Dealers can peddle new and used vehicles for just $50 a pop using one of the most visited sites on the Internet - eBay, an online auction with 5.6 million registered users.
The eBay (ebay.com) trading community, based in San Jose, Calif., last week launched an automotive category on its site. The automotive section of eBay serves both conventional car buyers and sellers, as well as collectors.
'We started noticing that cars were being listed on eBay back in January. People (sellers) noticed other items were selling on eBay fairly rapidly,' explained Kevin Pursglove, senior director of communications for eBay. 'From January onward, we saw more and more listings. It got to the point where users said they would like to have a separate automotive category.'
The auction now adds about 1,500 vehicle listings per week. There are currently 25,000 vehicles posted on eBay, 16,000 of them general listings rather than collector cars. Vehicle listings have been growing at a rate of 40 percent per month, said Pursglove.
The company would not reveal specifically how many of its vehicle listings result in actual sales. But Pursglove said that on average, more than 55 percent of the merchandise offered for sale on eBay winds up sold. 'Cars are pretty consistent with the other merchandise,' he said.
Pursglove does not know of any dealers who are selling cars on eBay, but believes it would make sense for dealers to use the online auction. He said other retailers -such as L.L. Bean Inc. of Freeport, Maine, and Lands' End Inc. of Dodgeville, Wis. - have used eBay to sell their overstocks.
The eBay auction serves a global community and features more than 1,600 categories of merchandise on its site. It has about 2.6 million items listed for sale currently. About $6.8 million in merchandise is sold daily on the site.
But eBay's broad customer base and merchandise selection could be a drawback for dealerships because most of their clientele is local and their focus is strictly on cars, auto parts and automotive services.
The auction company recognizes that - aside from collectors - consumers want to bid on cars in their vicinity and there is a limit to how far they will drive to buy a vehicle.
The company is establishing regional sites within eBay.com, starting with Los Angeles. And eBay intends to set up more regional sites this year, most likely for Chicago and New York. Promoting cars on eBay also is a no-risk process. The dealer only has to pay eBay if the vehicle sells. The fee is a flat $50.
To participate, dealers must register as an eBay member, because the site operates as a trading club. To list a vehicle, the seller selects a sale deadline of three, five, seven or 10 days, and accepts bids up until the deadline.
Like any classified ad, a prospective buyer can contact the seller for an opportunity to kick the tires before submitting a bid.
The eBay automotive section features: the Gallery, which allows prospects to view pictures of items up for auction; the Personal Shopper, which allows customized searches for specific cars and notifies potential buyers when the vehicles are available; the 'eBay Showroom,' which serves car collectors; and Featured Auctions, which lists highlights of specific auctions.