For car buyers they provide choice and information in the one place when looking for their next car.
For car sellers they enable their inventory to be put in front of millions of buyers and compete on equal footing to other sellers no matter the size.
Now, let’s imagine an online world with no online automotive third party marketplaces. How would sellers get their cars seen by buyers and how would buyers find the right car for them?
Dealers would have to rely on their own website to advertise their cars to sell. Yes the vast majority have their own website today but it is a totally different cost and investment conversation if they had to rely on their own website to attract buyers.
The massive investments and efforts third party marketplaces make to get the right car for the right buyer would be the domain of the dealer. Just like the old days when a dealer had to get a spot with good through traffic on a main road, smaller dealers would be up against it again.
The search engine giant(s) and those who have created business around it (i.e. SEM, SEO “experts”) would love it if dealers had to rely on how their website ranked in search, organically or paid.
Car buyers are buying new cars whether they be new or used – have you ever heard someone show you their “new used car”, they always buy a new car it’s just some are used – and third party marketplaces are the only place where new and used are presented equally.
This is an important part of today’s online world that I think is overlooked by most. Buyers come to third party marketplaces to narrow their car search so by mixing new and used together the buyer’s comparison set is broadened, bringing in cars they probably didn’t know yet could afford and/or were available.
Advertising in print still wouldn’t be viable so investing in the dealer website at a level far exceeding today would have to be the way forward.
I’m not even sure what private sellers would do. I guess they’d have to advertise in the newspapers per pre-Internet and rely on the publisher to list everything online that they have offline, a throw back to the News Limited and Fairfax 1990’s business plans. Maybe the publications like the Trading Post would still have currency?
Facebook Marketplace isn’t even the answer. How many of you want to sell your car to a “friend” really?
Online third party automotive marketplaces are a natural fit in the same way a Google is for search in navigating in today’s connected world.