Canadian Dealers Turn to Online Wholesale Avenues, Offer Best Practices

Ontario dealer Al Revell no longer buys any vehicle at the physical auction.

Instead, the co-owner of Revell Ford Lincoln in Verona, Ontario takes care of all his store’s wholesale buying needs through OPENLANE.

A case study on Revell’s store from OPENLANE revealed that a few years ago, Ford was steering its dealers to utilize its OPENLANE-powered Accelerate program for buying off-lease vehicles. So, Revell chose to give it a shot.

“Initially, we started using OPENLANE strictly to buy,” he told Auto Remarketing Canada. “In general, it helps us fill holes in our used-vehicle inventory.”

Revell also noted: “Once I started using Accelerate, I stopped going to auctions. I haven’t been to an auction in about five years.”

While all dealers might not take the same measures that Revell has, the online environment certainly has become an integral part of how Canadian dealers take care of their wholesale buying and selling needs.

The physical auction is still a fundamental and vital part of the wholesale process for many dealers. However, some have chosen to employ various online avenues as supplementary means to not only find used units, but sell wholesale as well.

For Revell's store, after getting its feet wet with sourcing, the store eventually got into online wholesale selling and now moves at least four to six units a month that way.

“It’s just a different source for your sales. We’ve been successful profitably,” Revell explained.

He also noted that some wholesale units have fetched retail profits, while with others the store was happy to take a “minimal loss” to move a stale unit off its lot. Not all of his wholesale sales are done via OPENLANE. As Revell pointed out, “We have a wholesaler working for us and he helps us turn over our used inventory as well as repping units at the local auction in Kingston.”

It appears that more and more dealers are becoming like Revell in the sense that they use various online avenues to fulfill at least some of their wholesale needs.

In fact, online sales comprise a quarter of all vehicles sold at Manheim Canada, said Cheryl Munce, who had been vice president of strategy, online and business development for the company and now is general manager at Manheim Toronto.

She further noted that based on year-to-date data, half of Canadian dealers are buying online and 45 percent are selling.

“Combined, 57 percent of Canadian dealers are using online channels,” Munce told Auto Remarketing Canada.

When asked how Canadian dealers and consignors are using Manheim Canada’s wholesale avenues for buying and selling, Munce noted: “Dealers today are living by the motto ‘Cash is King’ and finding ways to turn inventory faster. As a result, many dealer consignors are discovering that they can expose their retail lot vehicles simultaneously to a wholesale audience using OVE.com without ever moving the vehicle.

“The dealer can list vehicles themselves using a Seller Disclosure and when the vehicle sells, the vehicle needs to be brought to a Manheim auction for inspection and final sale. Other than the transport and sell fee, the listing fee on OVE.com is free,” she continued.