Tag Archives: classifieds

3 real time carsales metrics


I’ve spent the best part of the past 18 years leveraging the power of data in the online classifieds space.

When you have millions of consumers searching and finding their next car on a country’s number 1 automotive portal like carsales, Encar, Chileautos or Webmotors, data can invariably tell thousands of stories.


Here’s a few powerful “real time” metrics that only a carsales is able to provide with any credibility in their respective country’s car retail market:

Supply and demand
The Days Supply metric is one of my favourites, as it provides real value and something more accurately in the used car market that I don’t think can be replicated. It shows whether supply outstrips demand and vice versa. The beauty of Days Supply is that it can be measured for makes, models, versions, etc and for different geographical regions.

So if you were say a Melbourne metropolitan new car Dealer and a buyer has a 2015 Mitsubishi ASX as a trade in, a vehicle your used car team knows little about. Wouldn’t it be great to know that this model is the most sought after vehicle in Melbourne from a supply and demand perspective for vehicles that are less than 8 years old, have less than 60,000 kms and an average asking price of over $20,000?

What this means is that in the past 60 days 116 were sold but there are only 29 for sale which gives a Days Supply metric of 15 meaning that supply of this model for sale will run out in 15 days. Supply and demand says this is a car you should stock (all things being equal with the acquisition price).

Using the carsales LiveMarket Stocking feature, here’s the hottest used vehicles in Melbourne at 27 July 2017 (using the parameters above).

This list can be a pretty handy shopping list and reference point for any used car dealer.

Whilst Days Supply has been in available in Australian Dealers for some time, it hasn’t been used extensively from a buying perspective whilst some of the most profitable used car operations in the US use this metric to make great buying decisions.

Competitive sets
What better way of knowing what the competitive set is of a model of a car than comparing the models a consumer is searching, viewing and enquiring on?

We see millions consumers searching and finding their next car. Most consumers do not what they are going to buy next when they start their car finding journey on carsales. We see them search, view cars, narrow the search, view more cars, save cars in their Membership and finally enquire on cars, usually more than one.

By analysing this activity, we can categorically provide the true competitive set of each model of car and more often than not, the true competitive set is a little (or a lot) different to what the OEM thought was the competitive set for most cars.

The beauty of these data sets is that is always being updated and available virtually real time meaning that fluctuations in any competitive sets is quickly seen, providing enormous value to any “always on” marketing campaign.

Brand loyalty
When a consumer puts an enquiry through on carsales, many include their trade-in details with the enquiry. This information gives us a real-time view on brand loyalty, before the car has been purchased! Post enquiry surveys can then provide another level and view on brand loyalty too.

Comparing the make of a car being enquired to the make of the trade-in vehicle nominated immediately gives us a picture of brand loyalty. If I am enquiring on a Toyota Landcruiser and in the enquiry I include my Land Rover Discovery 4 as a trade-in, I think there’s a pretty good chance that I am thinking of swapping my Disco for a Cruiser wouldn’t you think?

When I am surveyed about my experience on carsales and if I bought the car I enquired on, this then provides rock solid evidence towards the brand loyalty indicator.

Using this data, brand loyalty can be measured daily and is accurate as opposed to waiting for registration details or OEM surveys.

The take out
These metrics are just three of a plethora of such metrics that carsales, Encar, Chileautos and Webmotors has available to benefit OEMs and Dealers, whether it be for effective advertising, pricing, appraising or buying cars.


Why Australia was different in online auto


Around 12 months I wrote a post titled “Why Australia was different to the US, UK & Canada”.

Here’s another angle to why Australia was different in the online auto classifieds space.

From an auto, jobs and real estate classifieds perspective in Australia, the old school media giants missed out online, big time.

With the exception of News Limited’s $2.2m acquisition for 40% of Realestate.com.au back in 2002 (which is now risen to 61% of over $8b value at time of writing), the media heavyweights in Australia being News, Fairfax and later Sensis (Telstra), especially with their $636m acquisition of the Trading Post in 2004, really missed the boat.

I can make educated guesses about how/why News and Fairfax failed in jobs and real estate classifieds online but I’ll concentrate now on the auto online vertical where my experience is much stronger.

The way they approached it was different and they did different things wrong.

News were too late to the party with Carsguide. Their first online auto go was Newsmotoring which didn’t even leverage their Carsguide offline brand and when they launched Carsguide online in 2003 it was too late. This should have been done in 1995! Isn’t hindsight beautiful.

Fairfax launched Drive online early but (in my opinion) didn’t leverage offline anywhere near well enough. Maybe this was because they were trying to protect the riches of their offline asset?

To highlight my point, when carsales started it was called Carz.com.au because you couldn’t register a generic name as a domain in Australia back then.

Then one Friday the Drive newspaper lift out had a computer on the front with a car crashing out of it with the caption which read something like “carsales.com.au – the end of the used car salesman?”.

So here we have Fairfax through its Drive newspaper brand brandishing an alertnative auto domain to their drive.com.au brand on the front of their lift-out and worse, no one owned the carsales.com.au domain – for long……the guys at Carsz.com.au saw the lift-out, checked the status of the domain, registered it and carsales was born.

Additionally, in both News and Fairfax’s cases, they had opportunities to acquire carsales early and didn’t. Again, I think they were trying to protect offline.

Sensis did a few things wrong. The number one thing was that an online classifieds site was way out of their core competency (I would have thought that they learnt that lesson 5 years earlier in 1999 when they spent millions trying to launch an auto online classifieds site and failed).

The second thing was that with Auto being the biggest part of Trading Post, by 2004 it was too late to win Auto online, especially with their lack of online expertise.

But from an operational point I actually don’t think they did too much wrong in terms of execution except that their thinking was protection of their print legacy rather than online first.

Could they have really done anything more than they did? Maybe but I’m not really sure what; the horse had bolted very, very quickly and before they knew it, the game was over.

The fact is that each of them did what has been done in virtually every other country but they ran into the perfect storm that carsales created.

As soon as carsales moved from the “pay per listing” model (which was/is used by 99% of online classified players) to the “pay per lead” model the game was up for News and Fairfax’s online auto transition from offline and Sensis’ new foray into online classifieds (even before they had started).

carsales made changes to its website to drive leads to dealers, at the same time the model encouraged dealers to put all their inventory online and the inventory was always refreshed because dealers didn’t want to pay for leads on sold cars.

In the same year carsales moved its private seller to pay until sold which saw a sharp increase in private sellers which in turn drove traffic and brought more buyers of dealers cars. The perfect storm.

For dealers, leads quickly became the way that online automotive websites were measured and no site could get near carsales for the number of leads a dealer would receive.

The reality was that no matter what the competitors did at that point and moving forward, the horse had bolted, carsales had won.

Traffic kept on growing as did leads and as a result, revenue just kept growing too.

Don’t get me wrong, it wasn’t all roses for carsales and did not come easily. They were incredibly smart and worked incredibly hard, after all the business decisions they made are what made them!

If the big media players did anything wrong (apart from the acquisition thing) it was not realizing earlier that the game was up; each of them kept throwing good money after bad thinking they could win.


1 out of 3 ain’t bad, apparently


To find a used car to buy before the Internet world we live in now, you would read the Trading Post or newspaper Classifieds and/or visit a good strip of multiple dealers close by so you didn’t have to run around too far.

Today it is so much easier to see all the cars for sale online in the one place but that in itself can make it somewhat harder as you second guess yourself and try to do everything to ensure you are getting a fair price.

I’ve just been through the car buying process again and can confirm that buying a car can still be hard work and stressful, even with all the information available today.

This was the process I recently went through.

The first step was to narrow down a few makes and models. I did that by searching through carsales, saving the cars in the member area, reviewing, culling and finally coming up with a model choice.

This part is definitely easier with lots of photos, information and great tools to help the search for the right car.

The second step was to visit a dealer to test drive the model I selected. As soon as got to the dealership another model jumped out as “car of interest” so I test drove both models. The new choice of model got the nod.

The third step was to get back onto carsales to find the right deal. I narrowed it down to three cars so I submitted enquiries on two of them as the third one was at the dealer I visited the previous weekend. Both dealers were prompt in contacting me which was great and I indicated to both that I would be visiting their dealership the coming Saturday.

The third step was to visit the dealer to check the cars out. I went out to the first dealer and headed into the new car sales as the car I had enquired on was listed on carsales as a new car demonstrator vehicle with a few thousand kms.

When I asked for the sales person I spoke to on the phone I was directed to the used car section. This was strange. Even stranger was the actual kms on the car – 27. Not 2,700, not 27,000, just 27. This was a new car. Being sold in the used car section. WTBH (What The Bloody Hell).

I asked the sales person the obvious question – Why? “The new car department is too busy so we are helping them out”, was the reply. It didn’t gel. I checked over the exterior of the car closely and found an obscure little divot that looked very much like a hail divot. This has to be why it is in the used car yard.

I asked the sales person if this car was a hail damaged car. “No, we don’t have hail damaged cars” was the response. I showed him the divot. He looked surprised, reiterated his answer, I questioned again so he said he’d check and waddled off to the office.

He came back five minutes later and said “Yeah, well it is a hail damage car. That’s why the price is so great. There’s only the one divot, it’s a new car in every aspect with the 5 year new car warranty, capped price services and all that”. Yes there’s only one divot, that we can see now. How many were fixed?

Ok, so 3 questions and 1 straight answer. Further to that, the car was advertised online as a new car demonstrator vehicle with a few thousand kms on the clock with no mention of it being a new car with hail damage. This is clearly misleading.

I ask the question now – which approach is better? To mislead and lie per my experience just described or to have advertised the car as “A great deal to be had, brand new car with minor hail damage, 5 year new car warranty, capped servicing, don’t miss out!”.

I don’t quite get it out but then again as I have had pointed out to me many times before, I’ve never actually sold a car (my previous cars sold themselves)


Which carsales moves were most critical?


After an article I wrote a little while ago (6 moves that drove carsales) I was asked by a number of people “were there any one of these moves that if not made, could have been terminal for carsales?”.

The 6 moves I talked about were introducing Private Sellers, adopting the Sell Your Car Until Sold model for Privates, moving to the Lead Model for Dealers, Acquired Trader Assets (cars, bikes, boats, etc), creation of Mediamotive and the implementation of an All Car Search, all in chronological order.

It’s a really interesting question and really who knows; I’ll have an educated guess nonetheless remembering I was not in the carsales business for ANY of the 6 moves I talked about although I was very close in running DMi, an independent technology/data services provider working with carsales’ competitors.

I can safely say that if carsales hadn’t have introduced the Lead Model in 2002 they would have been in a lot of trouble and most probably terminal.

At the time they were one of 3-4 auto vertical sites with the same business model trying to make a dollar; none were profitable and carsales was the only business whose sole focus was the online auto vertical space.

Almost immediately the currency for ALL websites listing dealer cars online was the number of leads they delivered and because of this model and the actions around it (like the mandated use of Autogate Lead Management), carsales were delivering a minimum of 4-5 times the leads of their competitors.

They had differentiated themselves from their competitors with a profitable business model and had created the ultimate barrier to exit for dealers – they become an integral part of the process for dealers to sell cars.

carsales made the car buying process all about the car and not about who was selling it. This flew in the face of virtually every dealer at the time who were convinced it was their brand, the dealership, that drove the sale.

Do people really care who they buy a used car from? No, they care about getting the right car at a fair price. This was true then and holds true today.

So what about the other points? Well, there could be an argument mounted that if they hadn’t have introduced private sellers in 2000 they may not have made it to 2002 for the next two important moves.

When they introduced Sell Your Car Until Sold (also in 2002), there is no doubt that this pushed their private seller business to relative levels no other auto classified vertical site in the world has reached.

But the fact that this was done in the same year as the Lead Model makes it hard to say that if they hadn’t had made the move it could have been terminal. In isolation, yes.

As for the last 3 moves, no they would NOT have made carsales terminal had they not been made. These moves just helped to accelerate the business.

Acquiring the Trader assets was very nice, gave the company added breadth and strengthened their offering but if it wasn’t done, carsales was going nowhere.

Establishing Mediamotive has been fantastic for the business in terms of diversifying and maximising revenue but again, the business wouldn’t have been terminal.

Same with All Car Search; excellent differentiator and driver of sustained growth but not terminal if not done but did have high risk in terms of potentially reducing dealer leads in favour or private leads (this did not happen).

All 6 moves weren’t without a high degree of calculated risk even if they all wouldn’t have risked the company.

To reiterate, I wasn’t working with carsales for any of these moves but I was working with carsales’ competitors at the time and saw first hand the impact each move had on them.


carsales – if it was easy, everyone would do it


The carsales story is a tale of many things coming together to create the business it is today.

One of those things is foresight; fundamental to building a successful dot com into an ASX Top100 company.

I have watched the business start and grow from near and at times little further away. Right at the very start my first business trip overseas was July 1997 to the US to review two new technology products with a view to make a recommendation on which path to take.

I was working with Reynolds & Reynolds Pty Ltd (R&R) and had just been giving the job of getting their E-Commerce business going.

Over the previous 3-4 years I had been designing and developing software to that utilizes the new DealerLink private network that would revolutionize the dealer management software services in Australia.

The software products I were to review were touch screen kiosks; a new technology showcased by a few vendors at the NADA convention earlier that year in San Francisco.

A dealer had seen the technology at NADA, immediately saw some benefit in helping his dealership and grabbed the CEO of R&R to show him.

The value he saw was the ability to have his inventory from all three locations available to be viewed at each location complete with photos. At the time, this was ground breaking.

The first place I had to visit was the Reynolds & Reynolds Inc head office in Dayton, Ohio. As they still had a small strategic stake in R&R and had a kiosk solution, it seemed prudent that we considered their software.

Their kiosk software was slick and worked well with the only downside being that each kiosk was standalone meaning the only way to update each kiosk was to load the inventory by disc each time.

The second stop was to Austin, Texas where Digital Motorworks Inc (DMi) had built the kiosk software our Australian dealer had been wowed by earlier in the year.

Whereas the Reynolds kiosk solution was standalone, the DMi solution utilized the Internet to update its inventory automatically.

Remember this was 1997; using the Internet to drive your business solution was somewhat new and deemed to be somewhat risky.

What this did was not only fed the kiosk solution, it also immediately enabled an internet strategy for the dealer – their inventory could be searched online within the dealer web site and it enabled individual dealer inventory to be aggregated together.

This was groundbreaking stuff back in 1997, especially in Australia and my mind was made up so I started preparing my recommendation paper.

The one hurdle was the cost of each – the DMi solution was over 4x the Reynolds solution up front and considerably more ongoing. I didn’t know how this would work as I put together my findings and recommendation.

Well on my return the decision ended up being clear cut – the Internet driven DMi solution, despite the relative cost, was chosen very quickly without too much debate – The leaders at R&R had bigger plans.

The last software piece I had developed before heading over to look at the kiosk software was the automated aggregation of dealer inventory direct form their dealer management system to a centralized database with a view to creating a wholesale vehicle sourcing system we called StockLink.

We used this software to populate the kiosk inventory database automatically and within months had kiosk systems running in each of the dealer’s three locations and searchable on the dealer’s new website.

Little did we know (or maybe we did) what this was the start of what would become carsales.

We thought touch screen kiosks would be a big hit, be in every dealership, shopping centers, airports, etc so people could find the car they were after, wherever they were at the touch of their fingertips.

Well the touch screen kiosks didn’t last but the Internet did, carsales was born through this technology and we are where we are today.

So, who had the greater foresight here?

Was it me for creating the software to automatically aggregate inventory and recommend the internet based solution? Hell no, I was merely following directions from my esteemed leaders at the time although I can take solace in that I didn’t hesitate in recommending the Internet based DMi solution.

Was it the car dealer who had the foresight to see the value of a networked solution? Yes he has to have some of the credit as he had a vision and whilst it ended up a little different to what was originally envisaged, he saw some value at the start.

Was it the leaders of R&R? Yes most definitely. They saw the vision of what this could bring to R&R, dealers and consumers.

It would have been much easier taking the Reynolds solution to fill a need. It was far cheaper and developed by trusted partners but it didn’t provide a platform for the future.

The fact that they took the harder, more expensive option was not the first time they would a similar road. They had the foresight to be brave in their business decision making.

If it was easy, everyone would do it. Amen.


Hindsight to be the next carsales


We’ve all talked with friends about super powers and asked each other which one you’d want. Mine would be the power of hindsight.

In my post The Hard Decision carsales had to Make, I talked about the leaders of Reynolds & Reynolds Australia using sound business acumen to make the right decision in persevering with carsales as a startup (it is now an ASX Top100 company with a market cap of ~$2.5b).

One of the learnings they used was the decision of Reynolds & Reynolds Inc out of Dayton, Ohio, to sell DealerNet.com in favour of being a business partner to Microsoft’s Carpoint.com.

Reynolds acquired DealerNet.com in 1995, the same year Autobytel was founded, and was one of the first online automotive classified sites in the US to list used cars. It was described as a “pioneer” in bring dealers to the Internet.

An article in Automotive News (26 June 1995) said ” DealerNet allows a computer user to hook on to the World Wide Web to get information on current car and truck models…..a consumer can get further information and even negotiate a deal via E-Mail – without ever stepping foot into a showroom”.

Reynolds was ahead of the curve with DealerNet.com with current day online heavyweights Autotrader.com and cars.com starting in 1997. Today each of them are worth billions of dollars as a couple of the leading online automotive classified sites in the world.

In the same year that these two now internet giants started, Reynolds sold DealerNet.com to The Cobalt Group so that it could focus on it’s non-equity strategic partnership with Microsoft’s Carpoint.com which was launched the previous year (1996).

When you look back now, this was a pretty big mistake no matter which way you look at it and would have been realized early.

So why did they make the decision to sell DealerNet.com?

Automotive News at the time said that Reynolds wanted to sell it to focus on its relationship with its new partner, Microsoft CarPoint.

They quoted the Reynolds director of online services saying “With CarPoint, we’re better able to fulfill our mission of linking dealers to buyers”.

The irony with this comment is that DealerNet.com, Reynolds had exactly the same assets as what Reynolds Australia had with carsales – they were the number 1 dealer management system provider to franchised new and used car dealers in the US.

What they didn’t have was the foresight that Reynolds Australia had – they couldn’t see that Microsoft had started CarPoint because it saw something big. Had Reynolds realized at the time that if this was a big enough opportunity for Microsoft to invest in then instead of taking a back seat and helping them try to build something big, they would have committed to DealerNet themselves.

The other irony is that CarPoint ultimately failed because it concentrated on new cars as opposed to used cars, using Reynolds as the link to the new car dealers instead of using Reynolds for integrating used cars online which is the path Reynolds Australia took to make carsales so successful in Australia.

Microsoft found that it was bloody hard building a profitable online automotive portal. They bet on the wrong horse (new cars).

If Reynolds were able to use hindsight they would have realized that if it was hard for them to build DealerNet.com, imagine how hard it will be for someone outside of the dealer eco system?

We’re never wrong hindsight, I know that but I wonder if there is anyone still at Reynolds who thinks “what if”.


Moving into Jobs Classifieds from Auto


When we started Digital Motorworks (DMi) in Australia in 1999, our total focus was the automotive industry.

This made sense since our experience was automotive and the DMi technology base out of Austin, Texas was developed for the automotive space aggregating inventory data from over 6,000 car dealers in the US at the time.

So how then was our revenue split 35% auto and 65% jobs classifieds just 3-4 years after starting?

It was about pivoting our niche core competency and getting out of our comfort zone, quickly.

Within 6 months of incorporating the company in Australia, we had signed a significant sized contract with a leading Australian media company giving them exclusivity over our data aggregation and normalization services in the automotive classifieds space for the next 3 years.

We were precluded from working with other major media players in the automotive space although there was still scope for more expansion in auto.

Pretty soon after this, we learned that News Limited’s new digital arm, News Interactive, was keen to get all the job ads advertised in all News newspapers around the country seamlessly into their Careerone.com.au website.

Could our data aggregation and normalization services be used outside of automotive? There was no reason why it couldn’t but it was big change to the business focus and to our head space.

We were given some sample job feeds to test and the results were encouraging but News threw another curve ball – the vast majority of ads are encapsulated in a pdf, image or an image in a pdf. Can we extract the jobs from these file types as opposed to a more logically formatted text file?

Long days and nights followed experimenting with OCR (optical character recognition) software to integrate into our systems and the results started to come slowly at first but the samples were encouraging.

Before we knew it, The Times of London newspaper group (a News International company) had heard about our technology and sent us samples to send back. It was starting to move.

Fast forward a couple of years, thousands of man hours, lots of perseverance and DMi was processing display and lineage job ads from every News Limited newspaper in Australia, The Times of London, the UL’s largest educational group TSL Education (UK) and Emap (UK) for display online in searchable formats.

Was this in our detailed business planning that we used to underpin financing and starting the company? Not even close.

It would have been very easy for us to not try our hand at this new business and stick with automotive, after all we were automotive people with automotive technology.

Sometimes stretching your niche core competency is ok as long as you have a handle on the effort versus reward and more importantly, a handle on what it might do to your business good and bad.


6 moves that drove carsales


With carsales turning 20 this year, everyone seems to forget or fail to realise that for the first 5 or so years, carsales was not profitable and was fighting for the number 1 position with a number of (much bigger) players.

carsales had a (seemingly) unique advantage from the outset in terms of access to dealer inventory by virture of starting out of the number 1 dealer management system provider, Reynolds & Reynolds.

This is a snippet from the carsales’ website in February 1998 when there were just 9 dealers online (1 from South Australia, 4 from Western Australia, 4 from New South Wales):

But this wasn’t the silver bullet everything thought it was (some still think it is today funnily enough), things didn’t just happen for carsales though – they happened as a series of good, calculated business decisions that weren’t necessarily popular or seen as the best way forward at the time but each of them were winners.

Who have thought the “I’m Interested” Form would have been so influential:

Here’s 6 influential moves that drove carsales to where it is today:

Private Listings (2000): Despite having a seemingly huge advantage with unparelleled access to dealer inventory, carsales needed to find a way to drive traffic to the dealer’s cars especially since it didn’t have the seemingly huge advantage it’s competitors had – offline marketing presence. It’s leaders understood that “buyers are sellers and sellers are buyers” so if they could attract private listings on carsales these sellers would also be buyers (of dealer cars). Of course the dealers did not agree with this thinking as they were worried that nobody would look at dealer cars if cheaper private cars were also available for sale. We know who was right.

carsales September 2000:

Sell Your Car Until Sold (2002): Most automotive websites around the world are products of media groups, usually newspapers migrating online. Their model for selling was/is “pay me now for this edition, if it doesn’t sell pay me again to advertise again…and so on”. Translated, this means if I do a bad job helping you sell your car, pay me again. This makes sense for a newspaper as there are costs associated with re-publishing each edition but there is no (cost) reason for this model online. When carsales introduced a flat fee to sell your car until it was sold, private sellers lapped it up. It now made sense to sell your car where you are looking to buy.

Lead Model (2002): Like the previous point, the media groups and their online automotive off-shoots were all about sellers advertising their cars “for sale”. If carsales followed this lead, it would be tough to compete as there was no differentiation to its competitors who being propped up by their offline assets. The carsales leaders decided to change the paradigm by moving from “fee per listing” to a “fee per lead” model. Almost instantly carsales changed the currency of online automotive to leads and created a differentiation that helped propel the business. For dealers, the proposition was now not about “advertising” online but it was all about “selling” – the better they worked the leads they were paying for, the better their closing ratio and more cost effective their online “advertising” would be. It was a true win-win-win for dealers, consumers and carsales.

Acquired Trader Assets (2005): For a number of years there was speculation about “who was going to buy carsales”. Yahoo was the first to take a small stake in carsales in late 2000 which they on-sold to Fairfax in early 2005 but for the carsales’ leaders, each inquiry for acquisition was a takeover bid, something they did not want. The approach from PBL and the end result was different as it was about merging the complimentary assets for both sides to get a win-win (one plus one equals three…or ten as the saying goes). carsales acquired the Trader online assets in the deal in return for 41% of the business giving it the number 2 online auto player as well as number 1 online assets in bikes, boats, trucks, machinery, etc. adding an unparalleled depth to the business.

Mediamotive (2009): The move by carsales to create its own direct corporate sales presence was pivotal in the growth of the business around this time. By taking control of the display sales and recruiting seasoned experts, carsales was able to take its product directly to the buyers using analytical data to ensure a premium marketplace. The Mediamotive business has been a show point for carsales to all automotive classified marketplaces around the world such has been its effectiveness in delivering in a results driven environment.

carsales May 2009:

All Car Search (2009): This may not seen significant to some but by including all cars in the one user search was a great success for carsales. Once again they were ahead of curve in understanding that “all car buyers are new car buyers, it’s just some of them are used” (credit to Greg Roebuck for that quote). For the first time a user could search dealer used, private used, new cars in stock and new cars available in the one search meaning consumers who thought they couldn’t afford a new car, were presented with new cars directly comparable to used cars. There was a fear by some that leads on dealer cars would go down if a consumer could directly compare dealer and private seller cars in the one search given dealer cars are usually a little more expensive (to cover warranties, overheads, etc). Well the opposite was true, interest on dealer cars (new & used) increased and a whole new consumer experience was the result, another win-win-win.

Finally
Running an online business like carsales doesn’t just happen, it takes hundreds if not thousands of constant decision making moments (big and small) to ensure it first of all gets ahead of the curve and then stay there.


The Hard Decision carsales had to Make


Very early in in the founding of carsales.com.au, it’s founders had a pretty big business decision to make which had an easy option and a hard option; the answer would have a material effect on its life span.

Here’s a little snippet that I believe is a great example of sound business decision making.

The rise of carsales.com.au was no accident and showed how the leaders at Dealer Management System provider Reynolds & Reynolds (R&R and now Pentana Solutions) were/are extremely astute business people who used business nous and previous learnings to make the right decision to forge what has turned out to be an incredible journey.

carsales grew out of R&R back in the late 90’s leveraging the DealerLink network between it’s dealers to seamlessly collect used car information.

R&R had a choice to make between two alternatives very early in the life of carsales:

The Easy Decision
Was to partner with one (or more) of the biggest media players in Australia to supply inventory as the infrastructure was already in place to collect the inventory and it really was just incremental revenue for not doing a real lot as well working with some of Australia’s largest and most well known brands, which could have been attractive to a small(ish) software house in Mt Waverley.

The Hard Decision
Was to go hard with carsales.com.au which was going into the unknown of competing against these media giants (at what they considered was their “bread & butter”) as a small software services provider.

Here’s my take on two important decision points that drove R&R to making the Hard Decision to turn their back on the media giants and compete against them with carsales.com.au:

1. “If it is this f&@king hard for us imagine how f&@king hard it is for them.”
This quote has stayed with me for nearly 20 years now. R&R had been trying to get dealers to list their cars on carsales.com.au for a little while and the process was a difficult sell even though there was a seamless, automated inventory feed from the dealer’s computer system to carsales.com.au. So when the big media players and newspapers came looking for (exclusive) inventory data deals, the leaders at R&R realised that if it is so hard for us to get inventory with our setup and relationship with the dealers, just imagine how hard it is going to be for them. They realised they had something of real value to build on.

2. They were quick learners.
R&R US acquired DealerNet.com in 1995 and was one of the first automotive sites in the US list used cars (cars.com and Autotrader.com started in 1997). In 1997 R&R sold DealerNet.com to The Cobalt Group so that it could focus on it’s non-equity strategic partnership with Microsoft’s Carpoint.com which was launched in 1996 (an excerpt from Automotive News, 1 December 1997DealerNet was a pioneer in providing dealers with Web pages in the early 1990s. But Reynolds wanted to sell it to focus on its relationship with its new partner, Microsoft CarPoint. ‘With CarPoint, we’re better able to fulfill our mission of linking dealers to buyers,’ said Kevin Distelhorst, Reynolds director of online services).

Fast forward a year to 1998, R&R US knew they had given up something that was potentially huge and missed their first mover opportunity (imagine their grief now, 20 years on when they see carsales.com valued at ~$2.6b). Generally speaking the US market is 2-3 years ahead on the take-up of new technology and/or processes which gives us in Australia an opportunity to learn.

Hindsight is a wonderful thing and it’s easy to say now that the right reign was pulled when the wrong one could have been so easy had the media companies in Australia actually got their act together.

I take my hat off to the leaders of R&R who made it happen.

Note: All views are my own and not those of carsales.com Limited or Reynolds & Reynolds (now called Pentana Solutions)


A Trade In Price is not a Retail Price


One thing the Internet has done to the car sales industry is (even further) blurred the line between a consumer’s view of a wholesale (trade in) price and a retail price.

When I say “blurred the line” I really mean “created an even greater divide”.

What do I mean here? Well, a consumer now has at their finger tips a proliferation of information on cars for sale, not only in their area but all over the country. Even more, this data is updated multiple times a day.

An important part of this information is the price of their car. This is where it is blurred as the car owner can easily see retail prices of the their car but rarely the wholesale or trade in price.

So when a consumer is buying a car from a car dealer and a trade in price is provided for their car, they are hit with “sticker shock” as they are conditioned on a retail price, usually the asking price and not even the sold price, further increasing the gap.

The end result is the consumer chooses to sell the car privately online and the dealer misses out on acquiring a good car to on sell.

carsales‘ Instant Offer goes a way to plugging this gap in bringing trade in cars to dealers as an option for private sellers selling privately.

Instant Offer is a great alternative for a consumer looking to sell their car quickly without the private seller process where our partner, a reputable wholesale buyer, will inspect your car to check that it matches the details submitted online and meets the offer conditions and will then offer you a wholesale price for your car (similar to the price a dealer would offer as a trade in).

While you may be offered slightly less for your car than you would selling through private channels, this is a quick and convenient method of sale which offers you next business day payment. From there the car will usually find itself for sale through the dealer network just like a trade in would.

It’s important to remember that wholesale prices (including trade in prices) will never be retail prices – they can’t be – but like retail, wholesale is negotiable and doesn’t have to be accepted.

At the end of the day it is in an auto verticals interests to ensure buyers and sellers (dealers and privates) have efficient methods to transact on cars in a retail and/wholesale environment.

Dealers and privates need to take advantage of the “network effect” a good online auto vertical brings. That is, the more sellers, the more buyers.


Take 2: Who has the No 1 Auto Classified Website in the World?


carsales is the number 1 auto classified website in the world.

Ok, there, that’s my answer to the common question of “where is carsales?” after my last post Who has the No 1 Auto Classified Website in the World.

How do I make this assertion now? (note: no I wasn’t told or advised to and I don’t feel obliged to!)

The best way I can answer this question is to quote the last paragraph of my last post:

At the end of the day, all of these websites are businesses and we all know that, as my esteemed former colleague used to remind me, “you can’t bank wank” – in other words, making money has to be the overriding measurement.

There you go, carsales is the number 1 auto classified website in the world because of the financials it delivers compared to the size of the opportunity, ie Australia’s comparative size in population & cars sold compared to the UK, US, China, etc.


A close second would have to be Autotrader.co.uk (although it is number 1 in terms of market cap) which has done an incredible job in the UK with others such as Autotrader.com (probably number 1 in terms of revenue), cars.com and Autohome.com (number 1 in terms of traffic) probably there abouts, all being great online businesses.

I could write another dozen posts with a different website in each post putting up a claim to be the number 1

Three areas where carsales is very strong compared to the before mentioned businesses are in private sellers, display advertising and adjacency businesses. These three business units help to make carsales the incredible business it is today.

The private seller business in carsales is an absolute standout compared to the majority of other online auto vertical businesses around the world. This is an area where large general classified business (horizontals) have really taken the space but carsales has managed to get and maintain a strong holding with the Australian consumer because “it works”.

The display advertising business of carsales has been a unique success story that has been able to deliver quality, premium audiences to automotive focused businesses, particularly OEM’s where a proliferation of data from consumers going right through their car finding journey has made it the most qualified advertising medium available.

The adjacency businesses are the newest of the three with the sale of tyres online through Tyresales.com.au, vehicle finance through Stratton Finance and car inspections through Redbook Inspect the standouts. Each of these businesses are partnerships carsales has entered into that leverage the carsales audience while still keeping an entrepreneurial style to ensure they grow as standalone businesses in their own right while delivering value to carsales through smart integrations.

Let’s not forget too that if carsales is doing well then it’s dealer clients must be doing well as it’s business model for the biggest part of its business is directly tied to what it delivers its dealers – leads which leads (pardon the pun) to sales.

The truth is, I could write another dozen posts with a different website in each post putting up a claim to be the number 1 auto classified website in the world.

I won’t do that but it does show one of the reasons to why this is a fascinating space to be involved in.


Who has the No 1 Auto Classified Website in the World?


What if I said to you that the number 1 online automotive vertical website in the world in October 2016 was Autoscout24.ch in Switzerland?

I can, for the first time, compare sites from different countries on the same measures…..based on my traffic health algorithm on 72 websites in 38 different countries

It is not unusual for us to visit a new country and have 3 players swear they are number 1 in online auto classifieds.

One points to traffic, another to inventory and another to dealers (who needs revenue and profit anyway?).

At the end of the day……making money has to be the overriding measurement

Everyone wants to be number 1 and it seems this is especially so in the online world where to claim yourself as the number 1 player in your niche is vital for advertisers, investors, etc.
20161206_autoscout24ch
This is hard enough to decipher within each country so how do we determine what automotive vertical website is the number 1 site globally?

From an online automotive vertical aspect, I see businesses claim number 1 in their country/region based on anything they can measure has them in front – visits, unique visitors, inventory count, dealer count – and the numbers can be near on impossible to test from outside the business.

You can’t do it by visits, inventory or dealers because a website operates in a country that has a large population with a huge car market will naturally have more visits, inventory and dealers – this does not make them the number 1 in the world.

I’ve wrestled with this for some time as carsales looks to strategically partner with more online automotive businesses around the world and I look at peers, competitors and targets so I’ve come up with a measure that for the first time doesn’t care how many visits, inventory or dealers are on the site.
20161206_encar
So getting back to who is number 1, how’d I come to this conclusion and what exactly is Autoscout24.ch number 1 in?

What I’ve done is created an index using a weighted algorithm for each automotive website around the world based on things that measure the health and stability of their traffic, namely user engagement and traffic sources. For me these metrics can tell you a lot about the online business and for the first time, I can measure websites from country to country on like for like data in order to get a picture of their real position in the market.

Like everything in online, one form of measurement doesn’t tell you the whole story but this index allows me to rank every website around the world to get an accurate picture of their traffic health irrespective of their traffic volume (although to get an “official” index a website must have over 100,000 publicly measurable monthly visits; this number is arbitrary).
20161206_chileautos
This means I can, for the first time, compare sites from different countries on the same measures. Traffic health should be pretty basic and each component would have individual focus within each business. Product teams would be all over user engagement metrics; SEO experts would be working to ensure the long tail of each website is indexable; and SEM spend would be closely monitored to ensure the right spend is getting the right results.

It’s pretty easy to correlate a high SEM spend, low direct traffic and a high bounce rate and what it means – poor traffic health – but as with most metrics to measure a number 1, they usually only tell part of the story.

In any case, based on my traffic health algorithm on 72 websites in 38 different countries, the top automotive vertical website in October 2016 was Autoscout24.ch (Switzerland) and businesses that are part of the carsales network including Encar.com (South Korea), Joinvillecarros.com.br (Brazil) and Chileautos.cl (Chile) are in the top 5 (the website rounding out the top 5 was Gebrauchtwagen.de in Germany).

Each of these websites has very strong user engagement metrics and extremely healthy, sustainable traffic sources.
20161206_joinvillecarros
It’s interesting that some countries and in fact continents have common traits in user engagement and/or traffic sources that flow through the websites.

The regional Brazilian website indexes do not surprise me given the regional focus in Brazil where dealers and consumers alike are somewhat parochial to regional automotive websites resulting in high user engagement and positive traffic sources which sees websites that are now part of the Webmotors network high up in this indexing including Blucarros.com.br, Joinvillecarros.com.br, Compreauto.com.br and Meucarango.com.br.
20161206_gebrouchtwagen
Anyway, my indexing algorithm gives me a great picture of where our peers, competitors, targets and carsales network sites are at around the world irrespective of the traffic they claim, inventory or dealer count.

At the end of the day, all of these websites are businesses and we all know that, as my esteemed former colleague used to remind me, “you can’t bank wank” – in other words, making money has to be the overriding measurement.