GSA Sales Present Auctions with Opportunities, Challenges

By Jeffrey Bellant April 09, 2019 829

Springtime is the season that many Government Service Agency (GSA) sales start to rev up.

GSA sales are bid out, so not every auction has them and they must be open to the general public.

Some auction general managers that do have them recently discussed the benefits and challenges of GSA sales.

Ryan Durst, general manager of Lincoln Auto Auction in Waverly, Neb., said the auction has had the GSA contract for almost a decade.

“It’s basically a big fleet account,” Durst said. “Our goal (for bidding) was to get more inventory all at once.”

Having a sale featuring 100 to 125 units every four or five weeks was a big attraction, he said.

GSA numbers are expected to be up this year after a down 2018, Durst said.

Bruce Beam, general manager of Dealers Auto Auction of Oklahoma City said its GSA sale is a solid business.

“We do the marshaling and the auction services for GSA,” Beam said.

For GSA sales, Dealers Auto Auction of Oklahoma City will run two lanes for six to eight months out of the year.

“We’ll run about 100 to 130 each sale. I think we ran about 1,350 last year for GSA,” Beam said,

This year has started out slowly, however. The auction just had its first live GSA sale on March 14 but only ran about 37 vehicles.

“We’re really hoping those numbers will increase throughout the year and we’ll get back to normal volumes,” Beam said.

Typically, the GSA sale starts out strong in March but tapers off as it gets to the end of the year.

“I’m hoping, maybe, that it works in reverse this year,” Beam said.

Beam said GSA also has its own online auction program where the units that are at DAA of Oklahoma City are posted on an auction site for GSA. Those will typically run for about a week, maybe 10 days.

“We still process that,” he said. “It allows them to keep vehicles moving throughout the year during times where they might not have the (volumes) to hold a live sale.”

Beam said they also use the online sale for specialty items like big trucks – an ambulance or a wrecker, for example.

Doug Rodriguez, general manager of Dealers Auto Auction of Chattanooga has two different government sales.

“We have the TVA, which is the Tennessee Valley Authority – a U.S. government company – which will have about four or five sales a year,” he said.

“But we’ll also have a monthly GSA sale on the first Thursday of every month.

DAA of Chattanooga had a 100 percent sale for the TVA in February.

“I think we sold $3.8 million of TVA vehicles,” Rodriguez said. “There were 125 units I think. There were a mix of sedans and work/construction vehicles. We get a nice mix.”

Echoing Beam, Rodriguez said the monthly GSA sales have been a little light this year, though last year finished strong with more than 70 units in December and as many in January.

“I expect for us to have an increased amount of vehicles for GSA this year,” he said.

Rodriguez said the benefit of GSA is it exposes the auction to a different buyer base.

“It does bring in some heavy hitters from the new-car franchise side that you might not get during a regular sale,” Rodriguez said.

Durst agreed that it draws in new faces with deeper pockets.

“It’s a step up in inventory, buyer base and all the ancillary things that come with it,” he said.

At Lincoln Auto Auction, the average GSA unit price across the block in 2018 was $9,200, which is more than double the typical price at the auction.

Holding the GSA sale at the end of the regular sale means that it draws more buyers in and “just kind of pumps up the whole week.”

But the GSA sale comes with its own hurdles, Rodriguez said.

“I think the challenge is the same everywhere. It’s a pretty tight squeeze to try and do without losing money,” he said. “It’s not something you traditionally make a bunch of money at. It’s contractual and there are no buy fees.”

The other challenge that comes with GSA has to do with the “G” in GSA.

“There’s a lot of red tape,” Durst said. “Getting on contract, there are a lot of hoops you have to jump through, from site visits to filling out packets upon packets of compliance stuff.”

Plus, the auction also had to upgrade its systems initially.

“We just had to get better at everything we did,” Durst said.

Dealers Auto Auction of Oklahoma City actually had a GSA sale years ago, gave it up, but got back into it.

At some point, it became a bad fit.

“We were a growing auction at that time and it just took away from our core business,” Beam said.

So the auction stopped bidding for the contract for a few years before getting back in.

Although the GSA requires that the sales be open to the general public, they are a small percentage of actual buyers, Rodriguez said.

“I bet I don’t have more than 10 percent who end up buying,” he said.  “I believe there’s a good segment of the population that thinks they are going to come in and steal something, get something ridiculously low.

“But like everything else here, it’s market-based.”

Overall, Durst, like the other GMs, is pleased with the GSA contract.

“It’s done what we wanted to do and gone past that,” he said. “It’s a big draw for us.”

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Last modified on Tuesday, 09 April 2019 14:24