Michael Chamness got a call recently from a Web shopper who offered to buy a new Lincoln Navigator off his Florida vehicle lot for $1,400 over invoice.
Sounds like a nice profit for his employer, Jarrett-Skeen Ford-Mercury-Lincoln in Dade City.
But Chamness, the dealership's Internet salesman, knows that the hot-selling sport-utility routinely sells for $2,500 over invoice. He did the deal for the Web shopper anyway.
'You got a guy handing you $1,400 and he's happy,' Chamness said.
MAKE AN OFFER
Keeping customers happy - at least customers who know how to shop on the Web - is why Jarrett-Skeen welcomes a new venture between Ford Motor Co. and Priceline.com. Last week, the automaker started testing a new service in Florida that lets visitors to the Ford Web site buy vehicles via the Stamford, Conn., service. The pilot program runs 90 days.
With Priceline.com, Web shoppers go online to choose a car or truck model, calculate a loan or lease payment, and make an offer based on how much they are willing to pay. The Priceline.com Web site shows two prices: dealer cost and manufacturer's suggested retail price.
Priceline.com sends the offer to dealers in the shopper's designated market area, without disclosing the shopper's name. Under the Ford program, the dealer closest to the Priceline.com bidder gets a first look at the offer for two hours. Dealers can accept the Priceline.com bid or return a counteroffer. The service costs buyers $50. Dealers pay $200.
But the Ford-Priceline.com program raises some troubling questions for at least one Florida dealer.
Mike Stedem, owner of Stedem Ford in Fort Meade, Fla., said the boundary-free world of the Internet is not the same as his world, where dealerships are assigned certain territories.
Stedem worries that Ford will help determine where the leads are faxed. And if certain dealers get all of the plum leads, it will look like a clear conflict of interest, he said.
'I want to know where their integrity is. Having Ford behind this and faxing leads to dealers' means the factory has a say in where each car will be sold, Stedem said.
Does Priceline.com drive down prices? Vehicles sold over the Web site carry dealer profit margins similar to deals done traditionally in showrooms, contends Maryann Keller, president of the firm's auto services unit. Priceline.com knows that because it sees the prices that dealers accept from Web shoppers, she said.
Still, Keller acknowledged that some dealers feel as though they are 'under siege' from both Web retailers and manufacturers who are trying to reach shoppers directly.
Ford declined to comment.
As Internet salesman Chamness sees it, the new logic of Web retailing demands that dealers accommodate shoppers who are increasingly armed with information and bargaining power.
The Ford-Priceline.com experiment does not introduce any new form of competition among dealers, he said. Dealers already poach customers from each other and are increasingly reaching beyond traditional geographic market areas to find new business.
And any dealer who expects pricing to be kept off the Internet is thinking like a dinosaur, Chamness said.
He added: 'That is the way the dealer wants to do business, not the way the customer wants to do business.'
Staff Reporter Michael Woodyard contributed to this report