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Rewiring Auto Motives

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Selling cars has always been a commission-based business that encourages the salesperson to strip the customer's wallet. Pete Ellis, founder of the Internet's first and biggest Web-based automotive site, hated traditional car dealerships with salespeople waiting to jump on the next customer who walked in the door. Ellis's vision of a new way of selling cars is actually changing the auto industry.

Ellis's business, Auto-By-Tel (ABT), in Irvine, Calif., uses the Web as a referral service to introduce highly qualified prospects to a national network of dealers that have signed exclusive contracts with ABT. Ellis makes money, not by taking commissions on the cars bought by ABT users, but by charging dealers for access to those buyers. In return, dealers get more sales, lower transaction costs -- as much as 75% lower than the cost of a traditional "walk-in" sale -- and lower advertising costs. The Web leads are motivated, highly educated people who know what they want. The pressure is off the salespeople, too, which makes everybody happier when the deal is done.

Copyright 1998 G+J USA Publishing




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