Racer Yoemans, Founder and President at BidCall Inc., a bidding software tool for the auto salvage industry based in the US gives his insight to how auto recyclers have dealt with business during the pandemic and what opportunities there are now that we enter the ‘new normal’.
Back in March, no one could have predicted where we would be today. In some ways, you could see a change coming because buying cars was starting to become easier. Buyers were pulling back as they watched and waited to see what would happen. This provided us with an opportunity to cast our net further out geographically as smaller customers needed specific vehicles.
As the government started talking about plans to shut down, it was assumed that buying would continue to be easy, but the realization that inventory may dry up was at the back of our mind. Even so, we expected cars to remain cheap in their costs.
We were naive, though, about the length of the shutdown when it was finally announced. We expected it to last only two weeks. No one thought it would still be in effect to some degree today, thus causing a shift in the supply chain. Early on, it was easy to buy inventory. But as the economy shut down and more people were staying home, our inventory went down. The supply chain shifted when everyone was told to stay home.
In the title work process, it normally takes thirty to forty-five days to convert a wrecked vehicle from clean status to salvage. The timeline for inventory going back up is unclear. In this business, if you have inventory, you will sell it.
We also had the benefit of being considered an essential industry due to the fact that we are a required industry that helps keep vehicles running. Right now, we are not only essential but also in high demand as customers are scrounging for parts. Essential especially to smaller yards because our software gives them the ability to expand their search field for inventory.
By the time May ended, the lack of inventory was driving our company’s success. The pandemic was, surprisingly, a great time to explore new opportunities with our cloud-based software.
On the 1st of May, BidCall Inc., became a cloud-based system. This created opportunities both on the customer level and with programming development software. While the complete effect from COVID is still to be determined, our company has the benefit of our new software guiding data for our customers. This enables us to capitalize on being essential as well as in strong demand. Now, there is more demand than there is inventory.
BidCall Direct has helped our company stay on top of where the inventory is and how long it is there with our Days To Sell feature. While we knew it was possible that the demand for wrecked vehicles would go down, it has actually done the opposite. It is easy to forget how hard buying can be in a normal July buy period when inventory was there for the taking just two months before. Now, it appears that we should have invested in more inventory just to meet the demand better.
With demand being higher than supply, lower inventory means lower raw cost. Now is the time to bridge the gap to supply. Our software manages the data to formulate the reaction to the current times. While the inventory is available now, the demand is so high that inventory will decrease at an unforeseeable rate. However, if a customer uses our software to reach beyond their normal perimeters, they have a good chance of keeping up with the demand.
Our company is in a unique position because we are able to push everything out to the cloud. This has helped us to step up our game in the industry with the release of the new software and COVID happening at the same time. We were at the right place at the right time and now the future is bright with our ability to manage data at a higher level. As the economy continues through this time, we will continue to put processes in place with our new software.
So, for us, COVID has had both good and bad challenges. The good challenge was the releasing of new software and creating a management process for it. The greatest challenge has been working remotely. While I, myself, am used to it having done it for fifteen years now, not everybody else has. It can be hard to separate your work life from your home life when they are happening in the same location. My advice would be to take the time to create a healthy, balanced schedule that allows you to divide up your time as though you left the house for work in a different location.
We strive to give our customers the best data out there for their inventory needs. As this year has proven, you can never be sure what is to come, but it is essential to be part of the solution. Our software has given us the ability to do just that.