From the Publisher

In 2002, 300,000 vehicles with a total value of $3 billion were sold — on one Web site. Is it any surprise the site is eBay? For buyers, sellers, dealers, and parts and accessories vendors, there's simply no other marketplace to match the huge selection, broad exposure, and ease of use that are eBay's hallmarks. eBay Motors the Smart Way offers sellers and dealers:

• strategies for setting and getting top price for any vehicle
• techniques for creating attention-grabbing auction ads
• new ways to add value with superior customer service
• valuable tips for using auction management services and other time-saving resources
• proven methods for maximizing reputation

Also a valuable tool for buyers, the book shows how to:

• determine a vehicle's value
• how find great deals and bargains
• arrange an inspection and run a "lemon check"
• secure financing for an online vehicle purchase

eBay Motors the Smart Way offers valuable information for all readers on how to avoid fraud and scams, how to properly document your transactions, and how to conform to state vehicle laws — even when transacting business over state lines.

From Mazerati to MoPed, Acura to Zamboni, if it runs on a motor, it'll take off on eBay!

Author Biography: Joseph T. Sinclair (Vallejo, CA) is the author of eBay Business the Smart Way and eBay the Smart Way. Don Spillane (North Haven, CT) has successfully sold vehicles and collectibles on eBay, and has been recognized as one of the site's highest-volume sellers.

Product Details

• Table of Contents
• Read a Sample Chapter

Table of Contents

Read a Sample Chapter

eBay Motors the Smart Way

AMACOM Books

Chapter One

Whether you're a buyer, seller, or dealer, eBay Motors is an exciting new marketplace for vehicles where you can save money and make money. Save money and make money? How can both happen at the same time in the same marketplace? Well, that's one of the great benefits of a large national marketplace. Everyone, whether buyer or seller, can do well financially or realize greater efficiency. But let's put that thought on hold for a minute while we review the numbers on eBay Motors.

In 2002 eBay members sold 300,000 vehicles on eBay Motors worth $3 billion. About 75 percent of those transactions took place across state lines. In 2003 eBay members sold about twice as many vehicles as in 2002 on eBay Motors, and in the fourth quarter of the year eBay Motors had annualized vehicle sales of $7.5 billion. So you can see that this is not a trivial market, and the information that follows is not theory. eBay works for both buyers and sellers.

Otherwise Successful

eBay, not just eBay Motors, is quite successful too. At the end of 2003, eBay had 95 million registered members and sales of $24 billion. In mid 2003 eBay had 16 million items for sale everyday and 27,000 categories of goods.

In the Second Edition of eBay the Smart Way in 2001 I said, "I'm bullish about eBay Motors. It will evolve into a dynamic vehicle marketplace over the next few years and gain a significant market share at the expense of local classifieds. It's doing well already." The figures now show that there was something to this prediction.

National Marketplace

Getting back to exploring the idea of a large national marketplace, let's look first at local markets. Local markets don't operate very efficiently. They're not large enough. For instance, you will pay more for a used car in Grand Junction, Colorado, than you will in Denver, Colorado. Grand Junction is simply a smaller city than Denver, about one-tenth the size. The number of cars available for sale in Grand Junction is smaller, and the dealers are fewer. The competition is less. Then too, there are fewer buyers, and they have fewer choices.

The cars being sold are likely to stay on the lot longer, overhead is therefore higher, and dealer confidence for turning over inventory quickly is likely not as high in Grand Junction as it is in Denver. Dealer sales efficiency is likely to be less, and the cost of operating (per vehicle for sale) is likely to be higher in Grand Junction. This translates into higher prices in Grand Junction than in Denver.

General Statement

The statement about Grand Junction is a general statement based on population size and does not pertain to any specific dealership in Grand Junction.

In Grand Junction the higher prices for used cars clearly don't benefit buyers. But do they benefit dealers? The answer is "No." The dealers don't operate as efficiently as they could in a larger marketplace. They have to get higher prices to make a normal business profit.

Note that local dealers constitute the local marketplace for used vehicles. Although it's true that the classified ad section of the local newspaper has traditionally been another marketplace where individuals can buy and sell vehicles, typically it does not have nearly the volume of the marketplace made by local dealers. Being smaller, the classified ad marketplace is less efficient than the local dealer marketplace. Prices will tend to reflect the local dealer marketplace rather than a separate price structure.

Now, make the jump from the Denver used vehicle market to the national used vehicle marketplace. The national marketplace offers even lower prices to buyers but greater efficiencies to dealers. But how can you make that jump? There's no large national marketplace for used vehicles, is there? Well, there wasn't a large national marketplace for used vehicles until the Internet set the stage for one. But now it's there, and eBay Motors is the leader.

For instance, check the number of Chevrolet Camaros for sale in your locale. The number on eBay Motors each week is well over 400. Check the number of Cadillac DeVilles for sale locally. The number on eBay is well over 200 each week. No local market can match these numbers. This shows that the national marketplace is huge. A huge marketplace breeds competition and results in efficiencies. Both buyers and sellers get benefits from larger marketplaces. And eBay Motors is now the largest used car marketplace in the US.

Does it make sense to buy a used car in Chicago when you live in Denver? It does depending on what you're looking for. The market in large cities tends to be a little thin when you're looking for something specific. There are so many brands, so many models.

For instance, if you're looking for a used, midsize sedan, 1998-2000 model, in good condition in Denver, you won't have any trouble finding one. However, if instead you're looking for a used Ford Taurus, 2000 model, with leather seats, in great condition, you might have some trouble finding one in Denver. Although the Taurus is a popular car and Denver is a large market, the lean pickings for your choice seem a little surprising. So, for cars, eBay with its national marketplace can work magic for you.

Indeed, eBay is a perfectly logical place to buy or sell cars. If you buy a car and live within 1,000 miles of the seller, you can hop on an airplane for less than $200 and drive the car home in a weekend. If you live 3,000 miles away, you can have the car shipped for under $900. If your prospective purchase is a good deal even after factoring in the cost of delivery from a distant city and if the car is exactly what you want, why not buy it on eBay?

And, as a seller, you can potentially generate more interest in a vehicle in the national market. eBay provides a cost-effective means of reaching that market.

Indeed, eBay brings the national market to Grand Junction putting people in Grand Junction on a par with people in Denver or anywhere else.

Local Market

Even if you don't like the idea of a national market being a good place to buy or sell a used vehicle, don't forget eBay reaches local and regional markets as well.

Used Vehicles

In the 1980s, car dealers sold three new vehicles for every used vehicle sold. Today for many dealers the reverse is true. They sell three used vehicles for every new vehicle sold. The used vehicle market has become a primary business. One reason is that vehicles have become so expensive. Another reason is the higher quality of today's vehicles. They last longer, and there is less risk purchasing a used vehicle. Still another reason is that the model changes are further apart. Often you can purchase a four-year-old vehicle that looks exactly like a brand new one. The used vehicle market as a primary business looks like it's here to stay. Used vehicles can be a good deal and make a sensible purchase. (Read Chapter 3 for some numbers that show how the cost of ownership per mile of used vehicles compares to the cost of ownership per mile of new vehicles.)

Leased Vehicles

Today many people lease vehicles, typically for two or three years. Consequently, many used vehicles come off leases into the used vehicle market reasonably new and in good condition with low mileage. This fuels used vehicle sales making the used car market even more attractive.

This book is about used vehicles. Few new vehicles are sold via eBay. But today eBay is the leading national marketplace for used vehicles, a fact supported by the sales statistics cited earlier. And the used vehicle market is now the primary vehicle marketplace. In other words, your best bet on finding a vehicle that you want at a price you can afford is to shop on eBay Motors.

For Buyers and Sellers

For buyers and sellers this book:

* Fills in the details for the ideas discussed in this introduction.

* Provides you with a general working knowledge of the used-vehicle marketplace.

* Gives you the knowledge you need to be financially successful on eBay Motors.

* Assists you in protecting yourself.

* Shows you how to reduce the risk of purchasing a lemon (buyers).

* Shows you how to promote your vehicle successfully (sellers).

* Provides you with a sound basis for doing business on eBay Motors (dealers).

Indeed, we believe you can buy or sell a vehicle as safely and effectively on eBayMotors as you can locally with less trouble and less expense.

Auction?

As you will read, this book discusses negotiation between buyers and sellers quite a bit. Why is that? Aren't auctions suppose to decide the sale price? What's there to negotiate?

First, the vehicle and its price are just one part of the purchase package. In addition, there are financing, insurance, warranties, delivery, inspectons, and transaction costs that are seldom included in the auction. They are all things up for negotiation. For example, if the seller is a dealer, that dealer might provide some of the things mentioned for a negotiated price.

Second, many of the sellers on eBay Motors are dealers. Many of the transactions resulting from eBay Motors auctions, it appears, never go to the completion of an auction. Thus, everything, including the vehicle sales price, is negotiated between the buyer and the dealer.

As a consequence, this book covers dealer-buyer transactions as if they were negotiations rather than auctions. This will move many eBay members out of their eBay comfort zone. But negotiation is the reality in many transactions resulting from eBay Motors.

The Other Side of the Motors Story

Cars and trucks are the major components of the eBay motor vehicle marketplace. But they are not the only motor vehicles, and generally what we say about cars and trucks applies to other kinds of vehicles too. Boats, ATVs (all terrain vehicles), motorcycles, and RVs (recreational vehicles) all have their unique resources, but buying and selling them is not much different than buying or selling a car.

The marketplace principles are the same. For all motor vehicles a national marketplace is often better for both buyers and sellers than a local marketplace. Determining value is a prime consideration for either buying or selling. Financing is needed in many cases. Insurance is always important to motor vehicle ownership. Transportation from the seller to the buyer is often a problem in a national marketplace. Negotiation principles are the same for motor vehicles as for other items. eBay techniques are much the same whether you're selling a camera, a car, or an RV.

Perhaps the one process that differs significantly is closing a transaction. For cars, trucks, motorcycles, and RVs you have 50 different states with 50 different sets of commercial laws and 50 different licensing laws. We don't pretend to provide specific guidance to adequately cover all the states for you. Fortunately, there is a lot of similarity for such vehicles. When it comes to boats, ATVs, and other such vehicles, however, there is less similarity between the states, and it's up to you to be alert and inquire in your state as to the proper procedures and proper paperwork needed to make a transfer.

The authors don't pretend to be experts on anything except cars and trucks. But because eBay Motors encompasses other motor vehicles, Chapter 22 provides resources for obtaining information and data that will help you make good decisions whether buying or selling. Perhaps someday eBay will be so big as to warrant specialized individual books on selling boats, ATVs, motorcycles, and RVs. Until then, we believe you will do well to use this book with its focus on cars and trucks as a general guideline for your buying and selling activities on eBay for other kinds of motor vehicles.

eBay Basics

This is a specialized eBay book. It doesn't cover the eBay basics. For the basics we recommend eBay the Smart Way Third Edition or a similar book. To learn the basics for operating a business on eBay we recommend eBay Business the Smart Way or a similar book. eBay Motors the Smart Way assumes that you have used eBay and are confident in your basic eBay skills. Moreover, it assumes that you are confident that eBay is a safe place to buy and sell almost any type of goods including motor vehicles. If you don't yet have the necessary skills and confidence, you will probably not get the most out of this book.

eBay is not a passing fad. It is the first great institutional marketplace of the new digital age. It couldn't have-and didn't-exist before the Internet. But the Internet is here to stay. And so is eBay. Consequently, it's to your benefit to learn the basics and develop the confidence to use eBay whether it's for your everyday buying and selling activities or for buying or selling a motor vehicle.

(Continues...)

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Excerpted from eBay Motors the Smart Way by Joseph T. Sinclair Copyright © 2004 by Joseph T. Sinclair. Excerpted by permission.
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