Online Auto & Web 3.0 (Part 3)

Business Model

Most online auto sites earn revenues from subscriptions, advertisements and commissions on vehicles, auto components and related products and services purchased through the sites. Most sites offer attractive subscription rates for the dealer community.

eBay Motors charges Insertion Fees of $30 – $40 for vehicles and a Transaction Services Fee of $40 – $50 for each vehicle listed on its site for sale. eBay in partnership with SquareTrade provides Dealers with a SquareTrade Seal for $9.50 per month.

Kelley Blue Book charges a basic fee of $20 for posting an advertisement to sell a used car for 14 days and $55 for a premium advertisement running for 60 days.

Auto magazines sites like Car and Driver have digital subscriptions, which are available at a significant discount to the newsstand price. A 1-year digital subscription of Car and Driver is available for $8, a discount of 83% over the newsstand price.

Considering the current trend of advertisers shifting from traditional media to online, the automotive sites are expected to experience a significant increase in their inventory and Borell Associates estimate online automotive advertising to grow at a CAGR of 13% over the next four years to become the second largest medium, behind broadcast TV.

(To be Continued)

[Part 1]
[Part 2]

This segment is part 3 in the series : Online Auto & Web 3.0
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