Today, when you electronically buy an airline ticket, you do so through an electronic hub, such as Egencia or Travelocity. When realtors electronically list homes for sale, they use a multiple listing service for all other realtors to see the property listing. Many see comparable change occurring for the remarketing of vehicles in the wholesale market.
This was a topic of spirited discussion at two seminars held last March at both the 2013 International Automotive Remarketers Alliance (IARA) Spring Roundtable and the 2013 Conference of Automotive Remarketing (CAR). The overwhelming consensus of remarketers is not “if” this will occur, but “when.” And, just as important, most see it happening sooner, rather than later.
The technology exists today to facilitate multi-platform selling, but, as they say, the devil is in the details. The IARA Standards Committee is taking the lead by proposing possible standards governing the use of multi-platform selling and is currently soliciting comments from the remarketing industry, including consignors, auctions, vendors, and dealers.
The Desire for Platform Diversity
Multiple platforms selling is the use of an electronic hub to expose a vehicle to the most purchasing dealers. Consignors will determine the venues their vehicle assets will be posted for cross-listing on multiple platforms. Real-world remarketing experience shows that by exposing products to the most buyers, you maximize resale prices. A central portal would provide consignors one common interface to facilitate online sale activities across multiple online platforms, allowing a single vehicle to be simultaneously listed for sale on various online sites. This central portal would connect all participating online platforms to receive and send information, including digital photos, inspection reports, floor prices, etc.
However, the IARA believes that to be successful, the simultaneous listing of vehicles on multiple online sale platforms will require standardization of industry practices associated with the online selling of vehicles.
Specifically, there will be a need for standardization among auction start and end times.
The IARA Standards Committee envisions the acceptance of the following general principles when remarketing vehicles on multiple online sale platforms. There should be a real-time exchange of data across the various bidding platforms. Bidding received on one platform would be sent in real-time to a central portal that sends out an update, also in real-time, to all other platforms upon which a vehicle is simultaneously posted.
Initially, the central portal should be agile enough to support both competitive bidding and “buy now” sale transactions. Online sale platforms would work cooperatively with each other to allow buyers to do business in the sale platform with which they are most comfortable. The IARA believes it is important that buyers and sellers retain the ability to operate on their preferred sales platform, while having access to the maximum exposure of vehicles.
The IARA Standards Committee recommends that the online bidding starts at the floor price on each of the platforms. Once the consignor’s floor price is surpassed on one site, the vehicle will automatically and instantly be removed from the other sites. The vehicle continues to be available for additional bids on the first platform that received the original bid until that online sale closes and the bidding ends. If the buyer clicks on the “buy now” sale price, it also instructs the central platform to pull the vehicle from the other sites and move it directly to the sale process.
A contentious topic about multi-channel platform is cross-bidding to maximize prices. The IARA points out that cross-bidding brings a new layer of complexity and additional time will be required to develop the business rules to facilitate this functionality with cooperation from the sale venues on various challenges, such as coordinating the start and end time of auctions.
Moving to a New Business Model
A central portal allows consignors the ability to manage online sales inventory through a single common user interface. Logging-in to the portal will facilitate the log-in to each participating platform. The functionality will allow consignors one location to facilitate a vehicle posted on multiple venues with competitive bidding across different channels. All online sales inventory will be visible in any online platform chosen by the consignor (along with individual condition reports) and the inventory will be managed from the central portal.
This isn’t blue sky technology; it is coming, either from the auction industry or third-party technology company. It will represent a “sea change” in how vehicles are remarketed online in the wholesale market. As one independent auction owner acknowledged, “everyone knows this is the direction in which the industry is going.”
This promises to be a topic of discussion again at the IARA Summer Roundtable Aug. 20-21 at the Hyatt Regency Downtown in Dallas. I encourage you to attend. In the meantime, check out www.iaraonline.com for a white paper on the topic.
“It’s hard to have all auctions and consignors agree, but we can try to get as close as possible to reaching an agreement so this evolution in the remarketing process moves forward,” said Bob Graham, VP, remarketing for ARI, and past IARA president.
Let me know what you think.