SCOTTSDALE, Ariz. -

With online auctions becoming more popular and alternative channels like dealer-to-dealer sales  gaining ground,   wholesale buyers and sellers now have many choices for conducting   business.

With that in mind, many in the industry may be left wondering what the future holds for the wholesale market; what will be the roles for these new wholesale options and traditional brick-and-mortar auctions?

Todd Kinzle, director of operations at Auction Genius, explaines though he does not think brick-and -mortar auctions will disappear completely, it may become even more important for dealers to put a strong emphasis on digital.

Susie Heins, vice president of dealer sales at Manheim, explained that she thinks the physical lanes still remain the most “efficient” place to do business.

“While it’s hard to predict (the future), the lion’s share of transactions still occur in the lanes — the most efficient marketplace hands down at the moment,” she told Auto Remarketing recently.

That said, Heins explained online sales have their place, as well.   

“Buyers are migrating more frequently to online channels, so giving both buyers   and sellers choices will still be critical to conducting business. The online challenge is helping them understand what the market value is for their vehicles, and they should not discount active bidding online. In some cases, that is the market,” she further explained.

Kinzle added:“I believe for the time being a dealer can survive without participating in live (online) auctions, but those who wish to thrive are staying ahead of the curve and making sure that they a fully equip to win in the world of online auctions.”

Alternative Buying & Selling Outlets

But online auctions are not the only place to buy and sell on the Internet. Both Heins and Kinzle touched on a few alternative options for dealers and consignors.

One of those is dealer-to-dealer sales.Though convenient, Kinzle stressed that you have to be a bit more careful with this type of deal.   

“There is nothing wrong with buying a vehicle directly from another dealer online or otherwise, especially if you know and trust that dealer. However, whenever there is one buyer and one seller, the negotiation takes on an entirely different flavor,” Kinzle said.

Kinzle explained that one of the issues with dealer-to-dealer sales is coming to an agreement on the right, fair price.
“The beauty of the auction environment is the ability to get to the bottom of the pricing question through competitive bidding. This usually gives both the buyer and the seller the feeling that the price was ultimately right,” he shared.

“This remains true whether the transaction takes place online or face-to-face. Dealer-to-dealer transactions require an elevated level of trust that is difficult to establish online. For this reason I think the auctions ability to provide an unbiased third party to the transaction creates a more desirable transaction environment,” he further noted.

Over at Manheim, Heins shared that it takes true “commitment” to make dealer-to-dealer sales work smoothly.

“Manheim does a significant amount of dealer-to-dealer transactions today with large groups. It works best if groups and their stores are fully committed to this channel and the group centrally manages it. It can be a great option in getting the right vehicles to the right lots for the dealers to sell,” she noted.

Manheim also has a few projects in the works that may present even more alternatives to standing in the lanes when dealers are ready to bid on new inventory. For example, Heins commented on dealer trade networks and the opportunities they present.

“Dealer trade networks, if the group is ready, can build significant efficiencies. They can also keep a vehicle moving in the remarketing cycle pretty easily and efficiently, as all of our tools can go from closed to open marketplaces including seamlessly moving a unit to the lane without missing a beat,” she explained.

Heins also noted that Manheim is getting ready to ramp up its mobile tools.

“We have great apps today that allow dealers to do everything from research inventory, compare pricing, to create personalized workbooks for units they want to purchase as well as pay for vehicles online,” Heins said.

“Our next generation mobile tools will allow dealers to bid from anywhere on Simulcast. The possibilities are endless with these tools,” she concluded.