Bring a Trailer, the auction site for all types of vehicles from classic cars to modern enthusiast automobiles, has grown from modest beginnings to become a premier online platform for car auctions. Since becoming a part of Hearst Magazines in 2020, the site has witnessed a significant increase in user base and page views, a trend attributed to the rising fascination with 'virtual' car auctions.
While some users log in to enjoy the thrill of the auction and spot their dream car, others actively engage in bidding, contributing to the site's growing sales figures. Despite economic uncertainties, rising insurance premiums, and higher interest rates in 2023, Bring a Trailer saw a substantial increase in its annual sales. The company's revenue rose 2% to exceed $1.4 billion, with total sales volume reaching over 30,000, marking a 19% rise compared to the previous year.
However, the sharp rise in total sales with a slight increase in revenue reveals a decrease in the price per lot. In fact, the average price for a car sold at an auction on Bring a Trailer dropped to $54K from $59.5K the year before.
According to Bring a Trailer CEO, Randy Nonnenberg, the classic car market experienced an inflated 'bubble' in 2022 with rampant spending. The correction arrived in 2023, setting more stable prices compared to the previous year.
The site reported several high-profile sales, including a 2014 Pagani Huayra for $2.89 million, a 1967 Porsche 910 at $2.5 million, and a 2020 Ford GT sold for $1.79 million. Despite these significant transactions, Nonnenberg focused mainly on the middle-tier listings, typically in the $50-$60K range.
Bring a Trailer's revenue model involves charging a $99 listing fee and a buyer fee capped at $5,000, constituting 5% of the car's sale price. Therefore, although million-dollar listings may bring prestige, they don't massively contribute to revenue.
Bring a Trailer's competitors, such as eBay Motors, Cars and Bids, and PCarMarket, cater to a diverse range of buyers. To enhance the sales process on Bring a Trailer, Nonnenberg plans to offer improved digital tools to facilitate transactions between buyers and sellers. Currently, once a vehicle is sold on the platform, buyers and sellers must independently coordinate the payment, title transfer, and car delivery.
Nonnenberg confirmed that, within the next 30 days, digital tools would be introduced to assist with documenting and executing such transactions, including verification, money transfer, and escrow services. With these improvements, Bring a Trailer aims to offer a safer and more streamlined experience for users hoping to buy or sell a vehicle on their platform.
Improved purchasing tools and a proliferation of online auctions may even encourage more 'auction voyeurs' to take part in bids, thus contributing to the site's sales and revenue in the future.
The author is Pras Subramanian, a reporter for Yahoo Finance.