealers[/tag]. There are some differences which I'll discuss, but in a nutshell there are a lot of similarities. Local Markets was released right around the time that eBay core decided to "rebalance" the marketplace with increased Store fees and an emphasis on traditional auction-style listings. Let's review the reasons why the rebalancing took place in the words of Bill Cobb.
Reasons for "rebalancing" the [tag]eBay [/tag]marketplace
In his announcement and at eBay Live! Bill Cobb gave these reasons for the adjustments:
- For buyers, core (traditional eBay.com) listings deliver the "signature eBay buying experience"
- For sellers, "they're the fastest way of selling on the internet"
- Auction-style listings are the "foundation of eBay" its "DNA" and made eBay what it is. Auction-style listings will always be "front and center" on eBay.com."
- Auction-style listings are responsible for 91% of the GMV (gross merchandise volume) on eBay.com
According to eBay, [tag]eBay Store[/tag] listings were intended to be a "way to display large amounts of inventory at a low price" and were meant to encourage an abundance of inventory on the site." However, he said it was "troubling" when they saw how Store listings had grown over traditional auction-style listings. At the time of the announcement, he said:
- 83% of all listings were Store listings
- Store inventory takes 14 times longer to sell - in some media categories it takes 40 times longer to sell an item
- Operations costs - the cost of hosting a Store listing - is 50% more than hosting a core listing
To counter this troubling situation and tip the sellers back toward traditional [tag]auction[/tag]-style listings, eBay adjusted (raised) the fees on eBay Store listings and has offered breaks to those listing auctions and fixed-priced listings. Some sellers felt betrayed since eBay has encouraged eBay Store development, and then all of a sudden changed their tune. Sellers who had built businesses largely based on their Store listings found their fees had risen to a level they were unable to meet.
eBay Motors Local Markets
With all that in mind, let's look at what eBay Motors is promoting. Until the Local Markets product came along, auto dealers (who list the most vehicles on eBay Motors) did not have the option of listing their vehicles as eBay Store items. Those dealers could have eBay Stores, but generally listed parts and accessories as Store listings. Vehicles were listed as auction-style listings, or fixed-price (Buy It Now) listings. The fee was (and is) $40 to list a vehicle, and if it sells there is a Successful Transaction fee of $50. These listings were visible to anyone who searched on eBay Motors regardless of location.
Local Markets listings are different. They are visible to eBayers within 100 miles of the [tag]dealership[/tag]'s physical location. Local Markets listings are also exclusively Best Offer listings. No set price, no reserve, no Buy It Now. The shopper makes an offer, and the dealer accepts or rejects it, or counters the offer. The hope is that people will more likely visit the dealership for a test drive and to kick the tires. Then they may consummate the deal on the spot, or go home and make a Best Offer through eBay Motors. The process is very much like a classified ad really. Find a car you like, make sure you like it, then haggle with the dealer. (As a side note: This is the only place you'll see eBay virtually encourage sellers to make a deal off eBay.)
Another feature of Local Markets is the dealer may list their entire inventory for one flat monthly price. For $1000 per month the dealer can list every car on the lot. Along with their subscription, they are given a Featured eBay Store. Auction-style listings still cost $40 each to list with a $50 Transaction Fee at the end of a successful sale.
Am I the only one that sees this?
So let's get this straight. In a nutshell, eBay steered the "core" away from large amounts of costly, slow-moving inventory to give both buyers and sellers a better experience. Auctions give the buyer the "signature eBay experience", and auctions are the "fastest way of selling on the internet" I think is how that went. Just for the record I totally believe that.
Why then is eBay Motors heading in the exact opposite direction? Local Markets is encouraging dealers to list vehicles that they would never have listed as an auction. All of their inventory doesn't belong on eBay Motors.
The cost
What about the cost to host these? Dealers turn their inventory approximately every 90 days. Once they sell a vehicle on the lot, or dispose of it through the brick and mortar auction house, they will have to remove it from eBay. In my experience with dealers, they are not the most vigilant when it comes to maintaining their online inventory. Through Local Markets, there will be lots of cars listed that are already gone, costing eBay. In fact, the listings are already becoming glutted with ho-hum [tag]Best Offer[/tag] cars. Costly, slow-moving inventory is what they are getting. The opposite of what they said they wanted to core sellers.
The experience
What about the user experience? Isn't that important? If eBay's "DNA" is auction-style listings, and eBay Motors is eBay's child - wouldn't they have some "matches" in that DNA? eBay should stick to what "made eBay what it is" and let [tag]AutoTrader.com[/tag] and [tag]Cars.com[/tag] have the classified space. When AutoTrader.com tried auctions it didn't work. eBay should learn from that.
Some will pat me on the head and say, "Well cars are different, people want a test drive since they're spending so much money." Yet, we don't see similar strategy being used when we look at diamond jewelry, fine art, and other items that sell for prices higher than the average eBay Motors sale. In the first six years of eBay Motors, two million vehicles were sold. Seems every time I sat on a plane next to someone, they told me they'd purchased their last vehicle on eBay Motors, or knew someone who had. With all the talk about the excitement of "Winning" with [tag]Windorphins[/tag], and "[tag]Shop Victoriously[/tag]" (and they DO show a car in at least one of those commercials) it seems a real contradiction to push a product that allows for none of that. Do you actually think a car dealer will let you test drive the car, then let you leave to go home and make a Best Offer? Why do people use the internet to buy cars in the first place?? It's because they absolutely hate the traditional process of buying a car through a dealer.
When I teach dealers to use eBay Motors, I will discuss the Local Markets product. My emphasis will still be on the national (and international) listings. One of the best reasons to use eBay Motors is because it give sellers a market reach no one can match. It creates excitement for the buyer. eBay Motors is offering "[tag]eBay Motors University[/tag]" again in many cities. Unfortunately, the emphasis is on Local Markets and is perceived by many dealers as a "pitch" from eBay. If you're a dealer considering Local Markets, search for a common vehicle on eBay Motors, within 100 miles, and if there are scads of Best Offer vehicles with nearly identical titles - you've found a Local Markets dealer. Call them up and ask them how it's going...
Visibility
One of the reasons eBay Store listings are slower sellers is because they have lower visibility on eBay when a user performs a search. Lower visibility equates to slower sales - that's not true with eBay Motors? C'mon. We're being told that limiting visibility to within 100 miles of your dealership will increase sales. What is not said though is that the potential customers within that radius are also seeing the print ads, TV ads, and hearing the radio ads for all of your current competition in your local market. The people down the street already feel they know what's available locally, they want to know what's available on the other side of the fence. They also have opinions and prejudices of your dealership that a person two states away doesn't have. Finally, if shoppers are interested in buying from a local dealer through eBay Motors, your current national listings already show up within 100 miles of your dealership, and around the world.
It's not you, it's me..."
Who has changed? The shopper or eBay? How can eBay say auction-style listings are the most cost-effective way to sell, and offer the best user experience overall - then encourage exactly the opposite with auto dealers? What happens down the road when there are far more mediocre Best Offer only vehicles, thoughtlessly listed? Will eBay rebalance the marketplace again? Haven't they learned? They should not push this product on dealers.
I personally really like car dealers. But some people may be of the opposite opinion feeling "since the dealers have done it to us for all these years, it's about time someone's doing it to them."
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1 comment so far ↓
Either they’re a little slow on the draw or they’re copying a smaller website that’s started to take a chunk of the auto sales market. For a flat $8.00 a month a dealer can list everything on OLA.com… And not be limited to a “Local Market”.
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