Inventory is king in the mass-market auto sales business. For Make It Easy Autos LLC, auto inventory has been its holy grail.
The brainchild of a former TV advertising salesman,
MakeItEasyAutos.com is a car shopping website a couple years in the making and a few thousand cars short of key volume targets.
“Everybody wants more cars,” says Nick Penka, the KOLR-10 sales veteran who now pitches the website to all dealers who will listen.
With business partners Kevin Grinder and Lonnie Ezell developing the site, and seed money from investor Eric Ecker, MakeItEasyAutos.com has 18 months of live activity under its belt.
Penka says the model is akin to AutoTrader.com and Cars.com but without a fee for each vehicle listed. Dealers pay a negotiated entry fee, usually starting at $650 to get their inventory on the site, and pay $375 per vehicle when sales close.
Penka says the partners wanted to remove as many barriers to entry as possible.
“We said when we started we created a little boat and pushed it out in the ocean with all the sharks,” Penka says.
Its big splash was running a $6,000 regional TV spot during last year’s Super Bowl.
“It was our way of saying, ‘Check us out.’ From that ad, we had 350 people getting on there for the first time within 30 minutes or so,” Penka says.
Drive buysGlenn Romines of Romines Motor Co. Inc. in Houston, Mo., was the first dealer to jump on board. He actually helped Penka formulate the idea after their TV sales relationship turned into a friendship.
A third-generation Ford dealer, Romines recognized a couple of years ago he was losing buyers from his hometown to other markets within driving distance.
“On the Internet, there are people who live close to you who may never know you had that vehicle,” Romines says. “I might have it right here in town, and they might go to Springfield to buy it.”
Penka listened to Romines’ story and, after leaving KOLR in early 2012, organized Make It Easy Autos LLC to give smaller dealerships a way to compete with the national, more costly online search sites.
For Romines, his roughly $10,000 monthly marketing budget through Ford isn’t enough for the national sites.
“It’s very expensive to pay for that by the month. My volume’s not there,” he says of his 100-car lot, noting Ford requires dealers spend half of the marketing dollars in the digital space. “I’ve got to figure out a way my numbers, compared to Friendly Ford’s number, can be effective.”
Make It Easy Autos currently works with 36 local dealers, and Penka says he’s added about 10 dealers the last month and has another 15 waiting to get inventory loaded.
A selling point is the minimal risk, he says, but the inventory volume remains a downside.
“Dealers are in a risky business. They are all about lowering the risk for their return on investment,” he says. “We take all the risk from the dealer. If I don’t sell a car for them, it didn’t cost them.”
Dealers in the mix are in the Springfield, St. Louis, Kansas City, Joplin, Rolla and Fayetteville, Ark., markets and have a wide range of cars on hand – from 25 vehicles to 1,200.
Numbers gamesNow, Penka and partners are playing the numbers games.
More dealers on board leads to more cars in the inventory, which equals more consumers online.
At launch in January 2013, MakeItEasyAutos.com had an inventory of about 14,000 vehicles. The goal next year is to offer as many as 45,000 vehicles, and Penka says a third revision of the website is underway to handle the more robust database.
On the consumer side, shoppers must register to the site to conduct full searches, but he says their identities are protected from dealers until they’re ready to look at a car. The site is designed to begin searches based on a monthly budget, then narrowed by make, model and geographic location.
“They are starving for knowledge,” Penka says, pointing to an industry statistic that consumers visit nearly nine auto websites before visiting a dealer for a test drive. “They jump from website to website searching for a type of vehicle and when they find it, they compare it to others.”
The market is indeed active. Seven of this year’s Top 10 car search engines collect monthly unique visitors in the multimillions – from Motor Trend’s 2 million monthly visitors to market leader AutoTrader’s 8 million, according to Compete.com.
With MakeItEasyAutos.com’s 15,000-20,000 unique visitors each month, Penka says site analytics have indicated only 4-5 percent of them connect with dealers, and dealers had conversion rates of 20-30 percent. The numbers have caused the partners to cast a wider net.
They changed their approach to go after larger markets and multistate dealers late last year.
“In order to grow this product, we need to get dealers on outside of this area,” says Penka, who is hitting the interstates each week and spent last week pitching dealers in Little Rock, Ark.
The goal is to build a network of 50-75 dealers in the larger markets and outfit each with a sales staff. He says recently signed auto groups in St. Louis and Kansas City, are Legends Toyota and Honda, Northtowne Auto Group and Frank Leta Honda.
In the first year, nearly 40 cars were sold through connecting consumers to such local dealers as Pinegar, Youngblood, Mayse and Springfield Imports.
“We knew it was going to be hard,” Penka says. “We have a three-year plan that we are working toward. There’s still a lot of work to do, and it involves a lot of headaches, like anything else.”
Given the initial $150,000 investment isn’t expected to last into completion of the three-year plan, Penka is actively seeking a national investor. The targeted amount is at least $1 million to grow the brand throughout the Midwest.
“You have one shot to do it,” he says.
