An Inside Opinion of Internet Sales and Why Dealerships Fail

"RealPontiacFakePontiac" (realpontiacfakepontiac) 05/20/2015 at 12:20 • Filed to: dealerships

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Tesla gets all of the attention when it comes to changing how people buy cars (and fuel them), but the dried up and motor oil-caked monolithic body of traditional car dealerships is attempting to change from within. As with all insanely large things, changing direction takes time and results in a lot of nervous shaking and questionable results. Just look at American landyachts from the 70’s and 80’s.

Sure, you could buy cars online with as much effort as it takes to watch a bad movie on Netflix. Unfortunately, American car dealerships largely seem indifferent to the possibility of selling cars with minimal effort. For the price of a website made in 2015 instead of 1999, you’d think that every dealership from Toyota to Ferrari would be jumping on the opportunity. Most of their attempts are about as useful as a Smart Car at a tractor pull, but they are trying in their own way, as I will go into some detail of below.

Although still stubbornly refusing to admit that the accuracy of their online inventory matters, many car dealerships employ people like me. Seemingly all referred to as “Internet Sales Managers”, we office dwelling few all focus our efforts on replying to leads generated from sites like Cars.com and AutoTrader.com.

The first step of the process looks like this for just about every dealership: While browsing Cars.com or something similar, you fill out a data sheet with as little information about yourself as possible (fake names are great; I will email or call you if you provide contact information and I will address you as “Jack Squat”) and say that you want a Ford Focus. That data sheet, called a “Lead”, gets sent to an Internet Sales Manager/Coordinator/Glorified Secretary. Once we find your desired vehicle, the process differs depending upon who you work for.

This is how my dealership does it: I send you an email with the final price before taxes, title, doc fee, etcetera. This final price includes our discount, available rebates, all of that stuff. The email also contains a PDF of either the specific vehicle that you expressed interest in, or of a vehicle that I picked if you just said “2015 Focus”. At the bottom is my name and all of my contact information, plus my license plate number and a picture of my car, so that you can run me off of the road because I have emailed you 30 times.

I like that we send quotes out to every customer that requests information. I like that we don’t ask them to come in for pricing or financing, even if they want accurate monthly payment quotes. I like that we don’t have stock vehicle photos for our website. I like that we have fairly decent video walkthroughs of our vehicles and that I don’t really email people 30 times.

However, there is a lot that I don’t like. The industry of car dealerships in America has advanced about as slowly as all-electric vehicles. While EV’s received a new lease on life, dealerships have basically defaulted. Something like 98% of dealerships in America must be owned and operated by old men who still won’t purchase something on “the Amazon” for fear of catching malaria. It seems as though they don’t want to pull money from the air, with little to no customer interaction.

For some, this is because they feel as though they deeply understand the market and yes yes, they understand that millennials don’t want to bother with salespeople or haggling and they just want it all right now, but they also read that millennials don’t have money and don’t buy cars, anyways. So, why should dealerships bother changing for the current generation if the youths are all too concerned with vaping, public transportation and not working? Because those articles are lies .

Toyota seemed to understand some of this when they launched Scion. They also possibly understood that old people love boxy cars with great visibility. Not many other manufacturers and their associated dealerships have adopted any sort of new way of dealing business, which leaves most customers at an annoying disadvantage. This especially annoys people who are simply shopping around, car enthusiasts, and anyone who frequently purchases things on the internet.

The things that we, as the buyers often have to deal with:

- Inventory saying that they have a Miata with a manual transmission when it in fact, has an automatic.

-Inventory saying that a rare, 100% stock Mk4 Supra is available for sale when it actually sold 3 weeks ago to some guy who drove in on a slammed GTI.

- A website designed in 2001 that will force you to see the vehicle in person to figure out what trim it really has.

- No useful pictures or, pictures of every single detail that you don’t care about, like 46 different pictures of the ventilated leather seating.

- “Internet Sales Managers” refusing to send you an actual price quote or anything beyond “COME INTO THE DEALERSHIP WE WILL GIVE YOU THE DEAL OF YOUR LIFETIME” 84 times in one week, all while calling you 10 minutes after each email to see if you have received their most recent digital, text based assault.

- And a hundred other little problems that add up to something of the equal size and annoyance of a Nissan Armada poking you in the arm saying, “hey, hey, hey, hey. I am fully utilized by my owner”.

Then finally, if someone gains half the amount of courage that the brave souls who purchase a 150,000 mile V12 Mercedes have and venture into a dealership, they are treated like a homeless person walking into a police department. They might help you, but they might also waste your time, spit on you and push you out the door. All because you were told by the Internet Sales Manager that the vehicle that you have been lusting after is yes, still for sale.

I’m not high up at my dealership. I make calls and write emails. That’s about it. While that sounds exactly like the job description of most CEO’s, I’m not even the General Manager at my dealership and I don’t have the ability to make decisions. But soon, I will be asking him if I can have control of our online inventory. I want to talk to him about the possibility of allowing customers to purchase a vehicle online, of an automated test drive scheduling system, synced up with sales peoples so that customers can very quickly and easily get a feel for a vehicle of interest while not wasting anyone’s time. A lot of people are tired of the old way of things because a lot of people have busy lives, too many bills, more kids than can fit in a Boxster and the patience of someone who grew up trying to watch porn over dial-up. Tesla is trying to change the game, but unfortunately it seems up to the incestuous relationship between politicians and dealerships.

Dealerships have the advantage here, but they need to realize that they are missing out on a crazy amount of money. Almost every one of my friends has decided not to purchase a car from one dealership or another because they couldn’t quickly find out the price of a car or motorcycle. The whole of the car enthusiast world appears to hate nothing more than pavement sharks in suits who only sell automatic M3’s. Dealerships need to open up their eyes and look around them: Elon Musk, Amazon, Ebay, Steam and countless other digital stores all sell big ticket items to millions of customers, many of them sitting on the toilet on their iPhone. Dealerships are missing out on this because they’re stuck in 1950, when the human connection meant something and when the world of technology wasn’t feverishly developing more ways to ignore everyone while also engaging with everyone at the same time. Even a few simple things like accurate online inventories would allow me, personally, to get 15 or more people every month into the store.

But instead, most dealerships are sticking with the tried and true: radio and TV advertisements at 3:00AM, targeted at the precious buyer demographic of bored 15 year olds watching Adult Swim.

elpaco13 > RealPontiacFakePontiac 05/20/2015 at 15:05

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Great insight. A few years ago I was interested in a BMW Z3. Called... CALLED the dealership after I saw one was available online. They said it was there. I went in and of course it was not. I walked out of the dealership and decided to call again and ask if it was available. They said it was available and on the lot. I called them out and that’s when I realized it was some random call center that had exactly as much (mis)information as I did looking at the website.

I did end up buying a ‘98 M Roadster from a dealership that accurately represented their inventory online.

Herr Quattro - Has a 4-Motion > RealPontiacFakePontiac 05/20/2015 at 15:11

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This needs to be shared to the FP now.

Maximusgoobe > Herr Quattro - Has a 4-Motion 05/20/2015 at 15:31

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Screw that, this needs to be sent to every auto dealership in the damn world.

Rusty Vandura - www.tinyurl.com/keepoppo > RealPontiacFakePontiac 05/20/2015 at 15:39

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You really have to listen to this episode of “This American Life.” They spend a month in a Jeep dealership in New Jersey. It’s surprisingly dramatic.

VideoPgh > RealPontiacFakePontiac 05/20/2015 at 15:59

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This so much....like when I hop online and look at the inventory of a dealership that according to their online inventory they only have 20 used and 45 new cars on said lot. But the lot is the size of a decent sized county and when you drive by they easily have 45 brand new full size pickups parked out front alone just in the 1st row of the lot.

RealPontiacFakePontiac > elpaco13 05/20/2015 at 16:08

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One of the absolute easiest and greatest things that dealerships can do to fix their problems would be to have accurate inventories.

We turn away quite a few customers per week because they want a specific vehicle that our website says is still for sale, but of course sold several days ago. It is frustrating and involves more work for whoever is handling the lead. I have to search for a vehicle as similar to theirs as possible, and those vehicles often aren’t on our lots, which means a dealer trade has to happen.

RealPontiacFakePontiac > Rusty Vandura - www.tinyurl.com/keepoppo 05/20/2015 at 16:09

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I’m going to watch that like, today. Thanks for the recommendation.

RealPontiacFakePontiac > Herr Quattro - Has a 4-Motion 05/20/2015 at 16:09

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Hahah thanks, man. Hopefully everyone else agrees, too!

RealPontiacFakePontiac > Maximusgoobe 05/20/2015 at 16:09

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If only. I can’t imagine the amount of angered mouth-frothing that would erupt from every management office across America, though.

Rusty Vandura - www.tinyurl.com/keepoppo > RealPontiacFakePontiac 05/20/2015 at 16:12

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It’s a radio thing, actually. You can download it as an MP3 and listen via podcast if you like. Well worth your time. Let me know what you think of it.

RealPontiacFakePontiac > VideoPgh 05/20/2015 at 16:13

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A lot of dealerships will wait quite a while before putting vehicles on their website, but I haven’t been able to figure out any real reason as to why.

I have encountered this a few times. All of the major dealerships in my area use an online system where we can search for vehicles across a massive area (500+ miles) based off of VIN, Model, Trim, etcetera. When trying to locate a vehicle for a customer, I will sometimes notice that another dealership has the exact car I need, but their website doesn’t actually have it listed. Most customers shop around a lot and I like to think that when I initiate a dealer trade, we get a sale that they lost due to laziness.

Rusty Vandura - www.tinyurl.com/keepoppo > RealPontiacFakePontiac 05/20/2015 at 16:14

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It strikes me that they do it the laborious way because that’s how they get folks into the repair shop after the sale. Let us know if they let you do it.

RealPontiacFakePontiac > Rusty Vandura - www.tinyurl.com/keepoppo 05/20/2015 at 16:15

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Ah, my mistake. I don’t keep up with any radio or podcast thing, although I hear that I have been missing out on some good crime drama because of the self-imposed audiorock that I live under.

Listening to it right now on their website. I’ll let you know what I think.

Thanks!

RealPontiacFakePontiac > Rusty Vandura - www.tinyurl.com/keepoppo 05/20/2015 at 16:18

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This will be a series that I will keep publishing and updating. I will definitely let everyone know what ends up happening.

I know that some manufacturers have tools to help dealerships and salespeople get customers back into the store for repairs, maintenance and stuff. Toyota has something- pretty sure that salespeople can even send service reminders to their customers phones, if they have the app installed.

It seems odd to me that manufacturers seem to create a lot of tools that are leagues ahead of dealerships, in terms of customer acquisition and retention.

Seems like every car maker has a digital showroom with full 360 degree interior panoramas. I don’t know of any dealerships near me that have anything like that, unless you count a hundred different awkward angles from the footwell up to the roof.

Herr Quattro - Has a 4-Motion > RealPontiacFakePontiac 05/20/2015 at 16:19

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Only because there computers have more cobwebs then processing power.

“damnit, I waited 4 months to load this B.S.? Thanks Obama.”

RealPontiacFakePontiac > Rusty Vandura - www.tinyurl.com/keepoppo 05/20/2015 at 16:20

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Hahaha okay, “balloons sell cars”. This is funny already and it pretty much just started. We have a helium tank in the back of the dealership, but I’ve only seen a few balloons around the whole lot, luckily.

RealPontiacFakePontiac > Herr Quattro - Has a 4-Motion 05/20/2015 at 16:23

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Very accurate. We have excellent support for our databases, contact management stuff, all of that, but it is all third party. Our actual computers aren’t bad, mostly i5’s and stable machines, but people still encounter issues. My dealership honestly seems on the up and up compared to some of the horror stories that I read about.

But, our online inventory isn’t quite so great. It’s only a few days behind on average, but it is frustrating for everyone involved. If it were near real time, I would almost be in heaven.

RealPontiacFakePontiac > Rusty Vandura - www.tinyurl.com/keepoppo 05/20/2015 at 18:30

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Had to put it on pause for a little while to make coffee and talk with some people, but just finished it.

That was a great program to listen to, I especially enjoyed Manny’s story and Art of War techniques. That’s almost exactly how I operate.

Thanks for pointing this out to me. Learned quite a lot and I have some things to research now.

Rusty Vandura - www.tinyurl.com/keepoppo > RealPontiacFakePontiac 05/20/2015 at 20:29

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You’re welcome. I loved how the down-on-his-luck guy hustled the sale that wound up putting them over the top for the month. Such drama, so human. And next month, it’ll be forgotten. Hero to zero, as the military recruiters say.

I’m glad you enjoyed it. This American Life is a great show, but for me, in small doses. The host, Ira Glass, is a little bit too judgmentally liberal for me, and he gets to editorializing and it puts me off.

wlb50 > RealPontiacFakePontiac 05/20/2015 at 22:36

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Went shopping for a Mercedes 3 years ago through MB-USA’s website. Sent via the web site (and manipulating my zip code) to 7 dealers and all but one gave me this routine:

“Internet Sales Managers” refusing to send you an actual price quote or anything beyond “COME INTO THE DEALERSHIP WE WILL GIVE YOU THE DEAL OF YOUR LIFETIME” 84 times in one week, all while calling you 10 minutes after each email to see if you have received their most recent digital, text based assault.”

Only 1 gave me a quote and an honest answer that they didn’t have exactly what I was looking for but here is what they had. Guess where I got the car?

Kept hearing from some of the others for weeks afterwards, all wanting me to come in.

I like straight forwardness and no BS.

RealPontiacFakePontiac > wlb50 05/20/2015 at 23:17

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Sounds about right. I’m all for complete transparency and getting everything done as quickly as possible. Most other people in my position don’t seem to operate like that.

I’m sure that they might get a couple more people in due to their pushiness, but I’d rather not mess with all of that, honestly. Job isn’t in danger so no need to alienate possible future customers.

AMGtech - now with more recalls! > RealPontiacFakePontiac 05/21/2015 at 03:11

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And the odometer. I will always disregard an entire dealership if they don’t bother listing mileage or price. I don’t care if they have 5 Odette exact car I’m looking for, not listing those things says to me the car has 500k miles and they’re asking double blue book And that if I do bother to call I will end up having to talk to some greasy stereotypical used car salesman who wants nothing more than to waste at least the test of my day.

NunchuckWoolery > RealPontiacFakePontiac 05/21/2015 at 09:19

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I used to work for a luxury dealer that thought that balloons sold cars. God I cringe every time I hear that phrase.

RealPontiacFakePontiac > NunchuckWoolery 05/21/2015 at 09:26

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To me it is the same as if I walked into Gamestop and saw stuffed animals tied to every display.

STUFFED ANIMALS SELL GAMES.
BALLOONS SELL CARS.

Like, what?

NunchuckWoolery > RealPontiacFakePontiac 05/21/2015 at 10:30

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That would be pretty messed up. The thing that always got me about that place was the fact that we were selling $50,000+ cars using cheesy B-lot gimmicks like balloons and sale signs in raised hoods, hell they even had the giant blow up car fox out front until the brands regional sales office caught a picture of it on our facebook page and called telling us to take it down. Of course everything ownership wanted us to do was stuck in the 80's and kinda shady. Fuck that place so hard.

RealPontiacFakePontiac > NunchuckWoolery 05/21/2015 at 10:43

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Hahah, oh man. You brought up a good point about the whole gimmicky B-lot things; they’re using techniques that work on little kids to get adults to spend massive amounts of money on a depreciating asset. It doesn’t make sense.

My dealership doesn’t go all out with those things, thank God. We have a few balloons but I don’t think that I have ever seen a sale sign propping up a hood. Everyone at my dealership seems extremely laid back in every way. I think that I got pretty lucky.

What was your places Facebook like? Ours isn’t too bad, mostly just owners day pictures and stuff like that.

U Drive a Camry > RealPontiacFakePontiac 05/21/2015 at 13:44

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Is the initial quote you send them the best offer? Or do you pad it with a healthy profit margin to the dealer.

RealPontiacFakePontiac > U Drive a Camry 05/21/2015 at 13:54

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To be perfectly honest, there is no “healthy profit margin”, considering the fact that we are talking about items worth tens of thousands of dollars. It is rare for a vehicle to make more than $3,000 total gross profit.

The quote that I send them as my very first email is the best offer that we can do in most circumstances. We usually take $1,000 off dealer invoice and our vehicles (and quotes) end up being several thousand below MSRP. If someone negotiates below that, we aren’t against that, but we can’t quote people the absolute, bottom dollar deal that we will do. Profit margins on entry and mid level vehicles are very low.

U Drive a Camry > RealPontiacFakePontiac 05/21/2015 at 14:09

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Am I fair to assume that “dealer” invoice is the same as “factory” invoice shown on TrueCar/Edmunds.com?

RealPontiacFakePontiac > U Drive a Camry 05/21/2015 at 15:02

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Nearly, yes. Dealer invoice is almost always higher than what we actually pay for the car. I can’t see what we pay for the car, but our gross profit take that into account, as far as I know.

DogRidingRodeoMonkey > RealPontiacFakePontiac 05/21/2015 at 16:35

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The inability of dealers to take internet sales seriously is one thing, but the bait and switch they do pull on their sites is even more infuriating. My wife and I left NYC a few weeks ago for the west coast, but we needed a car, an inexpensive yet reliable one that could get fixed pretty much anywhere (at 35 years old, this would be literally the first car I’ve ever owned having lived in NYC since I was 18). Since we were short on time, and couldn’t travel to Jersey or Long Island, we had to deal with NYC Honda dealers (which has already been an article of its own). I would pull a sheet on a car at the price we wanted, print it out, make online requests, confirm the stock on the phone show up and “Oh, it’ just sold, but give us a chance to earn your business.” Fuck you. Fuck you a million times you time wasting bastards, I had an entire life to pack up but I wasted three full days with these clowns.
I have no issues with the car, it runs fine and everything, but if I could just buy my next one online and not have to deal with all the scummy bullshit that came with buying our first car I would be goddamned elated.

NunchuckWoolery > RealPontiacFakePontiac 05/22/2015 at 17:12

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Man I hear you, the place I’m at now is a lot more laid back, the cheesiest thing they do is the painted on slogans on windshields. Our social media at the last place was run by me, I tried to keep the content fresh and diverse, and to show some behind the scenes stuff. But, ultimately it was tough getting our clientele to get involved outside of a handful of people that would interact with me on posts. I suspect a lot of that had to do with the fact that our average customer was in their 60’s and up. Teaching them how to use Nav systems especially with the Lexus remote touch was the most frustrating experience ever.

Caddywompis > RealPontiacFakePontiac 05/23/2015 at 11:43

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Great write-up. I think slowly, veeeeeery slowly, but surely, dealerships are changing for the better. I work at a small dealership out in the country, and while we have our own process, we (the sales/internt staff) are free to modify our aproach based on what is best for the customer.

Young guy calling me on a Challenger? I’ll talk Camaro vs. Mustang vs Challenger all day, we’ll jump in one and go hit chipotle for lunch and b.s. about cars, music, whatever, come back and I show them the invoice, rebates, and look up truecar right with them.

He’ll come back because he added me on facebook and we now regularly share youtube videos and we’re car guy buddies.

Grumpy old guy who sold cars for 6 months back in the 70s? I’ll “play the game” with him, scratch my head, run back and forth to the desk until he feels like he’s “won”.

He’ll come back because he knows he can “beat me down” on price and get a deal.

Middle aged woman with shit credit that just needs a car, and has the negotiating skills of Bobby Boucher? She’ll get the same price the old man got, without the bullshit.

She’ll come back for her next car, because she got pushed around at the ‘Yota dealer, and here it was simple and easy.

I’m fortunate enough to work on a flat rate, no worries about commision. My GM is a 32 year old who “gets it” when it comes to realizing that different people buy cars different ways. It makes it so much more enjoyable for everyone.

RealPontiacFakePontiac > Caddywompis 05/23/2015 at 20:45

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Glad to hear that you’re in a good place, man. Not ALL dealerships are evil...

Other_dan > RealPontiacFakePontiac 05/24/2015 at 14:08

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Not defending the business model, but adding to the discussion. Some states require that financial disclosures and contracts be presented and signed at the address on the dealer license. Failure to do so exposes the dealership to state tax audits, etc. Many states also have franchise laws that dictate how new vehicles are sold. I have been in the car business a long time (not sales) and I am comfortable that 50% of the way I do my job is dictated by corporate attorneys making sure that I don’t say/do something they would have to figure out how to undo.

The other 50% of my job is divided into catagories like “that’s how we always did it”...”it worked like this before”..,and “remember when so and so did it different and it failed?”... With a sliver of “holy shit! something new actually worked, let’s take credit for it”.

The dealership retail model is like the casino model. Make it like they expect it to be, but let’s be slightly less of an asshole than the last person. You can’t seriously expect a group of people who called the Internet “a fad” to embrace it as the answer to why they are not hitting budget. It is going to be a slow, uphill, grueling process to convince the North American Car Dealer that what they need are consumers to have MORE information available to them AT HOME. An honest, ethical, and confident car dealer wants educated and informed customers...which explains the begrudging establishment of Internet sales.

TxBrumski > RealPontiacFakePontiac 05/27/2015 at 18:01

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Toyota seemed to understand some of this when they launched Scion. They also possibly understood that old people love boxy cars with great visibility.

Eh, Toyota was just taking a stab in the dark with the youths. They found out that sponsoring raves and festivals didn’t really sell cars. The store I’m at currently sells about 8-12 a month and we’re in the Top 20 in the nation for Scion sales. No effort. Didn’t surprise me that Toyota told their stores that they could drop the Scion brand if they wanted and focus solely on Toyotas.

Also, the xB sold fantastic with the 50+ female demographic. They found out that it’s really easy to get in and out of. Not really anything to do with style but more on comfort and ease of use. Not bad!

RealPontiacFakePontiac > TxBrumski 05/27/2015 at 19:08

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Yeah, they were definitely just throwing things against a wall to see what worked. Which takes some effort on their part and it seems to be more than others. I don’t love what they have tried and it has not been a runaway success, but it at least partially worked.

My grandmother, who is like 87 drives an xB. It confuses me every time that I see it.