The digital highway to success

Date: Tuesday, August 30, 2016   |   Author: James Dallas

CD Auctions found itself in the right place at the right time when the boom in online auction sales began, James Dallas reports on how the company is taking on the big players in the remarketing arena

When CD Auctions began its gestation in the pre-digital age of 1989 as Cars Direct you could be forgiven, in hindsight, for thinking that its founders, Graham Johnstone and Roger Woodward, had access to a crystal ball.

They started the business by using the latest facsimile technology of the time to allow buyers to bid for vehicles via fax rather than having to attend a physical auction.

Fast forward to 2003 and the company moves to its current HQ in Corby, Northants and launches its first live, online bidding service.

The move was greeted with considerable scepticism in the early days when the industry could not quite believe customers would buy a vehicle without first seeing it in the metal, but the big players, BCA and Manheim, were already hosting online sales alongside physical auctions and within a decade the internet was accounting for about 30% of sales.

In 2010 Cars Direct became the CD Auction Group when it added the Pool fleet management division to its business and in 2014 Andy Brown took the helm when Woodward retired.

Brown says the company’s founders didn’t know the internet was coming when they started offering used vehicles by fax but had spotted an opportunity in the market that was fully realised with the profound impact the web has had on retailing.

Online trading is going from strength to strength because, he says: “The older guys are starting to retire, the younger guys are internet savvy.”

Brown claims CD Auctions’ smaller size and online exclusivity make it adaptable.

“When you are small you can be agile,” he says, “BCA and Manheim have 20 physical sites they need to feed.”

CD Auctions sources its ex-fleet vans from leasing and rental firms and SMEs with fleets of between 250 and 1000 vehicles.

Its in-house transport and logistics division collects the vehicles after which they are valeted and all branding is removed from LCVs as part of this process. Each vehicle is inspected with staff recording details and any damage on Sansom tablets.

Brown says up to 25 images are taken of each vehicle including at least six exterior and five interior shots.

CD Auctions offers targeted marketing with specific vehicles aimed at prospective buyers as well as offering larger clients the option of branded sales. It also holds regular general fleet and LCV sales.

The firm’s Pool fleet management service offers fleets secure storage of their vehicles between drivers.

“We store vans when someone leaves a firm until someone else needs it,” Brown explains.

The vehicle is prepared to meet compliance responsibilities and valeted before reallocation.

But the main thrust of the business is online remarketing and Brown says he “passionately believes” the company presents vans better than anyone else.

He claims LCVs have gone from accounting for 25% to 45% of CD Auctions’ business within the last two years and that this has corresponded with a 70% rise in volumes. Brown prefers not to name numbers but says they are in “the thousands”.

He says the firm does deal with big corporates like BT Fleet, Argos and Sixt Rent-a-Car but also does a lot of work with smaller leasing companies “who can’t get a decent shot with BCA or Manheim.”

Brown adds CD Auctions’ sales go up to a maximum of 100 units. He reckons most of the reservations people had about buying online have disappeared.

“Once people have bought once they have confidence,” he claims. Further reassurance is given by the fact the firm includes pictures of minor scrapes, tyre tread and includes details such as a radio not working, for example.

Last year CD Auctions launched a service enabling customers to bid from their smartphones and tablets as well as laptops and PCs and Brown says this route is increasingly popular because many buyers, like to bid when they are “out and about”.

The majority of customers are independent rather than franchised dealers, and Brown says this means the age profile of the vans they look for tends to be older than other auctions’ buyers – between three and seven years is typical with 30,000 to 150,000 miles on the clock.

“We are going to independent used van dealers who are selling to SMEs and owner-drivers, people who are setting their own businesses up,” says Brown.

He claims the pool of buyers has increased three times in the last two years and stresses they are just as important as the vendors on the firm’s books.

Brown explains that when a sale goes up the team emails the vendors on the database. Van sales start on a Wednesday afternoon and close at 1pm on Thursday. If someone bids at12.59 Brown explains a prior bidder then has five minutes to up their offer to avoid last minute “swiping”.

 

 

 

 

 



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