Gumtree Australia general manager Martin Herbst told GoAutoNews Premium: “We are always hearing from dealers that they want alternative places to advertise their cars.”

Mr Herbst said that about 1600 dealers represent more than a third to roughly half of the 150,000 car listings on the site. The remainder are private.

“So the dealers are increasing their proportion of the inventory on Gumtree Cars because we do a good job essentially of converting those people coming to Gumtree Cars into potential customers for dealers,” he said.

“We are really good at sending lots of traffic and potential demand into the cars category and then over to dealers. So I think we get a lot of interest from dealers because we are an alternative.

“We have been picked up by some of the bigger groups as well as the independents who are particularly mindful where they spend their money,” he said.

The business model is simple in that buyers can not only see cars to buy but are also able to see the dealer who is selling them, where the seller is located and who to talk to with an enquiry.

On Gumtree Cars, dealers details include logo, phone number and address on every listing, ensuring buyers can contact a dealer across multiple channels.

This is the opposite to the blind leads model where buyers do not know who is selling the listed car and have to wait for a dealer response to their lead before they can move forward in the sales process.

Mr Herbst said the company is particularly focused on creating “a very competitive open space for car buyers to find their cars; that means that we really try to be a hands-off intermediary”.

He said Gumtree Cars offers car buyers different ways to contact dealers up front. Some want to call, some want to go to the dealer and check the car out, and some just go to the dealer’s web page to check that out.

“So we want to make it really easy for them to make contact with the dealers in exactly the way they want,” he said. “We are creating a customer experience around that because the dealers tell us they want to be reachable.

“What is really important to us, and what is really important to the dealers, is that we have a very customer-centric model. We focus a lot on ‘net promoter score’, a lot on customer feedback and that shapes our product and our marketing as much as possible.

“This is how we came to take market share very quickly in the overall classifieds space.

The business model is simple in that buyers can not only see cars to buy but are also able to see the dealer who is selling them, where the seller is located and who to talk to with an enquiry.

“So we have taken the experience from the consumer focus base and now we are applying those principles on the dealer side: What are their needs, where are the pain points, how can we partner with them with a really simple revenue model that is transparent and predictable in terms of what they want to pay?

“So that is how we want to shape it – customer-centric from the dealer perspective.”

Mr Herbst said Gumtree Cars was asking dealers: “Let’s really key into what you are not getting now or what you want more of and we will get that for you.”

He said Gumtree Cars is currently developing analysis insights reports based on site data for dealers. This is expected to be revealed to clients within weeks.

Mr Herbst said: “Gumtree is committed to bringing data and insights to our dealers this quarter.

“Every dealer has a dedicated account manager so there is someone they know who they can contact for the questions they have and the needs that they have and that will be one opportunity for the account managers to share with dealers the insights they have developed from the analysis.”

There are three packages available – Premium, Plus and Basic – each with features designed to improve responses to dealers ads.

Unique to the Premium package is a priority top ad with broader radius. All packages now include call tracking to give greater visibility and control over valuable sales leads. Detailed pricing of packages is available online for dealers to calculate their budgets.

“What really differentiates us, and why dealers like us, is the way we work with dealers as partners and help them build their business and keep things simple as much as possible,” Mr Herbst said.

“And dealers like us. We know they pay attention to their numbers, and they are smart about how they spend their money and where their customers are coming from, and how they are selling cars; and they stick with us.

“Dealers favour us because they can control their budget by choosing the number of cars to display on Gumtree Cars and choose the package to deliver that. But they control the cost from the beginning. We are adamant about giving more autonomy and control to the dealers.

“We work to essentially understand how much inventory they have and we agree on the type of package based on that.

“Very soon we will be able to provide a lot of feedback, reporting and insights to those dealers. We will be able to let them know what is performing well and what is not, so they can choose the best methods to grow their business.

“We will be partnering with them and showing them what is really working – the makes and models that are selling well, here is where the buyer interest is, here is the value you are getting per connection.

“This is where we want to partner more with dealers, communicating that value and those insights back to dealers to help them build their businesses.

“These are tougher and tougher times, the financing regulations that are squeezing dealers’ margins, the slowing of some consumer purchases that is occurring. So this is a time where we can differentiate and gain more market share than in the past because the value that we see on a ‘per connection’ basis is, I would say, the best in the market,” he said.

By John Mellor