In an industry that is mostly dominated by large auction chains and independent auction owners, the McConkey Auction Group is one of a few small auction groups that are making big strides in the auction business.

CEO Bob McConkey opened his first auction in 1992 in Spokane, Wash., and since then has bought and sold auctions in Las Vegas; El Paso, Texas; and Kansas City, Mo.

The McConkey Auction Group now owns four-auctions in the Pacific Northwest region serving dealers and consignors in Washington, Oregon, Idaho, Montana and Alaska.

McConkey said he settled on a Pacific Northwestern regional business model because the area is home to him and his three adult sons, who are actively involved in the family business.

His auction group does business with Ford Motor Co., GM Financial, Honda Financial, Hyundai Capital, and “virtually all the banks and lease companies,” in his region, he said.

Growing through conquest

The area of the country in which McConkey’s auction group operates is spread out. For example, he does business in Montana and his competitors are “300, 400 miles away,” he said.

McConkey’s DAA Seattle runs 1,100 to 1,200 vehicles a week; DAA Portland, open for less than a year, runs 500 to 600 vehicles a week, and crossing the auction block at his DAA Spokane is 1,100 to 1,500 vehicles a week

His MAG Alaska digital platform has a physical site in Anchorage, where dealers can see in-person the vehicles that piqued their interest and have the option of bidding on vehicles in-lane or online.

He also operates his MAG Now digital platform for dealers throughout the Pacific Northwest who’d rather click tires than kick them.

About 35% to 40% of the vehicles that cross his auction blocks are off-lease and 60% are dealer-owned, a consignor mix which McConkey considers “very healthy.”
McConkey said there is virtually no organic growth in his market because there are fewer cars there than there used to be, and attributes his 30% growth over the last two years to conquest business, he said.

What makes conquest possible is that himself, his sons and their management teams are focused, accessible and make decisions quickly if and when necessary, McConkey said.

“Our motto is we have one team; one vision; one goal and our entire employee base of 500 people is focused on the same thing: make sure the car gets sold within our group,” he said.

“Doesn’t matter if it’s sold in Montana; doesn’t matter if it gets sold in Oregon as long as we sell the car and our competitors don’t.”

Used-car sales ‘mystique’

Pierre Pons, president of TPC Management, a remarketing industry consultancy based in Nashville, Tenn., said a regional approach for smaller auction groups such as McConkey’s makes good business sense.

That’s because dealers tend to buy vehicles within their own region, like knowing that there is a consistency of policy at the various auctions they frequent and often know who the managers and owners are in case there is a problem.

Pons said that smaller groups can use whatever technology they want, which is another advantage.

“Independents are advantaged because they not only can use their own technology, they can avail themselves to any technology,” Pons said.

“Every technology doesn’t fit every auction. There is still some mystique in selling a used car.”

ACV: product, data and tech

Another small auction group doing some big things is ACV. It’s also a company that to utilizes its own technology.

Best known for its digital dealer-to-dealer auction platforms, ACV coupled data — collected in-house during the “millions, plus” vehicle inspections it conducts annually — and artificial intelligence, to create APEX, a tool that “listens” to running engines by capturing its vibrations, said Vikas Mehta, ACV COO.

“Based on all of our inspections, we can make a determination if the engine sounds normal, or if there’s a knock, a tick or a squeal,” Mehta said.

“It measures the vibrations of a car, and especially when you think of EVs you don’t hear an EV but ‘feel’ if something is not right.”

In addition to creating a marketplace for wholesale buyers and sellers to do business, ACV is a product, data and technology company rolled into one, Mehta said.

“We have over 400 people in product and tech, R&D, data and design,” Mehta said. “That’s a core part of who we are and what we do.”

From app to AI

ACV’s business model calls for its inspectors to visit the selling dealers’ stores to inspect and take photos of their vehicles, and post the vehicles along with their condition reports for sale of ACV’s platform.

When ACV started 10 years ago, its inspectors used an app which was more like a note taking device, Mehta said. After visually inspecting the vehicle, inspectors snapped photos of it, and the buyer would decide what the car was worth.

But over the past five to eight years, ACV very deliberately invested in technologies that produces data that aids the buyer to get a very good read on the vehicle condition, and the seller a good read on price, Mehta said.

ACV also created a device that looks like two, 4-foot sticks that are shaped like a “V.”

“We developed this proprietary inspection tool which allows the inspector to insert an iPhone inside this tool (which utilizes) a series of mirrors that you drive the car over,” Mehta said.

It takes panoramic view photos and uses AI to “stitch” them together to create a clean, crisp image of the undercarriage. “We call it a Virtual Lift because you can get a view of the undercarriage without putting the car on a lift,” he added.

First digital auctions, then physical auctions

Over the past “couple of years” ACV acquired 10 physical auction sites it calls remarketing centers and opened No.11 in Houston as a greenfield remarketing center in mid-August.

At these remarketing centers, the company offers customers reconditioning services typically offered by traditional wholesale auto auctions.

They are open to dealers who want to see the vehicles they are interested in and to those who want bid and buy in-lane as well as than online.

The centers also give ACV’s commercial customers land to park cars before they are sold, Mehta said.