A lot of publishers are diversifying their revenue into e-commerce. Few have gone the route of Dennis Publishing, which started selling cars in 2014 from its website Buyacar.co.uk and expects auto sales to comprise 40 percent of its revenue this year, the rest coming mainly from advertising across its magazine titles.
This year the company will make £62 million ($81 million) in car sales revenue, up from £400,000 ($525,000) the first year. Next year, it will clear £100 million ($131 million), said Nick Flood, deputy managing director of digital for Dennis, speaking at Digiday’s Publishing Summit Europe in Barcelona this week.
The pivot to car sales was a heavy investment. Dennis has 65 people working on the effort, about 25 of which are sales staff, the remainder split across operations and customer service. Two dedicated editorial staffers have been hired for Buyacar.co.uk, which also relies on reviews written by auto editorial experts on its from Dennis’ car sites such as Autoexpress.co.uk and CarBuyer.co.uk, to help drive conversions.
The company also had to learn about things like payment expectations. “Dealers want to be paid on the day,” Flood said. “When people turn up and say they want to buy a car, our finance people tell them they have 60-day payment terms. That simply doesn’t work. So we’ve had to break down a lot of those systems.”
Dennis plans to grow the auto sales business by growing internationally, expanding its product range, growing margins and bringing delivery in-house.
To that end, the publisher is looking for other international publishers with whom it can do licensing deals. Dennis already sells an extensive range of used and new cars. Its most popular cars cost between £10,000 ($13,000) and £20,000 ($26,000); it also sells limousines and other high-end vehicles costing £120,000 ($157,000). It plans to continue to add to its car stock and add other vehicle types. It’s begun selling vans on its site and also is looking to high-end bicycles that sell for as much as £10,000 ($13,000).
Dennis gets a cut of each car it sells, but the bulk of its commerce revenue comes from the add-on packages that come with each sale, like financing services. The publisher makes £300,000 ($393,000) a month this way. The plan is to continue scaling that by creating new add-on products and increase the number of finance vendor partners it works with. In this way, it hopes to increase its margins from a current average of £1,000 ($1,300) per customer transaction.
Unlike most dealerships, Dennis delivers cars straight to the door of the customer, even when the dealership that stocks the car is hundreds of miles away, said Flood. This year 5,000 cars have been delivered to customers, up from the 8,000 sold and delivered in year one. Dennis doesn’t own the delivery process, though, so it may look to buy a delivery service in the future, Flood said.