Earlier today, Hemmings Motor News provided more detail in a blog post about their new online auction site aptly titled, “Hemmings Auctions.” In the post, Hemmings claims they “are creating a forum that combines carefully selected specialty vehicle listings with legitimate sellers and buyers, all supported by a level of interactive customer service that will far exceed the typical online experience.”
If those sound like fighting words, they are…for survival. There is no denying Vermont-based Hemmings has been the go-to source for the collector car hobby since 1954. Before the Internet, vintage auto enthusiasts including the author waited anxiously for their mail carrier to delivery that wonderful shrink-wrapped, phonebook-sized, orange-covered, “Bible of the Old Car Hobby.” So, while the company has been trying to fight the decline of print media through their online offerings, the reality is that the “Hemmings Nation” continues age and die off. While their core group of followers have likely adopted the Internet on some level, several comments quickly appeared on the blog’s thread that some hobbyists hesitate to register a credit card on the site to prepare for bidding. Is that sign Hemming fans will be slow to adopt?
Randy Nonnenburg, Co-Founder of Bring A Trailer, expressed that very thought during an “Ask Me Anything” session he held on Reddit.com in April. When asked about the impending launch of Hemmings new site, Randy replied, “I have read Hemmings since I was a kid and like those guys, but it will be interesting to see if their audience adopts online auctions. That is very different from their current offering. I believe that the commenting community on BaT is the most important part, and it is very hard to create, manage, and grow. Our team has done an amazing job with that and we have had a lot of luck and along the way.”
Based on Hemmings’ blog post today, here are hints of the details of the new site that will launch soon:
“We are creating a forum…all supported by a level of interactive customer service that will far exceed the typical online experience.” Hemmings Auctions wants to address the dirty little secret about Bring A Trailer few are willing to talk about: BaT offers minimal customer service post auction. Randy Nonnenburg is quick to point out that his website is merely a place that brings buyers and sellers together. When problems occur (no one knows for certain the rate, but they do happen) he and his team are quick to tell the seller its up to themselves to work it out with the buyer. Only in rare extreme cases will BaT refund the buyer’s five percent premium if the seller botches the deal. If Hemmings is successful promoting superior customer service that gains people’s trust, Bring A Trailer will need to respond accordingly.
“The Vehicles to be auctioned off will be selectively chosen by our experts…to prevent a barrage of “used car” offerings.” Not surprisingly, Hemmings will adopt BaT’s formula and curate vehicles for the site. Its interesting that they use this wording as this as one of the criticisms of Hemmings these days is their selection online has an increasing number of late model cars for sale.
“Listings will come from individuals as well as from Hemmings’ established network of trusted classic car dealers.” Ah, just what the collector car hobby doesn’t need right now: yet another site crowded with dealers that buyers need to sift through. While Bring A Trailer is very transparent about allowing trusted dealers sell on their site, the ratio tends to fluctuate between 30% and 40% percent. The sad reality is the history of most dealer-sourced vehicles on BaT tends to be very sparse compared to the private seller listings. We’re hopeful Hemmings at least provides the dealer transparency on their new site that collectible car enthusiasts prefer. What will be interesting to see is the ratio of dealer-to-private seller listings at launch as our hunch is that they will reach out to long-time dealer partners to help them get the site rolling with inventory.
“The option of setting a reserve will be available for auction listings, but the amount of the reserve will be determined by both the seller and Hemming’s listing experts.” Hemmings is quick to point out that their listing specialists will help sellers “set pricing for maximum value while avoiding unrealistically high reserves, which deter completed sales.” While we agree sellers need to be realistic about reserve setting, this sounds eerily similar to another BaT criticism that it tends to push for lower reserves to keep the sell-through rates up. Bring A Trailer now has the luxury of pushing low for lower reserves simply out of supply and demand: BaT currently curates an average of 45 cars each week day out of an estimated 100 requests the site receives each day, based on comments Randy Nonnenburg made during the aforementioned Reddit.com session. At least initially, its highly unlikely Hemmings Auctions will have that luxury. That said, we compliment Hemmings on leveraging their existing online offering by automatically converting auctions not meeting their reserve automatically to a six-month classified at no additional charge. That’s a point of differentiation Bring A Trailer ironically no longer offers since switching to a one hundred percent auction format five years ago.
“The fees associated with listing a vehicle on Hemming Auctions will be structured in a straightforward, transparent format with competitive pricing and no hidden fees.” Proper pricing of their new offering is critical to the successful adoption of Hemming’s new service. The word “competitive” likely means Hemmings plans to adopt a fee structure similar to Bring A Trailer’s. On the seller’s side, does Hemmings plan to match Bring A Trailer’s $99 “Classic” service or do they feel they can charge a higher fee at launch more in line BaT’s new “Premium Services” $349 cost. More importantly, what does Hemmings have up its sleeve for the anticipated Buyer’s Premium? Specifically, will they match BaT’s current five percent buyer’s premium or undercut it in an effort to steal market share? While we think its unlikely, will Hemmings try to leverage their status as “The Bible of the Old Car Hobby” to charge a buyer’s fee higher than Bring a Trailer’s yet still lower than the traditional auction houses?
The one item not mentioned by Hemmings yet is whether their new Auctions site will feature anti-sniping technology similar to Bring a Trailer’s last two minute rule. If you’re not familiar with this, during the last two minutes of a BaT auction, the clock automatically resets again to two minutes. The process continues as long as needed until no more bids get registered. Its an effective system that bidders and side line watchers alike enjoy.
We can’t wait to see how this all plays out. Meanwhile, we believe in the short-term it won’t be Bring A Trailer who stands to lose. While there are currently plenty of collectible vehicles to go around, we believe the traditional car auction houses such as Barrett-Jackson and Mecum stand to lose the most as younger collectors enter the scene who are more comfortable buying a specialty vehicle online. Stay tuned!