On March 26, Jim Ellis Auto Dealerships of suburban Atlanta offered a new 2008 Saab 9-3 for sale online. The price had been slashed almost 40 percent below sticker to $18,725.
It sold in four hours.
The Saab was testing the waters on eBay's Daily Deal page, where products are offered for one day at deeply discounted prices.
The eBay promotion tested whether focusing on one highly discounted vehicle at a time appeals to both buyers and dealers, said Nicolas Franchet, senior director of U.S. vehicles for eBay Motors.
The Daily Deal page, deals.ebay.com/deals, usually features consumer electronics, and eBay wasn't sure whether shoppers there would accept products priced as high as new cars. Now eBay is evaluating whether dealers will go for the Daily Deal.
Seven in one day
During the one-day program, Jim Ellis Auto sold seven similarly priced 2008 Saab 9-3s to buyers in Arkansas, California, Florida, Illinois, Massachusetts, and Michigan.
Local buyers purchased three more 9-3s after the listings were moved to eBay Motors Mega Deal page for three more days.
Wayne Ussery, Jim Ellis Auto's director of Internet marketing, said the group didn't make much money on the Saabs. But exposure on eBay put a national spotlight on aging vehicles that had been shunned by locals.
"I'd give the project a B plus," Ussery said. "We had some technical snafus with data not being quite right, but we cleared out some inventory that needed to be sold."
Daily Deal takes some cues from Woot--an online marketplace that offers one discounted product a day. Daily Deal started in the fourth quarter of 2008.
Consumer electronics have dominated the space because they are less expensive and easy to buy, eBay's Franchet said. The online market wasn't sure it could sell cars on Daily Deal. "We realize it takes more time to make such a purchase," Franchet said.
So eBay modified the Daily Deal format for vehicles. After being featured on the Daily Deal page for 24 hours, the vehicles were moved to the specially created eBay Motors Mega Deal page for three days. Sixteen 2008 Saab 9-3s and 25 2009 Volkswagen Passats were featured on the Mega Deal page during the pilot.
There is no timetable for autos to be featured on Daily Deal again, Franchet said. EBay is weighing consumer response and dealers' willingness to participate.
31 percent online
Jim Ellis Auto operates 13 franchises in 11 dealerships. It sells vehicles on a variety of third-party sites such as autotrader.com, autobytel.com, and cars.com.
Last year, the group's online listings generated 3,200 new- and used-vehicle sales. That represents about 31 percent of its 2008 sales volume, Ussery said.
The auto group set the price of vehicles based on a combination of customer rebates and dealer incentives and discounts, he said. The Saabs attracted about 200 telephone and 200 e-mail inquiries.
The Passats were discounted about 18 percent to the $22,000-$23,000 range. The auto group got dozens of phone calls and e-mails about the Passats, with one deal pending.
"The Saab deal was sweeter, and customers recognized it," Ussery said.
(Source: Automotive News)