Thinking some more about Internet automobiles.
With "pre-optioned" vehicles, done the way that the Japanese do for much of their production, you could do a ship to order. (It is more complicated than that, but it serves for this discussion.)
Give the customer a view of what exists, and let them select from that, then ship it to them. Essentially, this is an Amazon.com type dealership.
The question is: Can an internet company that maintains inventory in some cheap location or locations ship cars one-off to customers all over the USA and make enough money to compete with the local dealers who are in outlying cheap land suburban areas? Currently, dealerships are self delivery retail locations.
Secondary to that, one needs to ask the question of whether or not the shipping damages and finicky customer automobile returns will kill their margins. There is a decent amount of damage to cars from factory to dealership. The dealer preps and sometimes sends the car out for paint, what have you. This business model we are talking about re-introduces that cost a second time.
The finicky customer is another one that causes problems. There is a reason car salesmen are the way they are. People need some vaseline to ease the pain. Can a dealership function by shipping to a remote location a vehicle without an attendant? I would guess that they may well need to have a commission guy deliver the car. That further cuts into the sale margin.
The other business model is the one where an internet company lists inventory at dealerships all over who want to participate. But think about it. What dealer in their right mind would ship out a hot seller at low margin that he knows he can sell for double or triple the commission he is getting? So you will have the slow movers listed. And also you will have a problem with listed vehicles that are desirable coming up "oops." when a dealer decides to not sell one of his listed hot sellers. Who will know?
I have trouble seeing how this could compete all that well. But - in sales, perception is everything. But this is an awfully big ticket item... |
