GM’s eBay experiment fails, too many cheapskates online

People who shop online typically have an expectation that they’ll find a good price. eBay especially draws that reputation for many goods because of the competitive seller landscape it encourages. In GM’s case, eBay provided another tool for buyers to negotiate a better price with dealers because they could easily compare prices and make offers with little effort.

The eBay platform also eliminated the pressure that accommodates face-to-face negotiating where a sales person can pull tricks like checking in with a boss to see if certain concessions are possible. GM did create some buzz and traffic online because if it.

A section of eBay specific to the program attracted 1.5 million visits and 15,000 customer leads according to The Wall Street Journal. GM is reeling from another month of bad sales in August following the high caused by the Cash for Clunkers program.

While parts of GM’s new strategy seem to mimic the likes of Toyota with the superstar green Prius brand, the company is also experimenting in other ways to draw customer attention. Of course, simplifying the sales process is something GM did with the Saturn brand and now most signs point toward Saturn decommissioning soon, especially after the deal with Penske souring.

Usually experimenting with a new sales medium introduces some hurdles, and this is no exception. As an example, one potential eBay buyer submitted a $2,500 offer for a $40,000 vehicle. Sounds like that individual hasn’t ever heard of a “maximum plausible position” in negotiating.

Reactions from GM dealers were mixed, with some feeling aggravated with the ridiculous price offers, and others wanting to extend the program. GM hasn’t committed to trying eBay again, but with some tweaks to their online storefront they could see more qualified leads.

One glaring omission from the typical eBay process? Buyers couldn’t bid against one another. They could only send an offer to a dealer. The bidding process typically drives up price and provides a good idea of what the market is willing to pay. Of course, GM’s decision to take that part out points toward a discomfort with the current state of the economy and how wide drivers are willing to open their wallets.