CommentaryJul 2nd, 2020

The Real Value of Third Parties in Automotive


I’ve heard third-party listing sites described as a necessary evil in automotive. They provide valuable information to consumers and valuable leads to dealerships but many argue that these connections should happen without the third-party and their additional cost to dealers. 

Everyone is right here: some organic customer/dealer connections do happen, but I believe the real value of third-party vendors is the connections that would not have happened without them. 

You’ve heard me say it before and I’ll say it again: it can be hard to step into the shoes of our customers because we know so much about our industry. But consumers favor third-parties channels because they provide information consumers want that is difficult to find or nonexistent on dealer websites today. (PS: If you want to address this problem, check out this article on how experience in automotive hinders our ability to create an ideal consumer website.) These include a marketplace of consolidated inventory from almost every dealer in the region, independent, validated reviews about the dealership, upfront pricing, vehicle features, and even validated pricing. CarGurus offers a marketplace intelligence tool that guides the consumer towards great values. TrueCar’s price curve offers market-based peer pricing for the vehicle you’re considering. By making it easier to shop across a broad network of normalized dealer inventory, these services add tremendous value to consumers.

And in today’s climate, these third-party listing sites provide even more value to dealers today. The majority of consumers are limited to shopping from their homes so we are anticipating people spending more time researching and comparing their options online than they have in the past. This means aggregators will become a more essential part of the buyer journey as consumers shop your showroom from home. And without the limitation of dealership location, consumers who may not know about your store and therefore don’t think to check your individual dealership website will likely find themselves browsing your inventory on an aggregator as they research their new vehicle purchase. (More thoughts on shopping from home with the help of third-party listing sites here.)

If we look at non-automotive digital retailing journeys, third-party listing sites like Amazon and Walmart are leaders in eCommerce. Their value proposition to both consumer and seller (dealer) is near identical to the third-party listing sites as is their billing model. When looking at another industry, it’s easy to see how valuable these vendors are in the buying cycle. I personally can’t remember what online shopping was like before third-party listings were available. 

Authored by

Andrew Gordon

Curated, quality insights?
Content worth the click