RedBumper hopes to avoid lanelogic's shadow
Bruce Thompson launched the RedBumper used-vehicle inventory management tool in October.
Jim Carter, marketing director at Napa Ford-Lincoln in Napa, Calif., has used other tools to manage his used-vehicle inventory, but he is sold on RedBumper.
He says RedBumper tells him which used cars and trucks to stock, down to trim level and color, and has cut the time used vehicles stay on his lot to seven to 10 days, down from 20. Its smartphone app is fast and convenient, he says.
"We can use it on our phones at the auctions. We can access AutoCheck [vehicle history reports] to see if the car has been in an accident, if it's a one-owner vehicle -- it's all done on one screen, very rapidly and quickly," Carter says.
RedBumper is an Internet-based used-vehicle inventory management tool. It is sold by a company of the same name founded by Bruce Thompson.
But regardless of RedBumper's performance, it carries some added baggage: Thompson's last venture, which alienated many dealers.
Some dealers are still fuming about that venture, called lanelogic, which Thompson founded in 2005. Lanelogic formed a network of franchised dealer clients that bought and sold each other's used vehicles. If a dealer failed to sell a used vehicle bought through lanelogic within 45 days, lanelogic promised to buy it back.
But lanelogic failed in 2008, leaving some dealers with used vehicles but no titles, or titles but no vehicles. Some dealers said lanelogic owed them money.
Marc Cannon, a spokesman for AutoNation Inc., says the nation's largest dealership group had an unsuccessful relationship with Thompson and lanelogic and "it would be very unlikely that we would have a future relationship."
'Didn't rip them off'
If not for the recession, lanelogic would have succeeded, Thompson says. He knows some former clients are upset but says he worked hard to make dealers whole and resolve disputes.
"I'm sure that not all dealers were exactly happy with every decision we made, but we didn't rip them off," he says. "We did our best."
In 2008, Ann Morin, general sales manager of Bill Dube Ford-Toyota-Scion in Dover, N.H., told Automotive News that lanelogic owed her store $32,198. Thompson paid the dealership some money, she says today, but she has bad memories of months of getting the runaround. "I can say with certainty that my dealer principal would not entertain any business that he is tied to," she says.
Tommy Allison, used-car buyer and inventory manager at Fred Haas Toyota Country and Fred Haas Toyota World, both in the Houston area, says he is not familiar with RedBumper but was a lanelogic customer.
"I was a little nervous at the end," he says of lanelogic. But Thompson "took care of his obligations with us. We didn't get hurt -- not a penny."
Before lanelogic, Thompson was known as the founder of American Auto Exchange, now known as AAX. It is a used-vehicle inventory management tool that he sold to JM Family Solutions in 2005. It was acquired by DealerTrack Holdings Inc. in 2009. AAX, vAuto, FirstLook and HomeNet Automotive are major competitors to RedBumper.
Thompson launched the RedBumper tool in October and demonstrated it to dealers during the National Automobile Dealers Association convention last month in Las Vegas.
RedBumper tracks used vehicles listed online for sale in a subscriber's market and tells the subscriber the prices of specific make and model vehicles being advertised by competitors, and price changes on competitors' listings.
The system analyzes a dealership's used-vehicle sales history, and sales in its market, to advise what used vehicles to stock. It gives dealerships information such as a vehicle's average days to turn, average profit and current days supply in a market.
RedBumper costs dealers $650 a month. Thompson says 1,000 dealerships are using the system.
When the right vehicle is priced and merchandised correctly, "there is no reason for me to sacrifice my gross," Thompson says.
RedBumper has a smartphone app that enables salespeople to scan a vehicle identification number, take photos of a car or truck and send the information to a used-car manager.
The used-car manager -- whether across town or across the country -- then can appraise the vehicle and, within minutes, send a quote back to the salespeople.
You can reach Arlena Sawyers at firstname.lastname@example.org.