Californian startup Beepi is hoping to become the world’s largest peer-to-peer marketplace for buying and selling second-hand cars.
A new second-hand car marketplace called Beepi has just launched in the San Francisco Bay area, offering an alternative to the current process for buying or selling a used car, which has become outdated and tiresome for both buyers and private sellers. Founded last year, the Californian startup intends to put an end to the frustration many people feel when they try to sell their vehicle. They usually go to dealerships, which make them a low offer, or to online sites such as eBay Motors, Autotrader and Craigslist, which do not offer any support or provide any guarantees. Buyers often find themselves paying too much or buying a car which turns out to be in poor condition. Beepi’s solution is to create a peer-to-peer marketplace for used cars, where sellers can register their vehicles and obtain a higher price than they would receive from a professional dealer. Unlike most innovative technology platforms, Beepi’s aim is not to add features to the user experience, but rather to rationalize and/or eliminate all non-useful steps in the process, and there certainly seem to be many of those in the used car world. The company, which recently launched in public beta version in the San Francisco Bay Area, has just raised $5 million worth of new funding from venture capital firm Redpoint Ventures and other investors andis now looking to grow quickly.
Peer-to-peer transactions without the drawbacks
Once the seller has registered his/her car for sale on the site, Beepi will make an initial offer which it says will be $1,000 above what a dealership would offer. However this is just the lowest price a seller can expect to receive. After inspecting the car, the Beepi team will spend the next 30 days trying to sell it to interested buyers. If they do not succeed, Beepi will buy the vehicle for the price it quoted. Thus, the seller is assured to sell his car, or by an individual or by Beepi at the floor price. Meanwhile, buyers can have full confidence that the cars listed have gone through an intensive 185-point inspection by certified technicians. Once they agree to buy a car they also benefit from a 10-day, no-questions-asked return policy on the car, plus a full three-month, 3,000-mile (4,828 km) warranty on all parts and service. All payment processing and administration – title transfer, license plates, etc – is handled by Beepi, and the company takes a 9% cut on the transaction. Buyers can pay through a bank account transfer or use up to five credit cards to purchase a vehicle. If, for whatever reason, a buyer is dissatisfied and wants to return the car, the seller need not worry as Beepi will buy the car back and then endeavor to sell it all over again. The company will also send one of its staff to pick up the car and deliver it to the new owner.
Aiming to become a worldleader in buying and selling used cars
The service Beepi offers is based entirely on transparency and trust, and the company aims to make the used car buying/selling experience simple, rapid and even pleasant. Although many car seekers would never buy a used car without a traditional test drive, Beepi is betting that there are enough buyers who will make this sizeable purchase without seeing or laying hands on the vehicle first. This may now well be the case since habits have changed and today people are much more trusting about buying on the Internet. Nevertheless, building up demand at both ends of a marketplace will not be easy. The company’s initial outreach involved contacting car sellers on the local San Francisco Craigslist site for its first awareness campaign and it says it will never work with professional dealers. Over time, the startup expects Beepi sellers to also become Beepi buyers and vice versa. In order to give everyone the best price, Beepi has eliminated all negotiating steps, visits to dealerships, last minute surprises and commission payable to various parties. With the help of its recent $5 million injection, the Californian startup is planning to improve its technology and scale up operations. It intends to get into new markets. But although Beepi is primarily an online service, the fact that it employs its own team ofinspectors on the ground is likely to be a brake on its hoped-for expansion, due to the recruitment process and associated costs.