This 34-year-old station wagon auction brought in a record $675 million last year, finally embracing the internet

This 34-year-old station wagon auction brought in a record $675 million last year, finally embracing the internet

Despite the popularity of sites like eBay, the world’s largest collector car auction house has never really embraced online auctions.

Not before the Covid-19 pandemic hits. What started as a survival tactic – a fail-safe in case live events never returned – turned into a strategy that helped Mecum Auctions generate a record $675 million in revenue l year, according to CEO Dave Magres.

The business, based in the small town of Walworth, Wisconsin, has been around since 1988. It wasn’t exactly a small business before Covid: in 2019, it brought in more than $400 million in revenue from events live auctions across the country. . Auctions can attract between 20,000 and 100,000 attendees each, depending on the company.

Without them, Mecum was left with just an online bidding process, which Magers said was “pretty boring…it was a static screen with a number on it, and you press a button.”

In four months of lockdown, the company has built a new system that implements live video meant to make you feel like you’re sitting front row at a fast-paced auction. The idea is to let you experience the excitement of bidding on a 1966 Shelby Cobra convertible or the 1968 Ford Mustang driven by Steve McQueen in the movie “Bullitt” – even if you’re sitting on your couch at the other end of the world. .

Collector cars are on display at a Mecum Auctions live event in Kissimmee, Florida in January 2022.

Source: Mecum Auctions

The system only exists to augment live events: Mecum does not host online-only auctions. But when the company resumed live events in July 2020, its number of online bidders grew from around 50 per event to more than 1,700. People also showed up in person.

“We dramatically increased the number of eyeballs and the number of attendees just because we had people sitting at home with nothing else to do,” says Magers. “And it was something they had to do.”

Replace a “rather boring” system

Before Covid, Mecum was widely known for his TV auctions on automotive-centric television network Speedvision and NBC Sports. It has long been one of the top employers in Walworth, a town of more than 2,800 near Lake Geneva, Wisconsin.

The company is still owned by founder and chairman Dana Mecum, who ran the company with his wife and four sons for decades. Magers, a former insurance executive, became CEO in 2013 after previously serving as financial adviser to Mecum.

Seven years later, Magers wasn’t quite sure what to expect from Mecum’s first live event in the pandemic era. “Our thought was this: When we go back to auction, there will be a lot of empty seats and there will be a lot of internet bidders,” he says.

Instead, he was shocked to find “every seat in the house was full.” Attendees flocked to the in-person event at the Indiana State Fairgrounds in Indianapolis, which seats nearly 14,000 people. The 1,700 people who joined virtually were finally able to participate as well, with a live video feed of the auctioneer and cars being auctioned.

“The auctioneer knows who you are and speaks to you like he speaks to someone attending the auction,” Magers says.

Not only has the increase in online activity not come at the expense of in-person participants, but Magers says having more internet bidders from around the world has actually inspired more dynamic auctions. and led to an increase in the number of sales.

“The more people who bid on a car, the higher the price will be,” says Magers, adding that Mecum was also experiencing pent-up demand from a public eager to spend money after being locked down at home. him during the pandemic — a phenomenon that has affected consumers and businesses in various markets.

“What we’ve seen is that prices started to rise relatively dramatically during the pandemic, because of that competition. [and] due to accumulated resources,” he said, adding that Mecum is on track to easily surpass last year’s total revenue in 2022.

Magers has other plans for the future: the company signed a media partnership last year with Motor Trend Group, which now airs Mecum’s auctions on the Motor Trend television network, as well as 160 hours of auctions broadcast in live online every year.

The idea is to reach as many potential bidders as possible, whether they attend in person or virtually, Magers says. The company’s forced adoption of the Internet could make the deal more fruitful if live streaming helps Mecum grow a more global audience beyond the reach of cable TV.

“In our minds, the entertainment side of our business, the entertainment value of what we do, is relatively endless,” he says. “And we’ve barely scratched the surface of that.”

Disclosure: CNBC’s parent company, NBCUniversal, owns NBC Sports.

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