|
The inventory shortage at auctions has dealers traveling farther and shopping online more to stock their lots.
That means bringing in cars from far-flung locations.
“They are filling holes in their inventory with Internet purchases,” said Eric Lomen, president of Lomen Auto Transport. “This creates logistical problems but also creates some new opportunities for companies willing to adapt to a new business model.”
A main reason for the increase in auction values is a lack of new-car sales and the trades they bring.
The transport industry is facing the same challenge.
“Year after year, many carriers experienced slight growth and, with the cut in the new-car production, many carriers will be forced to change their business model to adapt to other segments or take a financial bath,” said William Billiter, vice president of AutoTransMart.com and general manager of JMN Logistics LLC.
“Last year it became very competitive in our market space and, if fuel prices begin to rise, it could have a huge effect across the entire industry. If carriers did not get lean and get more efficient in their business processes as others have, it will have a negative effect on their profitability.”
Both parties can benefit from dealer-transporter relationships.
Transporters depend on repeat and referral business just like dealers.
“When you find a good transporter, be loyal,” Lomen said. “Loyalty is a two-way street. A good transporter that knows that you depend on him will go out of his way for you.”
It takes communication to make this relationship work.
“The more information that is shared with each party, the less likely errors will occur,” said David R. Larson, senior vice president of business development for United Road.
“From a financial standpoint, dealers want the best price possible to transport vehicles they have purchased or sold online or at auction. For many of the smaller dealers that do not buy or sell in volume, they are subject to single unit pricing versus load pricing, which is much more economical.”
Technological improvements are helping to make the transportation process more efficient.
JMN has a product that allows customers to see the true market price before they purchase the vehicle, which includes transit times, and real time insurance verifications allow the dealers to expand their reach and tap into competitive prices.
United Road utilizes hand-held technology which allows its drivers to have their load information downloaded into these devices to improve efficiencies and eliminate errors in deliveries. This system is paperless and sends real time information to the dealer and manufacturer.
Some innovation is non-technological.
United Road has developed the “Dealer Club” to help low-volume dealers. The Dealer Club allows dealers with close proximity to one another to capitalize on each others purchases from a specific auction or area.
Experts expect online sales will change the way dealers do business and move them toward just-in-time inventory. Instead of having every vehicle on their lots, they’ll buy when they have a customer.
This makes transportation ever more crucial to the sales process. |
