- When I ask clients what is most compelling about our offering, I am told that they chose Manheim as a strategic partner for pricing wholesale vehicles because we’re the best at what we do.
- This partnership enables consignors to leverage best-in-class technology and a tremendous amount of Cox Automotive data to accurately price cars.
- Working with M LOGIC, consignors can sell cars faster and at the right price, which adds incredible value through both profit lift and efficiency.
I regularly speak to consignors about the importance of using technology and data to make faster, smarter decisions. We know that every day is sale day now that nearly half of all wholesale vehicles are purchased through a digital channel. To address this reality, my team at Manheim developed M LOGIC™, a suite of decisioning products that brings the power of Cox Automotive data and insights to wholesale clients in a very tangible way.
Thanks to M LOGIC, consignors are realizing huge benefits by leveraging our Pricing Optimization product as a smarter way to price inventory. Pricing Optimization is an AI-enabled solution that uses VIN-specific vehicle attributes and Cox Automotive data to set highly accurate auction floor prices, both online and in-lane. Through a customizable, easy-to-use interface, consignors have streamlined access to VIN-specific pricing history and self-service reporting tools, along with full control over which units to price by an M LOGIC algorithm versus manually.
When I ask clients what is most compelling about our offering, I am told that they chose Manheim as a strategic partner for pricing wholesale vehicles because we’re the best at what we do. This partnership enables consignors to leverage best-in-class technology and a tremendous amount of Cox Automotive data to accurately price cars. Working with M LOGIC, consignors can sell cars faster and at the right price, which adds incredible value through both profit lift and efficiency.
One major consignor selected M LOGIC as its pricing solution after running a comprehensive, three-way competition between M LOGIC, a large third-party competitor, and its own pricing process. During this competition, M LOGIC priced more than 8,000 VINs in the consignor’s upstream channel over three months, and the consignor and the competitor each priced a similar volume with a similar mix. The outcome was outstanding for M LOGIC: Our prices outperformed the competitor’s pricing by an impressive $220 per vehicle and the consignor’s pricing process by $140 per vehicle.
This consignor took a holistic view in determining these results, accounting for several factors to arrive at a truly accurate benefit gained by selling at a specific time for a specific price:
- Sale price relative to market value,
- Days-to-sell and depreciation,
- Transportation to alternative locations, and
- Fee savings depending on sales channel.
And this isn’t the first time that M LOGIC has outperformed other pricing methods. Previous head-to-head competitions against smaller pricing vendors and client in-house pricing teams have yielded similar results. Time after time, M LOGIC’s more accurate prices drive significant client value – overall profit lift of tens of millions of dollars per year in some cases – and also reduce cherry-picking, leading to a more balanced inventory mix across the client’s upstream and in-lane sales.
As a result of these repeated successes, M LOGIC Pricing Optimization has become the go-to pricing solution in the remarketing industry, with a half-dozen large consignors including Toyota Financial Services partnering with Manheim and leveraging it within live digital and physical marketplaces. In 2019 alone, M LOGIC will set auction floor or buy-it-now prices on 600,000 client vehicles, and we expect this number to grow to 1 million vehicles in 2020 as additional clients complete their onboarding. Clients trust our solution because they’ve tested it and have seen the results it delivers.
And while each of these clients will experience significantly higher returns, M LOGIC Pricing Optimization also benefits the entire ecosystem by helping consignors price cars right. For instance, in a declining market, our AI lowers prices on specific cars that are depreciating quickly, helping them sell faster and contributing to the overall health of the wholesale marketplace. Essentially, pricing cars more accurately improves efficiency across the entire remarketing ecosystem.
In Part II of this two-part series, I will highlight how clients are benefiting from M LOGIC Location Optimization, an auction agnostic AI-enabled solution that optimizes the distribution of vehicles from grounding dealers, marshaling yards, rental locations, and physical auctions to an ideal physical auction location. To learn more about M LOGIC and how using technology and data helps consignors succeed, visit https://www.mymanheim.com/decisioning/.
Dr. Ben Flusberg is associate vice president of M LOGIC, a suite of decisioning tools from Manheim that brings the power of Manheim and Cox Automotive data, tools and insights to help clients make smarter, real-time decisions and take action for faster inventory turns at every step of the wholesale life cycle.