Wednesday, Jan. 02, 2013, 03:58 AM UPDATED 4:08 AMBy Auto Remarketing Editor Joe Overby
SCOTTSDALE, Ariz. -
When the American Auto Auction Group got started in Charleston, S.C., around three years ago, its goal from the outset was to create a coast-to-coast nationwide network of independent auctions.
Having dug its roots on the East Coast, the group wanted to find a foothold towards the Pacific end of the country. That’s when George Pero and his “hybrid”-style Auctions in Motion came into the picture.
“When we found George (in early 2012), we saw a young entrepreneur who listens to his customer and has a vision for where the auction industry is going, and is quick enough and nimble enough to follow it,” AAAG chief executive officer Bill McIver said when Auto Remarketing interviewed him and Pero at the Used Car Week conference series in November.
“And when we saw what he had created and begun, we just knew it would complement some of the same things we were doing out on the East Coast,” McIver said.
It would take some time before a deal was finally sealed for AAAG to purchase Auction in Motion, but it was well worth the wait, McIver said, as the auction group was able to add a new style of wholesale business to its repertoire.
The model for Auctions in Motions, as its founder Pero describes it, is to “bring the auction to the customer.”
Or, put a different way, a “boutique approach” of bringing the auction to a dealer’s neighborhood.
As Pero explained to Auto Remarketing earlier in 2012, Auctions in Motion provides both “mobile” sales — where within a 72-hour period, the company sets up shop on dealer property, conducts the sale and has everything packed up and out of there — as well as sales that are at set, free-standing locations.
The latter are known as “hybrid” sales. Though different than the traditional brick-and-mortar auction, they are designed to offer the benefits of “mobile” sales and the traditional permanent auction sites.
When asked what the appetite has been to this wholesale selling approach, Pero said: “They embrace the different style of doing business, because it’s about efficiency. It’s about saving the customers’ time, both the sellers and the buyers.
“By bringing the auction to the customer, they maximize their time, a commodity that sometimes has an unbelievable value; they get to buy vehicles that are specific to a geographical area, they know where their cars are being sourced out of … but what’s most important is that customers have asked for this,” he said.
“Listening to the customers’ needs is what helps you build a successful business,” Pero added. “You don’t follow the ‘we’ll build it, and they will come’ (model); what we do is we come to you, and we’ll build it for you.”
In sharing his input on the feedback and reaction to this sale type, McIver harkened back to when online auction sales were first gaining steam.
What attracted people to the Web was that they could buy units upstream, or in other words, “closer to the source of the vehicle where it’s grounded,” McIver said.
“This is the same concept, but with a little bit different of a spin. You get the energy, the action, the enthusiasm, the competitiveness of a live auction, but it’s upstream,” he noted.
This style aims to make it convenient for the dealer, McIver added, noting that “he can come over, rep his own cars and then return to business as usual.”
McIver continued: “He can leave the cars available for retail literally up to hours before the sale. We go out and take the pictures, do the CRs on the cars while they’re still on the dealer’s retail lot. Then just prior to the sale, we’ll move them and run them through the lane.”
Pero emphasized that one of the more vital benefits to the dealers using Auctions in Motion is the fact that buyers and sellers tend to know one another.
“Because we deal in a specific geographic area, it’s a boutique approach, where the buyers know the sellers; the sellers know the buyers,” Pero said. “What we’re doing is we’re providing an auction environment with guaranteed funds for processing the titles, issuing the checks and collecting the payment. But for all intents and purposes, we’re doing business on the dealer property, and the dealers feel like they’re doing business with each other.”
One of the sales Auctions in Motion conducts is a “private-label sale” for the Rusnak Automotive Group in Southern California. The 12-franchise, 14-store group has had a relationship with Auctions in Motion for five or six years, said Mike Barone, who is the wholesale director at Rusnak.
Auctions in Motion has an auction set up for Rusnak in Pasadena, Calif., and the dealer group runs all of its wholesale units through this sale.
“It’s changed over time — we used to do a few units five years ago — but we’ve had extreme success in turning our wholesale inventory,” which is “very important” to the group’s chief executive officer Paul Rusnak, Barone said.
“(Auctions in Motion) has been a tremendous help in establishing a very accommodating auction for us, and it’s only grown,” Barone added. “So, we’re very impressed with the results we’re getting.”
When asked what the biggest benefit to using this approach has been, Barone said the group has been able to establish its own “following” among buyers.
“Being that we have 14 different brands and mainly all high-line stores, we get some of the best trades in the market. And they’ve branded it with our name for our auction. It’s really establishing that the right buyer is coming to our sales,” Barone said.
“We definitely believe in not hanging on to the product. Once we feel like we’re getting the market on these cars, we’re ready to sell those cars and turn them quickly,” he added. “They’ve helped us really establish a clientele that’s coming in every week. People are really excited about our trade-ins and the stores that buy our cars are very impressed. They (Auctions In Motion) have a more personal appeal, in terms of marketing and representing our group.”
More on AAAG/Auctions in Motion ‘Marriage’
In doing business with the Rusnak group, Pero and his Auctions in Motion team cater to the need of that particular dealer group. Such an approach is one of the benefits McIver and his team with AAAG has found in Pero.
“George brings a different aspect, a different perspective, if you will, to the way we look at the industry, and he helps us be poised to meet the changing needs of dealers going forward,” McIver said, “because it’s going to change.
“Neither one of us is perfectly clear on where it’s going to go, but we are very certain that we can follow those dealers and help them remarket and market their cars wholesale in ways that will add value for them, and that we can gain value from, also,” he added.
But it’s not just AAAG that has benefitted from this partnership, according to Pero.
“The benefits are very much mutual,” he said. “With many other businesses within the family of American Auto Auction Group, we have a tremendous opportunity to collaborate and discuss best practices. With 11 different fixed sites and 11 different private-label sales — or mobile sales, as we call them — there are so many great ideas that just surface from that.”
And going forward, 2013 may bear the fruit of some of those ideas. In discussing his goals for the coming year, McIver emphasized how working together is paramount for the companies.
And that may lead to future growth.
“One of my favorite thoughts, and we’re realizing it every day, is that none of us alone are smart as all of us together. We are learning from George; we’ve got ideas and practices and processes that he’s learning from us,” McIver said. “We’ve created a good stable environment with ready capital to expand our footprint where it makes sense. We’re ready.”