Remarketing

Remarketing: From Local Auctions to an International Marketplace

January 2013, Government Fleet - Cover Story

by Thi Dao - Also by this author

At a Glance

Some changes in the public vehicle auction space include:

  • Longer lifecycles causing resale prices on government vehicles to decrease.
  • Online auctions offering an international audience.
  • A wider base of bidders in a space previously populated by auto professionals.
  • An evolution of the online buyer.

No doubt technology has changed the way many governments function and perform services. Fleet vehicle remarketing is no exception. Government agencies have been trading in retired vehicles, using  sealed bids, hiring auctioneers for on-site auctions, or sending out vehicles to local auction companies, but online auctions have emerged in the last decade that offer an additional remarketing method.

Remarketing providers and auctioneers provide a range of services for governments that allow sellers to determine how much or little of a role they want to play in the process. Company representatives and fleet managers talked to Government Fleet about their remarketing tactics and services, as well as the evolution of government fleet remarketing.

A Changing Industry
As government fleets have evolved with the economic downturn, so too has public fleet remarketing. Gene Govoreau, general manager of Ken Porter Auctions, a Carson, Calif.-based company handling both on-site and online auctions, said he’s seen a rise in older vehicles sent to auction, paralleling the trend of governments keeping their vehicles longer. “Five years ago, [governments] were disposing vehicles at 100,000 miles; now it might be 150,000 miles,” he said. “Resale value on them is going down” as a result.

Buyers, however, don’t have to despair over not finding a newer vehicle. In addition to the trend to sell older vehicles, a small number of fleets are doing the exact opposite. That’s according to Joe Lane, vice president of national sales at Property Room, an online remarketing company headquartered in Fredrick, Md. Lane said, “We’ve seen some fleets that have decided to reduce fleet size overall and have sold relatively newer vehicles.”

Govoreau added that the biggest change he’s seen in the past 20 years is the increasing prevalence of online auctions.

This is demonstrated in the emergence of online auction services surrounding the turn of the century.  Entrepreneurs saw a need in the public surplus sector, and the emergence of technology led them to create what they thought was a better remarketing system — an online option that promised larger audiences and better returns.

eBay was founded in 1995, and it entered into vehicle sales by launching eBay Motors in 2000. Montgomery, Ala.-based online auction company GovDeals started in 1999 and had its first auction in 2001. According to Roger Gravley, VP, client services and marketing, nobody was remarketing government vehicles via online auctions when the company first started.

Property Room started out in 2001 offering online auctions for police and sheriff’s offices, eventually branching out to fleet as a request from clients, Lane said. Greg Berry, a former borough councilman in Pennsylvania, founded Philadelphia-based online remarketing company Municibid in 2006. He is now its CEO.

While numerous companies now offer online sales of government surplus items, Nick Peluso, senior vice president, customer management with Manheim, says the move to online vehicle sales has been slower on the government side. “The movement to online is slower than the other segments we do business with, non-government,” he said. Manheim, an Atlanta-­based vehicle remarketing services provider selling vehicles mostly to dealers, was on the federal General Services Administration (GSA) contract for years before deciding to exit the space. Peluso credits the slow move to online with the fact that government vehicles tend to be older, and dealers are hesitant to purchase these older units without first inspecting them.

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