Selling cars online? Here’s how to do that
Remarketing is a complex business, and the need to go online adds another layer of complexity. Yet as Fleet Europe’s Remarketing Expert Track demonstrated, those who commit to change can be richly compensated for it. So, what’s the best way to sell cars online? Here are a few things we jotted down.
The Remarketing Expert Track is an increasingly popular forum for remarketers to learn from each other. Past Wednesday, several hundred tuned in for afternoon presentations and discussions with experts from Indicata, CARA, Cox Automotive, Auto1, Cars2Click, and Twinner.
Opportunities to improve
If you missed the event, check out this dedicated YouTube channel, where previous Remarketing Expert Tracks can be viewed, and the videos for this one will be available soon as well.
As observed by Fleet Europe Remarketing Expert Johan Verbois, host and moderator for the afternoon event, “any training or workshop like this is an opportunity to reflect and improve our own business proposition. So let’s not waste this opportunity.”
What follows, is but a brief reveal of some insights; for the full Monty, so to speak, we refer you to the YouTube channel mentioned above.
Silvan Rath, CEO at Twinner with executive experience at eBay, set the scene. “The trend that I saw sweeping over retail a few years ago is what we’re now seeing in automotive.”
“What makes a company like Amazon so successful, are three things: strong customer trust, a wide product selection, and the assurance that you can return the product, if need be.”
Another key lesson to be remembered by online vehicle sellers: “Vertical integration. Amazon’s online stores generate only half of its revenue. The rest is in ancillary businesses, like delivery.”
According to Rath, if online vehicle remarketers want to be successful, they need to be multichannel (i.e. both online and offline, without neglecting either), fully transactional (i.e. the customer must be able to complete his purchasing journey online), and they must reduce overhead (i.e. get rid of empty bricks and mortar) and look at alternative contracting models (i.e. not just buying, but leasing, subscriptions, etc.)
Presenting a thought leadership piece on trade-ins and parts exchange, Sebastian Fuchs (Managing Director at Manheim Express and RMS Automotive Continental Europe), added two checkboxes to the to-do list of online remarketers: “In the near future, the value of infotainment systems will become increasingly important, also in remarketing. And as EVs increase and enter the used-vehicle market, it will become necessary to figure out ways and means of accurately assessing the battery health of these used EVs.”
In the subsequent key players' debate, Jost Dieckhaus, VP Remarketing Europe at Auto1 Group, came back on an earlier comment about the value of trade-ins in providing potential customers with liquidity. “We’ve now got this issue solved in Germany. You can sell your own vehicle fully online when you buy another one with us. And we can pick it up with the same truck we use to deliver your new purchase. Of course, that’s something we want to roll out across our other European markets soon.”
Fiscal and regulatory differences
Cross-border trade is the Eldorado of vehicle remarketing, but opportunities rarely come without obstacles, pointed out Frédéric Van Heems (Group Remarketing Director at ALD Automotive): “The European used-car market is roughly the same size as the one in the United States. Except that fiscal and regulatory differences per country continue to complicate the field. Players should be aware of these high barriers to market entry.”
In one of the break-out sessions, Brian Madsen (Director, Cars2Click International), outlined the solution to cross-border complexity: data mining and Artificial Intelligence. It’s a strategy that has propelled his company to continent-wide prominence in just a few years.
“AI takes away the complexity and allows you to target exactly who you want to sell to. One example: we sold 2,676 vehicles abroad for a Swedish customer, managing an excess return of 2.43% per vehicle. That’s a total of €1.5 million additional profit.”
All this thanks to ‘geopricing’ vehicles according to local supply and demand; and the company is… vertically integrated, with its own IT, logistics and financing arms.
Do’s and Don’ts
Towards the end of the session, two speakers specifically zoomed in on the do’s and don’ts for selling (and buying) used vehicles online.
Frederic Apers (Managing Partner at CarFlowManager), went to the heart of the problem: “Most online used-car pages have a conversion rate of no more than 5%.” Mr Apers had four tips to do better. Here are two:
- Provide an attractive offering. “More stock means more sales. For now, it’s mainly aggregators that benefit. To succeed, build stock.”
- The human factor. “Defeat complexity, start with a blank page. Let the consumer experience dictate what needs to happen. Leave the difficult questions for later, and leads will go up.”
Shaun Harris (Commercial Director at Codeweavers), had a list of six do’s and don’ts. Here are three:
- Aim for the unserved audience. “Target the 44% of customers who don’t enjoy buying a car in-store. They hate the paperwork and they hate negotiating prices. So, make sure the online price is fixed and fair.”
- Build confidence, and repeat. “Take Kazoo. They offer quality assurance, a money-back guarantee, and car care. And they don’t do it once or twice, but three times throughout the process.”
- Wait with the add-ons. “Yes, add-on products like insurance are good profit generators. But sell the car first and don’t get product-greedy.”
As mentioned, this is just a selection of the speakers and their insights. For the full experience, check out the YouTube channel mentioned above.
And make a note in your diary of the upcoming Fleet Europe Remarketing Expert track: Defleeting, finding the fastest cost-friendly way to a sale, on 8 December, from 1 pm CET (check here for more information soon).