September 2010, Auto Dealer Today - WebXclusive
eBay Motors Opened Dealers’ Eyes to Retail
Century Motors of South Florida is nothing short of a tropical paradise. Sitting on an acre-and-a-half, the lot is home to over 120 palm trees and several different species of plants and flowers. The compound, which is gated with concrete walls, also serves as a hurricane bunker. The building can withstand winds of up to 300 mph, and the windows and doors are good up to 180 mph.
Generally speaking, heated seats aren’t a popular option when purchasing a car in Florida. At Century Motors in Pompano Beach, Fla., Dealer Frank Fuzy said, “You can turn a heated seat on in South Florida … and it’s hard to tell if that heated seat gets warm.”
However, he buys vehicles with such options because his market reaches far beyond the subtropical climate of South Florida thanks to the worldwide popularity of eBay Motors. Heated seats are as important to the dealership’s customers from Alaska and Greenland as air-conditioners are to Floridians, which is why Fuzy has incorporated checking that they work properly into his pre-sale inspections.
Frank and his wife and co-owner, Gina Fuzy, haven’t always been retailing vehicles to faraway places. Their careers in the automotive business began on the wholesale side. Gina said, “We wholesaled for 19 years at Manheim Auto Auctions. We would run about 25 cars a week and then just stopped cold-turkey.”
“I was noticing buyers buying our cars and putting them on eBay, coming back the next week and buying [more],” she said. After a fellow wholesaler suggested they put their own cars on eBay, they decided to post their first car on eBay Motors in 2002, which sold immediately to a customer over 7,000 miles away.
Gina said, “It sold to a customer in Tokyo, Japan, and Frank said, ‘We’ll try this again,’ so we put five more on and they all sold. It just happened very suddenly. The more we put on, they would sell, so it just happened that we switched 100 percent to eBay Motors.” Running two businesses (a wholesale operation and a retail dealership that catered to customers worldwide) was “way too time-consuming.”
Many dealers think retailing across state lines is a headache, so retailing overseas (with even more rules and regulations) might be considered a migraine. However, to the Fuzys it’s just another part of their business. Frank said, “We have to match the department of revenue. We have to match sales tax of every state and country, so we’re up-to-date with our association and the regulations. We learned to export. We’ve shipped cars to … every country in the world just about, and yes, you need to know the rules, the regulations, and the paperwork.”
Turns out, the switch was worthwhile because, by 2002, the cost of wholesaling had significantly increased, and Frank said their auction and transport fees averaged $500 per vehicle when the couple left the wholesale business. Add that to what they spent to purchase and recondition the car, and their profit margin shrank considerably. He said, “We had to run close to 25 cars to make the same profit we used to make running five cars 19 years ago … With eBay, we can get the whole enchilada. We can keep the profits and offset the auction and transport fees … We can almost wholesale the car to the consumer for the same price that we used to sell at auction and keep more of the money.”
Frank and Gina Fuzy are two of the busiest in the business. The husband-and-wife team own and operate Century Motors with one other full-time employee and two part-time employees. They average 60 to 80 sales a month, and sell more than 100 cars some months.
Low retail prices aren’t the only things catching the eyes of potential buyers; the dealership posts 65 to 90 photos per vehicle so customers can feel comfortable buying a car without “kicking the tires.” Frank said, “We walk all points of the car, in and out … We’ll [photograph] the keys, the books, every tire, every rim.”
Additionally, the dealership offers a money-back guarantee on every car. Customers who fly into town and drive their purchase home have until they reach the state line, which is a seven-hour drive, to decide if the vehicle is not right for them. All other customers have the luxury of a 24-hour money-back guarantee. Additionally, all buyers who purchase a car from Century Motors on eBay are also backed by eBay’s guarantee. “If we don’t buy it back, eBay will buy it back,” said Frank, who added that in eight years, he’s only bought back one vehicle, which he promptly sold to another buyer who was 100-percent satisfied with the car.
Only the elite eBay sellers are covered by eBay’s guarantee. According to Frank, Century Motors (which sells on eBay Motors as Floridacars1) is one of four dealerships covered by eBay’s conditional guarantee out of the 15,000 dealers in the U.S. on eBay Motors. To be afforded such a compliment from eBay, the dealership, which is also a Top Seller (ranked ninth) on eBay Motors, Frank said, “You have to qualify. You have to sell X amount of cars and keep an excellent rating on your communication and item-as-described … [to] get the ability to do the [eBay] conditional guarantee.”
The dealership has indeed received several accolades on eBay Motors from customers. “We just rolled [over] 2,073 positive feedbacks. We keep a 100 percent rating, and every one of our feedbacks is on a car we’ve sold to a consumer. We’ve never bought an item on eBay on that account … To get that many positive feedbacks – over 2,073 – on used cars is a pretty powerful statement. This is what makes the eBayers buy a car without seeing the car,” said Frank.
In addition to the conditional guarantee eBay Motors awarded Century Motors, Frank and Gina have been invited to the last three eBay eCommerce events, and they fly an eBay flag (which isn’t easy to get) at their dealership. Frank said, “When we sold the 2 millionth car on eBay, they asked us, ‘Well what can we do for you?’ I said, ‘I want an eBay flag.’ And they went to their people … and they said no one can have an eBay flag unless you’re corporate … So they got permission from [former eBay CEO] Meg Whitman.
“So now in front of our building, we have the American flag, the Florida State flag and the only eBay flag in the nation … That includes renewals because with our wind down here, we get six months out of a flag, so I have unconditional refills of that order.” They were also flown to eBay headquarters in San Jose, Calif., and given a plaque signed by the entire eBay Motors division signifying the achievement of selling the 2 millionth vehicle.
The Fuzys, who have been in retail for eight years, opened a new facility two years ago that looks like a miniature Caesar's Palace. The new building features clouded ceilings, which you can catch a glimpse of in this photo of the customer game room that's stocked with a pool table, shuffle board, big-screen TV and couches, among other eye-catching toys and decor.
Given that the store sells 60 to 80 vehicles per month, one would guess the dealership employs at least 10 full-time employees, maybe more, but at Century Motors there are three full-time staffers (Frank, Gina and an Internet Manager). Frank joked, “Our hours are 9 [a.m.] to 9 [p.m.], nine days a week.” So how do they do it day-in and day-out? “We love what we do,” he said, adding that they also work hard, which may be an understatement.
The dealership also employs two part-timers. One is Gina’s father, who picks up customers at the airport. Gina estimated that 50 percent of their eBay buyers fly in and drive their car home, so her father stays pretty busy even as a part-time employee. The other part-time employee is a mechanic who does internal work on the dealership’s inventory. The dealership also sublets recon work out to a few local independent shops.
Even though most of the dealership’s business is conducted online or over the phone, which allows it to operate at full capacity with a relatively small staff, a staff of five is still small compared to other eBay Motors retailers of similar size. Gina said, “We’re kind of different than the other top 30 eBay Sellers, as our rep says … They’ve got 20 to 30 to 50 employees, and we’re doing it with a husband-and-wife team, Andy [the Internet manager] and my father, who is also our mentor from the car business.”
If they wanted to employ 20 or more employees, they would certainly have the space. Their new facility, which opened two years ago, looks like a miniature Caesar’s Palace on the grounds of a tropical resort. The building features black granite floors, clouded ceilings, glass balconies overlooking the indoor showroom (which is big enough to house 40 vehicles), a full kitchen, a customer lounge, a game room with a pool table, shuffle board, big-screen TV and couches, and a snazzy desk fashioned out of a ‘57 Chevrolet convertible, which also happens to be Frank’s desk.
The building sits on an acre-and-a-half compound with a lot that holds up to 100 vehicles and is surrounded with over 120 palm trees and several different types of flowers. Frank said, “We’re a little oasis that stands out … It’s just a tropical paradise when you come on the lot.” It was also built with Florida weather in mind. He said, “We built the place as a hurricane bunker. Our building is 300-mile[-an-hour-]wind rated. The windows and doors are good for 180 [mph winds]. We poured a concrete wall around the place; nobody could drive through it … We have electric gates in the front.” He likened it to Fort Knox when locked down. It’s also self-sufficient if needed. “We have a huge generator with a 1,000-gallon propane tank. We can run five days with no power, and all the workshop equipment will still function, plus everything in the showroom.”
The new building also features black granite floors, glass balconies overlooking the indoor showroom (which is big enough to house 40 vehicles), a full kitchen, and a snazzy desk fashioned out of a '57 Chevrolet convertible, which also happens to be Frank's desk.
Since the Fuzys opened the beautiful, robust new retail facility, foot traffic has increased, but not enough to warrant hiring another full-time employee (like a finance manager) yet. Currently, most of their customers (about 70 percent) either wire money or pay with a cashier’s check. The remaining 30 percent finance vehicles, but many of them go through their own bank or credit union. The dealership does help some customers facilitate financing, but not enough to warrant an F&I department.
Clearly, the Fuzys are picky about what they put on their lot—whether you’re talking about foliage or inventory. Frank hand-picks vehicles one-by-one and looks for eye-catching, low-mileage, “cream-puff” cars. Even still, the dealership averages $800 per vehicle on reconditioning to make sure the vehicles have that wow factor when customers look at them, whether via photos online or in person. He said, “All the cars are manicured perfectly [and] mechanically sound.”
As far as what the inventory consists of, it’s “a little bit of everything.” Frank explained, “We have a variety … We diversify from a $3,000 car to a $50,000 car … Inventory is like going fishing. If you’re using all shrimp and they’re biting on ballyhoo, you better have some ballyhoo … we like to have the different baits out, like fishing.” Several of his customers want “that affordable, clean, $6,000-to-$10,000 car with low mileage,” which does “amazing” at their store. “That seems to be the price range for people in-between a new [vehicle] or a cheap clunker.”
And the Fuzys might have discovered a new market for their diverse inventory—AutoTrader.com. While a 60- to 80-car month is normal, in March 2010 – the first month the dealership had its cars on AutoTrader.com – it sold a record 103 vehicles. “That’s what generated 25 to 30 percent of our car sales in that record month, so we’re loving it,” said Frank. He noted that the AutoTrader.com buyers seem to want to come in and kick the tires more than eBay buyers. And that’s perfectly fine, considering the Fuzys have such a nice locale to visit.
Vol. 7, Issue 7