All Things Techie With Huge, Unstructured, Intuitive Leaps

The Contrarian, Innovation Disrupter Paradigm & Automobile Remarketing - An Unconventional Approach

Uber did it. They tried to kill conventional taxis. Airbnb did it. They tried to kill Expedia, travel sites and conventional bricks and mortar hotels. Expedia, in turn, tried to kill conventional travel agents.  Dating sites did it by killing personal ads in print media.  Photo sharing apps destroyed the need for carrying pictures of your kids in wallets built with special snapshot compartments. Everybody is doing it.  The next big idea is to destroy, upset and disrupt bricks and mortar business.

BUT ..........................  what if it doesn't make sense to disrupt and kill the bricks and mortar business, but rather empower them with new technologies?  That is our story at

We knew that the social side of business was important. Car dealers, and indeed any business people want to do business with people they know and trust.  That's why we invented the Exclusive Zone and the Trusted Buyers Network.  We put the social media side to automobile remarketing. And we put in some real nifty tech so that new and used car dealers could run their own auctions with their own networks and cut out the bricks and mortar auction.  It was received with a subdued acknowledgement.   There was something that we were missing.

The "something" was both a technology problem and a more intrinsic human problem.  At the heart of our value proposition, we want to move trade-in vehicles quickly.  When you take your wheels to a new car dealer, he has to take your trade-in so that you can buy a new vehicle.  He really doesn't want your car.  Over 90% of trade-in vehicles do not end up on the dealers lot. They are either too old, the wrong condition, non-sellers, or not of kind vehicle that his clientele buys.

To ameliorate this, the new car dealer has developed several strategies.  It is assumed in the industry that unwanted trade-ins end up at the auto auctions.  Our research showed that this was not true.  Only 20% or so, of trade-ins ended up there.  The rest of the cars were disposed of through private networks.  The dealer always has a bunch of go-to guys who are wholesalers, used car dealers or other dealers.  The used car manager goes through the Rolodex, and using the phone, disposes of the unwanted iron on his lot. What he doesn't get rid of, goes to auto auctions.  This was a staggering piece of information for us, and it should be for the industry, because almost all of the used car valuators (Black Book, Blue Book, etc etc) use auction prices as the basis of their valuations.

The second problem with private networks, is that the networks are small, and the range of traded-in autos is very large. Thus the small network doesn't have the will or the ability to absorb all trade-ins.  Technology had one of the answers.  At we have foundation patent-pending in computer escalation of various buying groups until the car is sold.  Our technology is unique.

The way that it works, is that if the private network doesn't buy the car (using instantaneous mobile technology -- smartphones and tablets as well as computer) after a certain period of time, then the platform does some data mining and machine learning to offer to a group of dealers created on the fly who are known to buy these kinds of cars.  If that didn't work after a period of time, the platform moves the autos to a classified type of listing or consigns them to a bricks and mortar auction.  This technology is fabulous, but it didn't solve two problems.

The first unsolved problem was that the private networks were too small to adequately absorb the wide variety of trade-ins.  The second unsolved problem was a more generic one for the new car dealer.  If the dealer put too much into the trade-in, and then the trade-in didn't sell for what he thought it was worth, he lost money on both the trade-in and on the new car sale.  Cars rarely bring in what the published prices show in the various valuation providers.

The solution to both of those problems lay in leveraging the existing auto auctions.  They have almost the entire local network of dealers so that the buying network is large.  And those dealers in the auctions network have intense local knowledge of what a vehicle is worth.  For example, in rural areas, a king cab pickup truck may bring in a higher price than it would fetch in a gentrified urban setting.  A rural dealer could get more money for it.  That is just one example.

So we had to get this intense localized knowledge to the new car dealer, right when he was making the deal with the customer.  The only way to do this, was to involve the bricks and mortar auction.
This involved mobile technology of scanning the VIN number, taking a few pics with a smartphone, filling in a condition report and getting real time appraisals while the customer was looking over the new car.

The auction also has intense market knowledge of who buys whatever is offered. They flip the car to a group of buyers for real time appraisal.  The best part of this, was that the appraisals could be accompanied by an offer to buy at the appraisal price.  If there were no offers to buy, the dealer has a customer facing screen on our platform, showing the customer what his trade-in is really worth.  The dealer is no longer the bad guy when an appraisal is on the low side.  It is the marketplace that doesn't value the customer's car, and it absolves the dealer of trying to low-ball the trade-in.  Most all customers have an inflated idea of what their car is worth, and the Selectbidder platform takes the dealer's "bad" intentions out of play.

So, once we implemented this paradigm, the interest in our platform skyrocketed, as did the customer engagement and sign-ups.  Everyone makes money on this deal.  The auction get a cut for flipping the cars, the dealer is happy because the trade-in is disposed of instantly and he can make a profitable deal for himself without waiting for the trade-in to sell.

Sometimes it really pays to be contrarian and leverage the bricks-and-mortar business, instead of trying to kill it with technology.

You can read about here:

No comments:

Post a Comment