Auction Trends

Below is a graph of the sold units in the summer weeks for the past 3 years here at TGNA.  As you can see, each year tends to trend the same.  Sure there are some anomalies that can happen, but the majority of the time we can predict how large the sale is going to end up being.  Here are my thoughts on each week of the month and the general tendency that produces these results:

Week 1:  Wholesale inventories are lower as most lots have already been cleared by the month end.
Week 2:  Typically if there is a Statutory Holiday, it’ll fall on the first Monday of the month.  When there’s a holiday, it throws off the routine for a lot of businesses, including auctions and dealers.
Week 3:  I have seen the third week of the month to usually be the lowest in sales volume and I haven’t completely put my finger on it yet, but my best guess is that dealerships are busy trying to hit retail sales targets and all inventory is fair game.  So they hang on to everything, trying to retail it.  I would love to hear your thoughts on week 3.
Week 4:  Probably the most obvious week of the month, wholesale inventory reduction week.
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Seven Deadly Sins of Wholesaling

Wholesaling is alive and well as we know it; let’s keep it that way!  Don’t sabotage your wholesale business; avoid these common deadly sins of wholesaling:

YELLOW – Greed:  Greedy Greg always holds out for a better offer. Your first offer is your best offer!

RED – Wrath:  Walter got burnt and burnt his bridges. Take your lumps, and move on… smarter!

GREEN – Envy:  Envious Evan is upping the ante and trying to compete outside his niche.  The grass isn’t always greener on the other side, know your market.

PINK – Lust:  Lustful Larry is always falling in love with his inventory. Every unit is a bag of cash, put out the inventory that will sell!

ORANGE – Gluttony:  Garry the Glutton continues to buy more than he can handle. Know your inventory sweet spots!

BLUE – Sloth:  Sam the Sloth takes his wholesale relationships and business practices for granted. Pay attention to details; the small things make all the difference!

PURPLE – Pride:  Proud Peter knows all, and you can’t tell him otherwise. None of the above applies to him…

Auctioneers: Bid Takers or Market Makers?

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Every auto auction has auctioneers who are either there only to take bids or who can bring a market to life.  Here’s how you can tell which one you are buying from:

Fostering a strong marketplace by having the “Market Maker” auctioneers on the block is the route that all auto auctions need to take.

Wholesale Brand – What the Top Buyers Have Done

Buyers can create their own wholesale brand, just as sellers can.  Here are some ways they end up being valued:

  • Knowing what can be arbitrated – they aren’t wasting the time of sellers.
  • Giving a little bit on a unit to gain a lot on another – they understand that fluidness of the market and know if they can build a strong relationship it’ll work in their favour in the long run.
  • They are clear on bidding intentions with auctioneers in the lanes.  Auctioneers love knowing where a bidder stands; it makes the auction more efficient not having to second guess intentions.
  • Paying efficiently – on time every time – delaying on or making excuses when buying at either dealership or auction level sours the relationships….sometimes beyond repair.

Wholesale Brand – The Buyer’s Benefits

Buyers can create their own wholesale brand, just as sellers can.  Some upsides to having a great wholesale brand on the buying side are:  you’ll get more attention paid to you when something goes wrong, your auction’s reps will work just that little bit more – it is easy to when they always know where you stand.  Selling dealerships commonly work with the buyers with a great wholesale brand by doing “give and takes.”  This means they’ll go with a buyer on a unit at a lower price, as they know the buyers will step up on the unit where the seller needs him to.  You always get the benefit of the doubt with auctioneers and more importantly, auctioneers respect the bidders who make their job easier.

A good Wholesale Buying Brand has massive benefits.  My favourite line to try to make an “if bid” happen is “he’s a good buyer if you can make it happen…”  I only use it if it’s true but it sure works.

An Independent Dealer’s Wholesale Brand in the Lanes

The hierarchy of desired vehicles in a buying dealers mind, is as follows:

  1. Lease/Fleet units
  2. Franchise dealership units
  3. Bankruptcy units
  4. Bank repo units
  5. Independent dealer units

So how is an independent dealer able to raise his “stock” in the eyes of the buyers?  Be very open and transparent about your units by providing as much information that you have at your disposal.  Putting what you know about the vehicle in a print out for the window, providing vehicle history reports, bringing the unit in with a new inspection, and declaring known issues on every vehicle you list for a wholesale sale.  Do some or all of these things, and you’ll see more bidders step up and make offers based on the vehicle in front of them and not on who is selling it.  It’s a hard road to take, but for the independent that can be the most open and transparent seller in the lanes, the payoff is massive.

VW Golf walk around for Used Car lookout

How to get to TGNA from Moncton