Article On Business Week

[Doc]

A Speed Demon Called eBay Motors
"You get a good deal, and it's safer," says Simon Rothman, general manager of the auction giant's fastest-growing category

In April, 2000, when eBay (EBAY ) started selling used cars, skeptics thought the online auction giant had gone too far. Buying collectibles sight unseen was one thing, but purchasing an automobile on the Web? That would never work. Advertisement

It turns out people are just as willing to bid for used cars as they are for Beanie Babies. In fact, last month, eBay Motors sold its 1 millionth car. And with 12 million auto shoppers daily, eBay is the most-trafficked site of its kind, beating out Yahoo Autos (YHOO ), AOL Autos (TWX ), Cars.com, and AutoTrader.com.

The used-cars channel is also where eBay has seen its biggest growth. And Simon Rothman, global vice-president and general manager of eBay Motors, says this is just the beginning. "We've evolved into a mass market where everyday people are buying everyday cars," Rothman says.

On July 16, Rothman sat down with BusinessWeek Online reporter Amy Tsao to talk about driving growth at eBay Motors. Edited excerpts of their conversation follow:

Q: How does eBay Motors work? Is it like anything else on eBay -- you put your product on, people bid, and that's that?
A: It's very similar. The searching and browsing process is exactly the same as you'd find on the rest of eBay. The thing that we added on eBay Motors that's different is extra protection. [In addition to feedback rating] -- a big measure of trust -- we also offer a used-vehicle warranty as well as vehicle purchase protection up to $20,000, both paid for by eBay.

Q: Still, isn't it risky to buy a car on eBay?
A: It's safer than most ways you can buy or sell your car. Imagine if you bought a car through the classifieds. You would meet a seller that you don't know. You shake his hand and you try to assess him. You take the car away from his driveway and that's that. There is no significant recourse, no warranty, no protection, there's no mechanic. You get a good deal on eBay, and it's safer.

Q: What are the latest trends in how people are using eBay Motors?
A: There has been an evolution that in retrospect seems pretty obvious and clear. We were hoping it would evolve this way, but we weren't sure. Our clientele started primarily as people who bought and sold collectible cars. Then it evolved to exotics like Lamborghinis and high-line vehicles like BMWs. It was still primarily individual to individual.

Then over the next year or two small independent dealers started embracing it as a distribution channel to get national reach. It turned the corner this past year to become a mass-market business. Right now the three top-selling vehicles on the site are the Honda Accord, Honda Civic, and [Ford] F-150 pickup truck.

Q: So how much of the business is between individuals vs. through dealers?
A: About half the people who list cars on the site are individuals. The other half are dealers, with the majority of the dealers being small mom-and-pop shops. That market is growing very, very rapidly.

Q: Are bigger used-car dealers getting involved?
A: Yes. Some dealer groups are utilizing the channel, which is exciting for everybody involved. The numbers are too big to ignore. We embrace them as they come on, though smaller dealers already know how to use eBay really well.

What's exciting is how the site levels the playing field. As a dealer you can offer financing, warranties, vehicle purchase protection. And the only distinction between individual and independent dealers vs. a franchise dealer is your reputation.

Q: Is there any resistance from dealers? I could see some people in the industry not liking eBay.
A: It's a really attractive market for dealers. If you're a dealer in rural Pennsylvania or Alabama, your marketplace is inherently very local. And you don't necessarily get the national market rate for your vehicles. We bring [together] millions of potential buyers daily, and 75% of them people aren't in your area. You wouldn't have had access to them otherwise.

It costs $40 for a listing, but about $500 in advertising to get a local buyer to buy a car at a local dealer. You get on average eight different buyers who bid. So, cars aren't sitting on the lot as long.

Q: How much car financing is going on now through eBay?
A: Right now, it's still in the early stage. We haven't released the numbers. We'll probably start talking about that business more publicly next year. But we're off to a great start.

Q: What about expansion outside of the U.S.?
A: We're putting a very large push into expanding internationally. So what you'll see going forward is not only increased momentum, but you'll see us building infrastructure, exporting our knowhow from the U.S. into the international markets. We're now in most major countries in Europe. We're looking at Asia. We have a business in China, we have Korea, we're in Australia and that region. We're just starting to sell cars in all of those countries.

Q: So the eBay Motors model translate abroad?
A: If you look at the used vehicles that are on the road in the U.S., it's a little over 200 million this year. Internationally, not including the U.S., the market it's 500 million.

And here's the fascinating thing: The U.S. marketplace is relatively efficient compared to overseas. eBay Motors is probably going to end up being twice [as big] abroad. It will take a while, and we're just starting to gain some traction there, but the potential is there.

Q: What kind of growth is eBay Motors contributing to the top and bottom lines of eBay overall?
A: At the end of last year, we had volume of about $7.5 billion in goods sold on eBay Motors. [In 2003, eBay sold some $23 billion worth of merchandise.] It's the largest category in sales on the site by a long shot, despite that it's still one of the fastest-growing. And it's a very profitable business for the company.

Q: Where do you see that $7.5 billion figure growing to?
A: Right now, we have 1% of the U.S. used-car market and far less internationally. We've proven that buyers and sellers will use the online medium for cars -- that people will buy cars sight unseen. We don't know how big it will be. But if we continue on this trajectory, this will end up being a very large opportunity.


Edited by Patricia O'Connell

http://www.bloomberg.com/news/articles/ ... bay-motors

[witchie]

Wonder how much of that dollar figure is scams. I like the way he tried to sugar coat it as being safer than getting a car out of the classifieds. He based it on the meeting an unknown person versus getting an unknown car shipped to your door only to find out it was not what you bid on due to fluff.

[Doc]

Nor does he mention that sellers taking PayPal are getting ripped off by savvy consumers doing chargebacks!

Just Smoke & Mirrors Folks!

[Guest]

If you dip a turd in chocolate it looks good on the outside but deep down it's still a turd.

[Cobra]

My apologies for showing up as a guest. Hey I'm new here, I'll have it figured out in a few years!

[Doc]

Just check the Auto Login box when signing in.

[Guest]

I can not find out how to vote. Can view the poll results but there is no way to vote that i can see

[Doc]

You must be registered on the board to vote.

Registration is simple and we do not share your email address with others.

[witchie]

Welcome aboard Ron. If it weren't for the auto log in i'd forget my user ID here lol.

[Ron]

Thanks for the welcome Witchie! Know what you mean about the auto log in. I've got so many passwords I can't keep them all straight! i hate those places that make you change them once a year.

[witchie]

Ron I know it sucks. Nothing like having to go thru a ton of passwords just to figure out how to get into something. I've canceled out a few old email addresses that way though lol.

[JR]

Changing passwords once a year would be a dream for me at work. They make us change ours every four months and it has to be seven letters, numbers, characters in length, no names, a number at one end, characters in it and what ever else that is on the keyboard that can be placed in it. Passworded screensavers activate in 3 minutes of no activity. Hell, I got so many passwords for work, I had to write them all down, place them in a plastic do-hickey and click them to my badge hold for when I get a brain fart or CRS.

[JR]

Watching the news this moring, why is the Bush administration always speaking of a terroist threat and never getting into the specifics? If you've noticed, he's done this since the start of the political race for the office of president. Is this man going to try to scare us into re-electing him?

What is needed, is old fashion politics with debates between the canidates. Would be really nice if the canidates would speak without lies and double-talk and after they are elected.

We also need some better choices for canidates, why do they only focus on Bush and Kerry? They both make me wanna hurl, including Nader! None of them have an charisma, nothing new to offer, they are just plain boring.

I feel better now.....

JR

[witchie]

because he IS the terrorist?

I can't stand the man. For oh so many reasons.

Friends with Osama's family.
Sadam had NOTHING to do with 911
Making money in Iraq for his oil partners
His daddy and cabinent run the show not bumbling GW
Let them choose is VP who is in over his eyeballs with Enron yet not getting nailed for it.

The patriot act which is so unconstitutional we might as well burn the constitution. It makes anyone who breaks a law including spitting on the street a terrorist. Gives them the right to track everything any of us do and even come into our homes without having to get a warrent.

Worst of all he Knew about 9/11 before it even happend.

He is letting illegals stay and work if no US citizen will take the job because every one of his house hold staff in Tx is an illegal (i have no problems myself with illegals just the reason Bush did this) and now he has his own butt covered.

This is just the tip of the iceburg. I could rant for pages lol. I worked fundraising for him and walked out durring his second run for Gov. in Tx.

Notice we are not seeing him on tv as much? The clips I see make sense with stuff I'd heard. He has parkinsons by all clues. He didn't choke on that pretzle or whatever it was by some freak accident. It sounds like he had a parkinsons episode, same with falling off the bike. My grandmother has it as well so i'm used to watching her like a hawk when I'm home because she tries to over do it to show me she isn't as bad as she is. It effects memory, mind and body.

Health problems aside we are in some deep shit if he gets re elected. For those who support him please research him better and the things that he has done. Hell read the Patriot act and that should be enough for you.

[JR]

Witchie, I hate to say this, but I agree 100% with you. I haven't heard anything about having Parkinsons, will have to watch. My late mother-in-law had it.

I just read a story on the CNN website, Kerry wouldn't cross the picket line the firemen setup at the DNC, if it was there during the convention. He said he's never crossed a picket line. Being a member of Local 66, Sheetmetal Workers, that does mean a lot to me. I haven't worked out of my union for a number of years, but still carry a card. Old Dubba-U and his cabinet members wouldn't even think twice about crossing a picketline, since republicans are very anti union, anti labor. Ronald Reagan was one of the biggest anti-labor presidents we've ever had and he used to be president of SAG, but I believe he was a Democrat at that time, then crossed over to the republican party. They just screwed us on overtime compensation, read more about that in the paper this morning, that takes effect Aug. 30th. Bush wants lower minimum wages across the board in every state, I say bullshit! Bush don't care about nobody but himself and every day I hope he is not re-elected, just don't care for his politics. I'm not a fan of any politician, but care even less about bush. I hope the man loses.

JR

[Guest]

I read that article and just about barfed. Surely that'll help lull some more suckers into a false sense of security (a'la eBay's 'buyer protections').
But the real problem here lies with the reporter who swallowed and reprinted this B.S. without bothering to check ANY of the facts. How hard is it to simply check around, talk to a few sellers, maybe even peruse eBay's own message boards to see if any of Simon's statements smelled funny???? This all amounts to media-sanctioned stock price manipulation in my mind...

[RS69cam777]

I use to be in the United Steel workers union, One time we got sold out by a pin stripped suit cigar smoking Gangster the unions were loaded with em,

And don't think for one min, there's not a lot of politics in it, However the upside of the Union was very good,

Full Med coverage, Blue C/ Blue shield millon $ plan, I had 5 weeks paid vac, Birthday off-paid, flotting holidays ect ect..... even free Shoes,


On Politcian= Iam ready for a Ross P, or a poor guy,

[The truth]

How one group fights back....http://419eater.com/ IT IS HYSTERICAL

[Doc]

10 Years Later and not much has changed. eBay Motors Still Sucks!