Selling used vehicles purely online risks compromising vendor bids and prices says Shoreham MD
Following press announcements that suggests the majority of the big remarketing companies are looking at only selling used vehicles online Shoreham Vehicle Auctions (SVA) has reinforced the importance for vendors of also keeping their physical buyer options open.
Many larger vendors are tied into solus remarketing arrangements which could mean their vehicles are only ever sold online, which is putting all their eggs into one basket. SVA’s MD Alex Wright believes solus online contracts could compromise the number of bids and prices received on some stock particularly when the market is tough.
“We have been talking to buyers from the beginning of lockdown and have seen some of them back at Shoreham during the summer. While they have accepted online bidding during lockdown, they prefer to mix it up and also attend physical auctions. Online buyers have also said they like to see physical buyers in the hall as it supports market confidence of a sale,” he said.
“Buyers often need to see the market for themselves from the auction hall and gauge why prices are the way they are by interacting with other buyers. This became obvious in June when prices went through the roof as pent-up consumer demand chased a limited supply of stock. In our experience market confidence comes from people not machines.
“It’s all about building buyer trust which enables them to buy freely from some auctions and avoid others. That’s why having a solus online deal is dangerous as vendors risk side-lining some buyers and compromising bids and prices in the long run,” he added.
Wright believes the best option for vendors is to have a benchmark clause in place which allows them to send some stock into physical auctions with buyers in attendance. That way online and physical price comparisons can be made, and vendors can ensure they are putting their vehicles in front of the right buyers through the right channels.
“What 2020 has taught us is that all remarketing strategies need to be reviewed and modernised to cope with challenging situations like Covid-19. The pandemic has certainly modernised the remarketing industry by getting more buyers bidding online, but that doesn’t mean they all want to bid and buy all their stock from their PC or laptop.”