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.
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
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.
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