Remarketing: Let's get physical

Date: Wednesday, October 26, 2022 | Author: Tim Cattlin

The pandemic put a stop to physical auctions, giving the trade no option than to bid online. Now the halls can welcome back buyers, do customers still prefer to ‘touch the metal'?

There’s no doubt many traders missed that combination of diesel fumes and the aroma of cooked breakfasts that the auctions provided, but there have been cost and logistical advantages to both sellers and buyers bidding online. Are physical sales

now returning with a vengeance? Alex Wright, managing director of Shoreham Vehicle Auctions, was keen to get back to the traditional way of doing business. “We offered physical sales as soon after lockdown finished as it was legal to do so.

“Our buyers wanted to return to the halls, so we responded accordingly and continue to run physical sales for all our used stock from vans to dealer part-exchanges and ex-fleet stock.”

Explaining how this policy has paid off, Wright adds: “We have seen a number of new buyers come to Shoreham because we are physical and because other auction companies have decided to stay online. Often buyers have shunned the auctions that are
only trading online, which has worked in our favour.”

Gauging and responding quickly to buyer demands and moods was vital, Aston Barclay, LCV sales manager Geoff Flood explains. “In quarter one 2021, we surveyed our buyers prior to auctions opening after the various Covid lockdowns. It was very clear that on the LCV side buyers wanted to be let back into the halls to inspect and bid on vehicles which is what we did.” With challenging market conditions continuing, Flood said buyers wanted to carry out their own appraisals. “Due to LCV prices remaining very high, some buyers want to inspect a vehicle physically if they are going to have to spend record prices. It gives them extra peace of mind, especially on those vans with damage, as they can work out themselves how much the damage is going to cost to repair and how long it is likely to take to get onto the forecourt – bearing in mind parts delays and bodyshop waiting times.”

BCA has taken a different approach, and currently all sales remain online only. The company feels that buyers are now accustomed to online bidding and trust third party appraisals and there appears to be no plan to reopen the halls. “Anyone close to the LCV sector prior to the pandemic could see the momentum shifting towards a significant increase in digital interactions,” said the company’s chief operating officer Stuart Pearson.

“BCA has continued to lead the wholesale LCV sector by accelerating the shift and has used its scale and innovation to provide our customers with, what is without doubt, the most efficient way of trading in an ever-changing landscape.”

When accurate appraisal of vehicles is vital for traders who traditionally carried out their own inspections on site, are they able to trust the reports offered presale online? Shoreham’s Wright thinks so. “Yes, our comprehensive inspection data and images are backed up by NAMA grading standards, so the buyer is always very clear on what they are bidding on and what condition the vehicle is in. And if they are still unsure, they can always speak to the office where we will answer their questions.”

The trade valuation companies also feel that buyers are now more comfortable purchasing online. Validating the trust that could be found in accurate inspection reports Steve Botfield, chief commercial vehicle editor for cap-hpi says: “From many discussions with auction houses in 2020 and 2021 the number of rejected sales were minimal, thus proving that the quality of inspections met with the buyers’ requirements.”

However, with the return to normality in most aspects of business some traders became uneasy at being forced away from the halls.

“We could see the signs of this in late 2021, where condition started to play a bigger picture as to whether vehicles would sell or not as the market softened,” observes Botfield.

“Along with the market changing, buyers wanted the ability to inspect vehicles and so many of the independent auction houses found the need to offer a hybrid solution of opening their halls once again for buyers to attend but also to keep those buyers who had comfortably converted to buying online.”

Andy Picton, chief commercial vehicle editor at Glass’s, says the guide has been carrying out its own research on trade opinion of online versus physical sales. “We asked buyers if they missed the opportunity to attend a physical auction, 20% said yes, 60% no and 20% not sure.”

Vendors have mixed views on the shift to online sales. Imperial Commercials LCV franchise director Gareth Kaye says: “As a vendor, disposal of anything at the budget end of the market or later stuff when taking into account the massive variance in conditions, then the ability to attend a physical sale is paramount for the best return.”

Kaye adds: “Online activity will remain strong for those that like to operate that way (it was high before the pandemic anyway), so no change there.

But he cautions: “The auction houses’ inspection reports leave a lot to be desired at times, which doesn’t help.”

Van Monster Remarketing sell 95% of their used LCV’s through their own platform, disposing of not just vehicles from parent company Northgate, but also for external clients. Kevin Hall, head of remarketing explains the benefits of online sales. “Our fleet and OEM vendors are very happy with online remarketing. We sell their vehicles efficiently at very good prices via our online platform. They save on the transport costs incurred when a van is sent to a physical auction and the first road miles are when the buyer collects the vehicle.”

But what online sales can’t offer is the opportunity for networking. The research from Glass’s suggests that 60% of traders went to an auction purely to socialise with others. Imperials’ Kaye concurs. “That’s one of the biggest things for me. Being able to network and get a feel from fellow traders and dealers on the market sentiment and sales is invaluable.”

Is there a future for physical auctions? Shoreham’s Wright certainly thinks so. “There is a future for physical auctions as they set the tone for market prices. If an online buyer wants to get a feel of used market trends, they will visit us as they can feel disconnected when bidding from their PC.” He adds: “Franchised dealers often bid online but visit us when they want to talk to other buyers and get a feel for what is happening live in the market.”

Van Monster’s Hall is a little less convinced of the demand. “A small band of traditional buyers like to kick the tyres and physically inspect vehicles prior to them bidding at auction, which should keep physical auctions going into the future.”

Less optimistic for the physical auction future is Glass’s Picton, who says: “For now, I believe there is a place for physical auctions, but over time this will erode and we will move
to a fully online service.”

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