How to Start a Car Auction Business?
So many options to buy a car nowadays! Car dealers, classic and online auctions. Which one to pick? If you need something custom and don’t care about money, car dealers can be your option. When it comes to a cheap vehicle many customers opt for car auctions. Often auctions offer good deals because customers love the sense of a bargain. The idea of running auto auctions was born in the mid-1950s, to get rid of old cars. Nowadays thousands of auctions worldwide offer luxury, retro and everyday automotive to satisfy everyone’s needs. Over 9 million cars were sold last year worldwide.
Let’s start the ball rolling with a question what is an auto auction?
An auto auction is a type of venture which allows customers to buy a car through a bidding process. Many auctions in the US or Japan have partnered with car dealers, but many online auto auctions are suitable for individual sellers. The mentioned type of auctions allows simple and quick buy from your home.
Why auto auction?
Online car auctions are advantageous to business owners because they are not obligated to pay for long-term sales space, utilities, or employee sales wages. So, many business experts consider auto auctions as a profitable venture. Mentioned mean of business has a significant potential for growth. Many car auctions employ hundreds of people and have incorporated multiple departments on more than 100 acres of facilities.
What’s the difference between classic and online auction?
There is only one thing that makes classic auto auctions different from its online relative. That is the customer should be present during the bidding process. It is conducted by a supervisor all the way: presenting the lot, bidding and declaring the winner. The action of online auctions takes place on a website, where the bid auction software does whatever supervisor can.
What do I need to start an auto auction?
• Business plan
According to the US government, 40% of the startup companies lack a considerate business plan. The business plan could be your lighthouse. Spend at least three hours a day reviewing your business plan, which is a great source of insights.
• Budgeting
Sit down and estimate your expenses on marketing, documents, rent, auction software programs, and maintenance. Get yourself a hand to understand how much money does it take to start the business.
• Pick car auction software
Around 50% of potential customers left online auctions because a website was difficult to navigate. Try to imagine user’s behavior: all the buyer needs to do is to make a few clicks straight away from registration to money transfer. That’s a simple guide to choose best online car auction software.
• Research and analysis
Ask yourself a question “Why Am I better than competitors?”. Think about the strengths of your business that will beat competitors. So do think twice about your software and the features that similar services don’t have.
• Strategy
Individual seller or car dealer? Choose the one that fits your business needs better and the market where you are. Imagine, you have a dozen competitors. You need the advantage to stand out from the crowd, so the service should support both individual sellers and car dealers. This could be your key to success. Anyway, keep an eye on the market, and if you are on the budget choose the type of seller that profits the most.
Take a look at some good examples of best online car auction sites
• USS.JP
High-end Japanese auto auction has more than 10k lots around Japan. USS is the first kind of online auto auction with no middleman comes to my mind.
• Autotrader.com
A leader in selling second-hand vehicles in North America with a long history of downs and ups.
• Ebay car auction
The Auto auction by eBay blasting with hot offers on exclusive racing and retro cars. Make sure you have seen all the lots they have. It is a huge platform for any taste and price range.
• Copart
A new-generation auction that has embedded apps for mobile platforms. The main competitor of AutoTrader.
• AuctionExpert
The big boss of auto online auctions. About 230k lots are present on this platform. Any range of car: from retro to casual or custom made.
• BCA.com
A European online car marketplace that sells cars at a competitive price.
• Autorola.com
Another car marketplace from Europe. Autorola has a significant portfolio of auto auctions by country. Just find your local auction if you live in Austria, not necessarily to go to Denmark.
It’s time for some stats.
Car auctions share a significant piece of the pie of. It is reported in the “Cox Automotive 2018 Used Car Market Report & Outlook Forecast” that “Used cars should experience strong demand and growth in sales across the U.S. in 2018” while “a decline in new-car sales to be expected in the future”.
The report says the same thing “Overall UK Auto Industry Sales Figures monthly and yearly” and “Number of cars sold at auction in the United Kingdom (UK) from September 2014 to January 2016 (in units)”.
The amount of car sold in January 2016 in the UK is 169,678.
Now let’s draw attention to the chart “Number of cars sold at auction in the United Kingdom (UK) from September 2014 to January 2016 (in units)”.
110 322 deals have been made on the auto auctions in January 2016 in the UK. That’s 65% of the monthly car sales in the UK (January 2016).
The other thing that contributes to the growth of auto auctions is technology advancement. Auction software leaves no place for a salesman foisting a feature you would better send to the automotive hell, hence the customer can research and pick the options in which there is a real need.
According to the 2016 Beepi consumer automotive index “87% of Americans dislike something about car shopping at dealerships” while “52% of car shoppers feel anxious or uncomfortable at dealerships ”, it goes like this when you choose car dealerships, “ Among millennial women, 62% feel pressured to buy right away and 49% said they felt tricked into buying features they didn’t need”, sounds really convincing, eh? So why not to make some car shopping? And the last already mentioned fact is the price if you haven’t convinced where to buy. According to moody’s “the used car and truck Consumer Price Index will post a year-over-year decline of 1.07% in 2019, slowing from a 3.63% decline in 2017, before prices reach bottom in 2020”. That’s not a good news for businesses but it surely is a sweet nothing to buyers on the budget.
To conclude
Making an online car auction site is a decision that will give the owner a roadmap to fortune. No need to have a fat wallet and hire a crowd of people. The car auction software will save time and expenses. Merkeleon is a company that caters for any client who has an idea to make an online auto auction. We are trying our best to make your best on the market. Stand up and give us a call, if your venture needs to take a step forward.
If you’d like to get more details to the turnkey car auction software solutions, please visit the following page about online auction software or feel free to contact us and get free demo or professional consultation.
