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Making a Bid

eBay Motors’ online marketplace is no longer exclusive to sellers of unique and one-of-a-kind vehicles, with more dealers using it to expand their market reach and increase sales.

June 2011, F&I and Showroom - Cover Story

by Justina Ly

Nestled in a nondescript business park in Costa Mesa, Calif., is EuroCar, an independent dealership that sells pre-owned luxury and exotic vehicles. EuroCar’s unassuming concrete-and-glass building gives passers-by no hint at the multimillion-dollar inventory of Aston Martins, Bentleys, Ferraris, Porsches and Rolls-Royces parked inside the dealership’s warehouse showroom.

“You’ll drive by us and you won’t recognize what this is,” says Tilo Steurer, EuroCar’s founder and owner. “It’s a huge warehouse. You can’t see any cars outside.”

EuroCar’s modest exterior belies its success. The independent dealership reached $76 million in sales volume last year. Eight-five percent of total sales are Internet based, and 60 percent of monthly sales come from eBay leads. The dealership is recognized by eBay Motors as a “top-rated seller” and has earned a 100 percent positive feedback rating from buyers.

The Upscale Auctioneer

A native of Germany, Steurer started EuroCar in 2006 after spending several years in the vehicle service and wholesale industries. He lists 75 to 80 vehicles on eBay Motors each week on a 10-day auction cycle. His store’s average monthly retail volume is 65 to 70 vehicles, and eBay helps Steurer reach customers all over the world, including Australia, Canada, China, Russia and Sweden.

“For us, [eBay Motors is] a great lead generator and a great relationship builder,” Steurer says. “It’s not a blind sale. You get to know your clients over the phone, via e-mail and in person.”

Steurer says his dealership has been successful because its inventory fits the quintessential eBay Motors business model. “eBay is more of a unique market for unique items,” he says.

Since its launch in 1995, eBay has become known as the marketplace “where practically anyone can buy and sell practically anything,” as its Website aptly describes. The eBay Motors division has sold 4.3 million vehicles since it received its own site in 2000 and now receives more than 14 million unique visitors per month.

In the first quarter of this year, 74 percent of vehicles sold on eBay Motors were sold across state borders. Additionally, the site lists 30,000 franchised and independent dealerships.

Clayton Stanfield, manager of dealer training for eBay Motors, believes the e-commerce Website is a viable marketplace for franchised dealers because it can broaden their reach, deliver stronger leads and generate incremental sales. “Franchised dealers always believed they were at a disadvantage. They always believed that ‘indies’ could sell cars cheaper,” he says. “We had to teach them that they have a huge advantage because they have certifications and warranties. They have available financing which no one else can really do.”

Embracing an eBay Business

Bethany Johnson is the Internet manager at RBM of Atlanta-North, a franchised Mercedes-Benz dealership in Alpharetta, Ga. Johnson uses eBay Motors to sell her dealership’s pre-owned inventory, including Mercedes-Benz’s and other trade-in vehicles like Hondas and Mazdas. “I’ll launch anywhere from 25 to 35 [listings] at any given point. I do the seven-day auctions because I find that they’re the best bang for the buck,” she says.

Johnson believes her dealership’s embrace of selling vehicles through eBay Motors is atypical of other high-line dealerships. “They worry that they won’t get high enough bids on the vehicle or it’s not going to work for them,” she says.

But RBM North is proof that eBay works for luxury franchised dealerships. Johnson estimates that nearly 50 percent of the dealership’s total Internet sales, which account for 35 to 40 percent of the store’s total sales volume, originate from eBay Motors.

Johnson and her team of two employees make contact with all of their eBay Motors leads. They call customers who bid for vehicles and offer to answer any questions they may have. She says making first contact lets customers know there is dealership support available to them. In addition, Johnson’s store offers free shipping on any vehicle sold as well as airport valet service.

Johnson says she puts in extra effort for eBay shoppers because they tend to be solid leads. “They’re toward the end of their buying cycle. They’ve bid on that vehicle,” she says. “Now, whether they’ve hit reserve [price] or not, they are buyers and that’s what I like about eBay customers.”

Stanfield says a proactive approach like Johnson’s is key to any dealer’s success. “EBay Motors is a marketplace. We bring the buyer and seller together. The sellers who don’t do as well are the ones who expect the marketplace to also sell the car and make gross,” he says. “You have to be transparent and you have to reach out to your customers.”

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