Dealers should be prepared in order to find auction success
Dave McMahon, Senior Editor
December 26, 2011
Filed under Features
Even a single transaction can build profit
Dealers interested in expanding their customer base are missing out on potential profits if they’re not turning to an auction to either buy or sell inventory, according to Karen Braddy, general manager of Manheim Specialty Auctions.
“More than anything, the auction gives dealers an opportunity to expand not only their buyer base, but their seller base, too,” Braddy said. “It opens a whole world of opportunity in the wholesale arena that they normally don’t have the time or ability to take advantage of. Auctions were built on the guy who brings one unit and buys one, or the guy who brings two and buys two. Those are the guys who have mastered the art of the remastering channel. They know how to make the right choices.”
With dealers reporting a rise in sales of pre-owned units, Braddy says buying or selling at auction makes sense from a dealer’s business perspective.
“Dealers should approach their inventory the same way they go about their investments — don’t put all your eggs in one basket,” she said. “I vary my portfolio, because I don’t know what’s going to happen from one quarter to the next. Dealers don’t want to have all new inventory, and they don’t want all used inventory. You should even have some rental inventory. Going to auction is a step in the right direction.”
While dealers new to using an auction could view the experience as organized chaos, Braddy offers insight on how to make it a positive experience, especially for the bottom line.
• “Go online to preview the auction inventory. Use the auction’s market report for a pricing guideline. Sources such as Kelley Blue Book and NADA Guides also provide perspective.”
• “I probably shouldn’t even say this, but tell yourself a price that you will pay and stick with it. If you’re not going to spend more than $10,000 on a bike, hold to that. It’s the best and safest advice. Be prepared and stick to it.”
• “View the condition report online, preview the product, and buy only things that you have previewed.”
• “Most buyer’s remorse happens when a customer bids on something on the spur of the moment. We try to provide as many tools as we can to prepare you for the products you’re interested in.”
• “The first run at auction is always the best money for the seller.”
• “For a dealer selling a bike at auction, the cleaner the bike, the more money it brings.”