Adam D. Lee is Chairman of Lee Auto Malls in Maine. This was his guest commentary in Automotive News January 4th, 2011 edition.
Some pretty strong words for Autotrader and a very bold move by Lee. Only time will tell if he is brilliant or cuckoo.
"As crazy as this sounds, Autotrader, Cars.com and all of their cousins should be paying me to list my cars on their sites, instead of me paying them.
I have told my reps this many times, to which they all smile politely and confess that they see my point, but that I am basically -- well, wrong, to be nice about it.
Here is my logic. When you watch the news you doso to watch the actual news broadcast. You are not watching for the commercials. TV news and newspapers sell a product, which is the news. They have entire news departments with reporters and editors and anchors, all reporting the news. Having a good news show allows them to have high ratings. High ratings allow them to sell advertising for a lot of money. We all buy the news when we do car ads.
What product do the Web sites sell? They sell my inventory. They put my cars on their site and then they sell tons of advertising on top of that. All of the major manufacturers advertise on these sites.
Here is the rub: without my inventory to show people, (your inventory, too) no one would go their sites and they would not be able to sell advertising. Somehow they have convinced us to pay them to show our cars. It is not enough that we have to buy the cars, floorplan them and maintain them. Then they are able to sell advertising on top of that.
Really, sites like Autotrader don't have a product to sell. They just have my cars. Since I have the product and they have none, shouldn't they be paying me to use my cars? My cars attract people to their site and they can sell additional advertising? I think they should.
I am not even addressing the whole science they have developed of selling packages, premium packages, super deluxe premium packages and so on. It never ends.
I have just canceled my contract with Autotrader and Cars.com.
Am I a little worried about it? Yes, I am.
Is it the right thing to do? Ask me in a couple of months.
I am going to take the money I save to beef up Google ad words and my Internet department, and to promote my own Web site.
If I had more energy -- and if the other dealers in Maine didn't think I was crazy -- I would try to organize all of them to create a Web site for Maine dealers and we could sell advertising to the manufacturers and insurance companies and banks and stop paying Autotrader, Cars.com and their cousins.
I can see dealers in every state doing this -- maybe even NADA doing it for us. Think of the millions of dollars we could save. But, I believe our naturally competitive nature will prevent us from doing this. So I am going to give it a shot and keep my fingers crossed."