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Driving Internet sales

Winnipeg's LemonFree.Com lists 2.3 million vehicles a day

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Lance Schafer and Dan Legal are probably the largest car dealers in Winnipeg that no one has heard of.

The duo owns LemonFree.Com, an online auto listing site that has become one of the largest of its kind in the United States.

LemonFree.Com is no AutoTrader.com, with its $1 billion in revenues, but Schafer said he believes his Winnipeg website may rival the industry leader in sheer number of listings.

Launched in 2007, LemonFree.Com has about 2.3 million vehicles listed every day. Schafer said he believes it is one of the five largest sites of its kind.

Whereas AutoTrader charges a fee per listing, LemonFree.Com is completely free to the dealer and the consumer.

With 1.5 million users a month, it generates about 2,000 enquiries a day. Schafer said he is advised that, statistically, that would generate about 700 actual sales a day from LemonFree.Com users.

LemonFree's revenues -- "in the several seven figures" annually and doubling every year, Schafer said -- are generated from Google ads and affiliate offers (royalties from car insurance and financing companies who pay LemonFree a lead-generating fee).

LemonFree has 12 employees -- about double what it had a year ago -- and the company is self-financed. Schafer recently hosted some Boston venture capitalists in his Winnipeg office, but told them LemonFree didn't really need their money.

Schafer, 36, was recently named a finalist in the Prairie division of Ernst & Young's Entrepreneur of the Year program.

The University of Manitoba commerce graduate got into Internet marketing in the late '90s. At first, he set up a company that built websites, but he quickly realized there was more value in generating traffic than in designing sites.

His company became proficient in search-engine marketing and decided to put its strategies to use on a website of its own. They chose the auto market, with a goal of making the car-buying experience as simple and easy as possible.

"We really thought the auto market was an Old Boys club," he said. "We thought if we could provide a fresh approach, we could get a foothold."

The site encourages user feedback (weeding out disreputable dealers) and is now testing a dealer certification program to reward dealers that deliver the best experience.

The company is also about to announce a partnership with a major provider of vehicle history reports.

Business has been growing at a clip of about 10 per cent a month. The site includes listings of cars for sale from 28,000 dealerships. For various reasons, it is not comprehensive in the Canadian market, but that's also something Schafer is looking to change.

In the U.S., several large online inventory management companies automatically upload information to LemonFree.Com. One of the largest is HomeNet Automotive of West Chester, Penn.

"It is a very competitive field," said Gretchen Kennedy, HomeNet's director of marketing. While there used to be a lot the consumer didn't know, the online experience is becoming much more transparent, she said.

Schafer's goal is to let the consumer get as much unbiased information as possible.

He's also about to branch out into another market. The firm just acquired a Utah-based website called Schoolsoup.com that includes previously unsearchable data on $32 billion worth of scholarships.

martin.cash@freepress.mb.ca

Business finalists

Manitoba finalists in the Prairie division of Ernst & Young's Entrepreneur of the Year program:

Dale Ginn: San Gold Corp. (business-to-business products and services category)

Lance Schafer: LemonFree Inc. (emerging entrepreneur)

Khaled Shariff: Project Whitecard Inc. (emerging entrepreneur)

Republished from the Winnipeg Free Press print edition July 14, 2011 $sourceSection0

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