Being a Carwow Dealer

Being a Carwow Dealer

Author
Discussion

mr_fibuli

1,109 posts

194 months

Wednesday 3rd October 2018
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Interesting behind the scenes look at their offices here - shows where all the millions are going and what all those staff do: https://www.youtube.com/watch?v=fnAk7LLmVlE

uber

855 posts

169 months

Friday 5th October 2018
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I used it and found it pretty decent. I also sold the founder its original domain name :P

Sheepshanks

32,530 posts

118 months

Friday 5th October 2018
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uber said:
I also sold the founder its original domain name :P
Looking at their offices, you left money on the table!

alfabeat

1,103 posts

111 months

Saturday 6th October 2018
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Trophy Husband said:
The same with hotels. An empty room isn't making any money but overheads generally remain the same. We got a room in The Clarence in Dublin back in 2010 for 30 euros when the going rate was around 200 IIRC. Granted it was 8 o'clock in the evening when we booked it but 30 euros is better than 0 euros isn't it?
Not really. Less Vat, less room turnaround costs, laundry, coffee sachets. Busy fools. Better to be confident to leave it empty in my opinion.

Simpo Two

85,149 posts

264 months

Saturday 6th October 2018
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alfabeat said:
Trophy Husband said:
The same with hotels. An empty room isn't making any money but overheads generally remain the same. We got a room in The Clarence in Dublin back in 2010 for 30 euros when the going rate was around 200 IIRC. Granted it was 8 o'clock in the evening when we booked it but 30 euros is better than 0 euros isn't it?
Not really. Less Vat, less room turnaround costs, laundry, coffee sachets. Busy fools. Better to be confident to leave it empty in my opinion.
We called it 'wking for coins'. And that is what happens in a price-cutting spiral. Everybody is busy, but nobody makes a profit. No profit = lower wages and redundancies. It's all just a big circle.

POORCARDEALER

8,523 posts

240 months

Monday 8th October 2018
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Dealerships closing down in droves due to pissing car out of the door for no profit.....it will not last, as less dealers = less competition and higher prices....enjoy it while you can

superlightr

12,842 posts

262 months

Wednesday 10th October 2018
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POORCARDEALER said:
Dealerships closing down in droves due to pissing car out of the door for no profit.....it will not last, as less dealers = less competition and higher prices....enjoy it while you can
that's the same for any "product" thought isn't it?

Supply and demand.

Sheepshanks

32,530 posts

118 months

Wednesday 10th October 2018
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POORCARDEALER said:
Dealerships closing down in droves due to pissing car out of the door for no profit.....it will not last, as less dealers = less competition and higher prices....enjoy it while you can
The model has a pretty limited life anyway, certainly at its current scale.

The Mad Monk

10,474 posts

116 months

Wednesday 10th October 2018
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POORCARDEALER said:
Dealerships closing down in droves due to pissing car out of the door for no profit.....it will not last, as less dealers = less competition and higher prices....enjoy it while you can
Well, that's how capitalism works, and then things get into balance.

If you are successful, you succeed.

If you are unsuccessful, you fail.



KevinCamaroSS

11,555 posts

279 months

Saturday 13th October 2018
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engine_master said:
What happens if I don't tell them when I sell a car via their leads? Because, they charge high amount of money per sales. How can they understand if I cheat -not cheat, just walk around like this?
Simply put, that would be fraud if the CW contract requires you to inform them and pay for the lead.

Tuna

19,930 posts

283 months

Tuesday 16th October 2018
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You can't 'magic' money out of nowhere.

If a car costs X to put on a forecourt, and a dealer needs Y to cover their costs, then the minimal survival cost of the car is (X+Y). On top of that, they'll charge a premium - their profit.

If CarWow or others hunt around for the dealer with the lowest profit (and then charge them a few hundred to deliver the lead), you're in a chase to the bottom, with dealers who don't use CarWow able to offer a better deal and still make more money.

So, unless CarWow is the only way of generating sales, as a dealer you're not going to be better off depending on them. If they are the only game in town, then CarWow are going to turn you into the product and squeeze you until your commission is less than theirs.

Short term: how much does CarWow charge you per sale? Add that to your current marketing budget and how many leads would that bring in? Essentially they are just another marketing channel, so treat them like one and do the maths.

POORCARDEALER

8,523 posts

240 months

Tuesday 16th October 2018
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Tuna said:
You can't 'magic' money out of nowhere.

If a car costs X to put on a forecourt, and a dealer needs Y to cover their costs, then the minimal survival cost of the car is (X+Y). On top of that, they'll charge a premium - their profit.

If CarWow or others hunt around for the dealer with the lowest profit (and then charge them a few hundred to deliver the lead), you're in a chase to the bottom, with dealers who don't use CarWow able to offer a better deal and still make more money.

So, unless CarWow is the only way of generating sales, as a dealer you're not going to be better off depending on them. If they are the only game in town, then CarWow are going to turn you into the product and squeeze you until your commission is less than theirs.

Short term: how much does CarWow charge you per sale? Add that to your current marketing budget and how many leads would that bring in? Essentially they are just another marketing channel, so treat them like one and do the maths.
Id imagine most dealers on Carwow are doing it to generate numbers towards quarterly volume bonuses from manufacturers....they piss all the profit out of the car, and often sell at a loss hoping they make they bonus per unit....I know several dealerships that have gone bust playing tht very risky game

Chris Type R

8,018 posts

248 months

Tuesday 16th October 2018
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Tuna said:
You can't 'magic' money out of nowhere.

If a car costs X to put on a forecourt, and a dealer needs Y to cover their costs, then the minimal survival cost of the car is (X+Y). On top of that, they'll charge a premium - their profit.

If CarWow or others hunt around for the dealer with the lowest profit (and then charge them a few hundred to deliver the lead), you're in a chase to the bottom, with dealers who don't use CarWow able to offer a better deal and still make more money.

So, unless CarWow is the only way of generating sales, as a dealer you're not going to be better off depending on them. If they are the only game in town, then CarWow are going to turn you into the product and squeeze you until your commission is less than theirs.

Short term: how much does CarWow charge you per sale? Add that to your current marketing budget and how many leads would that bring in? Essentially they are just another marketing channel, so treat them like one and do the maths.
Don't you also need to look at this from the point of view of volume (achieving manufacturer discounts/incentives) as well as the commission from selling finance ?

From the point of view of the consumer it saves the pointless to'ing and fro'ing between salesman and manager.

Having visited a salesroom on Saturday, I'm all for disruption. Our salesperson was 15 minutes late (without a reasonable excuse) and offered us a poor deal (price and PCP offer).

Tuna

19,930 posts

283 months

Tuesday 16th October 2018
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Chris Type R said:
Don't you also need to look at this from the point of view of volume (achieving manufacturer discounts/incentives) as well as the commission from selling finance ?

From the point of view of the consumer it saves the pointless to'ing and fro'ing between salesman and manager.

Having visited a salesroom on Saturday, I'm all for disruption. Our salesperson was 15 minutes late (without a reasonable excuse) and offered us a poor deal (price and PCP offer).
Fair point on the incentives.

However, if a dealership wants to offer poor deals (ie. maximise profit), signing up to CarWow isn't going to help them. Cynical old me says if your job is selling widgets, and you have to get someone else in to help you sell widgets, then you're not going to make much money.

The other issue is what sort of customer you get through Car Wow. If all they care about is price, and you're all about a nice sales room, good service and all those expensive luxuries, then you're not going to be a good fit. If you just want to pile 'em high and sell 'em cheap - fill yer boots.

Sheepshanks

32,530 posts

118 months

Tuesday 16th October 2018
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Tuna said:
The other issue is what sort of customer you get through Car Wow. If all they care about is price, and you're all about a nice sales room, good service and all those expensive luxuries, then you're not going to be a good fit. If you just want to pile 'em high and sell 'em cheap - fill yer boots.
I was concerned about what kind of dealer I was going to get!

I have to say that it was probably the best new car buying process I've been through. Even after getting the price through CarWow the salesman was still prepared to negotiate on pricing when we played around with the spec based on cars that were in the pipeline (we needed the car quickly). I still got a full tank of fuel, car in showroom handover, bottle of champagne etc etc.

This was a for a VW Tiguan and I was benchmarking the price based on what others on a Tiguan forum was getting so I know it was thereabouts the lowest available.

Chris Type R

8,018 posts

248 months

Tuesday 16th October 2018
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Tuna said:
Fair point on the incentives.

However, if a dealership wants to offer poor deals (ie. maximise profit), signing up to CarWow isn't going to help them. Cynical old me says if your job is selling widgets, and you have to get someone else in to help you sell widgets, then you're not going to make much money.

The other issue is what sort of customer you get through Car Wow. If all they care about is price, and you're all about a nice sales room, good service and all those expensive luxuries, then you're not going to be a good fit. If you just want to pile 'em high and sell 'em cheap - fill yer boots.
I'm happy to pay an extra percentage for good service - the lowest price is not always the best.

I am however not happy to pay thousands of pounds more for poor and/or indifferent service. In the past this would have meant travelling to different dealerships or perhaps considering different marques - carwow saves some of the hassle. I suspect that the customers who choose to haggle will still be able to achieve better results than buying through carwow.

anonymous-user

53 months

Tuesday 16th October 2018
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The way cars are sold is crazy. At best it has been caught napping by the internet. In the past, dealers had geographic monopolies, that is on the way out

The relationships between manufacturers, country business units, dealers, fleets, consumers, brokers, finance houses etc. all seem to be largely dysfunctional just now

I’m sure it will work itself out, but no one can say it is working properly just now

Sheepshanks

32,530 posts

118 months

Tuesday 16th October 2018
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I suppose the problem is that no-one attaches any value to what car dealers do.

Butter Face

30,192 posts

159 months

Tuesday 16th October 2018
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Sheepshanks said:
I suppose the problem is that no-one attaches any value to what car dealers do.
Lots of people do, others don’t. We don’t do carwow as it literally is a race to the bottom.

A chap came in at the weekend, drove a car, went through all the specs, then pulled out a carwow quote, dealer has offered every single penny of the margin off, plus some more, then with the carwow fees is losing somewhere about £700 selling the car.

We told the guy we wouldn’t match it because we don’t need that business to hit target, he still bought at our price because he wanted to deal locally. If he didn’t he could have gone to Surrey for the carwow deal and if he had then that’s just fine.

HTP99

22,443 posts

139 months

Tuesday 16th October 2018
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Butter Face said:
Sheepshanks said:
I suppose the problem is that no-one attaches any value to what car dealers do.
Lots of people do, others don’t. We don’t do carwow as it literally is a race to the bottom.

A chap came in at the weekend, drove a car, went through all the specs, then pulled out a carwow quote, dealer has offered every single penny of the margin off, plus some more, then with the carwow fees is losing somewhere about £700 selling the car.

We told the guy we wouldn’t match it because we don’t need that business to hit target, he still bought at our price because he wanted to deal locally. If he didn’t he could have gone to Surrey for the carwow deal and if he had then that’s just fine.
Not us as we aren't interested in CarWow.

There is dealer who occasionally crops up with us where they are circa £800 less than using all the upfront money and then you have to add the CarWow fee of approx £360, so £1200 less than using all the upfront margin, so they are trading on hitting their back end bonus which isn't as much as £1200 per unit if they hit 120% of their target anyway, so I guess they hope that any CarWow business is a small percentage of their overall target so they are quids in, come the end of the quarter, it us utter madness and shows that they are effectively running their business hand to mouth.

Dacia Sandero has a 5% margin on Essential upwards; go on CarWow and you will find a dealer offering £100 off, wtf is the point, if they get the business they will have to discount by £100 and pay CarWow for the privilege, on a car that might count towards an overall target but will never pay any bonus money!

Plus the majority of dealers who deal in CarWow will never see any service or warranty work as most people who buy from them are out of the dealers area.