REMARKETING: Online provides auction houses with net gains
02 August 2011
The remarketing of vehicles online is continuing to make its mark in the auction arena. Rachel Burgess reports
There is still plenty of headroom in internet remarketing despite some spectacular growth in recent years, according to BCA director Tony Gannon.
"In the UK alone last year, BCA sold 105,863 vehicles via online channels, with the majority selling via Live Online, where online bidders compete with buyers physically in the auction hall. BCA also launched three pure online services - Bid Now, Buy Now and e-Auction - in quarter four of last year and these have made steady progress in the intervening months."
Online-only remarketing firm Autorola says it is seeing growth across Europe as online becomes more of a mainstream remarketing channel. Managing director Richard Pay says the group will sell 230,000 cars this year in 17 countries with the UK and eastern Europe anticipated to be the biggest growth areas in the next five years. "In the UK, we will sell around 15,000 vehicles in 2011, but this could rise to near 50,000 by 2016," he says.
BCA's data for the first quarter of 2011 reinforces the growing popularity of online sales. "Nearly half a million bids were made on Live Online between January and March 2011, an 18% increase year-on-year, and 28,500 vehicles were sold to online bidders, a 9.2% increase year-on-year.
"The number of individual trade buyers regularly using BCA's online selling channels is also growing every year," says Gannon. He adds that "the immense flexibility of online channels means customers can sell and buy used vehicles 24/7, 365 days a year, without incurring travelling costs or missing out on good deals because they couldn't get to an auction in person. Online is set to continue to grow in importance for vendors looking to generate even more buying power from retail dealers."
Autorola is educating vendors and buyers about the processes involved and the benefits of being able to sell and/or buy online says Pay: "Confidence from the markets is growing as they see the extra provenance that is offered by us such as detailed photos and descriptions.
"Online means a vehicle does not have to be physically moved to be sold and if you are a vendor selling thousands of cars, the environmental and transport cost advantages cannot be ignored."
With online usage at the forefront of technological advances, it's vital that firms constantly update software to lead the way. BCA launched a new version of Live Online this year, with multiple sales windows and "a new look and feel to make it even easier to use". Other improvements have also been added, including automatically updating sale information on the catalogue page and improved vehicle information displayed in the sale window. Gannon says there are also exciting developments in mobile technology at BCA that will be integrated in the remarketing process going forward.
Meanwhile, Autorola has launched a real-time used car data feed, which on a daily basis uploads a vendor's stock automatically from any remarketing system to Autorola's online platform. Pay says this data integration simplifies the trading of vehicles and saves the vendor time in the key area of stock turn.
He adds that the firm has an independent account that takes buyers' funds and protects them
until the new owner of the vehicle receives it: "With Autoquake going into administration, protecting buyers' funds while a vehicle is being prepped and delivered have become an even more important part of the online process."
In terms of impacting auction prices, online sales channels broaden the buyer base, putting sale vehicles in front of a bigger audience of engaged, professional bidders, says Gannon. "More buying power leads to quicker sales or even access to specialist buyers and the opportunity to remarket vehicles discretely, if required," he begins. "These are all benefits that will help fleets at remarketing time. By getting vehicles on sale quicker, holding costs and depreciation are reduced and money is back on the company's bottom line sooner, improving cash flow."
Naturally, the critical factor for building buyer confidence in online channels is a consistent and transparent inspection process. BCA achieves this by its inspectors using the latest mobile technology to create end-of-life inspection reports for sellers, which are uploaded remotely into BCA's systems. This data is used to populate online catalogue listings and includes digital images as well as a comprehensive inspection report detailing any damage.
Autorola's Pay says more and more fleets are using online as part of an overall remarketing strategy: "Every vendor's approach is different and most are piloting online as a benchmark against other forms of remarketing channels such as physical auction."
And Gannon says that as pressure grows to source used cars quickly and profitably, professional buyers appreciate the opportunity to fill gaps on their forecourt with online purchasing: "Buyers can source vehicles quickly and easily via the BCA stock locator, see the vehicle description and specification, and read a comprehensive inspection report. They can bid for the vehicle with a press of a button without having to travel to a sale. Payment and delivery can all be processed online, making the service complete."
He continues: "With used vehicles becoming an increasingly vital profit source for retail dealers, it is inevitable that these online channels will continue to grow in importance for stock acquisition. The majority of BCA's leading vendors agree and are already offering stock in online sales to complement their physical presence in the marketplace."
Pay concludes that as the cost of running large auction sites increases over the next few years, the number of physical sites is likely to fall with online taking up much of this volume.