I wrote a post a while back comparing a few of the major players in online classifieds. I've worked for a few of these companies personally, and several of my closest friends are National level managers with the other companies, so I have some unique insight into each. One site I gave some opinions on was Autotrader.com. Another online classified site which was left out of the mix was
Craigs List. If you're not yet familiar, Craigs List is a "no-frills" type of site with free auto classifieds. Their web traffic is among the highest of all sites, and continues to grow month after month. Currently they're the 9th ranked site in popularity in the U.S., ahead of even AOL.com, CNN.com, and Microsoft.com. Although they pride themselves on catering to individuals, many auto dealers have been using the site to sell cars. What better way to gauge the effectiveness (at least in my local market) than to actually sell a car.
For my experiment I purchased a 2000 Pontiac Sunfire GT for $700. After spending about $1100 to fix a few things (exhaust system, wheel bearing, radiator, power window) and a good detailing job, I was good to go. Into the car for $1900 and it books for a little over $4k retail, should be an easy sell this time of year.....an economy car at tax time.
Two days ago I placed an identical ad on both Autotrader.com ($55 "fully loaded" ad with 9 photos) and Craigs List (Free ad with 4 photos). I'll be updating this post frequently with feedback as to what sort of leads each site provides, and general sentiments.
As far as the listing process, both sites were easy to list and edit the vehicle. One area I feel is a real drawback on Craigs List is that my ad has already moved down the list considerably. Every ad that has been posted after mine is placed at the top of the list, so as time goes by I expect leads to fall off.
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Leads #1 and #2
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I received my first lead early Sunday afternoon. A younger sounding woman left a message saying she saw the car on Craigs List and had some questions about the vehicle. When I called her back 30 minutes later, her tone of voice told me she wasn't very serious about buying a car. She wanted to know the mileage (120k) and hung up. This brought me back to the days of selling cars and having to answer a lot of questions that I knew didn't matter in the long run.
My second lead appeared in my inbox this evening, again from Craigs List. One thing did catch my eye about this lead...the email subject. This person had somehow seen the ad I originally placed before my edit.....the ad I had up for about 2 hours two days ago before the price was corrected. Not sure how he found a price from two days ago that was fixed, but it could present a problem with negotiating price if he's a serious buyer.
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2 days and 2 leads, both from Craigs List
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Not much new to report on the leads. Maybe the used car market is really as bad as everyone says, or maybe just that not many people have received their tax returns yet and are ready to shop? I received one additional lead from Autotrader a couple of days ago. A gentleman called wanting to know how many miles were on the car. I told him, and he said he was shopping around for a first car for his daughter, and that he might call me back. The person who had previously emailed me sent another message saying he would check out the car this past weekend if it was still available, but he was a no call/no show. One thing that has proven a little annoying, and takes me back to the car sales days, is that I've taken the time to write a very detailed description about the vehicle, and the mileage is displayed prominently on both Autotrader and Craigs List. For whatever reason, people always ask questions that are already answered in the description. Just part of selling vehicles online I guess, but I have to wonder how many pointless calls are averted by having the detailed info on the ads. Surely I must be saving time by giving the details up front. This begs the question though: is it better to be as detailed as possible up front and weed out the non-interested buyers, or is it better to be vague and give myself the opportunity to sell more people over the phone? From a dealers point of view this depends on personal preference, but I'd rather let the car sell itself so I have time to focus on other activities.
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2 leads from Craigs List, 1 from Autotrader
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Well as a new twist on my experiment I re-posted to Craigs List to get my ad back to the top, and the listing on Autotrader has been cut down. I wanted to take a closer look at the impact a shorter (and more vague) description has. Sure enough, I got two calls from Autotrader shortly after modifying the description. Both people left messages, and when I called them back and left messages myself, they never returned my call. Found another car? Changed their mind? Who knows, but having SOME leads come in keeps hope alive for me that it will actually sell, and I imagine a dealer would feel the same way.
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2 leads from Craigs List, 3 from Autotrader
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Seems re-posting the vehicle on Craigs List has helped out. I have pretty much consigned the car through a local dealer I'm working with so interested parties can get financed on it, and also to see if Automart or Autoextra produce any decent leads. I received one call today from someone who sounded serious (off Craigs List) and actually showed up at the dealers lot where I've got the car sitting. Supposedly he'll be back tomorrow with a down payment. Another customer saw the car on Craigs List and filled out the dealer's online credit application, so things are looking good for Craigs List in this experiment. Hopefully I'll have the "dramatic conclusion" over the weekend.
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4 leads from Craigs List, 3 from Autotrader
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If you've been following this post for a while, you probably think I've forgotten about it. On the contrary! In the three months since first posting, there have really only been 7 total leads and the car is still sitting on the lot. Why isn't it selling? Is it a junk car? Probably. Is the market bad now? Perhaps. Am I trying to get too much for it? Probably. Am I holding out for my price? You bet! This car would not have sat in a dealer's inventory for this long unless they really didn't care about turnover rates. I'm not worried about cash flow or sales numbers, but if I were a dealer these things would certainly come into play. One thing that does surprise me is that Automart and Autoextra have not produced any leads at all. The original purpose of this post was to compare Autotrader and Craigs List, so maybe it's not fair to throw AM/AX in the mix later in the game. Time to repost to Craigs List and see if that drums up any more interest.....
******Latest Update 5/10/07******
Well reposting on Craigs List certainly helped get some action. I know most people on Craigs List seem to browse from newest to oldest rather than search, so I guess it shouldn't be a surprise. I posted 1 week ago, and literally 5 minutes after posting I had a response. Within about 6 hours I had 3 more people who all seemed VERY interested. I couldn't believe it. After talking with the first guy he filled out a credit application and would pick up the car in a day or two. Great, it was sold.....or was it? The guy got to the dealership too late last Saturday to do anything, so he was a "be-back" for Monday. No-show, and a follow up email revealed he spotted another car that he was approved for. On to plan B. The second guy also filled out a credit app and was very serious about the car. I put him on ice for a few days until I knew what the first guy was really doing (since he was willing to pay full price). Once the second guy's credit was pulled, he couldn't get approved without a down payment which he wasn't willing to do. Poor credit, 5 months on the job, 6 months in an apartment, and more delinquent accounts than you'd believe. All those issues, he didn't want to put a penny down on the car, and didn't want to pay more than prime interest. Yup, a crazy person, but still a lead for my purposes. The other two responses seemed like good leads too, but neither wanted to fill out the credit application online so I told them to visit the dealership in person. Not sure if they did or not. Since I'm in a military area, a few of the larger ships are coming in over the next couple weeks and that means a lot of Navy kids with big checks burning holes in their pockets.
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8 leads from Craigs List, 3 from Autotrader
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******Latest Update 6/3/07******
Activity has definitely picked up, and to my surprise it seems to be people on Craigs List finding my older posting. If they were just browsing they would have to go through a ton of listings before they got to mine, so this tells me that people are using the search feature more. Since the last update I've received another 6 leads from Craigs List and not one from Autotrader. Yup, the car is still for sale......
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14 leads from Craigs List, 3 from Autotrader
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******Latest Update 7/17/07******
Not a whole lot to report this time around. One email lead came in from Autotrader.com on the vehicle and 6 leads from Craigs List. I did repost to Craigs List again which always produces a spike in inquiries. The usual pattern with Craigs List contacts - several seemed interested and wanted to meet the following day to see the car in person, however no follow up email/call was ever received. I must say I'm still very surprised at the response rates between both sites. At this point Craigs List is generating 5 leads for every 1 Autotrader.com lead, but the most important thing is sales, and neither has produced this after 6 months. I know a dealer wouldn't usually hold a unit this long, so I'm attempting to abandon this project through the only auction I have access to: eBay. eBay is intended to be, in most cases, a wholesale network, so while I may not get as much for the car as if I held on to it I'd rather just get rid of it at this point.
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20 leads from Craigs List, 4 from Autotrader
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Craigs List vs. Autotrader.com: Who wins? There are a couple of ways to look at this evaluation I've done over the last few months. There are advantages to each classified site. Autotrader.com boasts the highest number of vehicles, and therefore the highest number of visitors for auto classifieds. One thing that isn't known is the number of visitors in my particular area. Sure, the number of times my vehicle was looked at is available from Autotrader, but these numbers are not available from Craigs List, so it's tough to compare. The more important number that auto dealers should be concerned about is the number of sales and return on investment. Autotrader is one of the highest price per vehicle sites out there, and Craigs List is free. Craigs List produced a significantly higher number of leads, and also produced the only leads where someone actually came and looked at the car in person. At the end of the day, neither site produced a sale, but after 6 months I attribute that to poor inventory selection. eBay served its unanticipated purpose in this experiment. I eventually dumped the car on eBay for no reserve and made a few hundred bucks profit, even though it sold for well below book value.
My conclusion: Craigs List generated a lot more action than Autotrader.com, and by numbers I would have to say it would produce better results with the right inventory. The downside is that if a car sits on the lot long enough, it's going to require much more work with Craigs List, because you need to keep posting the same car to keep it at the top of the results. Posting more than once every 45 days is against Craigs List terms of use, but to be effective it has to be done probably once a week. If I made a living out of selling cars, I think first and foremost I would buy the right inventory, and second I would put more emphasis into Craigs List than Autotrader based on cost. Like most dealers out there I would still use Autotrader for its reach and simplicity, but in a limited role based on cost. Maybe only with the Select Ads they offer (pay per listing) for certain units. $80 to finally get rid of any aged units on eBay seems worth it to me too. Even though $80 is a high cost per unit, consider the alternatives: having your cash tied up in a car that's not moving off the lot or paying auction fees at the dealer auctions.
Stay tuned for part two of this experiment which might be coming up in the next few weeks.
