A passenger vehicle was sold every two minutes and a part or accessory sold every 0.4 second on eBay in first-quarter 2014.
Murphy brings entrepreneurial spirit to eBay Motors.
A front strut for a ’94 Volvo may collect dust in a dealership’s parts department because of low local demand.
But expose it to a global marketplace of 144 million people, and that otherwise slow-moving part “has an entirely different demand set,” says Bryan Murphy, who heads eBay Motors, a unit of the online marketplace giant.
People buy and sell lots of things on eBay, from old books to software to the latest fashion wear.
But the company also boasts of a brisk business in automotive products. More than 5 million vehicles and 373 million parts and accessories have been sold on its website. A passenger vehicle was sold every two minutes and a part or accessory snapped up every 0.4 second in first-quarter 2014.
“Selling cars and parts is eBay’s largest business in North America in terms of gross merchandise value,” Murphy says. “A lot of people don’t know that.”
A metro Detroit native who joined eBay Motors in 2013 after working as a technology entrepreneur, he wants to amp up the action.
He and a reorganized sales team are pitching eBay Motors in an effort to increase its clientele of franchised and independent dealers, which now stands at 30,000.
eBay has sold cars and parts for years, but the recession whacked that part of the business.
“And frankly, there was a period of management that wasn’t interested in automotive and didn’t get it,” Murphy says. “Business went to sleep a bit. But part of our current CEO’s business plan is to bring in entrepreneurs and get things cracking.”
One of Murphy’s first orders of business at eBay Motors was to change its dealer subscription plan, moving from fixed prices to volume discounts for online vehicle listings.
“There were no discounts, and dealers like those,” he says. “If they buy more, they expect a better price. Now, the more listings, the bigger the discount, up to 25%.”
An example of pricing: a 100-vehicle listing costs a dealer about $3,000 a month. With parts, it’s different. eBay collects an 8% to 9% fee per transaction.
“The message we always deliver to dealers is that we’re not an e-tailer,” Murphy says. “We are an e-commerce platform for sellers and buyers to get together.”
Modern-minded dealers get that “and are all over it,” he says. “The more- traditional guys are tougher to convince.”
Some of them fear mass listings and pricing transparency will hurt profits.
“But it’s a genie-out-of-the-bottle thing,” Murphy says. “In the world today, with the availability of pricing information and transparency, there virtually is no consumer who doesn’t know what the price should be for, say, a ’12F-150 pickup with 25,000 miles (40,000 km) on it.”
Dealers may sell cars on eBay in three different ways: listing a fixed price; listing a fixed-price with a make-an-offer option; or putting the vehicle up for auction.
“Those three modalities together appeal to virtually every customer, because some people don’t like to haggle, some people do, and some really like to haggle and so they go through the auction process,” Murphy says.
“The world is shifting more to the fixed-price model,” he adds. “I don’t know if it is a good or bad thing, but it’s the reality. As a dealer, you can figure out how to turn it to your advantage or not.”
The traditional dealership market is local, but the Internet is breaking that wide open. In first-quarter 2014, more than 77% of vehicles sold on eBay Motors
were interstate deals. Buyers pay for the shipping. The eBay website offers a button that gives quotes from five carriers.
Many sales are international. “It is one of our fastest growth areas,” Murphy says. “Overwhelmingly, it is cars from the U.S. shipped overseas, rather than the other way around. American cars have a lot of cache globally. And a currently strong euro makes them appealing from a price point.”
He is a Generation Xer, who keeps his eye on the buying behavior of millennials, especially as they become a growing force as auto consumers.
“The thing you need to understand about them is they don’t play by our rules,” Murphy says. “They are all about their mobile device. They don’t like to go to stores and they don’t like to be told what to do. They influence a greater sphere of people, certainly Gen X.”
He tells a story of a friend who finalized the purchase of a used Jeep by using a mobile device while shopping at a supermarket.
There’s a reason more and more merchandise is listed online, including cars, engines, wheels, tires and 20-year-old front struts for Swedish cars. “Our position at eBay Motors is to skate to where the puck is going,” Murphy says.