CARY, N.C. -

Adapting to the situation presented by the coronavirus pandemic is on full display within the independent auction world.

Russ Smith is owner and general manager of Dealers Auto Auction of Idaho, which recently joined ServNet Auctions.

Smith felt the stress of when business life in just about every way came to an abrupt stop in March as the gravity of the pandemic took hold.

“I guess initially it was concern for my family and my friends health-wise,” Smith said when remembering his initial thoughts when COVID-19 started to become the problem that’s so familiar to the entire wholesale industry now.

“But then eventually, as a business owner, it works its way back to how do we stay open and what do we do to maintain a business and get people a paycheck,” he continued. “Some of those initial projections were so dire, the death toll and everything else that came out made things scary. Fortunately, some of those things didn’t happen as we all made adjustments. It’s a blessing that they didn’t happen, but any loss of life is still tough.”

David Andrews, who also is chairman of the board for the National Independent Automobile Dealers Association, currently owns a pair of independent stores in and near Memphis, Tenn., seven wholesale auctions located throughout Mississippi, Tennessee and Alabama, as well as a management company, a floorplan company and a finance company.

Andrews recalled a frank conversation he had with his spouse back in March when the coronavirus pandemic began to grip just about every part of daily life.

“I remember on March 15, I was talking to my wife when all of the sheltering at home started, never imagining something like this would happen, and I said, ‘Life as we know it may cease to exist. We could lose everything. And I’m talking about 40 years of hard work could go up in smoke.’ Fortunately, the automobile industry has been spared through all of this,” Andrews said.

“If you were in the cruise business or the airline business or hotel business or restaurant business, it’s not fair what’s happened. Even if you had a Ph.D. in economics from the Harvard Business School, I don’t think you would have been studying this scenario. It’s been like nothing I’ve ever seen,” he continued.

Fortunately, Andrews did not lose any of his business enterprises. In fact, he said he did not have any layoffs among his more than 1,000 employees. And perhaps even more importantly, among the handful of his employees who were diagnosed with COVID-19, each one only sustained mild symptoms and have recovered completely.

“It’s certainly unchartered waters for all of us, between worrying about your family’s health and your business health. But thankfully we’re all doing well,” Andrews said.

Like Andrews, Smith said he did not reduce his workforce even though Dealers AA of Idaho didn’t have a vehicle go over the block for nearly a month.

“Part of the scary thing was no one really knew enough about it to tell you what you could and couldn’t do in the very beginning stages, so we just sent everybody home. We paid them. We didn’t have to lay anybody off,” Smith said.

“When we started working back with online only, we would split shifts and worked limited hours,” he continued. “But it became pretty clear to us that online-only wasn’t going to be the answer long term, at least for us. We started running live sales again about six weeks into it once we had some good CDC guidelines to try to follow. At that point, it became the struggle with how do you keep your customers and your employees safe and comfortable.”

Smith explained that his auction closed its kitchen to reduce potential spread of the virus, marked off the facility for social distancing, conducted temperature checks for employees and customers and hired extra crews to clean. All of the efforts worked in tandem so in-person sales could happen again. And as a result, Smith said nearly 80% of vehicles on sales days went home with dealers who needed the inventory to meet growing retail demand.

“We needed to make sure we were invested in our people and the ones who are taking care of the business for us,” Smith said. “We chose not to let anyone go. We wanted them to know we were in it with them and were going to work through it together. As soon as we went back to live sales, we started to sell 70% to 80% of everything that ran across the block. Our buyer count went up by quite a bit. It was a challenge to make sure we had everyone social distanced. That took people. And my people made that happen. Had not we kept everybody, I don’t think we could have provided the service that we needed to when we started picking up new customers and new accounts and selling so many cars.”

Taking care of people has been the path for Andrews and Dealers Auto Auction Group, too.

“We’ve picked up a lot of business for various reasons. We worked with our dealers. We reduced buy fees by $200 per car just to show goodwill for our dealers. That’s a lot of our revenue. But hey, these are our customers. The way we feel about it, if it’s not good for the seller, if it’s not good for the buyer, then it’s not good for the auction. It’s just not a good deal,” Andrews said.

Andrews made those decision while two members of the group also are expanding, including one auction that is building a brand-new facility.

The group announced that Dealers Auto Auction of Memphis is building an all-new, six-lane facility on 100 acres in Eads, Tenn., while Dealers Auto Auction of Mobile is adding more acreage, offices and lanes to its existing facility.

“We are very excited to be able to continue to reinvest into our facilities,” Andrews said in a news release. “As a premier service provider, we have listened to our customers, and will continue to look to improve our facilities to continue to meet the needs of our customers both in-lane and online with our ever-improving technologies.”

The group has targeted both projects to finish this year.

In the release, DAA Memphis general manager Dan Dietsch said: “We are very excited to get into our new facility.  The demand that we are receiving is amazing, and having the extra room will certainly allow us to better service our customers”

Added DAA Mobile GM Tom Holton: “Being able to expand our parking and staging area, along with the addition of new office space and new lanes, will really help us take the auction to the next level.”

Smith emphasized that making investments like what Andrews’ group is doing is going to be crucial for independent auctions to thrive — even after the pandemic subsides.

“The independents need to make sure that they are as up to date as they possibly can afford on technology so if there is ever another forced shutdown that we have the infrastructure in place to sell cars online only if that’s what the government forces us to do. We were blessed that we had that in place,” Smith said.

DAA Seattle general manager Dave Blake oversees the McConkey Auction Group operation in an area where the coronavirus first started to appear and many business restrictions remain in place. DAA Seattle is running online-only sales, but Blake is taking the opportunity to improve every operational aspect as he explained in an online video distributed by the Independent Auction Group earlier this summer.

“For myself, it’s been a challenge at times to make sure I’m on the right path. It can be different one week to the next just based on it being such a fluid situation,” Blake said. “Who would have thought three or four months ago that for someone to enter the facility you needed to make sure to take their temperature and ask if they had any symptoms or had been in contact with anyone who had any symptoms and then still sell cars.

“For independents, we’ve always done a great job adjusting to the times or the situation. But this is not just a matter of operations, this is not just understanding the market; this is a matter of our own personal energy and approach. There is a lot demanded of us,” he went on to say.