#60 - 3rd Party Listing Websites

Hello and welcome to this episode of the Independent Dealer Podcast. Hope everyone is having a great week. Luke, I know you're traveling, so we've got you by phone this week. Let's talk a little bit about third party vehicle listing sites. You know a thing or two about that.

Yeah, that's what everybody wants, more leads, right?

Welcome to the Independent Dealer podcast, the podcast for auto dealers to learn and grow together. Here are your hosts, Luke Godwin and Jeff Watson. Everybody wants more leads. And you know, we've talked about that and I think last week or the week before, we discussed a little bit about prospecting your own customers and your own database to get more leads. But to balance that out, let's talk a little bit about where do we go to get new leads, where are we going to get fresh interest or where is it smart, you know, I mean, hooking up with these third party sites in order to get exposure and get eyeballs on our inventory? Is it a scam?

No, man. What's great, third party leads have a place in your market and they have a place for the car business. What you've got to be concerned with and what you've got to understand is what works best for your market, what's going to work best for your inventory and what's going to convert the best. Those are the three things you need to be concerned with. And what's funny is regionally it matters. So if you're in the Southeast, let's say Cargurus may work best. If you're in the Northeast, it might be Cargurus. But the further you move out west, you're going to start seeing where autotrader and cars.com and these are more popular. So you really need to determine, let's.

Identify who those sites are. So those of us that maybe don't know or don't use a lot, and I'll admit it, I list on one per third party site. It's regional to my area. It's kind of the most popular used car site in our state. But what other sites are there? What can we be using that's out there? And maybe, maybe let's touch on some of those geographical regions that we know of.

Sure. So if you, if you go from like the granddaddy of them all, which is, I'm pretty sure would be autotrader.com, right?

Yeah.

So that's the granddaddy and cars.com would fit right into that. And then as well as eBay, eBay for years was probably one of my big resources to sell Specialty type cars now they evolved more into the general car market now. But that's also a huge listing site and I think, you know, I think ebay is pretty nationally known and I think as well as Autotrader. But what I've seen though is that AutoTrader and Cars.com probably work better for higher end inventory and higher income areas is what I would would say to that.

When you're dealing with more specific units, you have very specialty type type products. You're going to go to somewhere where people are going to list it. And I think so much of it is like, you know, does come down to common sense. I mean think about it. If you're looking for a very specific, you know, vintage vehicle, you know where you're gonna go look. So that's where you need to be.

Yeah, I'm gonna go to ebay automatically. If it's a specialty type vehicle, that's where I'm going. Now that might be a little bit because that's what I used to do over there. But that's probably where I'd go, you know, if I lived in, if I lived in the Pacific Northwest and I'm looking for Mercedes or Volvo or something like that, I'd probably go to autotrader and cars.com because they probably are for that matter maybe Carfax listings. So in Carfax listings is fairly new, but a really good product that people should identify. If you're a CarFax Advantage dealer, you should probably look into that.

And I think we've also got True Car. We've got Cars Direct.

I know nothing about cars direct, but TrueCar, I've been a dealer for them for years. And TrueCar in my opinion works really well for people who are around military installations. They have a really great relationship with Navy Fed and usa and so I would really, if I was in a military area, I would be on TrueCar. Just hands down, I'd be on it. Cargurus. Now there's a love hate relationship with Cargurus probably for every dealer on the planet. They price your cars and they price them hard and it's really a race to the bottom if you own Cargurus. But with that being said, I think we've talked about this in the last little bit. That price isn't the determination for every person shopping. So just because Carter Rouge says that maybe you're not the best price in town doesn't mean you're not going to get leads and sell cars. So you know, keep that in the back of your mind.

Yeah, we've also got things like Facebook Marketplace and Craigslist. Now, obviously, I think today all of us need to be pushing our inventory to Facebook Marketplace. You just got to be there. I think regardless price point, it may work better for some of the lower end stuffs, but I think that's where a lot of the eyeballs are these days.

And let's, let's talk about how to get your, your cars to Facebook Marketplace. I was speaking to someone with Facebook back in August and said very soon that we will be able to push our cars there to their Marketplace. But right now I think you have to go through a third party. Is that correct, Jeff?

That's how I do it. I use a company that syndicates our stuff to Facebook marketplace for like $99 a month and they automatically upload my inventory every single night. Now that's one strategy to get them on Marketplace that works as you're listing as a dealer, which is probably the most legitimate way. I think a lot of people still find success posting individually from a personal account. I don't know how you know, the terms of service if you're violating it there. If you're, if you're trying to post as a dealer from your personal Facebook account to Marketplace or into you probably.

Yeah, you probably are. I would would say if you're doing that, just identify yourself as a dealer to the consumer. So you don't get, you know, so you don't get a bad reputation there. Yeah.

We found the most success posting cars directly into Facebook groups. You know, the for sale groups, the southern Utah auto sales groups, all these regional yard sale and auto sales groups. We found some good success with taking our cars that have a little more eyeball and sticking them on there one at a time, which is, you know, it's a lot of work, but post one or two a day.

Yeah, that is a lot. That is a lot of work.

People still making money on Craigslist.

You know, I haven't listed a car on Craigslist in probably five or six years. We used to sell a lot of cars on Craigslist. We even sold cars on Craigslist after it cost US$5 a listing. But I really, I don't think the Craigslist is a marketplace any longer. I might be wrong with that. It might be regionally, but I don't think, I don't think it's Marketplace anymore.

Yeah, I think so. The success we have. And through my. I use Hammer Core and they syndicate my stuff to Facebook Marketplace. They also allow you to Post to Craigslist automatically and I'll put I think two to three to four a week on there. And honestly the hits are on my cheap, cheap, cheap, you know, under two or three grand type stuff. And man, it's a headache and a hassle. So I would say that might be the area if you're really dealing with some cheap stuff, you know, buy here, pay here. Even lower than that type cash cars, that might be your area.

Right. And it's again, most of these things are regional, so do your homework before you spend any money.

So there's a couple ways to do that and I want to talk about that. I did a little bit of research. Now you can find out who's the most active car listing site in your region. And it's really, I mean, there's some scientific ways to do it. The easiest way for me, I went into my web browser. I opened what's called like an incognito window, which is like a private browser. It doesn't give you search Google search results based on your previous searches. That's the issue. You don't want to be googling for something because Google is going to give you the results it thinks you need. But if you open a private window, it's going to give you kind of unfiltered results anyways. So I open an incognito window and I just search used cars or cars for sale or trucks in my area and it brings up all the top listings ranked websites. Right. So I can instantly look at that. Yeah. And I can see, hey, who is ranking high for used cars. So when my consumer goes on there and searches for a used car, used truck, those are the results they're getting served. So I can see who's hitting.

Yeah, that's right. That's the information you need.

Cars.com comes up and AutoTrader Carfax doesn't even register in my neck of the woods, you know, as a listing partner. KSL is the big one that shows up in our area. They pay a lot to get those clicks to be the top. So those are the ones that I would list with in my region.

Yep. And then, you know, the next thing you got to think about, well, how much are people paying to be on these sites? How much am I going to have to pay to be on the sites? Right.

Mm.

And so you get, you've got to find, you've got to find a way to get to those sites. Now most of us who go to convention and different trade shows, we would have a pretty good Way to contact one of these third party lead providers. So make your connections there, find out what it costs. And also there's probably a rep in your region that's going to come by and talk with you. You know, the one thing I say is everything they tell you is negotiable. So don't take their first offer because it's going to be the highest offer.

And so much of what they're pricing is based on what they feel your regional demand is right now. It's hard to compare me to you, Luke, because you may pay a premium for some third party listing site being on the east coast. And for me, they might offer me some killer deal because they know they have very light presence in my area. You know, for me to get on Let Go, the app Let Go was pretty darn cheap because they know that there's not a lot of traffic and so they want to get dealers. And so they're going to subsidize or lower the price to get me on there. Whereas if you're in Atlanta, Letgo is probably way more expensive than it would be for me. So it's not always fair to compare apples to apples across dealers because it's not the same.

I don't think it's ever. And that's one thing we need to talk about is that you can't get on a Facebook forum and say, hey, what is everybody paying for such and such provider? Because it's not going to be apples to apples. You need to. Your inventory matters, your region matters, and the amount of cars you list matters. So make sure that you get with your rep. And you know, let's just say, let's just say you're paying $500 a month for a certain provider. Well, you gotta determine whether that $500 a month is gonna make sense for you. So you're not gonna know. You're not gonna know right off.

Okay.

What's gonna happen is they're gonna say, we can give you such and such amounts of impressions. Well, impressions don't matter. If someone tells you impressions, just say, well, that's wonderful, but impressions don't sell cars. And that's exactly what you need to tell them. Find out what makes sense for your inventory. So $500 may make sense for a third party lead. Don't sign a year contract at $500, because the only way to truly know if that third party site is helping you is by the amount of leads you get and by the amount of leads you close. You may get, you may get 150 leads from this website and in my, you know what I've seen with third party leads, you probably will close between 5 and 10% of those leads. So if you get them and you're not closing, then we may need to look at some other, other issues you're having. But if you get 150 leads, you should be selling, you know, 10 cars a month or so from those leads, right? Yeah, yeah, yeah.

I mean that's what makes a lot of sense. And if you don't know, again, I can't remember what episode it was. It's got to be somewhere in the 20s. I'll try to link it in the show notes. But we talk about, you're gotta be tracking your sources, right?

Yes you do. And what's great about these, well, what's great about CRMs and what's great about your website analytics, your Google Analytics, they can tell you where these leads are coming from. And even these third party sites, they give you amazing tools on the back end that will allow you to see if they came to your website after they clicked or if they clicked a map or if they called you or a lot of them even record the phone calls coming in for you so you can go back and listen to them. You know, these are things that help you with training, but they also give you a window into whether that service is right for you or profitable for you. And that's really what matters is does this help my business and does this sell cars as a push the needle, right?

Yeah, absolutely. So I would say this, Luke, when you're signing up with these sites, you know, get the trial period, you know, Right. I think most of these guys will let you do and who knows, they're all different. But if you can get a two or three or four month trial, whether that's free or whether you have to pay for it. I am not the kind of guy that likes to sign contracts for anything. It's always the last kind of option for me. But if you can say, hey, you know, I'm gonna pay a little bit more per month to go month to month for the first couple of months with you guys so I can prove you out. I'm going to set up all my tracking, my source coding so that when my lead comes in, I know who I can credit it to. But we're going to give it a shot, let's give it a run for a couple of months and let's see what exactly happens. What I don't want to do is be tied into a 12 month contract and then find out at month three that it's a bunch of junk and I still got to pay them for another nine months.

Unfortunately, so many dealers don't think that way, Jeff. And they, they take that 12 month contract because it's cheaper and they know it's gonna work. And they were sold a bag of goods. That or bill of goods. That's not it. So, so important to track these. And let me say one thing about those trial periods, and I really, truly believe this and I've seen it, that some of these third party sites can dial you up kind of high for a couple months. Okay. So be aware of that. And I would even say if you can, if you can go month to month, stay month to month, because yeah, what, what I've seen is some of, and I won't name names, but if they really want your business, they will somehow change your algorithm so that you appear higher than you should a lot of the times or higher than you will later on in the contract. So just be aware of that because it may, you may be getting 300 leads the first three months and then for the rest of your contract be getting 150 leads a month. So be very careful with that.

Yeah, you got to make sure they're not juicing you up front. And now one of the big issues we're gonna run into and my concern every time I get a phone call from Auto Trader CarGurus, Cars.com, any of these guys is my first thing is here's the problem, guys. You want to put my car up against homeboy down the street. I know that that thing rolled in off the trailer. He maybe, he probably didn't even scratch the auction stickers off it. He just threw it right on his front line. And now he's listing it on his site and he's marked as a great deal or a good deal or an awesome deal. And I'm marked as garbage on your site, so I'm buried on page 20 is a bad deal. Whereas homeboy, that's got a dead cat in the backseat is listed as a good deal. How do we keep that kind of thing or how do we mitigate it? We can't stop it. We can't go around it. It's their game. But if we want to participate and we want to play in their sandbox, how do we deal with that?

Well, you could, you know, so there's. Each state has different advertising rules, and then you also have the federal guidelines. And if you see somebody doing something that is questionable, you need to call them out. Now, none of us want to be rats and this, that and other. But you need to be in my state, if you offer a car and you charge a dock fee, that price has to include that dock fee. If it doesn't, you are in violation of our state's advertising guidelines. And if you see people doing this, which there's a lot of new car stores doing this, and there may be some independents out there doing this, but they have a. Let's say in North Carolina is pretty, pretty lenient on what they'll allow you to charge, but let's say they have a $899 dock fee. Now, South Carolina, you can only charge 225. But if you have that 899 doc fee and you don't advertise in your price, well, you can be almost $1,000 less than a guy doing it the right way. So number one, know your state laws and number two, abide by them. And number three, if you see somebody doing something that is in violation of those laws, you have to call them out because it's got to be a level playing field.

Absolutely. And I don't even think it's about being a rat. I think it's about helping to maintain the integrity of the industry. When we talked a couple months ago about the addendum sticker and how that is such a pile of trash. Yeah, yeah, you can addendum every cost under the sun, your recon, your certification program, your window etching, your nonsense just so that you can list some, some nonsensical low price on these online sites. So. So they're setting up an unfair or unethical framework and the dealers are trying to compete within that space. It's causing them this race to the bottom. Right. Both in gross margin and a race to the bottom in integrity. We can't fall into that. And we call people out because, yeah, we're trying to kind of buck the notion that used car dealers are all scummy. And we're going to say this car's 15 grand and when you show up, it's really 18.

And that's what gives car dealers bad names, is because that happens every day. Now, let's talk about the race to the bottom. We did speak about last week about how, you know, you don't. Or maybe two weeks ago, how customers don't necessarily care if you're the best price. You know, they want other things. So just because you're not, you know, you're not the best price in town doesn't mean one of these sites isn't going to work for you. So don't scream and cry about that. What you can scream and cry about is the customer who's not doing it the right way. Or like you talk about Jeff, someone who hasn't serviced their car or who did nothing, didn't even wash the car when they got it to their life. To me, that person is probably not going to be in business very long, but they may mess up your leads a little bit, right?

Yeah, yeah, yeah, exactly. They're going to, they're going to, they're going to show up on the top rankings of these sites over and over and again. You got to remember if you, if you want to play on their field, you got to play by their rules. So crying and complaining doesn't make a lot of sense if you don't like it. And this would be my overall conversation for this whole situation. Build your own field. You know, make your website the go to in your area. Make your Facebook page and your Instagram and your whatever awareness the go to so that you're not beholden to the third party sites necessarily to get your leads. You're creating your own action.

There's so much truth in that, Jeff. And we don't really spend any money anymore on third party sites. We still have a couple of them, but they don't cost us. They cost us very little. But what we've spent our money on is branding ourselves and going after digitally getting people to our website. And honestly I think that has to be your number one page in your playbook of advertising is building your brand and letting the consumer know. The reason my cars are a little more expensive than those cars are because we inspect our cars. They come with a warranty, they do this, they do that. And the consumer isn't stupid. The consumer will find the right car at the right price for them. Not necessarily the best car at the best price. Right. Or the, the car at the best price.

Yeah, yeah. It's not. Again, we know that where we're spending our advertising dollars and I think the average cost per customer for advertising, is it still around $200? I want to say maybe that's the.

Industry average or does that sound that's low? I think per car sold you're probably looking most people are going to be spending 200 plus. I think we're right around that 240. But you know, new car stores and higher end stores are going to be probably 500 to $600.

So yeah, lifetime value and we talked about that two weeks ago too. You can look at lifetime value. So when you're judging that acquisition cost of that customer and you're on a cars.com site that's costing you $1,000 a month, hey, you know, if you're getting five sales a month, you're 200 to 250 per acquisition. You're there, right? I mean, you're making it work. Maybe even if you're higher, 400, 500 per sale, maybe it's worth it to you, but there's definitely the diminishing return, right?

For sure. And I think if you, if you get into that $500, you better, you better have good, you better have good processes in place to sell them back end product and to keep that customer for a long time. Because I think you're getting dangerously close to putting yourself out of business if you're up in that area, honestly.

And with that catch, obviously you may be dealing with a higher end vehicle where your margins are larger. And so sure, you're only selling two and it's costing you 500. But it's that ebay listing of that car you would have never sold otherwise.

But yeah, for sure we can weigh.

That out and say, hey, you know what, I'm spending a thousand dollars a month there. What if I took that thousand dollars a month and I put that all towards my SEO ranking or my paid ads on Google, or towards my Facebook social media intern who does nothing but creates content for me 24 hours a day, seven days a week and puts it online on all the different social media platforms. You know, that thousand dollars a month can be powerful and I guarantee you they could probably replace those four sales you might be losing by leaving a third party site.

I believe that's the case. I honestly believe there is a place for third party sites, but I truly believe that if you spend it other ways, you're going to rule your market. Now you know what the good thing about third party sites can do is? They can get you outside of your market sometimes. So you know, I think that that comes in to say, hey, you know, I, I can rule my market by spending that extra thousand dollars a month on, on my branding and my social media. But it might, it might behoove me to, to spend that money on a third party side as well to bring in another state or, you know, another region of my state. So I think that's where they come into play a lot of mm, the reach.

So to wrap this up, Luke, and to recap the action that us Dealers are going to take this week. Right. When we get into the office today, we're gonna audit our third party sites. Let's look at what we're spending, go through the bank accounts, write them all out, go into our DMS, look at our historical sales for the last 6 to 10 months to 12 months. Let's track how many sales can be directly accredited to that site. Not just leads. Right. Luke, you talked about that. Leads are one thing. We get a ton of leads from places and we're assuming that we're closing at the same ratio because our salesmen are our salesman. And that's a whole other topic.

But that's a whole other topic.

All leads aren't created equal. Correct?

Correct. They're not. But I would look at my leads and my sole ratio because it's very possible that you're not, you're not handling them right. It's very possible your staff at handle them right.

That's fair. That's fair. You might be getting a car gurus lead that you are treating differently than a Facebook lead because you don't know how to handle the way it's coming into your dealership. Yeah. You know what percentage than you should be.

I hate to go off on a slight tangent about why we're wrapping this up, but one thing we really, one thing we really need to talk about is you've got to have a process in place to handle each lead. I see some people on the Facebook forum going after customers because the customer insulted your car with a price. You cannot do that. I don't understand how you paid to get that customer to you. Now, they may have offered you all the money they had on a $15,000 car. They may have offered you $10,000. That might have been all the money they saved up for a year to buy a car and you went and insulted them. What you should do is get that customer off the car they can't afford and onto a car they can't afford. So make sure you're being nice to customers. I shouldn't have to say that, should I, Jeff?

You know, it's funny. I think we come in with a sour perspective and sometimes we get offended by someone offering us half of what we have it listed at. And like you said, Luke, you don't know, man. You don't know if that guy is just a straight up dick and he's just trying to fish you or piss you off. Maybe he has nothing better to do with his time than just throw out low ball offers to every single car. That's listed online. I highly doubt that, but sure, man. I mean, ignore it or work it like a professional. But you're right.

Work it like a professional. Send them. Say, you know what? I really appreciate your offer. Unfortunately, that's not really the market value for this car, and I can't sell it for that. But guess what? Here's a car I can sell for that, and it's kind of. Kind of similar to it. Here it is. Would you. Would you like more information on it? And I tell you, you would probably turn some of those leads so fast into sales, it would blow your mind.

Yeah, come. Come on in this afternoon. Let me show you why it's worth $8,000. You know, like, just whatever it is. But so. So what you're saying, Luke, is. So in order to account apples to apples with our leads, we got to make sure we have a process for each lead. Because I do know that there was a short time I got. I don't know how I got on someone's list, but car gurus or autotrader or one of those guys would send me these. You have a lead. You have. You know, you have someone interested in your car because somehow they hijacked my inventory off my website and put it on theirs. And they came into some obscure email address that the party had found. Now, it never made it to my salesman. They never worked that lead. So we do have to be sure that we're giving them the same at bat, our salespeople, with each lead, you know, it's coming into our CRM the right way. They know how to communicate with that customer. Those types of things, right?

Yep. Yeah, yeah, yeah. And just like. Like, you're talking about audit. Not only audit, who you're spending money with, Audit the leads that are coming in, the sales you got from them, and the way those leads are coming in, because you know what? You might say this. This isn't working. Well, your sales staff may not be getting the leads. Yeah. Make sure you look at everything. Make sure you look at everything.

And maybe your CRM isn't even set up to capture the phone number field that's not coming in. Oh, none of these leads have phone numbers. Well, that's because you didn't map it to the right spot, you know, or. Or whatever the case may be. But we've got to know what we're spending with these guys. We got to know the leads and the closings on these, and then we can go in and say, okay, is this a cost effective source for me? Is My money better spent somewhere else.

It's like everything we talk about, you got to know your numbers. If you don't know your numbers, you can't make a decision.

Yeah, you absolutely got to know your numbers. And the other very, very important number to know on these is when does my contract expire? Is it on renewal? I need to put that in my calendar. Hey, you know, my car gurus or whatever. This contract I'm in signed up on, it ends December 31st. I need to know whether I'm re upping and am I getting so much value that I just want to shut my mouth and let it auto renew at the same price or do I need to make a fuss 30 or 60 days out so that we can renegotiate this price down, you know? Yeah, don't just let them renew you. And you could cut in that check.

And some of them may even have a 30 day out before the renewal. So you may have to write them a letter. So always make sure you know what you're signing up for.

Absolutely. Awesome, Luke. Hey, I think this has been so informational. I've gotten a lot out of this conversation. I know that the one third party site I do use is definitely on the chopping block this month. I'm gonna have to go in and audit the sales or the leads that I may or may not. And maybe I do need to open up to some of these free sites. I've always been against so many of them, but maybe I should try the free listing version of some of these joints and just kind of test the water to see, you know, maybe a certain section of my inventory would perform well, you know.

Hey, man, it's free. Nothing to lose.

Nothing to lose. Awesome, Luke, So much great time talking to you again. Luke. Do you have anything to say to the audience? I mean, we've been super. Just so excited and impressed with the gross. We appreciate you guys sharing this with your friends, getting the word out there.

Yeah. Thank you. Thanks to everybody listening and I think we just. We had a little article come out in Used Car News, so if you get a chance to read that, please do give us some feedback.

Yeah, awesome. Definitely email us@infoheindependentdealer.com it's in the show notes. If you've got questions, if you got ideas for a podcast, we'd love to be able to make sure we're addressing the questions and concerns that we have as independent dealers in this space. Anything. If you're on the show, we'd love to talk to you.

Yeah, yeah. Friend us on Facebook. Actually, friend our personal pages and our personal. What do you call them? Pages or whatever they're called, and send us a message and tell us what you want to know.

Yep. Awesome. All right, guys, we'll talk to you next week. Sa.