Thu, 12/19/2013 – 02:00 | AUSTIN, Texas
By Auto Remarketing Editor Joe Overby
Vehicle shipping is not a “deal-killer” in auto sales. Rather, as uShip’s Dean Xeros suggests, it can actually serve as a “deal-closer.”
That’s the crux of how a relatively new product from the company called uShip PRO can help dealers turn vehicle transport into an opportunity.
“Over the years, dealers have viewed shipping as more of a deal-killer. And we feel that given the emerging trends of out-of-market buyers looking at buying cars at a distance and dealers being forced to outside the comfort zone to acquire cars from auctions or other dealers, shipping really is not a deal-killer, but it’s a deal-closer,” said Xeros, uShip’s vice president and general manager for motors and relocation.
“So, when we get into that next level down, how can we help dealers?” he added. “Well, we can help them in one respect by expanding their selling radius, and we can also help them by expanding their buying radius.”
What uShip PRO provides is a verified, private carrier network competing for their business, allowing them to move beyond their local or regional comfort zones and expand their buying and selling radiuses.
In an interview with Auto Remarketing, Xeros gave a detailed breakdown of how uShip PRO accomplishes these tasks, beginning with the expansion of the selling radius.
uShip has discovered in conversations with dealers is that stores often have out-of-market buyers and the consumer buying the car needs to have the car shipped.
So, for the dealers, the concept of having a tool on their websites that allows the consumer to not only look at the vehicle but also determine shipping costs (giving a clear picture as to what it’s going to take to acquire the car) is something that sounded like a smart move.
And, as Xeros put it, uShip throws this into the mix as well: whenever an out-of-area buyer purchases a car from the dealer and ships via uShip, the company cuts the dealer a check on a revenue-sharing basis.
uShip explains that the dealer commission goes into effect when any car buyer uses the uShip shipping price estimator on the dealer’s site and then finishes the shipment on uShip. The estimator has a unique affiliate code attached and thus the dealer gets the credit.
“It’s very seamless, it’s easy,” Xeros said of the overall process. “When someone is shopping at 2 o’clock in the morning looking at (the dealer’s) site, they’re going to be able to get access to all this information. The dealer is not even involved in shipping.
“Now you can sell anywhere in the world, quite frankly. Our solution is a global platform,” he added. “There’s a growing trend of buyers in Russia buying U.S. cars. Our platform will help support the movement of that vehicle. So it’s not just a domestic play.”
Adding additional perspective on how export demand could increase, Xeros explained that when the U.S. dollar diminished in value, there was a “pretty strong movement” of vehicles being exported into Canada. That has “tapered a little bit,” but there has been some solid movement into overseas markets into places like Germany, Russia and the Middle East.
Another area where the export demand has begun to move forward is Africa, particularly Nigeria and surrounding areas, Xeros said, where there is “pent-up demand” for cars from the U.S. given the vehicle quality.
What’s more, increased construction and development in that area of the world has driven work-related vehicles like pickups and SUVs, he noted.
Such global movements are behind why uShip — which already operates in 19 countries — is “not not only further solidifying our domestic footprint from a platform standpoint” but also aiming connect continents and foster transcontinental movement.
Expand the Buying Radius
Another big piece of the pie surrounding uShip PRO is the ability for dealers to expand their buying radiuses.
About a year ago, Xeros had the chance to host a breakout session at a conference with a group of dealers. They had an “eye-opening discussion” about how they shipped vehicles and how involved they got with the process.
“For the most part, the only time they really dealt with shipping was when they bought cars at auction,” Xeros said.
In fact, he asked the dealers if they checked to make sure if carriers have proper authority, and “not many of them did.” As for the carriers having the proper insurance? No one had thought about it, he said.
What this brought to mind for Xeros is that uShip had the chance to “not only create some significant efficiencies for these dealers, but also to help protect from a liability standpoint and really try to create some assistance in helping them better manage their transportation needs,” he said.
So, for the dealer that has had to expand their auction search area for vehicles due to lower supply in recent years, that’s where uShip PRO comes into play.
Essentially, the company offers a “solution that will allow you to basically buy from any auction anywhere, with you not having to think twice about what it’s going to cost to get it here, how am I going to figure out who to ship it with,” Xeros said.
“And that’s where we can come to market with our commercial version of our uShip platform called uShip PRO,” he added.
He boiled it down like this.
The dealer has a group of carriers on uShip in a closed private network. Each of the carriers has been vetted for proper authority, proper insurance and the vast array of credentials like safety scores to which uShip has access. When the dealer has to transport the vehicle from the auction to his or her dealership, they can place it in the private network where only invited carriers can see the loads.
Dealers have the choice to ship the load either through fixed-price rates or go through the auctions format. The company’s fixed-price format can be where a service provider posts a published rate or the shipping customer uses a name-your-price tool.
The auction format can drive the shipping cost down, but it often takes longer than the fixed-price format.
“So they’ve got an opportunity to easily manage their transportation, significantly minimize their liability and allow them to now buy more cars from a greater distance,” Xeros said.
And, what’s more, it gives dealers the chance to get higher quality vehicles for their lots.
Furthermore, even with improving used-car supply, uShip PRO aims to help dealers cast a wider net and get right cars for right price.
“I think they still would be motivated to find the right car at the right price; they just have a lot more that they can pick from,” Xeros said.
He gave the example of dealer in Texas who just buys from Texas auctions and has been working with the same one carrier since 1984.
Xeros said the dealer told him, “I really like this solution because I really want to keep him honest. Yeah, I’ve been doing business with him for so long, but it’d be nice to know that there’s a little bit of competition in there.”
Xeros went on to add: “So here’s a guy that may or may not expand his radius, but he sees an opportunity to improve what he’s doing today, because the less money they’ve got in a car coming in from auction, the more margin obviously they’re going to have once they do sell that vehicle.”
Dealers looking to learn more about uShip for either buying or selling can visit www.uship.com/autodealer, where they can provide an email for follow-up from uShip.
For the original article, visit here