One-Price Selling

How do you buy a new Fiat 500 through Amazon? If you live in Italy it works like this.

1. Find the Fiat vehicle you like on Amazon.it. You’ll see that Fiat models have upfront prices at very attractive discounts.
2. Purchase the “Welcome Kit” for around EUR 180. This includes the dealer’s offer code for picking up the car at the posted price, a brochure, and a hat. The Welcome Kit is calculated into the final price and appears to be a small down-payment committing the customer to the transaction.
3. The Amazon Call Center then contacts the shopper and coordinates an appointment at the Fiat dealer of the customer’s choice.
4. The customer makes an appointment to visit the dealer, complete paperwork and take delivery.

Amazon/FCA and the participating Fiat dealers are offering upfront pricing and a convenient way to select and take delivery of a new vehicle. Amazon is reducing the friction in the transaction so that committing to purchase a car can be done with one-click.

US dealers should consider adopting an Upfront Pricing business model to eliminate the friction introduced by negotiation. Can you imagine Amazon engaging in online negotiation? Of course not. Amazon wants the shortest line between desire and purchase and they work tirelessly to eliminate any “speed bumps” in the online purchase process.

Ryan Adams Group guides dealers who are converting to Upfront Pricing so they can compete by providing a more transparent, customer-friendly way of selling cars.

Read a review (translated to English) from an Italian customer who purchased his new Fiat through Amazon.

 

5 of 5 stars A beautiful experience

DaMattia Sanfilippoil 3 December 2016

Color: White | Verified Purchase

EDIT 05/01/17: On January 3 I retired my 500! I added a photo to the review.

-I decided to buy the 500 Lounge version via Amazon because the offer was really convenient. So I took the first step and bought the Welcome Kit at 180 €. With my first subscription, the package arrived the next day. The package consists of:

– New Fiat 500 catalog (very eye-catching and well-kept in details)

– Red cap with FIAT logo

– Coupons to be delivered to the dealer.

After a few hours of delivery of the welcome kit, Amazon’s customer care telephoned me congratulating on choosing Amazon and FCA as the seller of my new car and explaining to me the details of what I would have to do in the following hours. After making the checks, I was assigned the most convenient dealer near my home (in this case the Mirafiori Motor Village in Turin).

A few hours later, I received a phone call from the dealer asking me to show me to the dealer after the appointment always taken at that time.

A few days later I went to the dealer, I received the final estimate (11300 € + 130 € of IPT excluded from the offer, which varies according to the province of residence) and I could conclude the purchase by signing all the documents. Remember to bring the Coupon present in the Welcome Kit and Amazon’s order confirmation (or receipt) !!

I take the opportunity to deny all the reviews that say it is not possible to make a loan. False, funding is ALWAYS possible with approval from the financial (in this case FCA Bank), quiet! So you can pay it all together, fund the entire amount of the order or give an advance and finance the rest.

The contract also provides a delivery date of 15 days following the order (or approval of the loan).

If you are going to buy a great city car, take advantage of this offer because you really save a lot of money (the value of the 500 Lounge + optional provided is € 16,000)

Really a nice experience, congratulations Amazon and FCA! 🙂

 

In our interview with Brian Pasch on CBT News, we discuss why a one-price or up-front pricing business model may be the future for your dealership. Topics that we address include:

• Most dealers are already very close to one-price, particularly on used cars.
• How upfront pricing affects recruiting.
• E-commerce and online payment calculators – how can the payment be accurate when the price is not?
• Using up-front pricing to speed the transaction.
• Selling a new way to buy a car before you sell the car – using a concept statement
• Does up – front pricing lead to greater customer satisfaction?
• How long does it take to switch to a new, up-front pricing business model?

Stay tuned for a second interview that specifically addresses recruiting millennials to a business that employs a up-front pricing business model.

Watch the interview here.

 

Glenn Mercer (GM Automotive LLC) published an independent study prepared for NADA in January 2017 entitled The Dealership of Tomorrow: 2025, Retail automotive trends for the next decade. The 87-page document is an interesting read. On pages 42 and 43 we like Mercer’s brief comments on negotiated transactions.

“…negotiated prices are just an artifact of history: it seems that we accept haggling about cars because we haggled over their predecessors: horses. As laid out in Steven Gelber’s excellent book on the early days of motoring, Horse Trading in the Age of Cars, we argued over horses because every horse was different, and because they were risky (they were usually sold without warranties and without the possibility of refund). When we replaced horses with cars, we stayed with the same system – even as virtually every other good was migrating to fixed prices (led by department stores such as Macy’s and Wannamaker’s in the late 1800s, according to Gelber). Maybe, a century later, it is time to put negotiated prices out to pasture, just as we did with our horses.”

Isn’t it amazing that with the changes in retailing over the last century that the automobile is still a negotiated transaction? In an age where companies such as Amazon and Apple are delighting customers with transparent pricing and sales processes that reduce friction, we are still clinging to a basic method of transacting business that is 100 years old and has been abandoned by virtually every other retail channel.

The majority of customers do not enjoy the time commitment required, uncertainty and stress involved in negotiating a car purchase.  We believe there are 2 primary reasons for this.

1. Most customers don’t get much practice negotiating for personal purchases. They have not developed the skill necessary to conclude a transaction confidently. Therefore they approach negotiation with anxiety and, even when the transaction is completed, may not be sure whether or not they arrived at a fair bargain.
2. Today there are numerous examples of better ways to transact. The effect that Amazon has had on price transparency and ease of purchase are influencing retail practices in virtually every channel. Technology is driving the availability of information (the dealer no longer knows more than the customer) and has facilitated methods of purchasing that have greatly reduced friction (Amazon one-click, for example). Customers are disappointed when a purchase of the expense and emotional significance of a vehicle is not as enjoyable as purchases in other areas of their lives.

Curious about converting to a non-negotiating business model? Ryan Adams Group is here to help. Call Alan Krutsch at 612.208.8539 for information, examples, and answers to your questions.