eBay: Have Buyers, Need More Dealer Inventory

eBay Motors is among companies at the forefront of the change in how automobiles are bought and sold.

It has moved more than 5 million vehicles and 373 million parts and accessories, and says a passenger vehicle is sold every two minutes on the Internet shopping site.

But there’s still ground to be gained, says General Manager Bryan Murphy, who recently sat down with WardsAuto to discuss the state of eBay Motors and emerging trends in the automobile retailing industry.

No.1 on Murphy’s to-do list? Persuade dealers to list more of their inventory – both vehicles and parts – on eBay Motors.

Here are edited highlights from that interview:

WardsAuto: So what’s eBay Motors up to for 2015?

Murphy: We’ve been really focused on a couple of things and seeing a couple of things, because we do have the world’s largest connected-commerce marketplace. We have 155 million buyers around the world, so clearly we see a lot of the trends. We see the shift to online and digital, particularly to mobile and Millennial. Those are the two seismic shifts affecting the automotive retail business.

To give you an example, about 48% of all of our transactions now are touched by mobile. We know that Millennials are becoming a larger percentage of people that purchase everything, but in particular autos. There’s been a lot of conversation around, “Hey, Millennials don’t buy cars.” I don’t think that’s true, they buy cars very differently, just like they buy everything else very differently.

Murphy: People want that Apple store experience.

WardsAuto: Do they still want to test drive?

Murphy: Sure. Some people do, some people don’t. We sell billions of dollars of vehicles sight unseen. That part of it is changing too. You have to take a long-term view of this and look out at the curve. For the last three years, I’ve done all my Christmas shopping from a mobile device. Ten years ago I didn’t do that. We ran around to stores and looked and touched everything. The same thing is going to happen for vehicles. So the guys today who are of a different generation, we have to go test drive that thing. But Millennials in particular, this (holds up his smartphone) is what they trust, this is what they use, and that’s what they do.

WardsAuto: So how do you interact with dealers?

Murphy: We are a marketplace that puts trusted buyers and trusted sellers together. We’re showing dealers they have an opportunity to sell more vehicles and parts – and soon to come service – to the 155 million buyers in the eBay community. So they basically list their vehicles on the site in a variety of different formats, ranging from classified ads to an auction format to a buy-it-now format.

It’s mostly (a) dealer-to-consumer (business). But we have a strong consumer-to-consumer business, which is one of the reasons why eBay Motors is the No.1 automotive site. Because we can show this spectrum of inventory, from a brand-new ʼ15 Ford F-150 to a certified pre-owned F-150, a used F-150 from a dealer and a pre-owned F-150 from a consumer. About a third of the buyers on our site have intent to purchase new. But (they) look at new and used and decide. And you have to have that selection for them to decide.

WardsAuto: Are dealers mostly using the site to move used vehicles or new?

Murphy: What I found when I came into this business is we had 30,000 dealers using eBay Motors to sell, which is a lot. That’s like most of them. So almost any dealer you talk to has sold vehicles on eBay motors. But what they tend to do is only list a handful. And when I asked why, the perception was eBay Motors was just for specialty vehicles and our pricing was too expensive and it was difficult to list.

So those have been the three problems we’ve been tackling for the last two years. (One) is a perception issue, because once again we have 155 million buyers (who) buy everything, new, used, certified, pre-owned, etc. A significant percentage has intent to buy new. And we’ve changed our pricing to make it more affordable and encourage dealers to list all of their vehicles on the site. If you’re going to list one, list them all. Put them up there, because we have more buyers than vehicles. And we’ve partnered with a number of industry service providers that help make it easier for dealers to list the vehicles.

eBay Advantage: Size, Reach

WardsAuto: There are all these third-party sites, such as TrueCar, Edmunds and eBay Motors. How many of these sites are people shopping?

Murphy: Lots. Our research shows consumers do a lot of research, because it’s an expensive item. They look across multiple sites. And what we find, the people that come to eBay – we get 41 million visits a month – they are very down-funnel. They have a very specific vehicle in mind and now they’re looking to buy. The reason they come to eBay is, it is the site that gives them the most ability to interact with the buyer. eBay is a site where I can actually make an offer, I can participate in an auction or I can just buy the vehicle now and I’m done. That’s very appealing to people, because once they’ve made a decision, they don’t want to fool around anymore. The number of visits to a dealership is going down, down, down. And people don’t like to spend a lot of time in the dealership. People want that Apple store experience: “Here’s the price, I’m a busy person, get me in and get me out.”

WardsAuto: And one of the big advantages over the others guys is you’re huge in general?

Murphy: Our advantage for dealers is three things. One is scale. We’re massive, particularly globally. The second is that ability to transact, to cut to the chase and speed up that purchase process. And we have a third advantage around trust, because it’s a community of graded buyers and sellers. Buyers look at that eBay feedback score and that means something to them. If a dealer has a 99% feedback score and a high number of transactions, that’s very reputable. People who don’t take care of customers tend to disappear.

WardsAuto: You also sell parts on eBay Motors. Is that something dealers are taking advantage of, or is that business mostly coming from independent parts stores?

Murphy: eBay Motors has 41 million visits a month. It is the most visited automotive site by consumers in the country. One reason they’re coming is what we call the flywheel. They can come and look at vehicles, we have over 49 million parts for sale, so massive selection for great value, and we’re increasingly offering service. So that’s the 3-legged stool for the dealer. We try to be their turnkey online solution.

OE parts, it turns out there’s huge demand on eBay for them, and that business is doubling for us every year. So we (tell) dealers, “I know you have 5,000-10,000 parts sitting on your shelves that you’re used to selling in the 20-30 mile (32-48 km) radius of your store. List them on eBay, it’s a global platform. Now you’ve just taken that inventory and exposed it to 155 million people around the world. And that changes the demand dynamics significantly for them.

Next Up: Service

WardsAuto: What are you doing with service plans?

Murphy: Lot of dealers have quick lanes where they provide oil changes, tires and wheel installation, brake service, that kind of stuff. So we’re beginning to help our dealers create demand for those types of services from them. Once again, 155 million people we’re driving into those (service) bays. This is also a big differentiator in the marketplace for us. Because if I’m a classified vehicle site, like these others, how often am I getting a customer to come to my site, once every 5.6 years? That’s a lifetime. The differentiator for eBay, because we have parts, accessories, service and frankly fashion, electronics, collectibles and everything else, we’re one of the most frequently visited services out there.

WardsAuto: How are you pushing that information in front of the right people?

Murphy: We’re developing those kind of personalization capabilities – so that whole big-data conversation. Every month we’re getting better and better at doing that, figuring out the propensity to buy. There’s a bunch of different ways we can do that. We know a fair bit about you, what you’re doing (and) what kind of vehicle you drive. Can we do a better job of anticipating your needs?

WardsAuto: So are you pushing offers to me by my ZIP code?

Murphy: Potentially, but not yet.

WardsAuto: Have dealers been slow on the uptake with all this?

Murphy: No, they get it. The breadth of companies that service the auto industry is mind-blowing. And the technology is emerging so rapidly it’s difficult for these dealers…they can’t even keep up with it. That’s where we can be a good partner. As one of the top global tech companies in the world, we are not just about vehicles and parts; we’ve got this whole $250 billion e-commerce. Helping them navigate and take advantage of those shifts, particularly around Millennial and mobile…because it’s not easy. Mobile is really tough. It’s tough to get it right and deal with the complexity. Because it’s not just the web, its IOS, Android, multiple flavors, it’s screens like this (holds up his smartphone), screens like that (points to a desktop computer). All of those experiences have to match. That’s very difficult. And figuring out the way Millennials shop. Getting that experience right – and a lot of people are not, they’re totally missing it – is critical. Those are the things we’re really focused on.

WardsAuto: So how will all this change the showroom?

Murphy: The Apple store is a great example of the way the world’s moving. (Consumers) are less interested in an extremely competent salesperson and more interested in having an experience with an extremely competent product specialist. That’s a big trick. That’s a big shift.

WardsAuto: And that’s already starting?

Murphy: Oh, absolutely. A lot of dealers are picking up on this, and they’re getting very good at it, and consumers are enjoying it.

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