Connect with us

From the Magazine

The Growth of Online Auctions Continues

Part of the reasoning is because dealers are busier than ever, but also, auction companies have done an excellent job making the process easier and more transparent.

Advertisement

Online auctions have been gaining in popularity for dealers ever since they were rolled out several years ago. Part of the reasoning is because dealers are busier than ever, but also, auction companies have done an excellent job making the process easier and more transparent. 

Advertisement
Click Here to Read More
Advertisement

“Across the country, we are seeing dealers participate 90% online and 10% in person,” said National Powersport Auction’s (NPA) Jim Woodruff. “Our online participation has grown every year since we introduced NPA Simulcast. Dealers trust our detailed condition reports and can bid while at their dealership.”

Gary Pollard, Rec Rides branch manager, said the increased participation for their online auctions has to do with changing preferences.

“Buyers continue to want choice and flexibility in how they research, bid and buy online,” Pollard said. “Buyer behavior and preference has shifted, and Insurance Auto Auctions (IAA) has shifted with it. IAA’s auction model foundation is built on providing the most flexible yet competitive channels to buy and sell vehicles.”

Advertisement

The shift in buyer behavior has to do with the confidence dealers have in working with a particular auction company and the trust they have in the process.  

Jane Morgan, president of specialty and off-site Solutions at ADESA, said the ratio of those attending online versus in-lane is about 1.5 to 1. 

“In specialty, we have more customers attending online than in person. We’ve seen that the better our condition reports are, and the easier they are to navigate, the higher our online attendance and the greater our percentage sold online,” Morgan said.

Auction companies that are changing with the times and keeping up with the latest technology are seeing growth. Mobile technology is the latest twist to the online model. Many dealer principals/buyers are on the showroom floor or working in another department, not sitting in front of a computer all day to watch their auctions. Mobile apps make the process quick and easy.

“Customers love our mobile-friendly interface and our instant search technology,” said James Skaggs, CEO and founder of Powersports Auction. “We’ve made it extremely easy to search through over 100K vehicles on our platform, save favorites, and get a text message and email notifications when prices drop or vehicles are listed in our auctions.”

Advertisement

According to Woodruff, every auction item NPA offers includes a detailed condition report, 12-30 high-resolution photos and access to their Value Guide, which gives customers confidence in the platform. Another key feature NPA offers is its Watch List. With over 7,000 units offered monthly, the Watch List allows dealers to manage the inventory they are following.

 For live auctions, Woodruff said dealers can bid via NPA’s Simulcast auction platform where they can see and click on the current asking bid, hear the auctioneer and communicate with the auctioneer directly through the company’s chat system. 

“This gives dealers all the same experiences as if they were on the floor, but from the comfort of their dealership or home,” Woodruff explained. “If a dealer cannot attend a live auction in person or online, he or she can place proxy bids, allowing our system to bid on the dealer’s behalf. Our proxy system only bids the amount needed to either meet the reserve or be the highest bidder.”

 Woodruff said dealers who are buying on NPA eSale or any of their online platforms have several features to assist them. 

“All of our online platforms are both desktop and mobile-friendly and offer powersports vehicles 24 hours a day, seven days a week. With auction items online 24/7, dealers can use this platform as their virtual showroom for customers that are looking for something specific,” Woodruff said. 

Advertisement

He also mentioned that once a dealer places a bid, they will be notified if they are outbid. 

“Another feature that is dedicated to our online platforms is NPA Dynamic Closing. This feature prevents a dealer from getting outbid in the final seconds. If another dealer places a bid with seconds left on the clock our system opens up an additional 5-minute window to allow the bidding to continue. This ensures the dealer that wants it the most will get it,” Woodruff added.

According to Pollard, one of the most popular features on their online platform is the high-definition photos. 

“Customers use a variety of IAA’s features and tools, but high definition photo details are among our most popular. HD photos enhance vehicle image resolution (5 megapixels), which helps buyers see vehicle detail clearly. In addition, our IAA Buy Now auction channel is widely used by our powersports customers, which allows the vehicle to be sold between auctions and for a set price, giving buyers the power to make immediate purchases for inventory they need,” Pollard said.

 He added that the online auction model seems to be a natural fit for dealers who are too far away from an in-person auction, but still want to participate as if they were there. 

Advertisement

“Online auctions are breaking down and removing physical limitations for buyers such as geography and time, and IAA offers a few different online auction options,” Pollard said. “Buyers are able to access inventory and make purchasing decisions 24/7 anywhere in the world, which is a great benefit in this fast-paced industry.”

As for how to get started with an online auction platform, Pollard recommended trying a free guest account to find and view inventory while getting a feel of the online auction. 

“With a free guest account, you do not have the option to bid or buy, which can help lessen the fear of accidentally bidding on a unit you are not prepared to purchase,” Pollard said. “The free guest account also gives you access to try account-only features such as the IAA Cost Calculator, which provides an estimate of costs, including bid amount and associated fees. Visiting our dedicated Rec Rides site at RecRides.com is a great place to start; the page can help provide more insight on what type of inventory can be found as well as when auctions are held.”

Some of the challenges with online vs. in-person auctions, according to Morgan, is the auction company must have great condition reports and photos to succeed in the online arena. 

Advertisement

“Our customers’ trust is important, and we gain their trust and build their confidence in bidding and buying by giving them an accurate, thorough description and image of our inventory,” Morgan said.

Scaggs said that since we live in an age where almost everyone does their shopping online. People are not so wary about purchasing online anymore. 

“Many people online window shop before deciding to purchase. Customers usually request as much vehicle information as possible including any aesthetic details the vehicle might have,” Scaggs said. “We have the dealership get in contact with them to provide them all of these details. Customers also tend to ask about auction deposits, which are 100% refundable. Our support team is always available to answer all of the customer inquiries.”

Morgan added that the best way to get started with ADESA auctions is to take a class. 

“Our Specialty division offers Auction 101 classes, which help immensely. There are also online tutorials. If you are near a physical auction, you should ask on a non-sale day for a walk-through of the online system. Every auction is prepared to do that,” Morgan said.

What is the next level for the auction or online selling? Scaggs said he thinks OEMs are going to use more online auctions than physical auctions in the next few years. “I believe dealers will continue to use online auctions because of how simple we make it to make a data-driven decision on when to buy or sell.”

Advertisement

But overall, convenience is key to online auctions. 

“We are working on ways to give dealers more frequent access to more inventory. We will be coming out with new tools and services to make online participation even more convenient,” Woodruff concluded.

Advertisement
Click to comment

POPULAR POSTS

News

Polaris Announces Re-Engineered Slingshot for 2020

Apparel

ScorpionEXO R1 Air Helmet

Tech Tips

Harley-Davidson Jackshaft Assembly

Tech Tips

Tech Tips: Transmission Shafts

Connect