When Hemmings Motor News announced its new Auctions website this past April, it represented the first credible large scale challenger to Bringatrailer.com. Hemmings is quick to say they plan to do online Auctions “Their Way” rather than follow Bringatrailer’s model, but is that good enough to steal market share from the segment leader as well as convince the “Hemmings Nation” that online auctions are good for everyone? Let’s review their plan.
Originally a blog site highlighting collector and special interest cars for sale online, Bringatrailer.com (affectionately known as “BaT” among its loyal fan base) has gone largely unchecked since Co-Founder & CEO Randy Nonenberg converted it into the leading collectible vehicle auction site nearly five years ago. With an established brand name that’s long been known as “The Bible of The Old Car Hobby” among collector and classic car enthusiasts, it’s clear Hemmings sees competing head on with BaT as their path to stay relevant in the space as print media and the aging hobbyists who supported both continue to die off.
First, look to the money. For sellers, Bringatrailer’s “Classic” offering (we covered the details of BaT’s $349 “Plus” offering here on our YouTube video) charges $99 to help curate and list their collector car, regardless of the expected selling price. Hemmings plans to charge $100 (okay, $99.95) for the same service. One key differentiator for Hemmings occurs when a collector car fails to meet its reserve during an auction; the seller has the option to convert his auction to a free six month ad in Hemmings existing offerings. Ironically, by walking away from their “Exclusives” listings five years ago, BaT no longer offers a competitive response.
For Buyers, Hemmings will charge the same five percent premium as Bring A Trailer. However, Hemmings will never have a price advantage over BaT. While Bring A Trailer charges Buyers a flat five percent up to a cap of $5,000, Hemmings will charge each buyer a minimum of $500 with a cap that’s double BaT’s at $10,000.
The following table helps put it in perspective:
This is where Hemmings “Doing it their way” is clear. Hemmings clearly believes their brand name has sufficient leverage that allows charging a premium below $10,000 and above $100,000. The slight difference under $10,000 is nominal and we predict the number vehicles auctioned under this threshold will be minimal. Recognizing the bulk of the collector car auction space is in the $10,000 to $100,000 range, Hemmings isn’t competing with BaT on price. We predict parity pricing won’t help Hemmings steal market share from BaT’s existing seller base. If not price, then how? Simple: Customer Service.
Listen to anyone other than Randy Nonenberg, and its apparent not all is all perfect at Bring A Trailer, especially over the past several months since they expanded to 50 auctions per day. BaT’s curated auction listings have become so riddled with errors that opportunists such as @Bringatypo on InstaGram gain a following having people watch them call out spelling and grammatical errors. Comments on Hemmings, Reddit, and feedback received directly by Guys With Rides makes it clear that Bring A Trailer’s skeleton crew of auction curators is too busy getting the next crop of 50 auctions ready to post and for the next day than to provide thoughtful and time-sensitive customer service.
Hemmings clearly plans to try and take advantage of this with the latest statement, “First of all this is Hemmings Auctions, so everything you know and love about Hemmings will be a part of it, including real, live human, Vermont-based Listing Specialists on hand to walk the sellers through the entire process. If there are ever any questions while you’ve got a car listed, you’ve got a person to contact. ” Frequent car sellers (a.k.a dealers) will likely see the most benefit from this. The ability to have a direct contact in any customer service setting is powerful to consumers, so we predict Hemmings, if their team is truly as customer focused as they claim, will win over sellers. Hemmings also plans to have a separate Q&A forum for just bidders and sellers. This is another point of differentiation for Hemmings as buyers will not have to scan through the sea of non-pertient comments that typically crowd a BaT auction listing currently.
Despite the innovations they are putting in place, we predict that in the short term Hemmings won’t make much of a dent in Bring A Trailer’s market share. The fact remains that there are plenty of collector cars wanting to be sold at any given time. While Bring A Trailer’s and Hemmings’ fee structures are equal to another, the competitors who stand to lose the most are traditional collector car auction houses such as Barrett-Jackson and Mecum who make nearly 20% on every collectible car sold. We can’t wait for August to start to see if predictions hold true. Stay tuned!
What do you think will happen? We would love to hear your thoughts, so please comment below.