Although they were considerably fewer in number this year, the third-party dot-com companies still had plenty to say at the NADA convention in Las Vegas.
From announcements of new products to strong statements responding to their many critics, the Internet companies still standing show they have plenty of fight left.
Here are some examples:
Mark Lorimer opened Autobytel.com's NADA press conference with some strong words for critics of third-party web sites.
Mr. Lorimer, after acknowledging NADA's “long and glorious history of protecting” its dealers, says NADA is performing a “bizarre disservice for its members” when it advises them to stay away from the third-party web sites.
The Autobytel president also challenges the media to enact some skepticism in discerning the difference between hype and fact when writing about the dot-com companies' alleged death.
“Three out of four customers prefer using an independent, third-party multi-brand online buying service when shopping for a vehicle,” claims Mr. Lorimer.
With more than 5,000 dealers using Autobytel, the third-party sites will play a role, he asserts.
“Even if the third-party companies account for only 5% of the industry, that is still a significant amount of traffic we're driving to the dealership,” he argues.
Responding to charges of Autobytel's shaky cash position, Mr. Lorimer says the company has $125 million in assets and $81.9 million in cash and will be profitable by the third quarter of 2001.
Mr. Lorimer expects the profitability will come from building brand equity, increased consumer confidence in Autobytel along with additional products being launched, such as the iManager.
That's an e-commerce integration system that consolidates dealers' tracking and reporting systems.
InvoiceDealers.com CEO Jon Christensen offers a theory on “why we're not going to go out of business” but the other guys might.
His two-year-old company has been profitable lately because its philosophy is to think small.
“With the advent of Internet companies, virtually all the business models were to raise a lot of money and dominate,” says Mr. Christensen. “They went in with guns blazing.”
That was seen as threatening, or at the very least irritating, he says.
Conversely, InvoiceDealers has raised modest amounts of money, and “we're not trying to change the face of the auto industry,” says Mr. Christensen.
He adds, “But, man, sometimes it seems like we're getting lumped in with everyone else. It seems like there's a total stigma being a dot-com.”
Says founder Greg Baszucki, “One of our sales guys has taken to saying, ‘I'm from InvoiceDealer,’ leaving out the dot-com part.”
InvoiceDealers started with $150,000 raised from family and friends. Its revenues are now $4 million a year.
Mark Campbell, chairman and CEO for StoneAge.com, says his company is different from the other dot-coms.
Mr. Campbell says StoneAge.com is one of the few dot-coms that have actually turned a profit — having done so for the last three years. Unlike many of the other online companies who turned toward investment capital to survive, StoneAge built its business one step at a time, he says.
Adds Bud LaCombe, StoneAge COO, “We're profitable because our customer acquisition cost is low compared to the companies who put together extensive portal deals and spent lots of money building their brands.”
The company started in 1996 as an online used-car classified service. Now It's a full service Internet company providing lead referrals, designing web pages and, since July 2000, providing financing for car buyers.
Its AutoTurndowns.com service assists dealers in obtaining financing for sub-prime candidates. StoneAge.com restructures deals for the sub-prime candidates allowing them to purchase a vehicle. Mr. LaCombe estimates the program saves as many as five car sales a month for the dealer.