The Blaise Alexander auction draws about 100 buyers weekly. “The secret to make it successful is making sure the cars are 100 percent as nice as you can get them,” said Alexander, right.
Going once
Blaise Alexander Family Dealerships launched its own weekly auction to wholesale its excess used cars and trade-ins, saving fees and earning extra revenue.
Scale can be a wonderful thing for a car dealer. It makes for bigger discounts from vendors, reduces infrastructure costs and allows dealers to experiment.
Take, for example, Blaise Alexander Family Dealerships, headquartered in Lycoming County in central Pennsylvania. The group’s 36 franchises spread across 18 rooftops generate enough trade-ins to allow it to operate its own weekly auto auction, where it wholesales its slow-selling used vehicles to other dealers.
And though it’s early days, the experiment looks to be a roaring success, group President Blaise Alexander says.
“I tell some of my new-car dealer friends — some of the bigger guys — that I’ll come down and help them engineer their own auction,” said Alexander. “It is a winner, an absolute winner.”
The dealer-only auctions are wholesaling about 120 vehicles per week, mainly to independent dealers in the region.
“These are primarily high-mileage units, maybe banged up a little, or maybe with some rust or engine/transmission problem cars, and we announce everything that we know about,” said Alexander. “We’ve already developed a pretty good following, and we have a good sale each week.”
Clean them up
{{title}}
{{abstract}}
{{/content}}
The auction, which debuted in June 2017, draws about 100 buyers weekly, either in person or online. It’s run out of an old construction company warehouse the group purchased about a decade ago as part of a deal to acquire an adjacent office building. The auction has three full-time employees — a title clerk, a lot manager and an auction manager — as well as several part-time drivers.
“The secret to make it successful is making sure the cars are 100 percent as nice as you can get them,” said Alexander. “We make sure they’re cleaned up, painted up, fixed up and state-inspected.”
Before the sale, he says, his dealerships put new tires on about half of the cars intended for auction.
“The thing to remember about most used-car dealers is that they don’t have a lot of facilities,” he said. “So you might as well do the work yourself and get work out of it for your body shop and your service department.”
Plenty of upside
For Alexander, the benefits are numerous. The group can sell off its least marketable vehicles and save transportation and auction costs. Not every wholesaled vehicle is auctioned in-house. Some specialty or high-end trade-ins go to traditional auctions because of an expected lack of buyers.
“All the fees to the dealers buying off me are roughly 50 percent of what they would be at a normal auction. So, it’s a win-win for everyone,” Alexander said. “We have all the independents from central Pennsylvania come. We give them a free lunch and free water when it’s hot or coffee when it’s cold.”
He says the auction opportunity was unlocked by the scale of his enterprise. All but one of his 18 rooftops are within 100 miles of his main store, including three stores purchased this year. With 15 rooftops last year, the group sold 18,091 new and used vehicles and wholesaled another 7,203. The group ranks No. 103 on Automotive News’ list of the top 150 dealerships groups based in the U.S.
“We’re turning a profit every week,” said Alexander.
The group has plans to add a second auction lane by the end of the year to reduce the length of the auction as well as segregate the stock more by its value.
The auction is not the only place where Alexander has used the size and geographic proximity of his dealerships to his advantage. Four of the group’s dealerships in and near Williamsport, Pa., share a common detailing center, where used vehicles are prepped for sale and new vehicles are prepared for delivery. But scale remains key.
“Not everybody could do this,” said Alexander. “You have to have the volume of trade-ins to make this worthwhile.”
Going once
Blaise Alexander Family Dealerships launched its own weekly auction to wholesale its excess used cars and trade-ins, saving fees and earning extra revenue.
Be the first to comment