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Friday, June 15, 2007

Buy-here-pay-here product

There are an awful lot of GPS vendors out there that focus on the used-car dealer channel, also known as the "buy-here-pay-here" channel. I'm not sure I really get the value proposition because they sell a unit and then every time the dealer "pings" the unit, they charge them for a hit -- usually 50 cents or $1. The dealers use the GPS location if they need to repossess the car, which I get, but that amount of airtime alone isn't enough to make the business model work. We're all like cell phone companies, so we effectively sell data and, in our case, services. For this buy here pay here business, unless the dealers are tracking the vehicle regularly, it doesn't really make it that worthwhile as a business endeavor. That's not to say there aren't other worthy business applications for this market, but it's not as simple as selling a black box and some pings.

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