Remarketing

Best Practices in Remarketing Partnerships

October 2016, Government Fleet - Feature

by Shelley Ernst - Also by this author

Clark County, Nev., auctions off its own vehicles as well as those of other local and state agencies. Photo courtesy of Clark County
Clark County, Nev., auctions off its own vehicles as well as those of other local and state agencies. Photo courtesy of Clark County

When it comes to remarketing fleet vehicles, there’s not a one-size-fits-all solution.

Fleets can choose between online auctions and local ones (or a combination of the two). They can choose whether to control the remarketing process from end-to-end or outsource it. And they can choose whether to go it alone or partner up with other agencies. These choices let fleets find the most efficient process to garner the best resale value.

At a glance 

When working with other agencies or private auctioneers, fleets should:

  • Vet the partner and understand the auction process
  • Ensure accurate information is being distributed
  • Spread the word about the auction, or connect with someone who can.

For Clark County, Nev., the City of West University Place, Texas, and Iowa State University Transportation Services, choosing to partner up on remarketing, either with a company or another agency, has paid off. Here’s how they do it — and the best practices they’ve learned along the way.

City of West University Place: Leveraging a Local Auction Company

Barrera
Barrera

The City of West University Place, Texas, takes advantage of the various remarketing choices available. The city’s fleet consists of 60 vehicles and more than 20 pieces of off-road equipment; the number of these assets remarketed each year varies, so there’s never a reliable annual turnover or a set remarketing methodology. Rather, the city thinks of remarketing on a case-by-case basis, choosing how it will sell the unit based on what type of vehicle it is. “When it comes time to surplus a vehicle, we first make an assessment of the vehicle to determine the best course of action for when and how to remarket it,” said Gerardo Barrera, general services superintendent.  

For Barrera, choosing whether to leverage the city’s local auction partner is a balancing act. “When using a local auction company to handle the entire process, it eliminates the need to allot staff time to oversee the auction. It also eliminates the need for storing the vehicle on-site,” he said. “But there is also a higher cost associated with this option, which means less revenue for the sale of the ­vehicle.” So when the fleet faces time constraints and staff availability issues, the convenience of handing off the work offsets what could be a lower net price compared to an online auction.

Iowa State University: Partnering with the DOT

Wellik
Wellik

Iowa State University (ISU) Transportation Services is responsible for 599 vehicles, ranging from compact cars and passenger vans to dining trucks, one-ton trucks, and emergency vehicles. In a typical year, the university remarkets an average of 40 to 60 of those assets. The organization’s main partner for remarketing efforts is the Iowa Department of Transportation, which holds two auctions every year.

“ISU has a fantastic relationship with the Iowa Department of Transportation,” said Kathy Wellik, CAFM, director of Iowa State University Transportation Services (UTS). “There is a very high turnout of bidders at the auctions because we have a fantastic reputation with the community of bidders and dealers. Local schools can also sell at the auctions if they have the need.”

The fleet handles all reconditioning, auction preparation, and paperwork. The DOT then contracts with an auctioneer to handle sales the day of the auction.

Over a three-week period, the university then takes the following steps:

  • UTS identifies equipment to be sold and sends a list to the DOT
  • Vehicles are prepped for the auction
  • Title paperwork is delivered to the DOT
  • Vehicles are delivered to the sale lot for photos to be posted online
  • Sale flyers are delivered around the state and online
  • The viewing day is held
  • Vehicles are sold at auction
  • The DOT collects the money and distributes it to sellers.

“UTS is extremely fortunate to have the state DOT less than a mile away,” Wellik said. “The fee they charge and the quality of bidders that attend the auction are amazing. The sale prices are always strong, and it just makes sense to partner with them due to their proximity and the amount of money we can save with sale fees.”

Occasionally, a university vehicle may need to be sold in between auctions. In that instance, the fleet department works with University Surplus to sell the vehicle through an online auction site.

Overall, Wellik said there are many advantages when it comes to partnering with other agencies to remarket vehicles. “Combining the variety and quantity of vehicles with other agencies makes it more attractive for bidders. The auction fees are less because of the larger quantity of vehicles being sold. And there is also less duplication of efforts in manpower for the sale, advertising, etc.,” she said. “There is a strong following because of the history of the auction.”

Online vs. Local Auctions

What’s the difference between online auctions and local ones? Here’s an overview of how each works:

Online

  • The fleet is usually responsible for the process from beginning to end
  • Fleets set the reserve price
  • Fleets have the power to choose whether to accept the winning bid
  • Service fees are usually passed to the buyer, maximizing revenue.

Local

  • The auction house handles the process on your behalf, minimizing staff time
  • The car is sold to the highest bidder
  • Selling price will depend on the number of bidders present to bid
  • Fees are taken out of the selling price.

“It’s about trying to surplus the vehicle for the maximum amount without incurring any other additional fees for your organization,” said Gerardo Barrera from City of West University Place, Texas. “Utilize both and decide what works best for your respective organization.” 

Clark County: Auctioning Vehicles for Public and State Agencies

Rather than providing its vehicles to another agency to be remarketed, Clark County, Nev., serves as the agency that facilitates the sale of other fleets’ vehicles at auction. The Clark County fleet itself is comprised of 2,840 light-, medium-, and heavy-duty vehicles and equipment. Its remarketing partnership works like this: The county has a contract through the State of Nevada Purchasing Office with TNT Auction. The county holds three auctions per year, and nearly all of the public and state agencies in Southern Nevada contribute vehicles to be sold at these public auctions. For Clark County, that’s nearly 200 vehicles per year. Factor in participating entities, and the total is approximately 1,050 vehicles annually on average.

Each agency is responsible for bringing its own vehicles to the auction and ensuring they’re stripped of all government markings and other identifying features, while Clark County works with the auctions and handles all promotions. “Clark County sponsors these auctions and through its Public Communications/­Public Information Office (PIO), does news releases, and coordinates any additional requests from the local media for additional information,” said David Johnson, manager of automotive services. “We also have a video, produced in English and Spanish, posted on our website to instruct the public on how to register as a bidder and participate in an auction.”

Johnson said this format has worked well for the county and its remarketing partners. “Hosting auctions with participation from a wide variety of public agencies is an efficient use of resources and provides maximum return for our taxpayers,” he said.

The City of West University Place, Texas, determines how it will sell its vehicles on a case-by-case basis. Photo courtesy of West University Place
The City of West University Place, Texas, determines how it will sell its vehicles on a case-by-case basis. Photo courtesy of West University Place

6 Steps for a Successful Partnership

All three fleets have seen success through their remarketing partnerships. Based on their experiences, they recommend the following best practices when it comes to teaming up for your own remarketing efforts.

1. The More, the Merrier

As Wellik noted, the more agencies there are contributing vehicles to an auction, the greater the variety and the higher likelihood of a sale. The more people involved in the auction, the better it is for all entities involved — the seller, the auction, and the bidders.

Johnson agreed. “We try to get all of the local entities involved in each auction. This results in a consistent amount of vehicles to be sold and brings back repeat buyers,” he said. “By working with the other public entities we are able to put on rather large auctions, which results in drawing a larger crowd. Larger crowds result in a livelier auction, which results in a better return on the assets we are selling.”

In other words, fleets don’t have to limit themselves to a single partnership — so if other agencies want to join in, the results could be better in the long run.

2. Vet Your Partners — and the Process

While having more partners can make for a great auction, it’s also important to have the right remarketing partner. The first step is to do your research. Does your remarketing partner have the right qualifications? Can it meet your expectations? These are important questions to answer before entering into an agreement.

“You need to know what you are getting yourself into before committing to something that could cost you more in the long run or not produce the intended results,” Barrera advised. “First, discuss how the agency operates and how they plan on remarketing for you. What experience do they have? Check references to verify that they performed the service they said they would. Simply put, you want to know what they can do for you that you can’t do yourself.”

During the research phase, questions to ask could include:

  • How long have you been in business? 
  • How are you paid for services or what fees can be expected?
  • What steps do you take to remarket vehicles? 
  • What marketing efforts do you use to attract more buyers?  
  • Do you rely on any other third party services that add additional costs that could be passed to the fleet?
  • Is there a fee if the vehicle does not sell?

Johnson said doing your due diligence to vet your partners, then ensuring you have a clear understanding of each other’s processes, pays off. “The right team will always get the job done right the first time and eliminates the multitude of headaches that can come from disposing of your assets,” he said. “By ensuring your remarketer is qualified and understands your processes, it should eliminate any issues. When you’re both on the same page, there are no surprises.”

Wellik agrees that communication is key for a productive partnership. “Make sure there are clear goals and expectations of timelines and vision for the partnering agencies. Communicate, communicate, communicate,” she said. “Without communication, it is not going to work.”

3. Aim for a Balanced Partnership

While clear expectations are a must, so are balanced expectations of one another. Barrera warns that taking on too much of the risk — or even entering into a deal that seems far more beneficial to you than to your partner — can be dangerous. “Don’t allow yourself to be placed in a position where the majority of the risks are on you, with little to no rewards,” he recommended. “If you don’t know or are unclear about anything, ask for clarification. If the agency you are considering is not upfront or is avoiding answering your concerns, trust your instinct. And if it seems too good to be true, it probably is.”    

4. Information Is Everything

Just as gathering information about your potential partners is critical, so is providing information about the vehicles you’re selling — and making sure that information is distributed to the intended audience.

“Marketing is key, and it’s important for your auctioneering firm/remarketer to have a viable website that is regularly updated with pictures and descriptions of information being sold at auction,” Johnson said. “Publicize the auction dates and registration and preview periods. Provide the public with information resources to help answer any questions they have about the sales process.”

Johnson said providing information about your vehicles isn’t limited to their selling points — fleets should also be up front about any known vehicle problems. “By disclosing any known issues, you gain the public’s trust on what you’re selling — and in turn they will be repeat customers. It’s just common sense.”

For Wellik, marketing isn’t the sole responsibility of the auction. Her team also provides valuable information about the vehicles they’re selling, and being available to answer bidder questions leading up to the auction has been key to developing a loyal bidding audience. “Having the viewing day at the lot where fleet staff are present to answer questions about the vehicles, and bidders can sit in the vehicles and look at them, is really important,” she said. “Our staff is also able to provide the history of the maintenance for the vehicles being sold. This allows the customers an extra comfort level knowing that the vehicle has been maintained properly.”

5. Image Is Everything, Too

Fleets should also do their part to provide their remarketing partners with visually appealing vehicles to sell. At UTS, vehicles are detailed before they go to market, and the original window sticker is placed in the window, a step Wellik said adds value to the sale price. “Image is everything,” she explained. “Simple things like having the original window sticker in the vehicle has helped because people know exactly what the vehicle has for options. Put a little tire shine on the tires, clean the interior and exterior really well, and watch the residuals come back to your fleet.”

6. Get the Word Out

The more people know about your auction, the better. Johnson highly recommended leaning on a Public Communications or Public Information Office (PIO) — or that of your partner’s — to generate publicity about the auctions, as it ultimately results in better turnout and increased sales.

“If you have a PIO, use them. They have the expertise to get the word out to the right people and generate media and public awareness of these auctions. It makes all the difference in the world,” Johnson said. “By using our PIO, we have watched our buyer turnout dramatically increase, which has resulted in our sale revenues going up. Even during the economic downturn, we only saw a decline of approximately 10% to 15% on what we were getting per vehicle.”

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