Experiments in auctions: Trying new formats
ORLANDO -- American Auto Auction Group exemplifies how the remarketing industry is experimenting with new formats to help dealers sell their unwanted used cars and trucks.
The 3-year-old Charleston, S.C., company operates 13 private-label and mobile auctions designed to match local franchised dealers who have vehicles to sell with local independent used-car dealers who want to buy vehicles. The company also operates 11 traditional auction sites.
Nontraditional auctions help dealerships turn those unwanted vehicles -- maybe they haven't sold, or don't fit the dealerships' customer bases -- into cash, while allowing dealers to keep vehicles for retail sale on their lots up to the very last minute, said CEO Bill McIver, 64, during an interview at the National Auto Auction Association conference here.
McIver takes the auctions to the dealers.
Those auctions are run as local events -- at some you won't even see American Auto Auction's name or logo. By selling to local buyers, dealers also avoid the costs of transporting their vehicles to a distant auction.
Consider the company's newest mobile auction in Meridian, Miss., a market too small to support its own traditional auction.
"The dealers in that area agreed that if we would bring the auction, they would bring the cars," said McIver. So his company runs the monthly auction out of a paved lot and a trailer.
One key: "The local buyers and the local sellers all know each other and trust each other."
The risk to dealers of a small local auction is that a small pool of buyers could mean lower prices for the cars they're selling. Even so, local private-label and mobile auctions have been around for almost 20 years. But the Meridian auction widens the pool by embracing technology. The sale is simulcast online, an option that the local dealers behind the auction can choose, through a digital platform powered by AWG Remarketing.
"The first sale we ran, we had a buyer online from Dubai," said McIver, who knows a thing or two about online sales.
When he retired in 2009 after a 40-year career with GMAC Financial Services, McIver was the finance company's director of Internet remarketing. During his tenure there he developed and then led SmartAuction, an online remarketing channel.
Or consider one of American Auto Auction's private-label auctions: Planet Auction, which it operates exclusively for dealer Randall Reed, CEO of World Class Automotive Group in Addison, Texas. World Class Automotive Group ranks No. 57 on the Automotive News list of the top 125 dealership groups in the United States, with retail sales of 9,760 new vehicles in 2011. It also retailed 7,340 used vehicles in 2011.
Planet Auction sells its cars in a refurbished body shop. American Auto Auction markets the sale to local independent dealerships, hires the auctioneer and drivers, handles titles and makes sure that the dealership gets paid for the vehicles its sells.
Once American Auto Auction has a commitment from a dealer or group of dealers to support a planned auction with vehicles, said McIver, "The rest is pretty easy. We make auctions happen."
You can reach Arlena Sawyers at email@example.com.