The bottom-line value of employee sales as part of a fleet vehicle remarketing program has long been recognized. Selling end-of lease vehicles to drivers and other company employees minimizes days-to-sell, thereby reducing depreciation; eliminates downstream expenses such as auction fees and costs; and offers company workers a valued benefit.
Typically, the window of employee sales opportunity is open from the moment the replacement vehicle is ordered until the out-of-service vehicle is picked up for resale.
The development of electronic remarketing tools, particularly Web-based technologies, over the past decade has helped facilitate employee sales programs. In particular, technology now provides easy access to maintenance history, condition reports, and vehicle photos, as well as online purchasing processes. In addition, most major remarketers now offer customizable employee sales programs, including online purchasing.
Mission Foods Employee Sales Program Notable Success
Mission Foods' employee sales program has achieved remarkable success. Chris Syed, fleet facilities administrator of the Dallas-based tortilla manufacturer and supplier, reported at least 45 percent of the company's remarketed vehicles are disposed through employee sales. "The percentage has remained steady over the past several years," Syed said.
Mission Foods operates a 300-vehicle fleet in the U.S. The vehicles, leased through LeasePlan USA, are primarily SUVs, including the Chevrolet Equinox and Dodge Grand Caravan, and sedans. Ninety percent of the vehicles are used by sales and merchandising personnel at offices throughout the country. Company employees number 5,000.
According to Syed, fleet vehicles are replaced every four years or 80,000 miles. She generally replaces one-third of fleet each year.
A 10-year veteran with the company, Syed developed the employee sales program when she moved to the fleet position eight years ago. "I handled the entire process by myself, but it got to be too much," she said. "In October 2006, we contracted with Flexco Fleet Services, a fleet remarketing services company headquartered in Ohio."
The employee sales process begins with the vehicle reorder, Syed said.
The driver is offered first purchasing rights.
"When I have ordered the driver a new vehicle, I notify Flexco that day. They usually notify the driver in 24 hours with a price, and the driver has five days to decide if they want to purchase their vehicle," Syed explained.
If the driver declines the purchase, the sale is open to all company employees. At that point, Flexco arranges for a third-party vehicle inspection. With inspections performed at the driver's office or local job site, "there is no inconvenience to the driver," Syed noted.
On the 15th of every month, a new vehicle sale starts. Syed sends out a monthly e-mail to all employees announcing a car sale scheduled on a particular date. The sales program is now so well known throughout the company, no other marketing or publicity is necessary, she said. "I begin to get phone calls right about the time the sale is scheduled."
The e-mailed sales notice contains a link to an online bidding site managed by Flexco. The site provides vehicle photos and condition reports, and offers financing arrangements. Purchasing employees arrange vehicle transport.
Occasionally an employee who knows a particular driver's vehicle is due for replacement requests to purchase that specific vehicle. "I notify Flexco that I have approved the sale," Syed explained. "The employee still goes through Flexco for pricing and paperwork."
The bidding process lasts 10 days. Vehicles not sold to employees are purchased by Flexco or returned to LeasePlan. When the new vehicle arrives, Syed or the driver notifies Flexco and pickup of the unsold vehicle is arranged.
"If there's a safety issue with the vehicle, I won't offer it for sale to the employees. It goes directly to Flexco," according to Syed.
Vehicles are offered to drivers at the wholesale price, "as a kind of reward for taking care of the vehicle," Syed noted. Other employees pay "somewhere between wholesale and the Kelley Blue Book private party price."
"I'm not out to make the most amount of money" from the sale, Syed said. "Employees love this program. They view it as a bonus."[PAGEBREAK]
Westfield Insurance Program Offers Ease of Use
Ease of use is a key factor in the Westfield Insurance employee sales program, according to Brian McKeighen, manager, sourcing, fleet, and travel.
Headquartered in Westfield Center, near Akron in northeastern Ohio, the 160-year old business and personal insurance company employs 2,200 in offices in 28 states, predominantly in the Midwest.
The company's 500-unit fleet comprises "mostly Chevrolet Impalas" used by claims staff, explained Jennifer Coles, fleet coordinator.
The fleet is leased through Wheels, and vehicles are replaced every 36 months or 60,000 miles.
McKeighen estimated Westfield Insurance has remarketed about 459 vehicles over the past two years.
A healthy 27 percent of the company's out-of-service vehicles are sold to employees via a Web-based program provided by Wheels.
Upon ordering a replacement, the vehicle is first offered to the driver, who has 14 days to signal intent to purchase. When the driver declines the offer, a notice is automatically sent to Wheels, said Coles.
The Wheels-managed employee sales site lists available Westfield vehicles, with the price, maintenance history, and condition report. A vehicle remains on the for-purchase list for six weeks or until the replacement vehicle arrives.
Vehicle sales are announced through the company's weekly e-mail all-employee bulletin, News to Use. In addition, said Coles, the list is posted on television monitors located in public areas of the corporate office.
Employees interested in buying a company car are directed to the sourcing, fleet, and travel page on the Westfield Insurance Intranet. A link takes them to the Wheels site.
Vehicles are priced at wholesale market values to all employees, said Coles. Vehicle transport arrangements are the responsibility of the purchasing employee, she noted.
Financing arrangements are available through Wheels, as well as the Westfield Bank, a member of the Westfield Group. Financing paperwork can be completed and submitted online.
Out-of-service vehicles not purchased by employees are returned to Wheels. The driver turns the vehicle into the delivering dealer, where it is picked up by the auction, Coles explained.
The employee sales program has been in place for several years, Coles said. Word of mouth and employee anticipation helps promote sales.
"When new orders are being placed, there's a lot of talking among employees. I get a fair number of calls before the list is posted from interested employees."
"The ease of use is a key element in making the program a success," said McKeighen. "And the fact that it's an established program and offers such a benefit, employees stay on top of the sales."
The company views the program as "a nice thing to offer employees," according to McKeighen. "They can get a good car for probably less than what they could find elsewhere. And with information from Wheels, they know how well it's been maintained. It's an incentive for drivers who may want to purchase the car to take care of it because they get a known vehicle at a good price," he added.