What is the asking price of a used car at Boch Enterprises Inc.? That depends on whether you come through the door or through the Internet.
Boch, a dealership in Norwood, Mass., has one pool of used-vehicle inventory but two sets of prices - one for Internet surfers and another for walk-in customers.
The Internet prices are about $2,500 lower on each vehicle. In fact, the dealership makes an average of about $600 less per vehicle from an Internet sale than from a walk-in sale. And that's OK with Ernie Boch Jr., vice president of Boch Enterprises (Toyota, Mitsubishi, Kia, Oldsmobile).
Why? Because low starting prices are necessary to attract browsing Internet shoppers, he says.
'It's a different medium; it's a whole new clientele. The Internet buyer is not that interested in haggling over price,' said Boch. 'They go to the site to see the merchandise, see if the price is fair, and they buy it.
'When a customer is standing in front of you, it's easier to negotiate. On the Internet you don't even know they're there. My idea is to gain market share with this medium.'
Boch, who sells about 3,300 used vehicles annually, said his used-car Internet sales have grown since he began cyber-selling in January 1996 to almost 3 percent of all used-car sales as of May 1999. He said his closing ratio for Internet used-car sales is 21.73 percent. His closing ratio at his New to You used-car superstore is over 25 percent.
Adding new vehicles, Boch said 3.38 percent of all of his business comes from the Internet, and his closing ratio for that business is 21.84. Boch's Web site address is www.boch.com.
DON'T WANT TO HAGGLE
Boch said he averages about $47,000 a month gross profits from the new- and used-vehicle sales generated by his Internet site. Gross profit is the difference between what a dealer pays for a vehicle and what it sells for.
Boch said he electronically tracks his online sales, and expects his used-vehicle Internet business to reach about 5 percent of all used-car sales by year end. He said 300 to 400 used vehicles are listed on his site at any given time. Boch's used-car site gets about 5,500 visits a month.
While used-car shoppers generally still want to kick tires before they take delivery, Internet shopping is gaining wider acceptance among used-vehicle buyers.
According to the J.D. Power and Associates Inc. 1999 Used Auto shopper.com Study, to be released Aug. 2, 26 percent of consumers buying a used 1994- to 1999-model vehicle use the Internet to help them shop. The study is based on nearly 10,000 mail respondents who recently bought a used vehicle.
These consumers generally go online as a substitute for traditional classified advertising to find specific vehicles, according to J.D. Power, a research firm in Agoura Hills, Calif.
MAKE AN OFFER
Boch's New to You Web page invites used-vehicle customers who find a vehicle they like to make an offer for it online. Boch said he occasionally gets an offer that is below cost - which he does not accept - but the offers are generally attractive.
He said he usually accepts about 50 percent of the offers he receives. In the other 50 percent, he exchanges two or three e-mails with customers before they reach a price, Boch said.
'It's a different kind of buyer,' Boch added. 'They don't want to see a ridiculously high price (on the vehicle), and they won't offer you a ridiculously low price either.'