Willis Johnson tells remarketers that they should use his online technology, along with physical auctions, to sell their wholesale used vehicles. He says many independent auctions are signing up.
Johnson is CEO of Copart Inc. of Fairfield, Calif. His sales pitch explains how he uses the technology his company developed, VB2, to sell the salvage vehicles he handles for consigners.
VB2 - short for "virtual bidding, second generation" - also can sell nonsalvage cars and trucks online, he says.
The notion of selling used vehicles on the Internet challenges the traditions of an industry built on sprawling auction sites. A big increase in electronic sales could mean auction companies no longer will need their large facilities.
Johnson says 38 independent nonsalvage auto auctions use VB2 to sell some of their inventory.
The technology gives its users access to the buyer bases of all auction companies that use the software, he says.
Many competing products allow sellers to show their vehicles only to their current buyers, Johnson adds.
All Web sales
"We believe that you can sell every car on the Web, straight or salvage," he says. "Will (auction companies) convert completely? I don't know. We didn't sell it that way. We sold it as an extra lane or extra sale a week."
Copart operates 110 salvage auction sites. Its primary consigners are insurance companies that sell wrecked vehicles and recovered stolen cars. Dealers, rebuilders and licensed dismantlers buy the vehicles. The buyers and sellers pay auction fees to Copart.
Copart earned $79.2 million in net income last year, on revenues of $400.8 million. It has invested as much as $85 million to develop VB2, Johnson estimates.
All major auction companies and many independent companies use the Internet to remarket consigners' vehicles. But the overall number of online sales remains small. Of the 10 million used cars and trucks that were sold at wholesale last year, 500,000 to 750,000 were sold online, auction company ADESA Inc. estimates.
Jim DesRochers, president of the National Auto Auction Association, says he does not believe the wholesale auction industry ever will sell all of the vehicles it gets from consigners on the Internet.
Salvage vehicles are sold as-is. But nonsalvage vehicles often undergo detailing, reconditioning and other services that boost their price, DesRochers says. Some dealers always will want to inspect in person the vehicles they buy, he adds.
And many traditional auctions include an Internet sales function, he says. "Why would you want to do something one-dimensional when you can do it a variety of ways?" he says.
Johnson says he expanded his use of Internet auctions to keep buyers. Copart's Motors Auction Group owns six nonsalvage auction sites. Johnson says his salvage auction operation has sold all of its vehicles on the Internet since 2003.
Motors Auction Group sites sell about one-half of their vehicles online. Johnson says he expects to convert all of those sales to online transaction by fall.
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