And says the new approach to fleet remarketing should prompt motor retailers to rethink their practices too
Cooper Solutions is applauding news from the new and used car digital business giant, Auto Trader, that it is to bypass the traditional remarketing of fleet vehicles via physical auctions. The move to sell direct to dealers instead, should herald a much needed shift in mind set and future auction practices used by motor retailers themselves, it says.
Barry Cooper, Managing Director for Cooper Solutions explains, “Auto Trader has put the spotlight on the legacy networks of physical sites of the UK’s leading auction companies, which in this day and age bring a financial burden indirectly shouldered by dealers who sell stock via these channels.
“Given the business model of physical auction houses, it’s no big surprise that they need a high transaction cost to pay for their overheads. We conducted our own research to validate this point. After looking at over 71,000 car sales, we confirmed that physical auction fees are typically bigger than the profits that selling retailers make and therefore significantly reduce the sellers profit. Given the current pressure on margins this simply isn’t good for business for today’s retailers.
“The move by Auto Trader not only enriches the used stock now available directly to retailers, it opens the door for them to follow suit for trade stock. Sytner Group has been proving for many years that digital auction is their optimal route to market and now Auto Trader is on the same track.
“By pushing the direct online remarketing approach for fleet, Auto Trader confirms our own position since we launched our trade-to-trade online auction site, FullAuction. As the message gets louder and more influential as power houses get behind its logic, we would hope that more retailers will be tempted away from the more traditional legacy remarketing channels and towards a more profitable digital disposal route.”
FullAuction from Cooper Solutions, is a trade-to-trade digital auction site which operates in a similar fashion to Auto Trader’s new fleet disposal platform. With FullAuction, the maximum buyers fee is £33, as much as 10 times less than a physical auction fee for the same car, meaning retailers make more money from the sale. In addition, the new remarketing models, including FullAuction, reduce the time to dispose of stock, which means dealers get the money in the bank quicker, boosting their bottom line.