May 28, 2019
The Northwest Market:
Wholesale market conditions in my mind can be summarized as healthy and stable.
The lackluster January and February created a bit of a stagnant glut of inventory that suddenly disappeared in March and April as retail finally caught fire. May was a good month with many reporting good but not great retail sales. The auctions have been short of supply which has helped to facilitate healthy sales percentages and strong prices. As we move into the dog days of summer, I think we will see more of the same with increasing strength beginning in June.
Efficiency – Effectiveness – Convenience
We are living in a world that places a very high value on convenience. Is buying everything on Amazon and then shipping 40% of what we buy back on a UPS truck really creating more market efficiency and effectiveness, or is it all about convenience?
I think we sometimes use the more honorable masks of efficiency and effectiveness when what we are really looking for is simple convenience. As it relates to the wholesale car business, I believe this holds true.
While fully embracing and seeing the benefits of technology in our business, I remain a strong advocate for the auction lanes as the most efficient and effective way to remarket cars and trucks. However, I do understand in some respects the auction lanes may not be the most convenient way to buy and sell cars. It takes hard work, skill and focus to effectively use the auction. It is not for the lazy or the faint of heart.
The number of free-market transactions that take place at a large volume auction in a matter of a few hours is the mark of efficiency and effectiveness that has allowed the system to not only survive but thrive while under constant attack from a growing number of “market disruptors” that continue to call for the demise of the auto auction. This is a deep and complex subject. The pace of change in our business is both alarming and exciting.
In future weeks, I plan to tackle in more detail (my perspective) on the role of the auction in the rapidly changing remarketing industry. I’d appreciate hearing from you – please email your thoughts to me at email@example.com.
Hope to see you in the lanes (or online) this week!!