Driving profit with commercial vehicles

With commercial vehicles offering retailers a valuable additional income stream, it is often only a fear of the unknown preventing many more from benefiting, according to David Fildes, Commercial Vehicle Specialist at grs.

“Demand for good quality commercial vehicles has been consistently strong over the past year and we believe this trend is set to continue,” says David, adding that a corresponding shortage of stock is helping to keep margins high.
“It’s still a tough and challenging environment for most retailers at the moment, so good news is always welcome. The high demand for commercial vehicles and the price they’re commanding is one such positive area, though there is definitely an emphasis on quality, particularly good condition, low mileage and late plates,” he continues.
“We talk to retailers every day of the week, and many are telling us that potential customers are regularly asking them if they can supply commercial vehicles, ranging from small car-derived vans to the mid-sized vehicles – such as the Ford Transit and Vauxhall Vivaro – and even pick-up trucks.”
And with summer already a distant memory, many traders will be thinking about upgrading their vehicle to get them through the coming winter months and beyond.
So with demand high and good margins to be had, what’s stopping more retailers from putting a tentative toe into the commercial water? “Like anything, it’s likely to be a fear of the unknown,” says David. “Retailers who haven’t previously stocked commercial vehicles will be unsure about their prospects, especially in today’s uncertain economic climate.
“However, the demand is there and we know from experience that any retailer can sell a commercial vehicle. What’s more, when buying from grs they can be assured of the same quality and service as they receive when buying cars – so that’s another reason to be confident,” he continues.
Indeed, grs has extended its market-leading photography to commercial vehicles and has recently started including images of both domestic and commercial vehicles within its weekly stock lists, as the company maintains its focus on making life as easy as possible for retailers to sell more vehicles.
Says David Fildes: “The ability to click and see is proving popular, especially when coupled with the high quality images available online and the fact that retailers can effectively use our stock as their own, which is completely risk-free for them.”
Yet the grs offer goes further still, and in addition to convenience and consistency, retailers of any size can also benefit from the expertise of the grs team.
Concludes David: “We can advise retailers on what’s selling well. We don’t charge for this advice – it’s all part of the service we provide. We want to work in partnership with retailers to help them maximise every opportunity. After all, if they’re successful then so are we!”

Agency in action: a case study

Every aspect of the purpose-built grs logistics centre at Cold Meece has been planned with military precision, from the ‘flow’ of vehicles through the site to the development of bespoke technology and systems that help to automate the process, making it as quick and efficient as possible.
One major company benefiting from this market-leading combination of market-leading efficiency and expertise is de-fleeting some 300 vehicles every month through the site. With speed crucial in helping to drive as much value as possible from each vehicle and ultimately maximise returns, grs aims to have completed the entire process within just five working days – from the vehicles’ arrival on-site, through inspection and refurbishment to imaging and readiness for sale.
Following inspection, grs undertakes refurbishment on a fixed price basis, and also takes care of all the back-office work; this includes completing all the contractual and financial paperwork which ensures each vehicle can be sold.
“We prepare the vehicles for sale not only from a visual perspective but also from the contractual point of view,” explained Danny Hartshorne, grs Sales Director. “A lot of activity takes place behind the scenes, which takes all the hassle off the vendor’s plate. We work quickly but thoroughly on their behalf to ensure their vehicles are de-fleeted and made ready for sale as soon as possible.”
Yet the advantages of working with grs go further still: “We have an extremely efficient operation which couldn’t be achieved without our great team of people and also the substantial investment we have made in Cold Meece,” continues Danny. “We are also a relationship business, so we make a point of getting to know our customers communicating with them in the way that suits them best. Every aspect of our service is tailored to their precise needs.”
If you would be interesting in visiting the Cold Meece logistics centre for a guided tour to see the operation for yourself, please get in touch with Danny Hartshorne on 01743 281836.

David Grice: man on a mission

David Grice, Procurement Director at grs, is a man on a mission – to make life as easy as possible for retailers.

“Traditionally, many companies have considered buyers and sellers to be worlds apart – completely separate teams with little in common, which means they end up rarely speaking or even work in ‘silos’,” he says.
While that has never been the case at grs, David Grice, who is now responsible for overseeing both the company’s sellers and buyers, is ensuring they take a ‘one team’ approach to everything they do, ensuring they can add even more value to retailers’ businesses.
“This approach makes absolute sense, as our account managers are talking to retailers throughout the UK every single day, so they know what’s selling well and what the latest trends are at any given moment,” says David.
“As well as sharing this valuable market insight with other retailers to help them maximise their own businesses, it’s also essential that they share their knowledge with our buyers. This ensures that the stock they are buying is tailored to the needs of our retailers.”
According to David, the old-fashioned definitions of buyers and sellers are too rigid to be of much use in today’s rapidly changing market. “Our account managers – who in the past would have been defined as the ‘sales guys’ – are effectively working as buyers for our retailers.
“We’re keen to develop a partnership based on confidence and trust by taking the time to really understand retailers’ businesses, which enables us to offer advice based on their individual buying profile, while at the same time making suggestions additional stock which may be of interest.”
David Grice has also been overseeing a number of practical changes, such as making the regular stock lists more user-friendly; they are now easier to open and include an image of each vehicle.
But is this quiet revolution reaping rewards? “Only time will tell,” laughs David. “Our main focus is to share our market intelligence with our retail partners, to enable us to build further on all the things we already do well – we believe that’s what will make retailers’ lives easier and we will continue to work hard to achieve this every time we talk to them.”

The real value of residual underwriting

“It’s very easy to do things a particular way because that’s the way they’ve always been done,” says Julian Pullen, Procurement Manager at grs. “But when it comes to de-fleeting vehicles we would always recommend taking a look at other options that may help to reduce risk and increase value.”
One way of achieving this is to look at alternative, or additional, disposal routes as part of a multi-channel remarketing strategy, such as residual value underwriting.
“It can help to reduce risk, eliminate uncertainty and speed up the de-fleet process,” says Procurement Manager Julian Pullen on the benefits of this approach, which gives vendors such as rental, contract hire companies and other fleet operators a guaranteed amount for their vehicles when they come off-fleet. This enables them to forward plan with greater confidence.
“Residual value underwriting can give fleet operators far greater operational security, as we provide the underwriting and take the problem off their hands,” continues Julian.
“Let’s say an operator has 20 Honda Civics coming off-fleet in six months’ time. We could provide a guaranteed price for those vehicles today which transfers the risk from the vendor to grs, providing far greater financial security.
“It’s always a good time to talk to us about it,” continues Julian, explaining that many rental companies and fleet operators are likely to have brought new vehicles on to their fleets following the registration plate change on 1st September. “Residual value underwriting is so beneficial because it enables operators to buy their new fleet based on the value of their existing vehicles, and there’s much to be said for the security that brings.”
Such forward planning can pay dividends in the long run, especially when market conditions are uncertain or volatile, or when values are depressed. When faced with such difficult conditions it may appear tempting to keep running vehicles for longer than originally planned, yet the additional maintenance costs such as servicing or a new set of tyres – not to mention those costs inherent in having a vehicle off the road – are likely to outweigh any benefits.
There are other advantages too; for many operators space is limited, which can create problems when new vehicles are delivered. “The handover period can be tricky and we can help ease the fleet change process. We will collect vehicles quickly, freeing up parking space, and either settle finance agreements or deposit funds straight into the vendors bank account. An all together quicker and less painful process than alternative routes to market such as auction or direct vehicle by vehicle sale”.
For more information on the benefits of residual value underwriting, or to talk through your specific requirements, please contact Julian Pullen on 01743 281814.

Making life as easy as possible for retailers

Newly promoted to the position of Sales Manager, Dean Richards talked to re:market about his new role and how grs is aiming to make life easier than ever before for retailers across the UK.
“I always wanted to join a company where I’d have the opportunity to work my way up,” says Dean Richards, who arrived at grs straight from college six years ago. Starting out as a sales executive, he has indeed worked his way up, becoming an account manager in the south east before being appointed Sales Manager earlier this year.
Since taking on the role, Dean has overseen a restructuring of the six-strong team of account managers which has seen them move away from having geographical responsibilities, to looking after a selected portfolio of clients instead, wherever they may be based.
Explaining the changes, Dean says: “Building relationships is key both for us and our customers, as it’s vital that we really get to know them and understand their businesses. As a result, we have been looking to match account managers to customers, rather than taking a geographical approach.
“We are a relationship business as much as anything else, and by getting to know our customers even better will help make sure work in partnership with them to develop the full potential of their businesses.”
What this means in practice is that some retailers may recently have been introduced to a new account manager who they are also likely to meet soon, if they haven’t done so already. As well as encouraging the account managers to take to the road to meet with customers on a regular basis, Dean is also keen to invite retailers to visit grs – to make their own inspection of Cold Meece logistics centre, which is capable of storing up to 4,500 vehicles at any one time.
All vehicles are thoroughly inspected and prepared for sale at the purpose-built 36-acre site, which also features a state-of-the-art photographic suite where they are photographed inside and out on a 360 degree turntable. The high quality images are then posted to the grs website, which can then be used by retailers to order stock. The online resource can even become an extension of a retailer’s own stock, with the images helping to close sales up and down the country.
“Our aim is to make life easier for retailers and taking a look around Cold Meece is a great way of demonstrating how we’re able to achieve that,” says Dean, adding that retailers of any size are able to benefit.
“Whether retailers buy one or a hundred vehicles from us, they can all tap into our extensive stock and the expertise of our team, who can provide advice and guidance on makes and models which are selling particularly well at any given moment.”
He concludes: “What’s more, they can all be assured of quality, consistency and speed, as we aim to deliver vehicles within two days of receiving cleared funds. That’s important, as it enables retailers to have the vehicles they’ve bought on the forecourt and ready for sale as quickly as possible.”
If you would like to know more or are interested in visiting Cold Meece, please contact Dean Richards on 01743 281818.

Acting as an agent: the Cold Meece connection

“Any company de-fleeting vehicles is looking for three key benefits – speed, efficiency and value,” says grs Sales Director Danny Hartshorne. “Turnaround time is key, and vendors want a partner who understands their needs and has the flexibility and know-how to accommodate them”.

Recognised as a leader in the remarketing sector, grs has pioneered a number of different approaches which can all work together as part of a multi-channel strategy, including outright purchase and residual value underwriting, both of which have grown in popularity in recent years.

However, there is an increasing focus on a third route, which brings another set of benefits for vendors – where grs acts as an agent on their behalf.

“There will always be a place for auctions within de-fleeting strategies, but they’re only one of the options available,” continues Danny Hartshorne. “Working with grs on an agency basis means there’s no waiting for the next auction if a vehicle fails to sell first time. We have built up extremely strong relationships with some 13,000 franchised and independent retailers across the UK over the past 15 years, so we have a guaranteed market for de-fleeted vehicles.”

However, there is another significant weapon in grs armoury above and beyond its deep industry expertise and extensive retailer relationships – its 36-acre logistics centre in Staffordshire. The purpose-built facility is capable of processing 60,000 cars and LCVs every year, and has the capacity to store up to 4,500 vehicles safely and securely at any one time.

Continues Danny: “Our Cold Meece site adds another dimension to our agency service which is unrivalled, as it gives us the ability to de-fleet, inspect and refurbish vehicles without delay. The team there understands the importance of speed to our customers.”

An estimate for any refurbishment required can be provided as soon as the inspection is completed, or work carried out on a fixed fee basis, whichever suits the vendor best. What’s more, all vehicles are photographed in the new Cold Meece photographic suite which includes a 360 degree turntable and high quality digital camera equipment. Photographed inside and out against a consistent and unobtrusive background, vehicle details and images are uploaded to the grs website where they can be accessed by retailers 24-hours a day – making the company’s agency offer more compelling than ever.

In addition, management information can be tailored to meet individual vendor requirements, whether it’s ‘days to sale’ or ‘performance against the market’, ensuring accurate and consistent measures of success are provided.

“Partnership is at the core of the agency route,” continues Danny. “Our logistics centre helps give us the flexibility – and capacity – that’s required to work with vendors in the way that suits them best. It also enables us to move quickly on a vendor’s behalf, carry out value-driven refurbishment and achieve real speed of sale. It gives us a real edge on behalf of our customers.”

For more information on how working with grs on an agency basis could benefit your business, please call Danny Hartshorne on 01743 281836. 

Making a commercial difference

The strong performance of commercial vehicles has continued unabated throughout the first half of 2011 with low de-fleet numbers keeping prices correspondingly high. This has been accompanied by a distinct flight to quality, with the emphasis now firmly on condition and presentation over mileage.
“High quality, well presented vehicles have been out-performing book values significantly and we see no reason to believe that this won’t continue,” said grs Commercial Specialist David Fildes.
“Condition and preparation are two keys to achieving strong returns and are definitely more important than the distance a vehicle has covered. On the other hand, poorly presented or poor quality vehicles are consistently selling for a lower percentage of book value. Without doubt, today’s market is all about quality, more so than ever before”.
Car-derived and medium sized vans such as the Ford Transit and the Vauxhall Vivaro are proving particularly popular, and grs has noted another interesting trend in 2011 – a strong growth in demand for different colour and higher spec vehicles boasting features such as air conditioning and parking sensors.
While seasonality may account for the importance of features such as air conditioning as buyers look for additional comfort during the hot summer months, this doesn’t explain the growing demand for different colours.
Ben Harvey, Commercial Vehicle Team Leader explains: “At first sight, this may seem hard to explain. However, vans can be quite an emotional purchase and for a small business they can also be a valuable shop window. When money is tight businesses may not be spending so much money on traditional advertising, but they do appear to be investing in the appearance of their vehicles, which can say a lot about a business to potential customers, as well as acting as a permanent mobile advert.”
Continued Ben: “That’s why good presentation is so important in today’s market, along with anything that helps a vehicle to stand out from the crowd, such as a different colour and metallic paint too. Add to that some professional sign-writing and businesses have a really valuable opportunity to advertise their business on the move”.
With this in mind, commercial vehicles – especially those with some additional bells and whistles – should be borne in mind by retailers, to help make their forecourt stand out and to tempt customers through the door.
The number of commercial vehicles sold by grs has risen ten-fold over the past five years, with more than 2,000 sold last year alone. This year has started strongly too, as more and more retailers realise the opportunities they can present.
Retailers looking to dip a toe into this market can call on the expertise of the grs team who are always on hand to talk them through the process and provide advice on the most popular vehicles and specification at any given moment.
“The shortage of high quality, well presented commercial vehicles makes them a terrific profit opportunity. Retailers who haven’t traditionally focused on this area might want to consider putting one on the forecourt to test the market and wet the appetite of customers,” said Ben.
“Retailers can treat grs stock as their own, offering their own customers access to the entire grs database online, making it entirely risk-free for them. And we don’t charge retailers a penny for buying from us – the price they agree is the price they pay for the vehicle.
“We really do make buying trade vehicles as easy as possible”.