Last week, Carvana said it was partnering with Manheim to launch a digital wholesale auction venture called CarvanaAccess.
It makes sense, seeing as Carvana has been keen on buying customers' vehicles but can't list just any old trade-in as part of its return-guaranteed retail inventory. At the same time, inventory shortages have left many dealers eager to snap up used vehicles wherever and however they can. Unfortunately for those dealers, the desire for inventory has also led to higher wholesale prices.
So it's a good time to have wholesale inventory to sell. Carvana said its CarvanaAccess digital auction, which started vehicle sales last weekend, includes full condition reports and 360-degree imagery. It's working with Manheim Digital in setting up "timed bid" auctions each weekend.
Add this to the rise of digital auction firms such as ACV Auctions and multimillion-dollar investments by Manheim and ADESA in digital auctions — as well as a pandemic that prompts social distancing — and one might think dealers would never again leave their office to purchase inventory.
But every time the digital realm seems poised to make old ways of doing things obsolete, preferences to do business in person seem to reemerge.
Not even the coronavirus crisis could keep buyers out of the physical lanes at some independent auctions, which in parts of the country never stopped running cars with in-lane bidders. And Manheim this month and ADESA in May began allowing in-lane bidders to physically return to auction lanes at select sites.
For buyers, the attraction of the physical auction varies from person to person, said John Brasher, CEO of ServNet, a group of 24 independently owned and operated auctions. It may be about basic camaraderie or having relationships with auctioneers, for example, or may be the certitude of seeing the sheet metal and smelling the interior for oneself. For sellers, having in-lane bidders can mean better prices and better conversion rates, Brasher said.
At the end of the day, it really boils down to whatever the auction customers want. Pandemic or no pandemic, the customer remains king.
"We're not trying to make that decision for our sellers or our buyers," Brasher said of digital vs. physical auctions. "We're just trying to make sure we're equipped to go either way."