GM's highly touted EBAY program an epic failure thus far

Breakage · 08-28-2009, 08:00 AM

GM’s Epic Fail on eBay
by admin
GM’s Epic Fail on eBay â€” Reviews & Ratings

All the analysts warned GM about emphasizing GM branding before creating and marketing great products. Turns out Obama’s first big GM marketing push with eBay is an epic failure.

The pilot GM eBay program, currently being tested at 225 California dealerships, has not generated substantial sales to the disappointment of GM executives.

GM dealers have posted 16,000 new vehicle listings, but sold only 45 vehicles through the ‘click & drive’ promotion. And while the first four listings are free, eBay charges $20.00 per vehicle for an eBay motors insertion fee–or in GM’s case, $360,000.00–which does not include the successful listing fee changed after a complete transaction.

In any case, it is safe to say GM lost a lot of money with their test run in the auction space.

But it gets worse.

The models generating the most interest was the now-discontinued Pontiac G8. This suggests that people turned to eBay in desperation, to locate a seller of the G8, as most dealerships have depleted inventories of this car.

In addition, Edmunds.com’s analysts also estimated eBay’s “buy it now” prices are on average 2% higher than average market price, about $500 on a $25,000 vehicle.

I guess GM forgot that when you sell via auction, you need to actually sell things people want–and that alone can drive the price high enough to meet your reserve.

It is not to say this business model cannot work. But you need a decent product to drive the auction above reserve or the buy it now price to be successful.

Nevertheless, it is somewhat comical to flashback and watch MSNBC’s August 11th coverage of the eBay program. Listening to them, you’d think this program could not fail. The only one with a sense of business acumen is the BusinessWeek editor. Watch:

VIDEO IS AT THE LINK AND IT IS HILARIOUS

GM’s Epic Fail on eBay â€” Reviews & Ratings

Hook · 08-28-2009, 04:58 PM

There are somethings you just can't do. Like sell a new car online. The car deal is like a nice dinner. An appetizer, a salad, a main course, a desert. It follows a particular order of events. No one orders the fudge sundae before the New York strip.

Breakage · 08-30-2009, 05:53 PM

I don't agree at all. They sell new cars online, either models in high demand or customers in rural areas.

Understand that the white house and the advisors are so theoretical, so far away from reality they don't even get something as basic as Ebay.
If they had passed
along the no dealer in the middle savings to people they would have sold,
instead they trying to get a premium over the going rates.

Hook · 08-30-2009, 07:26 PM

Quote:

Originally Posted by Breakage

I don't agree at all. They sell new cars online, either models in high demand or customers in rural areas.

Understand that the white house and the advisors are so theoretical, so far away from reality they don't even get something as basic as Ebay.
If they had passed
along the no dealer in the middle savings to people they would have sold,
instead they trying to get a premium over the going rates.

For every car bought new on line there are 13,786 bought at a dealership. If you have ever worked in automobiles you would just laugh at the idea of online sales. How can you test drive a car online? Oh wait you will go to a dealership and drive the car and then go to your computer and pay more for the car? Automotive companies will never slit the throat of their own dealers. Otherwise it would end up like horseracing.

Breakage · 08-31-2009, 08:48 AM

The stat is total bull****-people find cars online then go pick them up from dealers

I don't agree your post, I have experience in the industry granted it was a long time ago,
and I have a friend with a Subaru dealer who has told me several times without the internet he would be out of business. He routinely ships cars out west and overseas.

but by and large the entire car sales business is in the purchasing. Which of course comes back to the crux of the matter-no matter what they do if they can't make cars people want they will keep pissing away money.

Breakage · 08-31-2009, 08:54 AM

BTW

Quote:

If you have ever worked in automobiles you would just laugh at the idea of online sales

The last two cars I bought, not only did I buy them online,
but I actually built the cars from the ground up via the manufacturer's website.

08-28-2009, 08:00 AM	#1 (permalink)
Breakage Status: Hall of Famer Join Date: Sep 2003 Posts: 11,973	GM's highly touted EBAY program an epic failure thus far GM’s Epic Fail on eBay by admin GM’s Epic Fail on eBay â€” Reviews & Ratings All the analysts warned GM about emphasizing GM branding before creating and marketing great products. Turns out Obama’s first big GM marketing push with eBay is an epic failure. The pilot GM eBay program, currently being tested at 225 California dealerships, has not generated substantial sales to the disappointment of GM executives. GM dealers have posted 16,000 new vehicle listings, but sold only 45 vehicles through the ‘click & drive’ promotion. And while the first four listings are free, eBay charges $20.00 per vehicle for an eBay motors insertion fee–or in GM’s case, $360,000.00–which does not include the successful listing fee changed after a complete transaction. In any case, it is safe to say GM lost a lot of money with their test run in the auction space. But it gets worse. The models generating the most interest was the now-discontinued Pontiac G8. This suggests that people turned to eBay in desperation, to locate a seller of the G8, as most dealerships have depleted inventories of this car. In addition, Edmunds.com’s analysts also estimated eBay’s “buy it now” prices are on average 2% higher than average market price, about $500 on a $25,000 vehicle. I guess GM forgot that when you sell via auction, you need to actually sell things people want–and that alone can drive the price high enough to meet your reserve. It is not to say this business model cannot work. But you need a decent product to drive the auction above reserve or the buy it now price to be successful. Nevertheless, it is somewhat comical to flashback and watch MSNBC’s August 11th coverage of the eBay program. Listening to them, you’d think this program could not fail. The only one with a sense of business acumen is the BusinessWeek editor. Watch: VIDEO IS AT THE LINK AND IT IS HILARIOUS GM’s Epic Fail on eBay â€” Reviews & Ratings __________________ "An inexhaustible good nature is one of the most precious gifts of heaven, spreading itself like oil over the troubled sea of thought, and keeping the mind smooth and equable in the roughest weather." Washington Irving

08-28-2009, 04:58 PM	#2 (permalink)
Hook Status: Grade II Join Date: Nov 2005 Location: C-town, Ohio Posts: 1,539	There are somethings you just can't do. Like sell a new car online. The car deal is like a nice dinner. An appetizer, a salad, a main course, a desert. It follows a particular order of events. No one orders the fudge sundae before the New York strip. __________________ Disclaimer: The opinions and posts expressed by this announcer are not neccessarily those of Pinnacle Race Course!

08-30-2009, 05:53 PM	#3 (permalink)
Breakage Status: Hall of Famer Join Date: Sep 2003 Posts: 11,973	I don't agree at all. They sell new cars online, either models in high demand or customers in rural areas. Understand that the white house and the advisors are so theoretical, so far away from reality they don't even get something as basic as Ebay. If they had passed along the no dealer in the middle savings to people they would have sold, instead they trying to get a premium over the going rates. __________________ "An inexhaustible good nature is one of the most precious gifts of heaven, spreading itself like oil over the troubled sea of thought, and keeping the mind smooth and equable in the roughest weather." Washington Irving Last edited by Breakage : 08-30-2009 at 05:57 PM.

08-31-2009, 08:48 AM	#5 (permalink)
Breakage Status: Hall of Famer Join Date: Sep 2003 Posts: 11,973	Nah I wouldnt LOL,that is the typical thinking of the dealer living in the past The stat is total bull***-people find cars online then go pick them up from dealers I don't agree your post, I have experience in the industry granted it was a long time ago, and I have a friend with a Subaru dealer who has told me several times without the internet he would be out of business. He routinely ships cars out west and overseas. but by and large the entire car sales business is in the purchasing. Which of course comes back to the crux of the matter-no matter what they do if they can't make cars people want they will keep pissing away money. __________________ "An inexhaustible good nature is one of the most precious gifts of heaven, spreading itself like oil over the troubled sea of thought, and keeping the mind smooth and equable in the roughest weather." Washington Irving Last edited by Breakage : 08-31-2009 at 09:03 AM.*