CARY, N.C. -

There are some basic fundamentals just to be able to enter the auto auction game. One of those is having the ability to offer online sales.

Think of it like a hand of poker.

“Every auction, whether you’re Manheim, ADESA or an independent, there’s certain things you have to have these days just as your ante into the business. It’s kind of like a card game where you have to ante up a certain amount,” said Pierre Pons, who is president of the TPC Management Co., that provides consulting to auto auctions.

“So, to be competitive and to just play the game, obviously you have to have a facility, and you have to have to have people, staff, and you have to have auctioneers. And you have to have fencing, you have to have certain technology that runs the auction,” said Pons, who will complete his 12-year tenure as chief executive officer of the ServNet Auction Group at the end of December, while remaining in his leadership post at TPC.

“But in today’s world, you have to have some kind of simulcasting platform — whatever that is; and there are different vendors who provide it to the independent community — you have to be able to what we call ‘multi-post,’ which is put vehicles on multiple upstream platforms, like OVE, SmartAuction and OPENLANE,” Pons said.

In other words, having an online presence is a must for today’s auto auction. In fact, during the June phone interview, Pons said he had been visiting with a financial institution who said, “when the car’s there, and there’s a title there and there’s a floor price there, we want that vehicle posted immediately.”

The financial institution wanted cars “online right away,” even if the vehicles had not run through the lane, Pons said. Many consignors share that approach, he said.

“They want their vehicles being sold or have the ability to be sold seven days a week. The days are gone when it’s just sale day,” Pons said. “Sale days are still important, but in today’s remarketing environment, an auction had better be able to transact seven days a week.”

In the independent auction community, there is an app called Turn that’s helping give some of those auctions another sales avenue. Greater Rockford Auto Auction owner and director Ryan Clark and his team of developers own the app, which is being used by GRAA and six other independents.

“Our impetus behind launching Turn was to give independent auctions another channel to sell cars.  As you know, there are a number of entrants into the remarketing space,  and we were looking to give our customers an offering that lines up with some of those new channels,” Clark said via email.

“At GRAA, we have evolved into a, omni-channel model where we sell cars every day of the week through multiple outlets,” he said. “Turn provides one more way for us to market cars for our sellers and source inventory for our buyers.”

The Turn app is being used to sell so-called “out of the gate” vehicles and cars on the auction lot, Clark said.  “Selling cars through the lanes will always be the core of what we do, but Turn serves as a great adjunct to that core business,” he added.

As far as how it works, Clark said auctions can upload vehicles to the Turn app through Liquid Motors. The app then sets up 15-minute auctions throughout the day for vehicles to run.

“We set a run list so dealers have time to do their homework on the cars and place proxy bids.  Once the car sells, the auction handles the processing of the deal and performs any required inspections,” Clark said. “If a car does not sell, anyone can put an offer in on a car,  and the auction will work with the two parties to put a deal together.”

Often, it’s about blending the physical and digital.

At Manheim’s 70 auctions, for example, 46% of sales last year went to digital buyers, said Derek Hansen, who is vice president of off-site solutions at Manheim.

Earlier this year, that number was in the neighborhood of 48% — “our highest benchmark yet” — he said in a phone interview this summer. And the goal is for that to reach 50% for 2019.

“We see the wholesale industry transitioning to digital marketplaces faster than ever,” Hansen said.

A big part of that is the Manheim Express digital wholesale app, which just turned a year old.

The company is “investing heavily to continue to provide cutting edge tools and technologies to our sellers and buyers, and Manheim Express is a manifestation of that,” Hansen said.

“Really, it was an opportunity for us to take the power of the Manheim Marketplace to our sellers, wherever they may be,” Hansen said. “A lot of that is dealers at their retail lots. We could package the key capabilities of Manheim into an app that we could put into the hands of a dealer to allow him to scan a VIN, to get the vehicle history, get the market data on pricing of that VIN, to then image, using cutting edge 360 technology and specs based on a host of about 30 questions within the app, that allowed them to convert that vehicle on their lot to a live listing in a matter of minutes, and to sell that car within hours.”

Meanwhile, in mid-August, Manheim announced it was ramping up its investment in Simulcast and plans to add a host of new features to the digital auction platform later this year and early next.

The company declined to provide a specific breakdown of the investment but did note that it is part of the 2-year, $100 million overall digital investment that Manheim began in 2018.

As for a timeline, Manheim was currently testing the new features with a group of dealers, as of mid-August, and it plans to make a more extensive rollout later in the year, the company said.

“The new Simulcast updates further evolve a technology that has transformed the remarketing industry by bringing the auction to the dealer,” Manheim president Grace Huang said in a news release.

Part II can be found here.