Around the turn of the century, I was helping RouteOne to build their now-ubiquitous credit system. Then, I moved on to aggregation models for the “I” side of F&I. It was a lot of work.
We had to develop scores of unique interfaces for lenders and product providers. We had to develop deal calculation engines, and then reverse engineer each DMS so our payments would match. There were no automated sources for finance or product rates. We had to walk ten miles in the snow …
Today’s eCommerce startups have it easy. All of the key tasks are supported by readily available services, leaving the entrepreneur to focus on user experience and dealer support.
When I started writing about this space, the key challenges were price negotiation and trade valuation (and the test drive, but I’ll cover that in a later piece). Today, you have reliable online trade valuation from Kelley, Trade Pending, and others. Price negotiation can be handled through chat or one-price, generally on used vehicles.
You can have payment calculations, including incentives, from MarketScan, provider networks from PEN or F&I Express, and finance networks from RouteOne or Dealertrack. Everything in this paragraph is an API, not to mention passing data from your eCommerce platform into the corresponding dealer system. Finally, even the old faithful DMS now exposes a variety of databases, like inventory.
A few months ago, I described the role of venture capital in driving process change. I think this eCommerce ecosystem is equally important. Entrepreneurs can enter the space at a very low cost, relative to ten years ago, and meet most of their requirements through interfaces.