The Buzz: Bergstrom lets shoppers buy online and just come in for the keys – Appleton Post Crescent

Buying cars online is the new norm, and that shift in consumer habits is dramatically changing operations at the billion-dollar Bergstrom Automotive business based in Neenah. 

Starting Tuesday, some of the company’s physical car lots in Neenah will begin to show the effect of the sweeping changes. 

Bergstrom is now starting to act less like a traditional dealership and a lot more like Cars.com, Carvana, CarMax or any of the other big online sellers.

Embracing the internet has been key. 

“It has commoditized the new and used car business,” said Tim Bergstrom, president/COO. “We’re not acting like a dealership anymore. We’re acting like an automotive marketplace. It’s a digital lot.”

An example: On Tuesday, the company’s Used Car Superstore will move from its 440 N. Green Bay Road property, along Interstate 41 in Fox Crossing, to consolidate with the GM lot a few blocks south at 150 N. Green Bay Road in Neenah.

The space it vacates will be freed up for two rapidly growing parts of the business: a buying center that feeds online used car sales and a consolidation of commercial and fleet services.

The new buying center is a place for anyone to sell a car without buying another. It relies on internet sources, like Kelley Blue Book, to appraise and determine a car’s fair value.

“We’ll show you digitally what the car is worth on the market, and write you a check right there,” said Bergstrom. “It’s good for people who’ve tried to sell a car on their own and didn’t succeed. This is an easy way to get rid of a car. There’s no negotiating. We use statistical online data that’s extremely transparent.”

“We have this unusual growth and we’re trying to address it,” said chairman John Bergstrom. “Used car growth was up about 30 percent last month. That’s amazing in a business that’s normally flat.” 

Executive analyst Michelle Krebs at Cox Automotive’s Autotrader said what Bergstrom Automotive is doing is what they’re telling all dealers to do.

“Automotive consumers want to buy vehicles in much the same way they do other items from Amazon and such, though most still want physical access to the product at the dealership,” she said. “We have been advocating that dealers move much of the sales process online. Some are. Bergstrom Automotive is ahead of the trend and on the right path, not surprisingly because of their track record for vision and success.”

In July 2018, the Bergstrom company put its entire inventory on one site, and moved its sales staff to salary rather than commission. It started “upfront pricing,” meaning a negotiation-free fixed price based on “equipment, product availability, demand and age in inventory.” 

“Our prices are cheaper because you get rid of the waste of holding inventory. Sales processes are faster,” said Tim Bergstrom.“We used to turn our inventory four times a year. Now it’s 12 times a year. Ninety percent of all vehicles are viewed online before they’re purchased.

“Guests used to do their homework online, and then come in and start over,” he said. “Now you can do as much as you want online. You can come into the dealership if you want to. You can buy a car at 1 o’clock in the morning if you want.”

He said the average car buyer previously spent about 4 1/2 hours in the dealership. Now, if they do much of it online, they just come in to pick up the car. “We can do it in 9 1/2 minutes.”

The company instituted a seven-day window in which buyers can change their minds and get their money back. A low-price guarantee in that time-frame gives a 110% refund of the difference if buyers find the same car at a lower price elsewhere.

Have a business question? Contact reporter Maureen Wallenfang at 920-993-7116 or [email protected]. Follow her on Twitter at @wallenfang.

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