Reverse car auction business targets women

Kate Jones
Published: March 25, 2013 - 5:21PM

Shoshi Vorchheimer saw a business opportunity when a female friend recounted her discomfort car shopping. It was a familiar tale – woman goes to car dealership, woman feels inferior.

“Here we are, working women contributing to the household income, our money’s as good as anybody else’s and you still hear of this happening,” Vorchheimer says, adding, "the whole notion seemed ridiculous.” So like many businesses, Vorchheimer’s was born out of frustration that fuelled inspiration.

Dutch Auction Auto aims to help women, and some men for that matter, navigate the male-dominated world of car buying. It operates solely online and while dealers list cars on the site, there is no face time between salespeople and buyers, except when it comes time to pick up the car.

Vorchheimer says this made many clients breath easier. “The dealer and buyer remain anonymous until the end of the auction,” she says.

Vorchheimer isn’t the only one trying to make the automotive industry more female-friendly. In 2000, Juliet Potter launched Autochic, a car site that advises women on how to buy a vehicle.

Last year car dealer AP Eagers, which employs about 3000 people in dealerships across the country, ran job ads calling for female workers in an effort to redress its 80 per cent male and 20 per cent female ratio.

Both Potter, AP Eagers and now Vorchheimer have established their businesses on the notion that women are just as involved as men when it comes to making a decision to purchase a car. According to Autochic’s research women now buy more than 60 per cent of all new cars and make the final decisions in 85 per cent of all decisions about buying a new car. Nevertheless, Autochic’s data shows 89 per cent of women still report a negative experience in their dealings with the car industry.

“I remember going into a dealership with my kids and the salesmen would look with horror at the children,” Vorchheimer says. “It was just such an awkward situation. There had to be an easier way. I wanted to take gender out of the equation.”

Vorchheimer runs her website on the side while juggling her full-time job as a secondary school English teacher and role as a mum to four children aged under 13.

It was while she was on maternity leave last year she began developing the Dutch Auction Auto business. “I thought, ‘Now’s my chance – it’s now or never’.”

Vorchheimer began by getting car dealers across Australia on board with her ‘Dutch’ or reverse auction concept. In such an auction buyers nominate their starting price and sellers bid against each other to beat that price. The seller with the lowest price wins the auction.

“We have an advantage in that people who come to our site already know what they want,” Vorchheimer says.“The reverse auction is a new concept, but already we’ve had a fantastic result.”

But how do you sell a new sales technique to car dealers, some of the best salespeople in the business?

Vorchheimer says getting the car dealers on board was a lengthy process, but once the first dealer signed up others were keen to be involved. At last count, Vorchheimer had 320 dealerships listed on Dutch Auction Auto.

Securing funding was even more difficult than convincing the car dealerships to come on board. “The hardest thing was going to the banks. When you get turned away it’s easy to feel despondent but you’ve just got to keep going,” she says.

The site launched in December last year and much to Vorchheimer’s surprise, a BMW was the first car to go under the hammer. She had expected her target demographic to buy mid-priced cars, not luxury labels.

The web site has needed some minor tweaks since going live. For instance, the site now advises buyers to kick off with a price 10 per cent below the recommended retail price to start the bidding war. This had to happen, says Vorchheimer, to prevent buyers listing ridiculous prices.

The site also demands a deposit from buyers to ensure they are committed to a sale. This protects the dealers from time wasters and also guarantees Vorchheimer’s site deals with genuine buyers.

With the help of a silent investor, five staff and some notable female backers including former newsreader Tracey Spicer and ABC broadcaster Lynne Haultain, Vorchheimer expects Dutch Auction Auto to continue changing as it garners more buyers and more feedback.

This story was found at: http://www.smh.com.au/small-business/reverse-car-auction-business-targets-women-20130321-2ghfc.html