Will the Dot Coms Survive? - Brief Article

Host of NET GAIN: Success on the Internet

"It was the best of times. It was the worst of times."

This opening sentence from Charles Dicken's "A Tale of Two Cities" perfectly describes what many dot.com companies experienced in 2000. Remember the flood of dot.com commercials during the Super Bowl. Remember all the dot.com booths (and promises) at NADA last year? At the beginning of the year many dot.coms claimed they were flying high and success was guaranteed. In reality, as we now know, many were just whistling in the graveyard. Today, many of those same companies are either financially crippled or just plain out of business. Remember that cute puppet on the Pets.com commercials? He is looking for work since Pets.com went broke, and he is not alone, over 78,000 people lost their jobs in the dot.com sector in 2000.

The news has been just as grim for third party lead providers. Stock prices for Autobytel and Autoweb are in the low single digits and both are looking for cash. CarsDirect and Autoweb have laid off employees to save millions. Priceline.com cut its direct sale automotive division in half and Maryann Keller resigned. Others, like CarOrders.com, tried the direct selling sales model, and lost so much money in 2000, they had no choice but to throw in the towel.

Why is this Happening?

* They can't turn a profit

* Venture capitol is drying up

* Stocks have lost their glitter

* Flawed business models

Why should You Be Involved the Internet?

Despite the death rattle coming from many dot.coms, don't make the assumption that the Internet is a fad and your dealership can ignore it. Forget direct sales -- it comprises less than five percent of all new sales. The percentage you need to be concerned with is 65%. Current surveys say 65% of all car shoppers are getting in-depth vehicle and pricing information from the Internet and your web page before contacting your dealership or walking onto the showroom floor. 65%! A number that is only expected to rise in coming months ... not years ... months. Shouldn't your dealership's web site have the information and the interactive ease-of-use customers expect in the car buying process? You are not going to allow these customers to be sniped by your competition, are you? It's time to face the stats, if you cannot provide the information these shoppers are looking for, then someone else will!

Relationship Revolution

The truth of the matter is the Internet is only a tool. A tool that allows customers and dealerships to form relationships based on lots of information quickly changing hands. There is no reason to believe that it will be more easily accomplished by manufactures than dealers. It is the traditional role of dealers to have relationships with customers. The Internet will make it faster and easier. This is where the tool called the Internet will revolutionize the automotive industry. Are you ready?

Dealerships Sound Off about Internet Challenges

It's extremely important for one person to stay on top of what is happening in the industry. I think a year ago dealers were really trying to figure out how they were going to respond to the Internet. Then the spotlight was on all the lead generators. Now, more and more, dealers want to take hold of the Internet process. There are many CRM packages that link back to dealer web sites. Let's face it, dealer web sites are the ones that drive numbers. There is a growing awareness among dealers that they are in charge of the Internet and the Internet customers. It is time for us to take control. That's why we must continually learn how to use the Internet more effectively.

Adam Lee, President Lee Toyota

I don't think the Internet is going to sell one more car than they would naturally. What is going to happen is there is going to be a shift and dealerships who do a butter job at selling cars over the Internet are going to pick up incremental sales that dealerships who don't as good a job are going to lose. We want to keep learning how to do a better job

Greg Machado, Machado Motors

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