Autoweb.com's New Risk-Free Pricing Structure Revolutionizes Online Car Buying Industry
9 February 1998
Autoweb.com's New Risk-Free Pricing Structure Revolutionizes Online Car Buying Industry
SANTA CLARA, Calif., Feb. 9 -- Auto dealers looking to expand
their sales volume by taking advantage of customers shopping on the Internet
for new and used vehicles need look no further. Autoweb.com, the industry's
leading online car buying and selling service, has broken through the clutter
of a previously confusing and overcrowded marketplace of automotive "cyber"
sites with a risk-free pricing structure that is already a hit with dealers
nationwide. The plan was well received at the National Automobile Dealers
Association (NADA) Show in New Orleans, La., where Autoweb.com announced the
news to the astonishment of the industry and online competitors and signed
almost 400 new and pre-owned dealers in just four days.
Autoweb.com charges dealers $25 per customer purchase request, along with
a nominal annual sum of $500 to $1,000 (based on the franchise and market
share). Current competitive annual pricing structures can reach as high as
$20,000 per franchise regardless of results. In an industry where standard
dealer pricing structures have been based on monthly and annual fees, whether
or not referrals or "car buying referrals" are generated, Autoweb.com offers a
refreshing alternative for dealers -- a "satisfaction guarantee" that
permanently changes the traditional pricing structure of this highly
competitive industry.
"This new pricing structure provides auto dealers with the highest return
on their investment of any major online car buying service," said Payam
Zamani, co-founder of Autoweb.com. "Without flat rate pricing, our plan
offers dealers a profitable fee structure that is risk-free and easy to use.
If we don't deliver results -- our dealers don't pay. It's as simple as that.
"This is the best way to pass along savings to our member dealers. We
believe this new pricing structure without dispute makes Autoweb.com the most
cost-advantageous service in the industry for large and small dealerships."
The overwhelming response from dealers and industry leaders at the NADA
show already speaks to the success of Autoweb.com's new pricing model. The
company signed on 270 new car dealerships and 100 used car dealerships from
traffic on the trade show floor alone. This enthusiasm for Autoweb.com in
part comes from dealers who may have been hesitant in the past to investigate
the merits of utilizing an online car buying partner due to prohibitive
monthly fees.
Moreover, Autoweb.com offers an irresistible alternative for dealers who
are currently aligned with other services but prefer not to be locked into
costly agreements with restrictive, non-refundable fees and little or no
guarantee of success.
"Autoweb.com has developed a pricing model that really suits my needs,"
said Joseph Bellavia, of East Rutherford, NJ who owns a local Audi franchise.
"I am thrilled with the obvious profit benefits of their pay-per-customer
referral program -- it's an offer that I just can't ignore. For only $25, I
potentially stand to gain a motivated car buyer and I'm not locked into a
situation that requires me to pay useless flat fees, regardless of the number
of referrals I receive. I switched to Autoweb.com on the spot at the NADA
show floor and immediately canceled my arrangement with a competitive service
that wanted me to pay thousands of dollars up front. From a dealer
perspective, this makes better business sense."
"Autoweb.com makes the auto buying and selling process more efficient and
effective for consumers and dealers," added Zamani. "We've taken the hassle
out of the automotive retail experience, and with our new pricing structure,
we have streamlined the process even further.
"We believe that our dealers won't find a better situation from any other
service the size and scope of Autoweb.com. Or from a service offering the
same level of quality customer follow-up, breadth of informational resources
and caliber of promotional partners.
"The more referrals we pass along to our member dealers, the greater the
return on their investment. This is a winning combination that we can't
imagine any progressive dealer would resist. We believe the rest of the
online car buying industry will now have to follow suit if they want to remain
even remotely competitive with our service."
Based on the purchase request focus of Autoweb.com's new pricing
structure, the quantity and frequency of customer referrals will certainly
create a new metric for success. This comprehensive online automotive
retailer sharply distinguishes itself from others within the industry through
its array of value-added services such as informational resources and dealer
training programs assisting a new breed of car dealers to sell a higher unit
volume. Autoweb.com provides unparalleled customer service to auto dealers
including detailed customer respondent surveys that outline valuable feedback
on customer usage.
Company Background
Autoweb.com has enjoyed an impressive year -- it was the first online car
buying service to reach the 1,000,000 purchase request milestone in the fall
of 1997, a crucial indicator of the site's popularity among online consumers.
The service is also a six time recipient of PC Magazine's "Top 100 Award" and
is the preferred independent online car buying site according to user traffic
statistics listed by Web 21's "100 Hot" sites.
The company has grown exponentially in the last year -- increasing its
dealer membership from 200 to more than 2,000 since 1996, and enhancing its
monthly purchase request attempts from 15,000 in January 1997 to more than
290,000 in January 1998. And in yet another testament to Autoweb.com's market
leadership, an astonishing eight percent of all car buyers in the United
States now visit Autoweb.com before making their purchase decision.
This impressive consumer response reflects a growing trend to choose
Autoweb.com when shopping for new and used vehicles. The process is easily
accessible to anyone online and represents a new direction in auto buying that
is gaining an irreversible momentum. According to a leading industry source,
four to five percent of all automotive sales are currently conducted through
online channels and that number grows monthly.
Autoweb.com's move to the forefront of the industry hasn't been
accidental.
The company is leading the industry in both the consumer and dealer
markets, in part, through various strategic partnerships and business
practices including affiliations with industry leaders such as Yahoo!, USA
Today, Barnett Bank, CBS Sportsline, C/NET's Search.com, Netscape
Communications, Infoseek, Lycos, and Car and Driver Online.
With the recent announcement of company plans to hire an additional
100 employees in 1998, Autoweb.com continues to focus attention on delivering
the best quality service in the industry -- a philosophy which is the
cornerstone of the company's success. Unique among online car buying
services, each purchase request is followed-up by a call from Autoweb.com
customer service staff to both the customer and member dealer to ensure a
smooth purchase transactions.
Founded in November 1994, Autoweb.com ( http://www.autoweb.com ) is the
leading online brand for new and used cars, where informed, motivated buyers
are put in touch with an exclusive network of the highest-ranking dealers in
the U.S. and Canada. Using Autoweb.com, consumers can inquire about car
availability and pricing, secure a loan, compare auto insurance rates, check
vehicle recall and service data, or advertise their used auto for sale.
For more information, contact Autoweb.com, 3270 Jay Street, Building 6,
Santa Clara, California 95054. Telephone: 408-970-9100, Fax: 408-777-9553,
Email: info@autoweb.com.
SOURCE Autoweb.com