Market Conditions Commentary
 
Simulcast and the future of auctions.
by Robert Hollenshead
May 30 2013 12:45PM
I remember when we first sold a car on simulcast.  The consensus then was that it will never amount to more than 20% of the cars converted but if it got to that point it would be great.  Nobody even knew what a proxy bid was and condition reports were only done (in a very crude way) for important commercial accounts.

I pay very close attention to the information and statistics that are a byproduct of or remarketing business.  An undeniable fact is the ever increasing incredible influence that Simulcast has had on my ability to sell 95% of our first run units under the hammer week in and out.  We are selling units 600 units from $150,000 right down to $500 cars from 9AM to 4PM every week via simulcast.  The number of dealers logged at any given moment can be as many as 400 and cumulatively for the day well over 1,000.  Put that into perspective.

Imagine a lane with 450 dealers standing in a lane.  That has never happened, at anybody’s auction, in anybody’s lane, but it does now, on simulcast. 

If you watch our lane, a good 80% of all cars get an internet hit, some weeks more.  The ingredients that allow this to happen include simulcast, a condition report, an unprecedented volume of logically arranged volume, four decades of consistency, my willingness (stupidity) to sell every car, every time the hammer hits the block so not to frustrate a buyer that is willing and has shown me the respect of bidding, and the trust we have created over many decades with  buyers, both in the lane and on line.  I have to tell you this has been very expensive (as well as torturous journey for many reasons that can’t be covered in this article but is a topic that is a chapter of my book).   However, what has become as clear as a Swarovski crystal is that trust is earned and it cannot be bought when it is convenient to draw on it.   In the real auction arena, where fear and greed are king, simulcast has revealed itself not to be a “twenty percenter”, but a “seventy five percenter” as well as a co-validator of a lane bidders will to bid, it is a hardcore remarketer’s future, like it or not.

From my perch I see simulcast dominating the future.  The silliness of listing 200 units on a static listing service, regardless of which one you choose, is a fad that will be eclipsed by undeniable stellar results on simulcast.  Listing 200 cars on static sites for nutty money and hoping to catch a nit-wit to pay too much   is goofy if anyone believes that is a solution.  If you are a lazy seller buried in mud up to your eyeballs or a buyer that believes in Santa Clause and you will be the lucky one to catch a seller off guard and pinch a good one worth the money ( and then go through the meshugas of one off transport), there is still a portion of the Brooklyn Bridge for sale and I am the exclusive sales agent, honest.

I am planting my flag and future on planet Simulcast (notice the capital in S in Simulcast due to my deep love of this little baby).  I wish all users the best of luck with static listing.  I genuinely hope that a 7% conversion rate gets you where you need to be.  But while you are buying one here and one there and chewing up your entire day trying to catch a whooper in the deep blue, log on SSSSimulcast and you can buy 75 an hour, every week, snow, rain, hot cold, Holiday, heart attack, gout attack, war in China , tsunami on the North Pole, or any other little thing you can think off, at real market value and on the spot.  What you will see is the undeniable fact:  I’m selling, you are buying.  It’s called our future.

Sell Well and Buy Better


5 Readers' Comments

1
Jason Nash
Binghamton
NY 13901
11 years ago
Love the commentary. Sumulcast is a great tool for buyers who cannot make it to the physical auction. Now only if Manheim would finally get rid of their "convenience fee" at least on units sold under $5k. $300 fee on a $1500 unit is ridiculous. The fact that they continue to raise buy fees and charge this fee on top when Simulcast bidders make the market, is another example of bad auction management. Taking every dollar they can while providing mediocre service seems like the Manheim way. Miss the old days of auctions like PADE that treated each and every dealer with respect and as if they were the only dealer there.

2
Robert Hollenshead
MANHEIM
PA 17545
11 years ago
Thanks Jason. I hear the exact same comment from literally thousands of dealers. What seems anti-logical to me is that the same transaction on OVE costs three times less than a lane transaction. I'm nobody but it seems to me that this is backwards. the lane should be less and on line listing silliness should be more. Why would we want to minimize a dealers will to do business in the live arena than do a limp putz transaction online? I want everybody in the lane and on simulcast so we can sell every car and find the ACV. What do we prove on a "Buy it Now" deal where who knows what happened and get charged 1/3 the fee? Again, I ain't nobody but it seems ass backwards to me.

3
Ben Houser
Slatington
PA 18080
11 years ago
I like simulcast because as a one man operation, I can't go to the physical sale even if I wanted to. This way I still get the benefits of a fast, live auction. OVE is okay if someone has a unit you need right away and cannot wait until sale day to get it. But Manheim ought to stick to their own policy that every vehicle listed on OVE can be priced no more than 20% of average MMR. All you see on OVE are vehicles priced at retail and hardly any at wholesale. Maybe that is from people who are upside down buying cars with OPM and are trying to save their ass. I once asked a manheim rep about it and he just laughed. I don't know what he thought was so funny, they are just wasting their own money with a website that probably hardly converts any sales. Another bozo who's money isn't on the line.

The convenience fee to buy on simulcast is BS too. I'm glad Jason pointed out the $300 fee on low cost units, I didn't know that and thought they were all $50. The fact there are no set buy fees is

4
Ben Houser
Slatington
PA 18080
11 years ago
Continued... BS too. I'm glad Jason pointed out the $300 fee on low cost units, I didn't know that and thought they were all $50. The fact there are no set buy fees is ridiculous too (varies from seller to seller). I bought a car from Honda the other week and almost had a stroke when I saw the buyers fee. I paid more in buyers fees on that car than I did on one I paid $6K more for from a dealer.

Mr. Hollenshead, I would like to personally thank you for understanding how a real auction ticks. I'm 23 just starting out and only buy cars with my own money. It means a lot to me that you always sell because you understand that an auction determines true market value on a car. So far I've only bought one unit from you, but I don't have time to waste with other sellers on "IF" sales. They need to make up their mind in 20 seconds if they are selling or not. I can't waste sale day until they figure out if they accept my bid or not because I don't have unlimited funds or a floor plan. That's wh

5
Ben Houser
Slatington
PA 18080
11 years ago
Continued... That's why I only buy from people like you or from the manufacturer who actually sell when the hammer falls. My father (the marine) always used to instill into me that in life everything you do will be done with "speed and accuracy." You sir, are a prime example of that. All I can say is it is a good thing car dealers don't run a cattle auction. If they did, this country would starve because they are trying to get unrealistic prices at an auction. You want retail prices for your unit? Sell it on your lot or autotrader. At a cattle auction, whatever the bids stops at sets the price. The same rule should apply at an auto auction. Sell well tomorrow, Benny H.