One of the nation's newest kids on the wholesale auction block is ready to grow.
Auction Broadcasting Co. plans to build and acquire up to 13 additional auction sites during the next five years, said Bob Rauschenberg, a company partner who is in charge of sales and marketing.
Auction Broadcasting, of Indianapolis, has seven auctions, all in the eastern half of the country.
Rauschenberg declined to disclose the locations for the additional auctions. But he said the company wants to fill in some areas in the East and expand into the West. He said the additional auctions will give the company enough coverage to compete for wholesale auction business nationally.
'We're looking at five locations to get into quickly,' Rauschenberg said. He said two are in the Midwest and one each in the Southeast, Northeast and West. 'We hope to have those five completed in the next two years.'
Auction Broadcasting's seven auctions are in Minneapolis; Grand Rapids, Mich.; Toledo, Ohio; Indianapolis; Nashville, Tenn.; Washington and Tampa, Fla.
The private company was established in March 2000 by Michael Hockett and three partners: Trent Knox and Carl Miskotten, who are the former owners of West Michigan Auto Auction in Moline, Mich., and Rauschenberg, former executive vice president of sales and marketing at ADESA Corp.
Hockett is the founder of ADESA, which now is owned by ALLETE. Auction Broadcasting is the country's third-largest auction company. Manheim Auctions is the largest, with 86 auctions in North America, followed by ADESA, with 54 auctions in the United States and Canada.
Acquisitions and greenfields
Rauschenberg said that the new auctions will be a combination of acquisitions and greenfield sites. He said the sites will be about 150 acres. The number of lanes will vary by market.
Like the other auctions built by Auction Broadcasting, the greenfield sites will have 'theaters' where dealers can watch the auction lanes through a glass wall and/or participate in the activities at the company's other auctions via TV monitors and laptop computers.
The company's acquired auctions do not have theaters but are linked by cameras and monitors.
Auction Broadcasting favors greenfield sites because they can be built to the company's specifications and be expanded easily. The company would not disclose the cost of the expansion or say how it would be financed. New state-of-the-art auctions typically cost $10 million.
Built to expand
For example, the company's Washington auction, which opened in April, has six lanes, but it most likely will be expanded to 20 lanes within two years, Rauschenberg said.
'We prefer greenfield; it gives us a building that is state-of-the-art - tomorrow-land rather than yesterday,' he added.
Finding enough land to accommodate an auction operation is relatively easy. Getting the land zoned is usually the hard part, Rauschenberg said. Zoning issues can take weeks or years to be resolved.
Local community leaders sometimes have the notion that auto auctions are junky and trashy.
Said Rauschenberg: 'That's when we take them up in our airplane and show them one of our facilities.'