Market Conditions Commentary
 
I am just getting ready to go to the auction and I am thinking about things
by Robert Hollenshead
Jul 11 2013 9:34AM

I am just getting ready to go to the auction and I am thinking about things, like things.  I am going to buy and sell 900 cars this week, close to a record for me.  I am thinking about where the buyers are from, market regionality, CRs, arbitration, post-sale inspections fees, auction fees, the amount of working cash necessary,  technology, and transportation.  Man, it’s amazing how the game has changed over the past ten years compared to the prior 32 years I have been in the wholesale business. 

In my opinion it is just the beginning.  Cost of acquisition is overwhelming so that process will change.  The inefficiency of static wholesale listings is so bad that will change as well justy like the eBay craze came and went in a short period, so will the insanity of listing 100 cars to sell 3 due to sellers unwilling to sell at market value and buyers overwhelmed looking and bidding on  1000 cars to buy 2.  It’s actually brain dead.  We have moved away and from the most beautiful for of inventory exchange in history, the live auction driven by the hammer, into meshugas. 

Relax, it will be back because the efficiency and beauty of greed versus fear in an open arena will not be trumped. 

Just like the spirit of the human being naturally refuses to be stifled, the fact/need to find the highest and best market for liquidating wholesale inventory will not be trumped by a non-player’s invention to be in the middle of the middle. 

I give it two years and some Christopher Columbus will come to the conclusion that the live auction with a hammer, simulcast, a CR, a seller that has the balls and brains to price to the market, and a venue that isn’t looking to retire on the amount they charge for each transaction !@#$%^&*()__)(*&^%$#@! will be the winner, as long as there are still guys like us that are still in the game (not sure if you are paying attention but there are fewer and fewer guys in our game…and no young guys getting in). 

P.S. I still say we need to have a united voice but the apathy that we as a group show seems as if that is a pipe dream.  Anybody awake?

Robert Hollenshead


5 Readers' Comments

1
Charlie Karynis iii
Cambridge
MA 
12 years ago
Bob-

Interesting take but I believe your view is tainted by your love/hate relationship with Manheim PA. I am sure they give you a sweetheart of a deal to sell your prime inventory at their facility (making customer acquisition costs quite attractive). However, you are the wholesale monster in the market, for us smaller guys, selling in the lane/auction will be for the leftover garbage. We sell our prime inventory online due to reasonable customer acquisition costs and worldwide audience.

The future is in online wholesale selling channels — large auction facilities, overpaid incompetent auction staff will get trimmed — condition reports / transparency will improve as wholesale online channels mature and pricing becomes more competitive — end result will be an efficient wholesale market place.

Charlie

2
Robert Hollenshead
MANHEIM
PA 17545
12 years ago
Charlie,
The idea that we have a sweetheart deal is a brainfart. You can come here as a new customer and get better numbers then I can and the idea that we have a "deal" is also nonsense. Everyone thinks that to be the case because it would be impossible to believe that it isn't true, but it isn't. I have been selling here since 1972 and have all the benefits that you do.

Nice to hear your view. Thanks

3
Daryl Firewicz
West Homestead
PA 15120
12 years ago
I can tell you that I am very tired at looking online at overpriced cars. On more than one ocassion i see the ove and autotrader price the same or very close! If you cant retail it for " wholesale," what dealer in their right mind would want it at your asking price? Lately at the local auctions it's not much better in the lanes, buyers and sellers often too far apart with sellers seeming to think their 90 day old front line units are still worth what they paid for them 100 days ago.

4
Robert Hollenshead
MANHEIM
PA 17545
12 years ago
Daryl,
It's hard to take the medicine and learn the market. I find that when you stay pyschotically current with the market the medicine is easy to ingest. It's when the "i think I might get lucky" monkey jumps in your head it is the equivalent to the death rattle. That is one of the reasons I don't see the value in static listings, what you might gain you will definitely give back on the units you put in the I want to get lucky and find a dumb ass pot. I sold 400 units today and there was some serious medicine in the group, but it sure won't be better tomorrow or next week. That's why I say what my dear friend Al Balis always used to say, "take thge doe and let them suckers go". Find new ones and dance with them.

5
Micheal Spurgeon
Nashville
TN 37210
12 years ago
New at this game and have heard so many wonderful things about Ebay. Read Texas Direct's Zero to Sixty Million ... But I have to tell you, the only thing I've got by working with Ebay is IT experience ... since our account got hacked right off and cars were listed under our name that we did not even own! I heard about Hollenshead byword of mouth as an wholesaler you can trust. While we are still a tiny fish in this puddle, every experience I have had with them has proved that to be true. How about running for president ... we could use a little plain spoken honesty there, politics would be a step down from used car dealer in reputation/honesty department, but hey, anything can improve