Deal Pack Blog

E-Business: Pros and Cons to running your dealership online

One of the latest trends in the car industry is e-business. E-business refers to running your company completely online. When it comes to selling cars online, it can be profitable but difficult. As with any business model, e-business has its pros and its cons. E-business involves setting up a website where your customers can view and negotiate on vehicles. Then generating the sale, and sending all the paperwork via mail or email to be signed. If a down payment exists on the deal, it would be collected through an automatic withdrawal from the customers checking or saving account. Finally the last step would be to deliver the vehicle to the customer and collect on payments also via ACH or recurring credit cards.

 

One of the benefits of running this type of business is the quick start up. The only things you really need are a website and vehicle inventory. You would have very few to no employees and certain fees such as freight fees can be applied to the customer’s account so that they are covered. Also, many customers would appreciate the fact that they don’t have to sit in a dealership for long hours negotiating on pricing, and filling out paperwork.

 

On the other hand, this type of system limits the interaction between you and consumers. Some consumers may like to test drive a vehicle before they buy it. If they don’t have this option, they really only have your word that the vehicle will meet their needs. Secondly, although you may save on labor cost, your advertising cost may be significantly high. There are no salesmen there to grab a customer with a sales pitch so your advertising must be able to get the customers attention, and keep them on your website.

 

Even though in today’s modern world where we seem to have less time on our hands and we are constantly looking for the convenient way out, certain concepts such as purchasing a vehicle may still be something we should consider spending some time on. It is definitely not a small or simple purchase for the consumer or a simple process for the dealer. So before jumping ship and heading online, be sure to weigh all of your options when deciding on a business model.

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