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For many Australians, gone are the days of trawling through newspaper classifieds in search of a bargain. Instead, they are carrying out their shopping online – from the weekly supermarket shop to big ticket items such as a cars, bikes and boats.
carsales.com Ltd, Australia’s number one online automotive classifieds business, is at the forefront of this significant change in consumer behaviour.
The business model is focused on helping people sell things, plain and simple, and there are three key factors contributing to the business’s success. Firstly carsales.com is committed to continued innovation, especially in its use of online technology architecture to deliver the best possible quality solutions for all customers. Secondly the business is a youthful, fast-paced business environment reflected in the ongoing development of new digital and advertising channels such as mobile and social media. Thirdly carsales.com is driven by a customer-focused strategy,the belief that if you win the customer,everything else will follow. These three factors will be the focus of the material that follows.
Before looking at various aspects of the carsales.com business model, let us examine the company background and structure. Founded in 1997, and led by CEO Greg Roebuck for the past eight years, there are four major divisions under the carsales network umbrella:
- Private (for individuals who wish to buy or sell auto, bike, marine, homes, general classifieds and industry products)
- Dealer (for businesses that trade in auto, bike, marine, homes, general classifieds and industry products)
- Dealer and Data Services (support and research products for Dealers and Manufacturers)
- Display Adverting (for businesses that wish to advertise their products to the carsales customer base, i.e. Banner Advertising).
There are 26 brands, as indicated in Figure 1 below, where buyers and sellers can trade goods such as cars, bikes, boats (the focus of this case study) caravans, industry equipment and most recently homes.
This structure provides a range of revenue streams for the business. In relation to the automotive section of the business, carsales.com receives a significant proportion of its revenue from display advertisers, and motor vehicle dealers who pay for each enquiry they get from the website. In addition private sellers pay a fee for advertising their products on these sites.