GM and eBay Motors: A Marriage Made Somewhere that Will Help Someone

Well folks, like it or not, today's the day that General Motors and eBay Motors team up to bring you the deals you've been waiting for - or think you've been waiting for. Only time will tell what's right.

Actually, this linkage should have been made a long time ago and there was a lot of dancing around the edges of eBaydom by many car dealers. Usually, though, they kept the new cars for the "retail" shoppers, while the preowned cars and "value" cars went to the eBayers.

That model has been turned head over heels today as General Motors and the auction giant begin a retail relationship that's likely to benefit both.

Let's face it, for a long time folks have complained that car prices are just too high and they've stayed out of the market. Further, there have also been those who can't get credit but who need a new car. And, they've been stuck, too.

On the dealer side, there have been self-styled "Internet" Departments that were little more than email traps or phone traps that tried to drag customers into a showroom with the promise of a great deal.

Most of the time, the great deal was in the head of the consumer because dealers only wanted to get folks through the doors and then sell them as close to retail as possible. Thus, Internet Sales Managers were actually little more than glorified appointment setters (having spent three years doing this, it's pretty obvious there's more than a little experience behind these words).

We broke the mold in 2004 with our first sale through eBay. Yes, we were a retail car store that actually sold on eBay and we made money, at the same time. And, believe it or not, the consumer saved a bundle. (One particularly expensive brand new VW that listed out at about $114,000 went to a buyer in the Midwest for about $87,500.

So, you can see that the deals were there if a buyer was patient. You'll also likely see news stories all over the place today and tomorrow touting this new program and if it is done right it will help both the dealer and the consumer. It has to because that's the way eBay is set up to work.

It won't work if dealers set about "business as usual." That is getting customers into their stores with fantastic promises of great pricing through eBay and then suddenly finding that the $14,500 Malibu LS (if there is such a beast) is now suddenly available only at $16,200 because someone "forgot" that there was a DVD player or someone forgot to list the destination charge.

There are all kinds of games that dealers can play and hopefully they will let customers work out real deals with salespeople so that everyone benefits. This program will go exactly nowhere if dealers stick with their "old ideas."

Actually, you'd be surprised how many dealers think they will be able to get away with their old ideas. Oh I'm sure they'll enter into the program with the best of intentions, but you wait until the "first pencil" is completed on a vehicle and suddenly the great eBay deal you've been expecting may be headed toward the scrapheap.

Now, maybe that's totally wrong. Maybe eBay will be watching closely as GM dealers around the country try this new way of selling. And, believe it, for them it will be a new way of selling. Essentially, they are giving up control of their products to a third party who will be the party to set the prices.

It should be an interesting day.

Meanwhile, as the dealer community works on the second and third billion that Congress has appropriated to bail out the car industry dealers are beginning to report spot shortages of certain models.

For example, at some Ford dealerships, you'll be luck if you can find a Hybrid anything while at Toyota dealerships you can find Hybrids but they will be going for a lot more than you ever envisioned (simple supply and demand).

One Midwestern dealer complained to a TV reporter last night about the shortage of Hybrids, but he was quick to point out that they expected a bunch on delivery trucks in the next few days. The only problem was they've already been sold.

To say the car market is in a weird state right now is putting it mildly. eBay is getting involved with GM and folks will be able to make offers through emails that dealers may have to accept. It just depends on how the program is set up. Otherwise, it might be business as usual.

The eBay market is a specialized market with a specialized buyer who has a certain set of expectations that some dealers are going to find quite unique. (This comes from about five years of experience in this market).

To say this isn't your granpa's car business anymore is actually putting it lightly. It's more like an abyss that dealers are standing at wit no way to cross but eBay, emails and phones and good deals, of course.