The days when car buyers would stroll sales lots kicking tires are over, says Robert Avery, co-founder of Reno-based DealerTrend Inc.
And the days when a dealer could rely on his gut to make decisions about what cars to order from manufacturers are gone as well.
DealerTrend says software it's developed helps automotive retailers with both issues but the little company faces plenty of competitors.
About 80 percent of car buyers go online to shop. To lure those surfers into the showroom, a dealer's Web site such as those created by DealerTrend must satisfy.
"The industry is being revolutionized," says Avery. "People do their research online then walk into a dealership with a printout and tell the dealer, "This is what I want for this price.'"
Dealers that don't have an online presence lose sales, he says.
"A used car dealership may lose $10,000 a month by not being online. A new car dealership can lose $30,000 to $50,000 a month if it doesn't have a Web site," Avery says.
He says a northern Nevada used car dealer saw its sales grow to 60 cars a month from 25 after it installed a Web site.
Despite that, Avery finds it a challenge to get auto dealers to computerize. Dealers tell him, "I don't need a computer. I go by gut feeling."
A lot of gut feeling is involved in stocking new cars, says Avery, but he had auto dealerships as clients of Avery Communications a technology services firm he also owns and he noticed dealers had a problem getting the data they needed to place the right orders.
So he created software to give dealers a better bargaining position with manufacturers.
Jones West Ford in Reno went with the program. General Sales Manager Jason Murry says, "It gave us information to control our inventory. We could look into each model line and track different trim levels. It gave us a deeper and more detailed look at inventory. That gave us a good idea of what to order from the manufacturer."
Ordering inventory isn't always easy, says Avery.
While foreign manufacturers such as Toyota are receptive to dealer desires, the U.S. auto giants are not. Instead, the factories push available product onto sales lots.
But dealers can better demand specific options and colors if they have hard sales data in hand the data tracked by DealerTrend automatically.
The automatic aspect of the product is a prime selling point, says Avery, because it can handle prospect development, customer-relationship management, and automated letters. That spares a dealer from tedious clerical tasks.
It can also update pricing on a Web site and automate uploads for dealers who have agreements with online sales sites such as AutoTrader.com.
But the company isn't alone.
Half a dozen national competitors are courting the same dealerships that Avery hopes to sign. And with just two sales reps, DealerTrend can't contact prospects fast enough. The challenge to growth, says Avery, is capital.
Expansion plans include Reno, California, Las Vegas, and Arizona.
"We're starting a targeted West Coast campaign," he says.
Customers lease the software and get unlimited support. Prices average around $300 a month for a used car dealer and $1,500 for a new car dealer. But limited packages can cost $49 a month while top-of-the-line can cost $2,250.
The company employs nine, including four software developers and programmers.
Gunne Rostrup, who developed Dealer-Trend with Avery, is vice president, Mike Fitzpatrick handles sales and marketing, and Ron Frank runs the marketing and graphics department. Avery wants to add two salespeople and another two customer service reps.
As a native Nevadan, says Avery, "I aspire to build something northern Nevada can be proud of."
