Auctions Help Independents Find Cars as Franchise Stores Keep More

By Jeffrey Bellant July 26, 2018


ORLANDO, Fla. – Independent auction leaders discussed everything from the dip in inventory to the use of Internet tools to connect with dealers during a panel discussion here this summer.

Inventory continues to be a challenge, panelists said.

Michele Noblitt of Dealers Auto Auction of the Rockies in Denver said consignment is off.

Repossessions are very low in her area and she attributes that to the low unemployment rates.

“We’re down 7 percent across the board, as far as dealer consignment and fleet consignment,” Noblitt said. “Another factor in our area, too, is that we are one of the fastest growing economies. So people are employed and their rents are astronomical.

“When you factor in $2,500 in a rent payment and trying to have a car payment insurance and gas – I feel for the independent dealers. It’s touch to be selling cars when you have such high rents and high bills to pay.”

David Andrews, CEO of Dealers Auto Auction Group, agreed that repos are off.

He said being in the recon business is key for dealers to get inventory when volumes are low so they can get cars to fit their market. Using auctions and products like CRs and inspections can help dealers avoid the risks of buying a bad car and better source more inventory.

Panelists also commented on how companies like AutoNation and Carmax also disrupt the supply with their own auctions.

Noblitt doesn’t see either as a threat.

“I think we’ve built up enough loyalty that our consignors would stay with us,” Noblitt said.

But Andrews and Noblitt agreed those are still cars that don’t make it into the traditional auctions.

“You just have to cast a wide net to find cars to fill your lanes up,” Andrews said.

Andrews added that sourcing cars from private owners is much more competitive, too.

“(One source) reported that Carmax buys 40 percent of their cars from private owners. That’s a huge number,” he said. “They’ve done a great job of branding themselves to buy cars.”

Andrews added that simulcast and Internet remain good sources for dealers looking for extra cars. He said a big effort goes into those online vehicles to make sure the buyer is happy with the purchase.

Doug Turner of America’s Auto Auction challenged dealers to check out static sites like SmartAuction, OpenLane and OVE for inventory. He added even though franchise dealers are retailing vehicles they used to send to auctions, buyers often find these cars on the static sites.

“Not only are franchise dealers trying to retail it, they’re trying to wholesale it at the same time – especially if it’s 60-plus days old – to try and keep the inventory turning,” he said.

Panel Moderator Lynn Weaver, executive director of the Independent Auction Group, said Auction Pipeline is also a great source for inventory and marketing information

Turner said the challenge on the digital side is to understand whom you are buying from; for example, do they have a good track record and do they sell a quality car? Who is doing the CRs and who is doing the inspections?

Auctions are working harder in the digital realm to reach dealers.

“We do text messages, email blasts and we just newly revamped our website,” said Noblitt. “We sell on OVE and SmartAuction and have our live simulcast.

“We actually go out and visit dealers, too.”

Andrews said texting is a tool the auction uses, but social media in general is also important.

“It costs money and takes time, but you have to figure out how to reach dealers,” Andrews said.

Several attendees said text is the preferred method of contact from auctions, with an occasional visit or call from the owner/GM.

Andrews agreed. He is more likely to respond quickly to a text message than an email.

One dealer said the information he wants from an auction is run numbers and volumes.

Andrews said his company is engaging with dealers through Facebook.

Turner said his company uses Facebook, Twitter, Instagram and LinkedIn. But he said one challenge with Facebook is that a person is scrolling through pictures of their children or grandchildren and then they get an advertisement.

“You have to make sure you don’t blur that line between personal stuff and business,” he said.

Some of the auctions have also used YouTube to a lesser extent.

“It’s something I would consider doing,” Noblitt said, “maybe on some higher end cars.”

All the panelists said digital continues to be a growing part of the business and auctions must engage customers within that space.

But they also agreed that brick-and-mortar sales are here to stay.

“It’s a social place,” Noblitt said of the auction facility. “People come there to talk about trends and best practices. I don’t ever feel that the brick-and-mortar is ever going way.”


Last modified on Thursday, 26 July 2018 20:53