UK’s Largest Auction Group
Asked by the UK’s largest auction group to rescue 100’s of vehicles every month.
Due to the Mr Renault recovery truck contact, we gained consistent work with the largest auction company in the UK & Ireland.
The auction group had a depot near a government facility. The two plots of land were separated by what can be described as a fancy metal fence. Vehicles would be dropped off in Plot A. There were hundreds of vehicles parked up in Plot A. The vehicles would then need to be taken to Plot B, ready for collection by the people who won them in auction.
We would have to get each vehicle, strap them up on the spec lift recovery track and then quickly transport them to the other plot of land.
– The first challenge was that the auction group wanted to initially pay a low amount for each vehicle movement.
– Some days we would only be required to move only a few vehicles. Maybe a handful which would make the entire job not worth doing if we didn’t do something about it.
– The snow in winter time was a problem. Making movements near impossible.
– Some vehicles were completely locked so you couldn’t gain access.
– Some vehicles were automatics or stuck in gear. So all four wheels would not freely move making the movement far more difficult.
– In the beginning the entire day was taken up carrying out the work. Not leaving much time for more profitable ventures on the same day.
– Moving some of the vehicles and parking them was extremely difficult. It required a lot of accuracy and great driving skills. We had to avoid damaging any vehicle.
– We made a deal so that we were paid fairly for each vehicle transfer. Making it profitable taking into account everything going on.
– We made a deal that we would be paid a minimum amount for the day if the number of vehicles didn’t add up to this amount.
– We had to attach snow chains to the tyres of the recovery truck so the cars would move around. Some days we went there and the snow was so deep that it was impossible to move any vehicles. It was agreed that their entire auction business should come to a standstill due to the bad weather.
– We gained entry to locked vehicles by using a smart device we had. It was effectively an air cushion that you put into the door, blow it up and it would create a one inch gap. We would then use a metal rod with a loop on the end to put through this gap and fish for either the central locking mechanism and try to open it up. Or to hook onto the door handle.
– Some vehicles would require the window to be smashed if they were newer because the computers would prevent outside access.
– More expensive vehicles would require a new key to be made to prevent any damage. These vehicles would be more valuable. It was usually the old, or scrap cars that didn’t need keys.
– We got far quicker at moving every vehicle. So that the entire day’s work could be done in an hour. This made it feasible to carry out the work. And would allow us to do other things in the day.
– We used expertise to move every vehicle without creating a single scratch. And we did it with swiftness. It required a lot of communication to make sure vehicles were reversed into parking spaces at the right angle and with the precise space at each side.
– Carried out work for 2 years. 1 day a week. Earning around £200 for the one hour of work required each day.
– Gained exclusive access to vehicles.
– Found a vast source of vehicles we could acquire to then resell. Decided to expand the car sales business by using these supply of vehicles from the auction group.
I saw potential with the vehicles we were dealing with. I realised that we had exclusive access to every single vehicle that was going up for the online auctions. I could see the condition of them and talk to the staff too that would handle them. No one else would have this access. Giving us great power if we were to buy the vehicles for ourselves.
Spending the time moving the vehicles ended up being a loss leader. Although it wouldn’t make any real money. It would be a great way of analysing all the vehicles and gaining insight so that we could reap more rewards by selling the vehicles ourselves.
Also by keeping in close contact with the staff, would speed up the transfer of ownership for any cars bought. And would keep the auction group happy, they knew who we were.
We could also save time by collecting our purchased vehicles on the same day as carrying out work for them.
Selling more cars by using the contacts from the auction group
Whilst carrying out recovery work directly for the largest auction group in the UK. We had exclusive access to all vehicles.
We decided to use this access to assess the condition of all vehicles.
Could use information to see which vehicles were worth buying.
This meant we would have access to 40 vehicles a week to purchase if we wanted to. (Just from this one depot. The auction group had about 12 other depots).
The only problem would be the competition of other buyers. Some of them were stupid enough to overpay for cars.
The other challenge was marketing the business in a way to ensure you could ship out enough cars. To take advantage of our exclusive access.
Final challenge was to store all of the cars. Cars take up physical space. Space costs money. Space is also required to work on vehicles.
Buying cars from auction is a risk. Some cars needed a car and wouldn’t start. Some cars might not even be worth fixing because they were too broken. Needed engine rebuild etc.
Some cars might not be popular enough to sell either. It’s fine buying a £5000 car for £500. But if you can’t find a buyer, then it’s pointless. Very large automatic petrol cars had these symptoms.
To do the numbers of cars i wanted, at least 10 a week or more. I needed more mechanics.
There were enough cars out there that the only competition we really had was from a company called Motorhog. Everyone else was poor. They had no money. Motorhog on the other hand does about £30 million a year.
However Motorhog would only buy up all the old rubbish cars and wouldn’t pay anymore than £100-£200 a time. Mostly they would buy cars from the section that weren’t legally allowed to be put back on the road.
– After assessing vehicles. I had a list of them in a spreadsheet, provided to me by the auction group, with all REG plates and Makes / Models etc. I used this worksheet to generate estimated sale values of every single car. So I knew exactly what to pay before even bidding and the profits that would be made, in a worst case scenario.
– Discovered which cars would start and would not need fixing. Auction company told us which cars had keys made for them. Our auction company contact was giving us insider information. People online were just buying sold as seen.
– The cars which didn’t need fixing, we were able to out-bid every single person online because we knew the value of the cars.
– We would wait until the last few moments of the auction ending on every single car. And then only put minimum bids on the cars. There were so many it didn’t really matter. Thus we could buy many cars at the £100 starting bid. Sometimes we might go up to £200.
– We would make sure there was £600 minimum profit to be made on a car. We would look for cars which would have a profit of £2000 though. Otherwise you’re wasting your time. There were many cars which would generate this profit.
– Moved into a bigger premises to be able to handle the additional workload of the extra cars bought from auction. The premises could hold 2 workshop bays and store about 20 cars.
– Developed a website to make it easier to upload cars.
– Partnered with a valeting company to handle all cleaning of cars. But they would sometimes ruin the vehicles electronics by not protecting them properly. Or they wouldn’t dry them properly, so it would waste time before we could send the vehicle to a customer. I got in touch with the owner and said, if it carries on we’ll move the business elsewhere. The problem never went away, I guess some workers are careless. They only want their hourly wage and don’t treat vehicles with respect.
– Decided to get an in-house valeter to come in on weekends. Avoided all trouble. But the environment was dusty, so we’d need to quickly clean the outside of a vehicle before a customer saw it. Wasting 20 mins a car.
– To find new mechanics, for a brief time marketed the business as only using female staff / female mechanics. As outlined all the benefits female mechanics bring to the table. Greater trust etc. In fact the entire business was geared around this.
– I even had fiat 500’s in a special colours, as courtesy cars for customers.
– To solve the labour/mechanic issue I partnered up with halfords. Had a meeting with the CEO Andy Randall in Redditch. I wanted to utilise the free labour hours halfords autocentres had in the day. In return I wanted discounted labour rates on our cars. In these free hours, he would be paying the staff to do nothing. It was a win-win situation.
– Car purchases went well. Maybe 1 out of 15 cars was not worth repairing. So we were making all of the money, 100% of it on 14 out of 15 cars.
– In the instances where the car was not worth repairing, the time would be better spent sending it to the scrapyard and taking a chance and purchasing other vehicles instead.
– Cars were being turned around quickly. In a week. Each car would go from being purchased to ready for sale in a few days.
– On the mechanic side, it was extremely difficult to find enough female mechanics. The process was too slow. Or they were straight out of car fixing college. So would need a year or two to get up to speed and with more training.
– The halfords guy wouldn’t give me rates low enough for me to make proper money with. I didn’t want to be making him and Halfords money. We wanted to be making the profits ourselves. Although he would have given me nationwide coverage and a brand backing that would be reckoned with. It was too early to partner up with them.
– I called up every single local mechanic garage in the area, to put my car sales fixing situation to them. To see if they wanted to carry out the work for me. I managed to partner up with one company. They had 7 workshop bays and a huge premises. They were really cheap too. They would collect the vehicles in the morning then drop them off in the evening. But the profits still weren’t good enough. I’m not a fool.
– Luckily found another contact who had a car repair unit, with 1 or 2 bays. He carried out some work. He was quite cheap also. But one one occasion, he tried to cheat and mess us around. He said he did some work and replaced a part. But never kept the old part. So there was no way of proving he did anything.
He also failed to fix something, spending ages on it and then making the car worse. He even tried charging for this. A complete waste of time. That’s the reason he’s still in a small unit, getting nowhere.
I had to recruit my own mechanics directly. Which I did. I advertised the vacancy and again sold people on my vision. I then had 2 contacts who I just had to ring up and then would work on the vehicles when I wanted them to.
– I also employed a body work guy. He fixed all the dents, and sprayed the vehicles. Did about 1 car per 2 days. After waiting for different coats to dry etc. We only had space to spray one car at a time.
– Got an inhouse valeter to do the cars. When he wasn’t available I just decided to clean the cars myself. Using a commercial vacuum and carpet cleaner. It was easy. But we were much better off sending the vehicles off to someone else. As my time is better spent elsewhere. Actually getting the sales coming in and the money in.
I learnt that you can’t really rely on others if what they are doing is average. Most people’s standards aren’t as high as mine.
I also learnt that others will try to cheat you so I know exactly what to look out for. They also don’t get a second chance. Once is enough. They also don’t get paid if they try anything on. Tough luck. It’s their loss.
The car sales expanded how I wanted it to. But I didn’t anticipate how difficult it would be to find mechanics who actually had a brain. This is still an ongoing problem to this day. The only way you can really solve it is by paying the most out of anyone else. You can have all the bullshit but at the end of the day, employees only really care about how much money they are going to be paid. They don’t care about you, or your vision. No one cares about your business as much as you do.
I also found out that people would prefer it if I delivered the cars to them. As they were struggling to find people to take them to our car’s to view them. They would have to wait for relatives, or friends to give them lifts.
This sparked another idea for me. To improve the sales and conversion rates even more.
It was a great opportunity though, being able to purchase cars from auction and make £1000 each on them. It was like printing money. It was lucky we stumbled upon it.
But it still wasn’t where I wanted to be.
I needed to be making at this point £250,000 a year or more, just for myself. It could be done. But I had to change things up.