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I think most of my readers have heard of Bring a Trailer, or 'BaT' as it is colloquially known. Founders Randy Nonnenberg and Gentry Underwood started posting listings of interesting cars as a hobby in 2007, collecting small referral cheques when the cars they featured sold. In 2010 they quit their day jobs and brought on some employees including Howard Swig to manage the auctions. Howard is the son of the late Martin Swig - Founder of the Monterey Historics and California Mille vintage car rally. By 2014 they had several hundred thousand subscribers and, in an inspired decision, monetized their traffic with an on-line auction platform. They started with three cars, a 1970 “Boss” Mustang, a 1991 BMW M3 and a 1964 Alfa Romeo coupe. At the time of writing, BaT has completed more than 52,700 auctions with a sell rate of over 75%. BaT currently has over 400,000 viewers and over 150,000 registered bidders.
Now, eBay has been around for more than 20 years, and sells more cars and trucks than anybody-but BaT's curating of interesting vehicles (they only take about 40% of the applications) and auction format has won the favour of car collectors. BaT differs from eBay in several important ways. Firstly, BaT staff write the auction copy and stay away from flowery language and 'puffery' - the descriptions are detailed and factual and aim to under-promise. Secondly, the auctions don't allow 'sniping' or last-second bids. At the end of the auction each new bid extends the close by two minutes - similar to what happens in a conventional auction - it is over only when there are no further bids. Most important is the addition of a forum-type comments section that has a huge following of knowledgeable enthusiasts who comment and vet the cars. BaT's fairly aggressive moderation keeps the trolls out. The owner is expected to participate in the forum and answer questions and provide additional photos/documentation on request. Most auctions will have more than 200 photographs as well as documentation.
The initial curation by BAT which weeds out the sketchy owners and cars, honest descriptions, depth of the documentation and the vetting by the marque experts in the auction forum lead to a high degree of confidence from bidders-most of whom will buy the car sight unseen.
Importantly, the fees are reasonable. Listing is only $USD100 and the seller keeps 100% of the sale price. The buyer pays a 5% buyers fee up to a maximum of $5,000. Collector car auctions generally charge 8%-10% for a sellers fee and 10%-12% for a buyers fee. On an expensive collector car, BaT is almost free by comparison.
Because BaT has a huge user base and has created an extremely knowledgable community, they can afford to be choosy with what they accept. The $100 listing fee wouldn't even cover the time for somebody to write the description, so they are not interested in listing vehicles that won't sell. If you want a reserve price on BaT, it has to be very conservative, or they won't take the car. This is a little disconcerting, but a look at auction results reveals few bargains - just about everything is fully priced. Many results are jaw-dropping...
On one of Jay Leno's Garage episodes, Randy Nonnenberg said that BaT looks at three things when deciding on whether to accept a car: the car, the reputation of the seller, and the reserve.
BaT's meteoric rise in prominence got the attention of the traditional high-end collector car auctions such as RM and Gooding. I heard rumours of RM offering $10M to buy it. Shortly after that, in June 2020, it was announced that Hearst Publishing had purchased the company, rumoured for $100M. That got everybody's attention. Some guesswork and back-of-the-envelope math suggests revenue in the $30M per year range, profits probably $10M of that, making a 10X earnings valuation credible.
It didn't take long for new entrants to appear in the on-line auction marketplace. Firstly, with COVID, the traditional auction houses started offering on-line auctions which are likely to continue. RM Sothebys created their 'Online Only' auction platform and Gooding & Co. created 'Geared Online', both of which offer monthly one-week auctions, though without the forum component that BaT uses.
Hemmings embraced the digital age by expanding their written content and adding an on-line auction site that mostly features collectible American cars.
The PCARMARKET was created by David Jacobson to specialize in collectible Porsches. They added a YouTube and podcast series which featured interviews with Porsche heavyweights such as Bruce Canepa, Rod Emery and Alois Ruf.
Popular YouTuber, Doug DeMuro, monetized his massive subscriber base by creating Cars & Bids which targets 80's and newer speciality cars.
Then came more on-line auction platforms looking to carve out a niche for themselves: Thembmarket, Collectors XChange, Collectingcars, Shiftgate, Fastcarbids and if I check my email probably another few! Most of the new entrants have few or no live auctions at the moment, despite some full page ads in Sports Car Market. There will clearly be a rationalization as everybody finds their place-those with significant subscriber/viewer bases have a pronounced advantage over new-to-the-industry start-ups.
Specialty 'bricks and mortar' dealers are adapting by offering listing services for BAT where they compile the documentation, prepare the car, photograph and video, respond to inquiries during the auction, and handle the shipping afterward. If you can get past the risk of auctioning a car with a low reserve or no reserve, this method of selling will net the owner a far greater percentage of the cars value than selling/trading it at wholesale, or trying to sell it locally. Detailed professional quality photos and videos greatly enhance the probability of getting top dollar for the car, which is all about gaining buyer confidence.
[Romanosky Vintage also offers this service, my BaT username is Lromanosky.]
I think that on-line retail auctions will also find their place with conventional car dealerships. It is in nobody's interest to have inventory collecting dust. Just about any used car manager would welcome a one-week auction, even it it meant less profit, as what kills a used car operation is the depreciation and 'lot rot' that befalls vehicles that sit around. The collector car community has certainly embraced on-line auctions, and it is only a matter of time before the larger car-buying public do the same, which will be a game-changer for car dealerships. Bring A Trailer has made a huge impact.
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