With over 150,000 buyers and over 2.2 million cars sold on KAR Global’s digital auction channels, there’s an undeniable need for dealers to tap into the digital market when selling vehicles. While the physical auction experience isn’t all that different from the digital auction experience, there are some tips to remember before you sell your first vehicle online.
Here are our things to keep in mind before you send your first vehicle to a digital auction.
Digital is still wholesale
Digital doesn’t mean retail. While our platforms may look and feel like Amazon or eBay, on the other end is a dealer just like you. And just like at the traditional auction, it’s another dealer bidding on the car, and they aren’t going to pay the same price as someone who walks onto your lot.
Before you send your vehicle to auction, do your research so that you know the vehicle’s wholesale and retail market values; tools like autoniq® provide quick and easy access to the industry’s top pricing guides with the click of a button. So be realistic and expect wholesale profit margins rather than retail.
Set a realistic floor price
Having a floor price is one of the most underrated and underestimated tools for moving inventory quickly and attracting more bids to your vehicle. Although the exact floor price is never disclosed to Buyers on platforms like TradeRev, ADESA Simulcast® and Simulcast+SM, Buyers and Sellers receive a notification after the floor price is met.
Once those Buyers know the floor price has been achieved, they’ll bid with more confidence, knowing you’re 100% willing to sell—and with more confidence comes more bids. In fact, on TradeRev, once a floor price is met, vehicles average an additional 10 bids and sell for more than 16% higher than the floor price. But remember, as I outlined in my first point, it’s important to set a realistic price, so do your research and set your floor price accordingly.
Reputation is key
Your reputation to consumers is key to your dealership’s success, so why should it be any different when it comes to your peers? Just like at the physical auction, Buyers can see who the digital Seller is. If they’ve had a bad experience with you, not only will they not want to do business with you, but just like in retail, word will spread quickly.
On the other hand, if you create a good reputation, not only will Buyers be attracted to your vehicle when they see you’re the Seller, but they’ll also bid with more confidence. So, make sure to be transparent in your notes, responsive to questions, and work to build a reputation that other dealers will trust.
Keep an open mind
If you’re trying out a digital auction for the first time, you’re not going to know everything right off the bat. But with a little work, you’ll soon realize just how easy digital auctions are to navigate.
Think about when you first tried Facebook; it was a learning curve just to figure out how to add a friend. But the more you used it, the easier it became, and suddenly it was second nature. Now you use it as a tool to build your brand, attract customers, and even to sell cars.
Just like social platforms, we’ve put a lot of effort into creating an easy user experience. Have an open mind, ask questions, and keep learning. Soon enough, digital auctions will become second nature, too.
The opinions expressed in the Go Digital series are the opinions of the authors only and not those of KAR Global.