March 12, 2007 – A retail outlet that’s here to stay

INDIANAPOLIS — Curtis Kroeker can’t help but crack a smile when he hears that some dealers view the Internet and his company as an evil rival, waiting and willing to snatch up potential customers before they get the chance to step inside the doors of a dealership.
Kroeker, senior manager for vehicles at eBay Motors, says it’s not the first time he’s heard that, but fortunately more and more dealers are realizing the Internet, and specifically eBay Motors, are here to help, not harm.
“Four or five years ago there were a lot of dealers who were under the impression that eBay actually sold bikes and was a competitor of theirs,” Kroeker said. “What we’ve really tried to do is educate folks that nothing could be further from the truth. Basically eBay Motors is a marketplace so as a dealer you need to look at it as being a complementary sales channel through which you can sell your inventory. Our role is to be a facilitator of industry growth.”
A Global Presence
Founded in 1995, eBay quickly became a worldwide phenomenon, with buyers and sellers across the globe using the site to find everything ranging from sewing needles to million-dollar business jets. In the fourth quarter of 2006 alone, eBay marketplaces net revenue totaled $1.2 billion. eBay Motors, one of eBay’s many marketplaces, recently celebrated the sale of its 2 millionth automobile, and in the fourth quarter of 2006 reported an annualized gross merchandise sale volume of $15.7 billion. The site also averages a motorcycle sale every four minutes, and a motorcycle or powersport part, accessory or apparel item sold every six seconds. With numbers like that, Kroeker finds it puzzling that there are still dealers who are resistant to the e-commerce revolution.
“More and more buyers are turning to the Internet for their research and their actual transactions, and as a dealer if you aren’t there, then you’re going to miss out on that activity and that business will end up going to somebody else,” Kroeker noted. “So I can see why a dealer would look at this and say, ‘Oh I wish this wasn’t happening because this means I need to do things differently.’ But I’d argue that it’s actually good news for the dealers because it’s bringing more buyers into the marketplace and making it easier for them to transact.
“As a dealer you can try to resist this trend, but your long-term best interest as a business is to understand that this is the way the buyers are going, and it doesn’t mean you should close shop or not do the things that you’ve done in the past, because I think you should.
“Obviously you’re serving your local community and the buyers in your area and they’re going to want to come down to your shop and have the same face-to-face experience that they’ve always had. But you also need to add an e-commerce channel as well. And that should include a couple of things. It should include a dealer Web site because a lot of people are going onto the Internet just to find the dealers in their area. You’re going to also look for sales channels that you’re going to tap into on the Internet, and there are a variety of channels to do that. But with eBay Motors, with more than 12 million unique buyers coming every single month, and with the millions of dollars that we put into marketing to buyers to keep bringing those people to the site, that’s a channel dealers should definitely tap into.”
Parts and Accessories
Besides the sales of motorcycles and ATVs, Kroeker also suggests dealers use the Internet and eBay Motors to sell parts and accessories.
“As terms of number of items sold, parts and accessories vastly passes vehicle sales right now,” he said. “My first message to dealers is if you sell a vehicle on eBay, you should treat that the same as selling a unit to someone in your store. eBay provides the ability to cross merchandise parts and accessories for that item. When you’re closing the deal with that person you should be asking them if they need a new helmet, set of leathers, gloves, etc. All the customization you would do face-to-face should also be done online.
“The second thing is eBay is a fantastic mechanism for the not-in-season parts and accessories. When your inventory stockpiles start building up, and things are starting to move into old season, stuff like take-off parts, any scratch-and-dents or returns that maybe the OEM won’t take back, that stuff sells like hotcakes. Not only will they be able to get rid of the items clogging up back rooms, but they can profitably move it to clear up more room.”
So how does Kroeker see e-commerce affecting the powersports community in the coming years?
“E-commerce is here to stay, and rather than maintaining a slow, steady growth, it’s accelerating,” he said. “You look at the Gen Y kids and even our generation, and things just get busier and busier and we have less time and the Internet gives us the ability to take a lot of the legwork and inefficient time out of the decision process. It’s very much a part of how people shop today. And with eBay Motors, when you look at the numbers, the writing is on the wall that this is not a passing fad and something that only a few people are doing. The actual stats on powersports specific are a little harder to find, but half or two-thirds of buyers visit a dealer’s Web site before they actually visit the dealership itself. And the amount of growth we’ve seen our on site has been phenomenal.”
One interesting trend Kroeker has noticed is how closely the powersports industry has followed the automobile industry in terms of adapting its business to an evolving consumer base, and the sooner powersports manufacturers, distributors and dealers adapt, the more business they’ll see.
“From a consumer behavior perspective, the powersports industry is where the automobile industry was a year or so ago,” Kroeker said. “From the dealer perspective, the industry is where the auto industry was two-plus years ago. When I started with eBay Motors four years ago, I was hearing the same thing from auto dealers asking me if this thing is going to go away, what’s this all about, etc. And you can see today that car dealers and even the OEMs within the industry are really embracing e-commerce because they see it as the way people want to shop. And if you’re going to be successful, you need to provide your product in a mechanism that’s consistent with the way people want to shop and buy.
“I think powersports is heading in that same direction, and dealers in this industry are starting to understand how important e-commerce has become. With anything new there’s always going to be work that needs to be done at first, getting a Web site set up, training your staff, etc. But that amount of training pales in comparison to amount of business you’ll be able to bring in from the Internet.”