Recently, many of you may have read about a trial program where General Motors attempted to sell their vehicles through Ebay. The reason for this was simple, GM had done enough research to know that a huge consumer base want the ability to buy a car directly from the internet to avoid the huge disappointment of dealing with a salesperson who knows less about the product than they do - (see side story "women turned off by dealers" http://www.autoremarketing.com/ar/news/story.html?id=10596). The Ebay trial turned out to be a dismal failure and nothing more than what many of it's dealers were already doing. Perhaps the idea to reach out directly to it's customers was correct but the manner in which they executed it was poor.
The hurdle GM (or any other car manufacturer) faces is that it cannot sell directly to the consumer because they are not legally allowed to due to federal and state franchise laws. State Franchise laws vary from state to state but generally are there to ensure that car manufacturers treat all dealerships in a vaguely defined term - "fair and equitable manner". Any activity to sell directly to the consumer without any dealer involvement would be seen as undermining the existing business relationship and dealer associations would have the car manufacturer dragged into court faster than a lotto winner signing his name on the winning ticket.
One possible solution is to create and online sales program which will gives dealerships the option of participating in. The program would work in a manner that allows the consumer to select the model/options they want followed with a small deposit (as is usually the case when dealing directly with a dealership). As for pricing, GM should be able to offer some price discount AND pay participating dealerships their full commission provided the vehicle can be in the consumers driveway within 30 days of the initial order (see my blog called "Pay your suppliers with post consumer money and watch profits soar).
As orders come in to GM through the Internet, they would be distributed to participating local dealerships in a similar manner as GM distributes it's allocations, thus ensuring a process that would abide by state franchise laws. As soon as the customer completes the transaction, the customer would receive a confirmation notice through a vehicle such as camarotracking.com which would return the order number and order status code. The dealer would receive notice through Global Connect telling with the customer and sold units particulars. Both the dealer and the customer would then be kept informed regularly through tracking software.
All Internet sales directed to a dealership would count against it's allocation for a particular product so that no dealership would be treated unfairly. Dealerships who do participate must turn the product over to the consumer within 24 hrs of the vehicle arriving to ensure a quick completion of the transaction. This would also limit the consumers exposure to only dealership activities that involve closing the deal, which is something that many consumers would appreciate.
It's a win-win for everyone involved. The dealer makes it's comission on it's allocation, the customer get's to order in a manner of preference, both the customer and dealership get regularily notified of the orders progress through camarotracking.com, and the dealer get's to focus more time on marketing and walk up activity. So is it possible for GM (or any other car manufacturer) to sell directly to the consumer? As long as the solution includes the participation of the dealership community so they can profit by the transaction, then absolutely!
