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July 26, 2007

HotSwap To Enter $370 billion Used Car Market

Michael Arrington

36 comments »

Used car sales are big business - at least $370 billion/year in the U.S., with $81 billion or so of that occurring online. New startup HotSwap wants to apply some of the more recent trends on the web to that market, and bring more buyers and sellers together. And while used car sales aren’t exactly sexy, HotSwap is a very cool site. Think YouTube, for used car sales.

The company, which is based in Berkeley, CA, allows anyone to list a used car for sale. In addition to basic information, people are asked to include a video of the vehicle, which is embedded in the listing. Videos, they say, are a much better way of showing off a car. And with the ubiquity of simple video cameras (most digital cameras also take video), just about everyone can easily create and upload a video. See the video at the end of the post for more details.

Listings by individuals are completely free. Dealers pay a small fee per listing and also pay for more advanced software to keep track of listings.

The site has fairly useful Ajax tools for refining search, allowing visitors to look for specific color, type of car, location, mileage and price. Offers can be made directly via the listing, or viewers can ask a question, etc. Listings will also be able to be embedded into other sites.

Listings are light since the site is pre-launch and no one has heard about it. But they’ve already inked a deal with Red McCombs Automotive, which has around $800 million/year in sales and will list every used car on HotSwap. The company says they are also in discussions with AutoNation, which has nearly $20 billion a year in revenue.

The site hasn’t officially launched yet. There are no credentials stopping people from visiting but much of the functionality hasn’t been finished and there are bugs. The company says they’ll officially launch in the next few days.

HotSwap raised “around” $1 million in funding from Kinsey Hills Group (who also funded Scribd) last month. They compete head on with eBay, of course, as well as sites like Vast and, to a lesser extent, Edgeio (which I co-founded).

  • Sphere It

This entry was posted on Thursday, July 26th, 2007 at 8:36 pm and is filed under Company & Product Profiles. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

Trackbacks/Pings (Trackback URL)

  1. HotSwap To Enter $370 billion Used Car Market » TechAddress

    July 26th, 2007 at 9:30 pm

  2. Weblog de Jean-Michel Maurer

    July 30th, 2007 at 3:45 pm

  3. HotSwap Launches - Video Classifieds

    September 8th, 2007 at 2:02 pm

Comments

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  1. Rod Fleck

    July 26th, 2007 at 8:44 pm

    …and why didn’t I think of this???

  2. Dave

    July 26th, 2007 at 8:54 pm

    lol…I think they compete with a few others as well…this is one of the most crowded spaces in the world with many, many well established companies (much more established than the ones you pointed out Mike). Not sure if embedding a very slow, auto loading video will be the killer app in this sector.

  3. Thomas

    July 26th, 2007 at 8:59 pm

    Did you heard Rutan’s spaceport explosion?

    Rutan’s spaceport ran out of business and cost tons of money redo it again!!!

  4. Jono

    July 26th, 2007 at 9:28 pm

    This isn’t that great of an idea…I predict mediocrity at best.

  5. Internet Evangelist

    July 26th, 2007 at 9:32 pm

    Dave… more competition is an indication of market size. If the market is that big as the post says, hotswap has chances. The myth of First Mover advantage rarely works.

  6. Dave

    July 26th, 2007 at 9:36 pm

    #5 - first mover? lol…this is one of the oldest and most mature sectors in ecommerce. Im not saying there is not room for improvement…but first mover advantage in this sector took place in ‘92.

  7. Jono

    July 26th, 2007 at 9:38 pm

    Dave is right, you need to look at the giant Autotrader.com and Cars.com who dominated in print and web for the last decade. Ebay doesn’t have a finger on the automotive market. New competitors will find it hard as well.

  8. Andrew

    July 26th, 2007 at 9:39 pm

    Few things:

    a) How the hell did they get 2 million in funding? You make a copy of that site in 1 week if you tried hard enough

    b) the 370 billion a year used car market may be true….but thats not correct for resources that bring those users together.(sites, newspapers etc)

    c) Video is not a killer app for this field…I don’t have time to watch a video for 10 minutes for each possible car I might want. I just want to look at 6 pictures, read the description..then if I like it, go and test drive the car in person(of course after emailing the seller with a lowball offer)

    d) Do videos help sell cars? Maybe if your car is not a commodity, like a highly modified 800 hp Z06 Corvette that I saw listed on ebay a couple of months ago. Yes that you might want to watch the video to see how the car pulls etc. But I won’t be going to a site like that to watch a 10 min video grainy video of a regular civic

    e) How the hell did they get 2 million worth of funding?

  9. 80s.mobi

    July 26th, 2007 at 9:54 pm

    i agree with the video thingy - i don’t like it.
    it’s grainy and annoying.

    i’d rather see 6 or so photos, and read a description.
    i don’t want to sit through a mediocre video walkabout of a car.

    the site sucks, autotrader and cars.com blows this out of the water

  10. Bob

    July 26th, 2007 at 10:01 pm

    Well, it’s slightly better than having a 640×480 image of cars which is the largest automotive selling website.

  11. Wes

    July 26th, 2007 at 10:17 pm

    Because this is a crowded market, I think this is the reason these guys have gone and come up with something that nobody offers and they thought of putting video clips.

    Some buyers maybe more keen on engine sound and the like rather than a grainy video of a car moving.

  12. Jay (living in First Life)

    July 26th, 2007 at 10:27 pm

    Yawn. Not worth even stating why this is DOA.

  13. Chris

    July 26th, 2007 at 10:31 pm

    You guys know that the site supports the ability to upload images as well, right?

  14. Nathan

    July 26th, 2007 at 10:41 pm

    Currently, we’re in pre-launch beta with our used car platform Jerara.com.

    While the market is crowded, we still see chances.

  15. chris

    July 26th, 2007 at 10:51 pm

    And they even chose led zeppelin for the background music, nice!

  16. mikvah talk

    July 26th, 2007 at 11:14 pm

    Did you know that HotSwap was orignially a site for people to trade wives. It’s true a couple of college buddies were sitting around in their jamas. They were looking to score with married chicks when they came up with this awesome idea.

    They would be able to snoop personal communication and move in on the big ones. Well they graduated from college and their parents were really going down hard on them to grow up and make some money. They then figured what is something close to a wife that guys love.

    …Money, hmm…. no, oh yeah cars ah duh!!!

    So began HotSwap.com

  17. Cars

    July 26th, 2007 at 11:28 pm

    This is certainly better than using Craigslist or news classifieds - it is just a way to prefilter potential prospects before visiting

  18. random guy

    July 27th, 2007 at 12:13 am

    Hey, that girl in the tutorial is pretty cute.

  19. alberto

    July 27th, 2007 at 1:29 am

    I’m afraid you can publish video of cars on eBay since a few years…

  20. Phil

    July 27th, 2007 at 5:12 am

    As the owner of one of the longest running used car classified sites out there, I can tell you that “inking a deal” with Red McCombs is about as challenging as receiving a solicitation from a Nigerian prince. We’ve been spammed by them for years for their cpm pop-under advertising (Google stories about this).

    But best of luck to them…I think getting videos of cars will be more difficult then they anticipate, but it is a neat idea if it works.

  21. James Pinkston.

    July 27th, 2007 at 8:40 am

    hmmm I wonder if Mike invested in these guys?

  22. Jay

    July 27th, 2007 at 9:51 am

    Points for good taste in music :).

  23. Brian

    July 27th, 2007 at 10:15 am

    I can across a pretty interesting site on Craigslist the other day while shopping for a car. The site, Evenlevel.com, allows you to buy used cars straight from dealer auctions and the prices were pretty good compared to autotrader.com.

    I’ve seen dealerships with videos in their listings for awhile though, and most were higher quality than those on Hotswap.com. I can see videos being helpful on eBay motors where the buyer may never see the car before buying it, but it doesn’t make as much sense to me in the local classified space.

  24. MetroBellevue

    July 27th, 2007 at 11:19 am

    It’s a great idea. I like it.

  25. Mike

    July 27th, 2007 at 12:58 pm

    Hey, very interesting but Don’t like the Hotswap domain name. Need to swap the name for a better name, It don’t fit the theme?

  26. Vijay Teach Me

    July 27th, 2007 at 1:02 pm

    Is’nt a neat idea, wow my car gets to be in a video, made just for her. I enjoyed our long drives together and the wind passing by…. can I be poetic in my listnigs.

    Vijay

  27. Shahed

    July 27th, 2007 at 7:03 pm

    ok I created this site for my client. and my client did this site 5 months back with his personal money..

    http://www.classifiedinmotion.com

  28. David Mackey

    July 28th, 2007 at 8:35 pm

    Not a bad idea, though people could just embed YouTube videos into sites like eBay…Though since their pricing model is free for individuals, I’d expect many will see it as a good opportunity.

  29. Gearhead

    July 30th, 2007 at 2:11 am

    Looks promising. I like that they are encouraging, and making it easy for people to upload videos of the car. It often baffled me why people try to sell a car online with just 1-2 pictures when a digital image costs nothing. Videos would be perfect.

  30. Jeff Kershner

    July 30th, 2007 at 2:39 pm

    This could be short lived. I know Video seems to be all the hype, BUT for selling vehicles, I just don’t know. Now dealers have to hire someone to take videos while customer want to spend less and less? This is more work then what most dealers are going be willing to place effort into. Not sure if the ROI will have sense.

    Many dealers already have a tough time taking decent photos, and now you think they are going to add Video into the equation?

    How is a Video walk around of a car any different from several photos of the vehicle? Photos are usually less grainy, larger in size and load a lot faster, even if you are on high-speed.

  31. Andrej

    August 3rd, 2007 at 3:39 pm

    Video classifieds will revolutionalize person-to-person commerce. It’s much easier to make a quick video about your product that describes in greater detail than pictures or plain text. Furthermore you immediately know who you are delaling with - whether the seller is shady or a reputable dealer. Check out iMoondo.com for a more general community video classifieds aka craigslist, but with video.

  32. sarah

    August 13th, 2007 at 9:31 pm

    AutoTrader.com already does this. :-)

  33. rachel@realpeoplerealstuff.com

    August 22nd, 2007 at 8:59 am

    Check out realpeoplerealstuff.com. We’ve got video classifieds for cars, real estate, musical instruments, and more.

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