For a long time, single-channel sales were the default option for fleet managers looking to remarket end-of-contract stock. Working via a single method of disposal created strong relationships and removed variables. It was one less thing to think about – and, anyway, what was the alternative?
Today, however, there is a clear alternative. The age of multi-channel remarketing is upon us – and in this article, we will explore why that is the case and how businesses can use the approach to their advantage.
Multi-channel remarketing: Why now?
Remarketing is undergoing a digital transformation. Initially, digital solutions worked to optimise the channels we already used, but it wasn’t long before they started to open up entirely new opportunities – most notably distance selling. Digital channels have all but done away with traditional geographic boundaries, making vehicles visible to all relevant buyers, wherever they may be. At the same time, buyers are more confident using digital platforms, with the profusion of high-quality images and videos meaning they no longer see distance buying as a risk. A wider pool of buyers, of course, means stronger returns for vendors.
Just as buyers have more choice of vehicle, fleets and leasing companies have more choice of remarketing channel – including traditional auctions, digital auction platforms, direct-to-dealer channels, and retail. They are all easily accessible, non-exclusive, and have their own strengths. Let’s take a closer look at each of them:
Option 1. The wholesale auction
Selling stock at auction is a proven, effective way of moving stock, including at high volume. With regular scheduled auctions, you get a clear expectation of the time to sale, meaning it’s easier to plan. In addition, by working with an established auction provider, you can outsource time-consuming administrative tasks, with the provider taking care of vehicle storage, movements, preparation, marketing and buyer engagement. You benefit from their expertise when it comes to taking care of vehicles and achieving the best possible price for them, too. And let’s not forget that ‘traditional auction’ is something of a misnomer – auction giants such as Manheim now offer a hybrid of in-person and virtual sales, meaning you don’t miss out on exposure.
Of course, providers with physical auction sites will have the highest overheads, meaning costs will be higher (typically, the buyer covers the auction fee rather than the seller, but that still means they have less to spend on the actual vehicle). And if you need instant vehicle movement, you’ll find that a traditional auction can’t move quite as quickly as a purely digital channel. A final downside is that you don’t have a direct relationship with your buyers – so you miss out on negotiation opportunities and customer data.
Option 2. The self-service digital auction
There’s a way to get the benefits of an auction wrapped up in a digital package: Manheim Express, a real-time marketplace for defleet vehicles. The advantage of an app-based platform is that it’s at work when you aren’t – marketing your stock 24/7 once you upload it.
Meanwhile, buyers enjoy lower fees than a traditional channel, and confidence in what they’re buying thanks to Manheim Express’s comprehensive, AI-powered condition analysis tool and integrated real-life market data insights.
This route is highly suited to smaller fleets, whose stock volume is low enough to keep the admin of uploading every vehicle manageable.
Option 3. The direct-to-dealer approach
A streamlined sales process sounds good: cutting out the middleman may mean costs are reduced and vehicles sell faster, and funds earned will be returned to the business quickly. And right now, with the new car market starved of supply, there is high demand for trade-to-trade vehicles, which means they command good prices.
Even so, you still need to market the car, which involves time and – potentially – difficulty without a third party to help find the right buyer. In fact, there’s extra work at every stage. As the seller, you will be responsible for storage, movement, vehicle prep, payment processing and paperwork. And if there’s an issue after the sale, it’s down to you to solve it.
Option 4: The retail route
Of course, digitalisation has come to vehicle retail too, meaning you can make stock available to consumers, achieving a retail price point while keeping overheads under control. But selling to a consumer is a far more complex process than selling to trade: time to sale can be far longer, warranties are required, and returns are far more common. And, just as with direct-to-dealer channels, you could be responsible for storage, transportation, marketing and paperwork – all at cost to you.
Put simply, the rewards are there, but only if you are prepared to take on the risk.
Which one is best? All of them, of course
There is no ‘best’ channel in every case; instead, fleets are selecting channels flexibly depending on what works for the business and the vehicle in question. This is what multi-channel remarketing aims to achieve: using the full power of the market to deliver the optimal combination of value, timing, cost, effort and risk in every single scenario. Previously, it would have been impractical, but digital tools are bringing it within reach – and even making it the default option – for many businesses.
So, how do you go multi-channel in practice? Rather than starting with a defined strategy, start by asking questions that will define your strategy going forward. Here are seven things to consider:
- Do you have a large volume of vehicles you need to dispose of?
- Are you prepared to take on marketing costs yourself, or are you looking to save on overheads?
- Do you have your own storage and delivery solutions, or will this be an additional cost?
- How quickly do you need the stock to move – are you in a hurry or can you afford to wait for the best price?
- What is the profile of your fleet? Do you have popular stock or something more niche?
- What are the costs and responsibilities when it comes to warranty and other regulatory procedures?
- What is the lifespan of your stock? How quickly is it depreciating?
Based on your answers, you might, for example, opt for the ‘fast and light’ benefits of a native digital platform for vehicles you need to move on quickly. For other vehicles – where it’s better to take advantage of optimal selling periods – you decide you are happy to wait and to use a traditional auction when the time is right. If you went down a single channel, you would inevitably lose out on value for one or the other of these vehicle groups. Going multi-channel helps you maximise the return on the whole fleet.
The key is in understanding your fleet and how to dispose of it smartly. It’s not always the case that the biggest buyer pool will fetch the highest price – because there are other associated costs factored into resale, which will fall out of the acquisition price. Likewise, controlling time to sale is crucial, and the quickest is not always the best, depending on value fluctuations.
With some clever thinking, businesses can ‘match’ the right stock to the right channel, ensuring they never miss out on margins or incur unneeded costs. That’s the power of going multi-channel!