Auction house harnessing online

Turners Auctions is aiming to extend its market share by creating more ways to sell used cars – and to sell them direct to members of the public. The company is regularly selling more than 1,000 items a week on Trade Me while trying to increase traffic on its own website, which was relaunched in April with online tender and auction functionality now being tested. Chief executive officer Todd Hunter says the strategy, to be reviewed in three years’ time, is creating an online marketing operation focused on retail customers, while being supported by its bricks and mortar network. It has also boosted its finance business by selling more units with add-on finance and insurance products, while there’s an opportunity for the company to grow its share of the used car sector where less than 10 per cent of units are now bought at physical auctions. “We have customers on the vendor side that want us to get more,” Hunter told Fairfax. “By going direct to the end user rather than selling to someone who sells to the end user, we’re focusing on more margin on their behalf.” Around half of the vehicles it sold last year were to dealers who tend to pay less than consumers and it wants to decrease that number. Turners is also hoping BuyNow and CashNow will boost direct sales. Under BuyNow, customers can purchase vehicles any time at a negotiated price rather than waiting until auction day. The success rate for selling finance doubles under BuyNow compared to auctions as sales people spend more time with customers. Some 11 per cent of November’s retail sales were through BuyNow, with the fleet division purchasing vehicles via CashNow. Hunter says the buying and marketing strategy for used cars resulted in operating profit for Turners’ fleet division improving 63 per cent to $981,000 in the first half of the financial year, while revenues rose 24 per cent to $21.2 million. While Japanese import sales were flat in the second half of the year, the margin per unit improved through BuyNow, with the average selling price through BuyNow about 4.5 per cent higher per sale than at auction. Last month, Turners advised the market of improved second-half trading with net profit this calendar year set to better 2012’s by about 10 per cent. It had previously said its 2013 net profit would be closer to the 2012 result of $4.2m. David Vinsen, chief executive of the Imported Motor Vehicle Industry Association, says dealers may not like the push towards dealing directly with the public, but they will continue to deal with Turners for buying and selling. He told Fairfax: “We understand Turners is doing what it needs to do and we respect that, even if not all the members like it.” To read the article in full, click here.