In July, ShipCarsNow invited a cross section of industry analysts, customers and suppliers to discuss current industry challenges and brainstorm strategies for addressing them. Timely remarketing and vehicle value retention emerged as the top issues. How can we improve in those areas? Here's an insider's view of the discussion.

State of the Auction Industry

While online and simulcast channels are increasing, our panel agreed physical auctions are still the norm, not the exception. However, technology has greatly improved the online auction experience, with the added benefit of improving an auction's operations overall. Technological innovations have also allowed retailers like Carvana to break into the online space, and may affect how vehicles are retailed in the future.

Key Takeaways

Don't be afraid of technology

• Experiment more — and use technology to change how a consignor plays in the market.
• Use more data — In addition to using data to give pricing advice to buyers, auctions could offer regional pricing analytics, marketing testing, residual value calculations and arbitrage intelligence.
• Plan with the end in mind — Auctions should market a vehicle's value and features to the dealer/buyer, with the goal of changing their mindset from "How can I price this to sell fast?" to "How can I sell this vehicle for maximum return?".

Understand the market

• Protect your residual values — Unless the economy improves faster than expected, the wholesale vehicle market has peaked in 2016. The supply surge may force values to soften, from current three-year retention of 52% to more "normal" rates of 48% by 2019, putting the focus on residual values.
• Improve vehicle desirability — Sellers can make vehicles more desirable with certified pre-owned programs, used-car leasing and other creative ways to market used inventory.
• Improve buyer relationships — Sellers can improve their relationships with buyers by providing greater transparency when it comes to condition reports, maintenance records, accident reports and VIN-level details like trim, color, options, etc.

Improve timely remarketing and value retention

• Move vehicles where the demand is
• Determine what's more important to your business: cash flow or retention?
• Use slow weeks to certify and/or recondition vehicles so they're retail ready
• Work with other consignors and your transportation provider to establish efficient pipelines to profitable markets
• Create a standard set of specifications for remarketed vehicles
• Time your consignments and sales so you don't flood the market

ShipCarsNow is committed to providing our customers with a superb transportation experience, to maintaining a professional and supportive relationship with our suppliers, and to understanding how market trends affect all of us. The open dialogue at the Customer Forum allows us all to better understand the industry, how change affects us, and how we can work together for success. We are invested in continuing the conversation, so please feel free to call us if you want to discuss how these topics and more affect your business — and how we can help.