Carsdirect.Com - Successful Test Led To National May 1999 Launch, Aimed To Be A Brand Leader, Survived Dot.com Shakeout Of 2000
In mid-2001, CarsDirect.com was one of the few surviving online direct auto buying services and a brand leader in the industry. It acquired competitor Greenlight.com at the end of January 2001, while other sites—including Microsoft CarPoint's Drive-Off.com subsidiary and CarOrder.com of Austin, Texas—were shutting down. Nevertheless, CarsDirect.com CEO Robert Brisco was confident that the company would survive, eventually go public, and even achieve profitability.
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CarsDirect.com was created at the Internet incubator Idealab, which also developed such Internet companies as eToys.com and GoTo.com. Co-founders were Bill Gross, founder of Idealab, and Scott Painter, who became CarsDirect.com's CEO. At the time CarsDirect.com was founded in Culver City, California, in late 1998, it was a bold step to try and sell autos and trucks directly to consumers thr…
Five months after its national launch, CarsDirect.com began building its brand with a $20 million
advertising campaign for the fourth quarter of 1999. The company hoped the campaign would help boost sales from more than 1,000 cars a month to more than 2,500 by the end of the year. According to Media Metrix, CarsDirect.com received 215,000 unique visitors in August 1999. Comparatively, referral si…
By the time Brisco took over as CEO, CarsDirect.com had figured out how to price its vehicles without losing money on every sale. Initially, its policy was to price vehicles at invoice plus one percent. That resulted in under-pricing by about $1,500 per vehicle. CarsDirect then changed its policy to make deals at market prices. The company found that some high-demand vehicles could be sold at a mu…
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