Richard Aucock speaks to the people behind Trader-net.co.uk about their new trade-only auction website.
GENUINE alternatives in the used car retail world have been, for the past half-century, rather thin on the ground. If you take a car in part-exchange and then move it on, it’s either sell through an auction house, or pass on to your chosen underwriter.
But now, there is another way, says James Buxton. He’s one of the brains behind new startup Trader-net.co.uk, an online auction site which he intends to see become ‘the default option for motor trade professionals who want to sell to a large audience of trade-only purchasers’.
The team intends it to be big news, a significant new launch for car dealers. Everything is in place to ensure this, he told us – from funding to key managerial experience. ‘We are the real deal – we have significant financial backing, plus a management team with experience spanning main dealers, independents, Blue Chip corporates and
web-focused businesses,’ he explains.
‘We are not just another online auction. We are a genuine corporate company, offering car dealers a real solution to the challenges of disposing unwanted vehicles.’
In its simplest terms, it is an eBay auction for car dealers. Through a single website, car dealers will be connected to multiple trader partners, all operating around an auction model for used cars.
But it’s the specifics of that model that makes Trader-net.co.uk different, Buxton explained to Car Dealer Magazine. Significant time and investment has been put into administrative elements, meaning a serious and professional approach is offered from the start. There is even a seven-day support helpline for the continuous live auction.
‘We are not playing at this in our garden shed! We have used the best servers, for example, which can cope with rapid growth
and guarantee always-on access. A million hits and 20,000 user sessions will not be a problem for us…’
HOW DOES IT WORK?
It works by allowing car dealers to bid, in real-time, against each other, at any time. It runs continuously, 365 days a year, and also lets dealers load new stock at any time, from anywhere. ‘So long as you have an internet connection, you can use the site,’ says Buxton. Be that home, office or motorway service station.
From the very start of the process, the choices are all down to you: auction length, reserve, starting price, collection time and payment, the whole lot.
Being able to determine your own terms before you put a car on the market means much less hassle and wasted time at the end of it. As volumes of used cars grow, the importance of this is not to be overlooked.
In use, car dealers bid against each over ‘live’, just like in a real-life car auction. They can set their maximum bid if they need to move away from the machine, or monitor it in real time instead. The system emails the car dealer with the winning bid automatically, while simultaneously emailing the seller with all the information they need to sort out payment and collection or delivery.
‘It’s simple to use and we provide full dealership staff training. We also ease things for dealers wherever possible – for example, by using a DVLA auto-upload function, and offering a reporting function if required. We have even designed in the ability to integrate it into a car dealer’s DMS.’
Strict vetting ensures it truly is trade-only. ‘We conduct VAT number and registered address checks; this is very much in our own interests too – if private individuals do get in our service will be damaged.
‘We also have a strict code of stewardship on the site. Abuse will not be tolerated; we have a five-point code of conduct and, if it is not adhered to, people will be removed from the site. Although we intend to grow rapidly, we are not purely chasing numbers. Trader-net.co.uk will retain a focus on providing a service. We can do this because we are so well funded, which takes the pressure off.
‘There will be no short-cuts or, say, approval of unsuitable members if they do not meet our criteria.’
Franchised car dealers are the initial target, explains Buxton. This is to guarantee the quality of stock – especially those which may not get such favourable rates from auction houses, such as dealers not part of a ‘top 100’ group.
‘We’re also focusing on independents; we have already targeted 5,000 here. However, these are initial targets; really, we’re not pigeon-holing our customer base, as the flexibility of our model means it can be optimised for anyone in the trade.’
Buxton says the timing of it is exactly in tune with market sentiment. ‘The focus on used cars is bound to intensify now scrappage has ended. Dealers will need to source more used cars, to make up for lower volumes of newer cars sold. In addition, the tough year many are forecasting will put margins under severe pressure; it is going to be crucial to maximise returns on each used car.’ All are areas where Trader-net.co.uk can help, he says.
‘Don’t overlook the speed of cashflow we offer, either. Anecdotal evidence is that banks are maintaining and ever increasing pressures on car dealers. Anything that helps the bottom line here, by keeping cash flowing through, is going to be advantageous.’
Savings on offer are considerable; ‘remember, there are no buying fees, no selling fees, no contract – we even offer 60 days without subscriptions; after this, there’s a monthly fee, but even this is small.’
How much does it cost? Buxton says it’s more than market-competitive. Largely, the focus on high volume (along with the healthy upfront balance from investors) means costs can be kept in check.
‘Remember, there are no buying fees, no selling fees, no contract.’ Buxton says Trader-Net offers 60 days without subscriptions. After this, for the trade, there is a monthly subscription fee of £45 plus VAT, but this is a flat rate that doesn’t alter no matter how many cars you sell. ‘It’s the same for traders no matter what their trading profile.’
Precise savings depend on the size of the dealership. ‘We have figures from a five-dealer site that show simply by stopping using the fixed auction, it saved £150,000 per year.
‘This doesn’t include any additional profit that would be made by increasing the amount received for part exchanges, either. However, every dealer and group will have a different set of terms with the auction, so it is quite difficult to quantify exactly.’
Only you will be able to take what Buxton says and apply it to your own firm; Overall, though, ‘we strongly believe we can improve car dealer’s cashflow and bottom-line profit’.
So in summary, he says, dealers should see it as more of a club than a plain dealer auction site. ‘We treat our members like members, with support and constant communication. You’re not accessing a faceless platform, but a genuine resource that can help your business grow.’
Visit the site or call 0844 877 1111 for more details