The Automotive Direct-to-Consumer model Explained

Hi, this is Gary Lewis at GL digital. I'm going to talk today about what the direct-to-consumer model is for auto dealerships, and how dealerships can use it to triple their profits and sell more vehicles. And I'm going to do it in five minutes.

Background: The motor trade before the internet

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First, let's have a little review of what the motor trade looked like for at least the past 60 or 70 years.

Everyone had the same problem, your dealership might have looked like this, it might not, but everyone still had to buy and sell cars.

Where'd you get the cars from? Well, customers would literally drive them onto your forecourt, especially if you had a local reputation. And they would ask if you could buy it for cash, or do a part exchange. Or you could get them from auction, if that wasn't enough.

And where could you sell your cars? You put it in the Yellow Pages, let your fingers do the walking. Or you could put a classified ad in the local paper. And if truth be told, the cars would just sell themselves. It was straight forwards.

The dealership exists to generate profit on this transaction, that is generate value by facilitating the transaction, by making it as easy as possible for the customer to get what they need and to make sure that cars don't come back.

The motor trade on the internet

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This is what the motor trade looked like for at least the last 20 years what's changed was the internet we realized is these big classified ad platforms such as AutoTrader and eBay, they exist to put your adverts on the internet, which is where all the customers are.

You can still get cars from people who walk in off the street, and you can still buy them from the auction.

Of course, these classified ad platforms do charge transaction fees. They do charge listing fees. So they get a little bit of a skim off the top . And as for the auctions, we've got to remember they take their fees as well. So the dealerships are left with a little bit of value from this, and this is what we're all used to.

What's changed? The motor trade now

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What's changed recently? You will have noticed there's some big changes that have happened in the industry.

First of all, customers will go straight to these buying platforms such as we buy any car, dealerships might never even see the stock when it comes available for sale. It goes on the market because the customers will go straight to these platforms because the experience is just so easy to be honest.

Also the auctions have got these platforms such as Cinch, this is owned by BCA. So they also now have the ability to bypass the dealers and go straight to consumers through the platforms that they control.

Dealerships can still get stock but it's getting a little bit more difficult.

Autotrader and eBay of course still exist, but it feels like the fees are going up every six months, the dealerships have essentially been bypassed.

We don't have control over the customer journey anymore.

What are dealers left with today?

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What does that leave the dealers with? I'll let you work that out for yourselves.

The traditional business model is unsustainable today

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Of course, we can all see that this is unsustainable because dealerships can't get stock. It's like hen's teeth and they can only sell on third-party platforms that have got high fees. And we have no control over that transaction. The platform owns the whole customer experience.

It's taken away from us. So how do we fix this?

Solution: The direct-to-consumer model for local dealers

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Well, what I put forwards for dealers is a direct to consumer model, similar to what the big platforms are doing, but for local dealers.

I want to enable dealers to buy cars directly from consumers and sell direct to consumers, bypassing all third parties using the internet and using social media.

We can actually do this. We can decentralize the industry.

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I want dealers to have not just out the whole pie, but the cherry on top as well.

Our solution

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Our solution comes in two branches.

We have lead generation, here we generate pre-qualified leads from local customers looking to sell the vehicle, and we can get them before they go to the big lead generation sites, such as we buy any car, we can get first dibs on these.

We also run hyper-local targeted ads on platforms, such as Facebook, and TikTok we target a local radius around 25 miles because we know that over 50% of your sales are going to happen to customers in the local area.

So we want to concentrate your advertising on that area to get a steady stream of customers, pre-attached to a vehicle and great finance customers as well. The dealership sits in the middle and converts these customers.

Thank you

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This is our solution for the motor trade in the 21st century. Thank you very much.

If you want to know more about the services, give me a call, check out the website, I'm happy to answer any questions you've got.


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