By Alison Spangler, Senior Director for Manheim Digital
Many dealerships have long held the view that the wholesale used vehicle market is an option of last resort. It’s a place for accepting losses, not an avenue for driving profits.
Digital technologies, though, are transforming the wholesale marketplace, making many dealers rethink their approach to that part of the business. The promise of a new, more profitable wholesale marketplace is translating into a major shift in dealer buying habits. Last year, more than 40 percent of acquisitions at Manheim operating locations were from digital buyers—and that number is accelerating.
What’s driving this digital adoption and challenging conventional wisdom about the wholesale marketplace? Four key factors are behind the shift:: increased efficiencies, reduced risks, unparalleled convenience, and improved bottom-line results.
Saving dealers time and money
Time savings is a key reason why dealers should rethink making digital buying and selling a part of their overall wholesale strategy. It’s no secret dealers are facing a challenging environment with tightening margins, a slowdown in sales and increased competition.
Digital technologies help streamline the wholesale process for both buyers and sellers. If you’re a dealer with trade-ins, it helps you offload inventory faster because there’s no need to ship the car. You can list and sell in the wholesale marketplace right from your lot. If you’re a buyer, you have access to fresh inventory, helping you quickly find the exact car you need right in your backyard.
Reduced risks and less hassle
The digital marketplace also is becoming less risky for dealers, thanks to advances in inspections and imaging. Objective and detailed condition reports instill buyers with confidence as they search through the listed inventory. High-res imaging builds trust, even if a buyer can’t see the vehicle in-person.
The convenience factor can’t be overlooked either. You can buy or sell a vehicle whenever and wherever makes the most sense for you and your business. No need to drive to a physical sale and take valuable time away from your dealership. Digital wholesale channels put the marketplace at the tips of your fingers. All you need is a computer, tablet or smartphone.
Results that matter to the bottom line
Finally, and most importantly, the digital marketplace is changing the game for the wholesale business due to the impact it has on a dealer’s bottom line. Buyers have easier access to a wider selection of inventory, enabling them to better stock their lots with vehicles desired by their customers. What’s more, artificial intelligence is now being used within the marketplace to learn buyer preferences and help sift through thousands of listings to serve up the right vehicles at the right prices.
Sellers can expose their inventory to more buyers, increasing the potential for a higher bid and greater returns. They also can reduce holding costs by moving inventory faster and save on transportation costs by not having to take vehicles to an auction site. Whether buying or selling, these savings flow right into your business’ bottom line.
Maximizing the digital benefits
The benefits of the digital marketplace will only increase for dealers who fully leverage the available technologies and tools. For starters, mobile apps make it easier than ever for dealers to list vehicles for sale right from the dealership lot. Using the technology already in an iPhone or Android device, dealers can capture immersive, 360-degree images that enable potential buyers to see the vehicle from every possible angle, inside and out.
Integrated wholesale appraisal tools enable dealers to make smarter decisions for both buying and selling vehicles. These tools can help determine the true value of a vehicle, the cost of holding onto a vehicle and whether it’s worth investing in reconditioning. Dealers also can use assurance programs to protect their digital purchases in the event that a vehicle needs unforeseen repairs or doesn’t fully meet initial expectations.
These advances all add up to a dramatically different experience and outcome for those dealers tapping into the wholesale used vehicle marketplace. The shift to digital is not just an evolution of the auction; it’s a reinvention. With this technology, dealers can make smarter, faster, more confident decisions for buying and selling inventory. If you’re not already using the new digital wholesale marketplace, it’s time to give it a serious look. The benefits are too significant to ignore.
Don’t miss Alison Spangler’s upcoming session at DD26 on Wednesday, April 10, 2019: 10:05 AM – 10:55 AM. This session will demonstrate how you can get vehicles into the wholesale marketplace faster, and much more!
About the Author
With over 10 years’ experience in the automotive industry, Alison Spangler currently serves as Senior Director, Offsite Solutions at Manheim. In this role, Alison is focused on helping clients buy and sell inventory outside of traditional auction lanes and find new ways to turn wholesale into profit. She is part of the leadership team for Manheim’s Digital platforms, which include the revolutionary new app Manheim Express, as well as OVE and Bid Lot offerings. Alison joined the Cox Automotive team in June 2013 as an Account Executive with NextGear Capital. She holds a Bachelor of Arts in Education from the University of Kentucky.