Over the past three years, ARI has been shifting its remarketing process toward a total Internet platform. “We recognized that an Internet platform was essential to increase the exposure of every vehicle without increasing transportation costs or days to sell,” said Frank Grochal, vice president of used-vehicle sales for ARI, a national fleet management company headquartered in Mt. Laurel, N.J. “Increased exposure to more and better buyers is the key to maximizing the resale value of every vehicle and is particularly important when the market is weak.”

The process began when ARI decided to use Auto Auction Service Corporation’s Inventory Management System product. Using AutoIMS, ARI connected electronically with every auction to send consignments, floor vehicles, view auction notes, and receive conditions reports and digital pictures - all online, in real-time.

“With all of our vehicles in this environment, administrative processes improved, allowing ARI to sell vehicles faster,” said Bob Graham, ARI manager of used-vehicle sales. “It also allowed the company to offer every vehicle in both the physical auction lane and in every type of Internet/cyber sale regardless of auction type. Manheim’s Cyberlot, ADESA Open, Online Ringman, Live Lane, and Live Lot could all be used seamlessly from this platform.”

Independent Dealers Involved
ARI next turned its attention to independent dealers, primarily members of the National Association of Fleet Resale Dealers (NAFRD). The goal was for resale dealers to use an Internet platform. “ARI partnered with Onlane, which matched the AutoIMS functionality of processing online condition reports and digital pictures. Onlane also added its own Internet bidding product to the mix,” said Graham.

Before partnering with Onlane, independent dealers bought the cars directly from ARI in one-on-one negotiations. “That process meant that each vehicle was exposed to only one dealer. ARI now holds live Internet sales on the Onlane system twice a week, and every vehicle is exposed to every dealer,” said Graham. “However, ARI can still sell any vehicle directly to a dealer when appropriate.”

With every auction and dealer operating on an Internet platform, ARI was in a position to offer the company’s entire inventory to clients’ drivers and employees. ARI created a proprietary Web site, www.ariautodirect.com, at which clients’ employees can purchase vehicles online. These potential buyers view the same online condition reports, estimates, and digital photos that dealers use to buy vehicles.

ARIAutoDirect is a fixed price Web site, and potential employee buyers can see vehicles not only offered by their own company, but also any vehicle ARI offers for sale.

Developing a Retail Program
In keeping with its program of increasing exposure and maximizing resale values, ARI next began developing a retail consignment program.

“Taking advantage of the vehicle sales explosion on eBay and its consistent growth was the next logical step in ARI’s ongoing efforts to create a total remarketing Internet platform,” said Graham. “Tapping into the retail market would provide a significant ‘lift’ in results for ARI clients.” eEbay Motors dealers specialize in the “wholetail” market. “They retail vehicles to the public at prices at the low end of retail and just above the high end of wholesale, providing value for both the buyer and the seller,” added Grochal.

ARI teamed with Onlane to create the platform to communicate with eBay Motors dealers. Jeff Frimmersdorf, senior manager at eBay Motors, led the project to identify and recruit the top eBay Motors sellers. Specializing in selling a wide variety of vehicles, especially high-mileage, domestic fleet vehicles, these dealers had to have outstanding “seller ratings” on eBay and an excellent overall reputation.

ARI teamed with these top sellers for two critical reasons. “First, they were the proven market leaders in selling vehicles online through eBay, eliminating the need for ARI to ‘reinvent the wheel.’ Second, the eBay dealers ‘retailed’ the vehicles, dealing directly with the retail buyer and allowing ARI to maintain normal ‘wholesale type’ sales to the eBay dealer,” said Graham.

Pilot Program Proves Successful
A pilot program is in place with several eBay Motors dealers in the Atlanta, Fort Lauderdale, Philadelphia, Chicago, Indianapolis, Kansas City, Dallas, Houston, and Los Angeles markets. ARI consigns vehicles through Onlane to the eBay Motors dealers. The eBay dealer picks up each vehicle, performs a complete inspection, and digitally photographs the vehicle. The inspection report and photos are transmitted back to ARI through Onlane. The eBay dealer also uses the information to sell the vehicle. For easy access, the Onlane system also provides ARI with a direct link to each vehicle’s eBay listing.

“ARI grants the eBay dealers a 21-day exclusive to retail the vehicle. The 21 days includes the pick-up time to ensure a prompt pick-up process,” said Graham. “The eBay dealer enjoys free inventory with no floor plan expense, and ARI pays the normal transportation and clean-up costs as they would at an auction.”

ARI sets a wholesale floor price on each vehicle, then shares with the eBay dealer the amount above that floor price upon vehicle sale. This process provides the eBay dealer with the freedom to make decisions and sell vehicles at wholetail, with the financial incentive to push for retail on any vehicles. “Either way, ARI receives a lift over the initially set average wholesale auction floor price, and often that lift can be substantial,” added Graham.

If the eBay dealer doesn’t sell the vehicle in 21 days, ARI will direct Onlane to post the vehicle in the twice-weekly sale to ARI dealers. ARI also posts the unit on ARIAutoDirect for client-employee purchase. With ARI’s standardized Internet platform, the entire process is accomplished without moving the vehicle or incurring additional sale expense.

Auction Vehicles Get Internet Exposure
Because of its Internet-based platform, ARI is now able to run vehicles in traditional auction lanes and on its own privately labeled Web site on an alternate day. This allows the vehicle to be exposed to about 1,600 additional dealers via the Internet each week. There are live real-time feeds between ARI’s systems, the dealer Web site, and the auctions. If a vehicle sells at the auction, it comes off the Web site automatically, and if the unit sells on the Web site, the auction is electronically notified to hold and then redeem the vehicle to the buyer.