Add one more initiative to the growing world of automotive e-commerce.
IMotors.com of San Francisco is selling used cars on the Internet. Its hook? Customers can specify the precise model they want, and iMotors will find it, buy it, refurbish it and ship it, all at a cost below Blue Book value. And customers have a week in which to return the vehicle risk-free.
'If we are ultimately successful, it will be because we have made a concerted effort to eliminate gobs of expense,' said iMotors CEO Adam Simms. Some of the traditional trappings of automotive retailing iMotors will trim include inventory costs and real estate investments, Simms said.
But iMotors will have to do much more than trim costs. A number of dot-com automotive companies are angling for consumers' dollars. Many have greater name recognition than iMotors. Many are funded better.
'They're still trying to push the rock uphill,' said Paul MacDonald, an information technology consultant to the automotive retail industry who is based in Hayes, Kan. 'Even though the product looks good, they need to show they have a brand name.'
IMotors is starting small. For a year it has operated in Northern California. It will expand to Los Angeles with eight new delivery centers in place by year end. Plans include delivery centers on the East Coast by the end of 2000, Simms said.
IMotors has about $50 million in start-up money. The investments come from several funds, including Donaldson, Lufkin & Jenrette's e-commerce fund, Global Retail Partners; Vulcan Ventures; and Oak Investment Partners.
The expansion plan targets what Simms calls 'Web-enabled cities,' areas where e-commerce is accepted and used. New York, Boston and Atlanta are among the cities Simms said likely will host an iMotors delivery center.
Customers visiting iMotors' Web site are able to specify precisely what type of vehicle they want. For example, a 1994 Ford Taurus, green, with less than 70,000 miles. At that point, iMotors' call center searches its database of public auctions around the country, finding vehicles that match the requirements.
When a vehicle is found, iMotors contracts with a buyer at that auction, and the vehicle enters iMotors' system.
It takes about two weeks to deliver a customer's car, Simms said.
Simms, 38, has a background in traditional automotive retailing. While selling cars at a brick-and-mortar dealership, he learned how important quality vehicles are to an outlet's success. Therefore, a cornerstone of iMotors' business model is its vehicle refurbishment center, Simms said.
Once bought, cars are shipped to the center in Sacramento, Calif., where an inspection, routine and preventive maintenance and detailing are performed. Last year, 3,000 cars went through the center, with each car spending an average of 29 hours undergoing treatment, Simms said.
Cars sold by iMotors are backed by a seven-day, money-back guarantee and a three-month warranty.
A thorough inspection and a warranty are both steps that bode well for iMotors, MacDonald said. Said MacDonald: 'IMotors has its gun aimed and its bullet loaded. It remains to be seen if it can hit the target.'