The auction kings
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Manheim draws comparisons with the Launch of its virtual auction channel Simulcast in 2004, following the rebranding of the timed online auction system bought earlier this year from EVS By Kevin Swallow
AUTUMN HAS PROVED fruitful for Manheim's auction house in Leeds. At the start of October it topped £1m, based around 27 FH13 tractor units direct from Volvo Trucks. It attracted 48 buyers in the hall joined by 110 joining on Simulcast, Manheim's virtual auction channel. The sale achieved a 76% conversion rate.
Two weeks later and Hitachi Capital Commercial Vehicles achieved more than £250,000 for 26 end-ofcontract trucks. Thirty-seven registered buyers patrolled the auction hall, while the 88 who accessed the auction through Simulcast ended up buying 43% of the vehicles sold on the day.
Today Simulcast is approaching its 10th birthday and plays a central role for Manheim. James Davis (right), Manheim director of CVs, says 60% of all the trucks sold this year will be to online buyers — a far cry from its beginnings when it accounted for only three or four vans a week.
Manheim Bid Or Buy Now is the rebranded online timed auction bought from EVS in May. Since going live, it has attracted interest from people in 98 countries.
The UK and Ireland led the way followed by Portugal, Cyprus and New Zealand. Davis says 65% of the online traffic is new. Around 78% of the activity is from desktops and they are visiting the site daily, as part of their routine when looking for stock.
While he is disappointed by the number of trucks Manheim is selling on its Bid And Buy Now e-auction, which is based at the Leeds auction site, Davis says its start mirrors the beginning of Simulcast, and it will grow. Technology and experience
What the deal gave Manheim was the online technology and experience — Terry Stout, auctioneer, Julie Tegg, account manager and Mark Spavins, a shared resource on contract with EVS as business development manager, have all joined — and it forms part of the jigsaw in what Davis calls a refocus on heavy commercial sales.
Success has eluded the used truck dealers that have tried timed online eBay-style auctions because they lack the contacts and vehicles to stimulate and maintain interest.
Upgrades and revamps
In July Manheim took a controlling stake in the leading digital business, Kingfisher Systems (Scotland). The company helped develop the software for its Simulcast and the software behind the EVS Online system that is now Bid Or Buy Now.
Key to Bid Or Buy Now's success is confidence, explains James Davis. To remove duplication, Manheim insists that vendors sign an exclusivity agreement so while the vehicle is on Bid Or Buy Now, it is not on sale anywhere else, allowing Manheim to manage the asset.
Manheim has also tweaked the closing moments in a timed auction when a flurry of bids try to outdo each other to be the final bid. If there is heightened activity, the sale will go into extra time and eventually end when the bidding stops. This mirrors the process in the physical sale and allows an asset to realise all bids from interested parties. "The only difference is that it's silent," he adds.
The only notable success has come from Fleet Auction Group and sister company ProTruck Auctions, which uses an online-only sale to follow up its physical auction.
And Davis agrees that to make what it bought from EVS work it needed a physical truck sale to go with it. "In its previous guise online was the only route to market; we have turned it on its head. When a vehicle comes on site, we put it online first as a shop window. If it sells, then it's sold, otherwise it goes into the physical auction. It operates as a cascade," he explains. Different strokes
The format won't work for every vendor as they are driven by different goals: performance against thirdparty valuation, number of days in stock, or a specific residual value. However, by putting a vehicle into the Bid Or Buy Now — which is now a fortnightly 24-hour online timed auction — Manheim can prove to clients that the asset is offered to the largest possible audience.
"If a vehicle arrives at an auction centre two weeks before a monthly sale, rather than let it sit there, we can put it online first to reach a wider audience," he explains. "We placed one vehicle online, which came in from an early termination, and it got two bids. We put it into the physical auction and the bids were marginally lower, and that surprised us."
He argues that Bid Or Buy Now can do what a single auction site cannot do, and that's reach a global audience through Manheim. It's that reach that allows it to invest in systems like the one developed by EVS. An example is dealerauction.com, which Manheim bought last year. Now the eBay-style dealer-to-dealer website is being rolled out in Canada and will be launched in Australia.
With LGVs making up just I% of the overall UK market for Manheim, the true calling for Bid Or Buy Now could be the bigger sectors. "I can see it being adopted by the van and car market. We have got clients who operate cars, vans and some trucks. When they looked at the success of Simulcast — there are more online purchases in this arena — it made sense to invest in Bid Or Buy Now because it is scalable to larger markets," he says. •