P&A auction offers dealers bulk buys
Dave McMahon, Editor in Chief
January 20, 2014
Filed under Features
Manufacturers also benefitting from NPA Black Market
National Powersport Auctions earlier this quarter launched the NPA Black Market, an online auction that offers noncurrent brand-name powersports gear, accessories and parts at a wholesale level, giving both product manufacturers and brick-and-mortar dealers another opportunity to sell product to their customers before it goes discount to large online retailers.
Product categories at recent auctions have included helmets, riding gear, goggles/gloves, boots, exhausts, wheels and racks. And suffice to say, the demand at the dealership level has exceeded NPA’s expectations. In fact, the NPA Black Market auction platform in December is the company’s largest yet, with more than 75 lots sold. That led to NPA Black Market moving more tha a quarter-million dollars of product for its clients.
Due to the various size and scope of NPA’s dealer partners, lots are divided by size. A small lot, for example, could include a six-pack of helmets, whereas a large lot for helmets would consist of 40.
“Right now we’re being selective with our product and offering an array of sizes,” NPA media manager Ryan Keefe said. “We want to make sure we’re offering quality product that dealers can make money on.”
In NPA Black Market’s short lifetime it has already offered more than 30 product manufacturers with hundreds of SKUs. The online auction runs 24 hours a day, with all four NPA locations participating. All lots are sold in an auction environment, usually online with a three- to four-day run time at the NPA Black Market website. Among the brands that have turned to NPA to part with their noncurrent inventory are Troy Lee Designs, Vance & Hines, Scorpion and several distributors. The lot sizes and product mix changes often, providing dealers with more reason to frequent the online auction.
Demand created market
Keefe said NPA decided to launch the NPA Black Market after extensive research with both product manufacturers and dealers.
“All manufacturers have noncurrent inventory that they need to move,” Keefe said. “And dealers are always looking for something that’s not a huge cash outlay for a buy-in. The manufacturers wanted to reach a wide range of dealers, which we provide, and they wanted national and international reach, which we also offer. With NPA Black Market we’re able to move their noncurrent or unwanted inventory faster, while keeping the manufacturer’s sales force selling the current season product with bigger margins. Plus, our competive auction platform provides them with the highest return possible while ensuring dealers only have to pay for what they really want.”
NPA package the product into groups or lots of complementary products, with the online description including photos of the product and various color ways when needed. In order to appeal to a wide range of dealers, lot sizes, depending on the product and quantity, can range from winning bids of $500 to $5,000, depending on product quantity, demand, location, time of year and other factors.
Parts staff involvement
NPA Black Market also is getting more dealership personnel involved in the auction process, since many of its early adopters are turning to parts department staff to be the store’s link to the NPA Black Market.
“It’s definitely the type of environment where parts staff are comfortable getting involved, especially when they see the type of product we’re offering,” Keefe said. “We are seeing a lot of them place their bids from their smartphone or tablet.”
Product manufacturers typically turn to NPA for two reasons — money or warehouse space. Or both. NPA’s warehouses all are now housing aftermarket products and accessories in addition to their lineup of motorcycles up for auction. OEMs who have long depended on NPA to help liquidate their noncurrent vehicles, have already started talks with NPA about the prospects of auctioning their noncurrent parts and accessories inventory as well.
Dealership base expands
One of the most attractive aspects for brands and manufacturers who use NPA Black Market is that it allows their brand’s reach to expand. For instance, a dealer who might not currently stock a specific helmet brand, for a variety of reasons, can dabble with sales of the brand by placing the winning bid on a small, medium or large lot without having to adhere to the brand’s normal qualification criteria. The dealer’s success in selling the product could lead to more purchases, either as a qualified reseller of the brand or by keeping tabs on the latest NPA Black Market lots.
NPA staff members sort and merchandise the product accordingly. And while it does not need a traditional NPA condition report since it’s all new, the online auction still provides full descriptions of sizes and quantities, with photos to show colors and other visual factors.
“In a given lot, we try to find a complementary run of sizes and colors,” Keefe said. “We try to replicate it the same way a dealer would receive it from the brand.”
The small quantities of a specific product that could be a successful fit for a dealership is appealing to dealers, Keefe said.
“It allows dealers to test the waters with specific products and brands, to see if they are products that they want to carry in their dealership,” Keefe said. “We’re already seeing dealers who have participated in multiple Black Market auctions. It’s growing faster than we expected.”
Manufacturers, meanwhile, are keeping products inside the dealer network for a longer period of time than they would otherwise.
“The goal of NPA Black Market is to keep the product inside the dealer network longer, strengthening product manufacturers, the dealer bsae and ultimately our industry,” Keefe said. It’s a great opportunity for buyers to get into product that they’ve never carried in their stores before, at a small fraction of what they would typically need to order to bring in new product,” Keefe said.