Serial entrepreneur Bret Gardner was living in Houston when he started looking into buying a new car. Though he finally found the brand new, black Jeep Grand Cherokee Overland he wanted at the price he was willing to pay, the journey cost him more time and trouble than he expected.
“I realized there was something wrong within the industry connecting buyers and dealers,” he said. “It leaves buyers to do all the work.”
In fact, AutoTrader has reported that the average new car buyer will spend 13 hours of time researching what kind of car to buy and another five hours at dealerships negotiating and sealing the deal. To Gardner, that clearly presented an opportunity.
Yet, while busy running his other ventures, he parked the idea to build a business connecting buyers and auto dealers and focused on a different concept he planned to pitch during TechStars’ Startup Weekend competition at Geekdom in September.
But when that idea had to be shelved at the last minute, Gardner dusted off the auto-buying one, wrote a business plan in 15 minutes, assembled a team of seven and walked away with the top prize – $12,000 worth of startup services to launch the business.
Amworx is now gathering speed, developing a website that will automate the process, and allowing new car buyers to send their request to a statewide network of dealerships who then compete to give the buyer the best deal.
The goal is to help buyers get the best price on the car they want and help dealers who need to widen their outreach beyond the local market.
“When we went up to pitch the idea (at Startup Weekend), we were going up against eight teams and a lot of exciting ideas out there. But we were the only one that had gotten feedback that wasn’t negative,” Gardner said. “The only thing we heard from the judges is we’re not charging enough. But we were very set that we don’t want to charge more because we don’t want to gouge people. We want to save people money.
“The company was not built because I want to be rich,” he continued. “I built it because I didn’t enjoy my first vehicle purchase.” Besides, he added, given the market size – there are 1.2 million new cars sold every year – there’s plenty of money to be made.
That goes for the sellers as well. Because dealers spend an average of $35,000 a month on marketing, only to reach a strictly local population of buyers, Amworx provides a cheaper alternative to move cars off the lot. Selling more cars in a given period of time – because they are reaching a larger market – saves them money in the long run and may even result in bonus dollars from the manufacturer which they can then turn into discounts for buyers.
Those who use the service will find it also levels the playing field, said Jordi Dominguez, Amworx chief financial officer.
“When a buyer sends out a request for a new car, he is anonymous to the dealer,” Dominguez said. “They won’t know your income or whether you’re a man or woman, for instance. It allows the buyer to get a fairer price.”
While the Amworx team – which also includes Art Gómez Tagle as chief operating officer, Lizzie Nguyen as chief design officer, and Ramil Rodriguez as marketing manager – is working to build the site, bring dealers on board, and validate the concept, Gardner is encouraging car buyers to try the service during the busy car buying holiday season and give them feedback.
“Even if you’re not buying right now, it still adds value and proves that it works,” Gardner said. “We are trying to prove the model and improve the experience for users.”
Using the service requires completing an online form at amworx.com, describing the make, model, and features you want. It is free to search the site for deals and use the information to shop around, but a $25 fee will give you access to the dealership’s full details. Dealerships compete for the buyer by offering their best prices.
Buyers get to choose which offer fits them best, and the dealer will then complete the transaction and arrange shipping. The savings usually exceed the expense of shipping by far, according to Gardner. In cases where the buyer wants the car right away, he or she has the option to travel to the dealership to take ownership of the car or choose a local dealer.
It’s currently a manual process for Amworx while the team builds momentum as well as the necessary funding to support an automated system. They are working with 35 Ford, Chevy, and Dodge, Chrysler, Jeep, and Ram dealers from all major Texas cities, with more to come.
“Eventually, we would like to add features to the service, like arranging financing prior to the sale and offering shipping calculators,” said Gardner, who freely admits he’s not a tech guy.
In the meantime, he is working long hours with support from his mentors at Rackspace, Geekdom, and the startup ecosystem that helped him get the business launched – and he’s still driving his 2014 Jeep Cherokee.