Online car sales began revolutionizing the market well over a decade ago but the last five years truly revealed new heights for an industry epitomized by the smashing success of Bring a Trailer. The range of options for selling cars online grew and grew, beyond Craigslist to Ebay Motors and aggregate sites like AutoTrader and CarGurus. Now, each new site launches hoping to capitalize on the success of (if not the spillover from) the giant in the room, BaT. But amid the boom, everybody doing the buying, selling, and listing online always shares the same concerns about how to accurately represent a car remotely.
Another entrant into the arena called Awesome Joe Auctions—like a regular Joe, but better—hopes to revolutionize the online car-buying experience with the invention of a Buy Confident Process that includes agreed-upon conditions reports and third-party verification. Hoping to discover how Buy Confident sets Awesome Joe Auctions apart from the crowd, I spoke with Chief Ventures Officer David Atadan and his son, Official Spokesman Tommy Atadan, about their strategies for providing a new level of security in an industry rife with misrepresentation.
Father-Son Duo David & Tommy Atadan
David Atadan's background includes founding Trellist, a business solutions firm serving some of the largest companies in the world. Awesome Joe Auctions eventually evolved out of that solutions-oriented mindset and his own personal automotive enthusiasm, as one of a handful of car-related companies operating under the Andy Lally Alive umbrella of online ventures.
"Our vision was to leverage all of that mission into our vision, which was a family of companies," David said, "And so, what would be the first venture or company that we would start? Well, we started in automotive enthusiasts and motorsport products because that’s my passion."
Bringing a recognizable automotive celebrity into the fold certainly helped to get the ball rolling, too.
"I had met Andy Lally at the race track," David recalled. "Outside of Jimmie Johnson, Jeff Gordon, Kyle Larson in Nascar, Andy Lally from the IMSA side is one of the best-known names."
Andy Lally Alive currently includes a social media platform called MotorCrush, the event registration and management system Track Rabbit, and Awesome Joe Auctions, as well as a host of marketing and branding tools.
"Whether you’re using Track Rabbit to go to a track or you’re buying and selling your track car, it’s the same audience," David went on, "We provide a unique value proposition, and some unique processes, in each of these in order for us to really help this industry and help the market."
Developing Andy Lally Alive And Awesome Joe Auctions
Focusing the conversation more specifically on Awesome Joe, I asked how long ago the prospect of an auction and classifieds site fit into the vision for Andy Lally Alive.
"We came together with Andy in about 2015," Tommy jumped in, "Awesome Joe, it's something we’d been ideating on and building on, iterating on and improving."
Given that Bring a Trailer graduated from an aggregation site to actual auctions way back in 2014, that long gestation period for Awesome Joe before the official launch in 2020 translates to plenty of time figuring out a new solution for the obvious challenges presented by online car listings. And unlike most of the strictly auction-focused or classified-focused sites out today, Awesome Joe offers both.
But the big draw that David and Tommy hope sets Awesome Joe apart from the competition is their proprietary Buy Confident system. Flipping around through the classifieds and auctions currently live on the site, I picked up that most listings include a number of specific details called Condition Disclosures that the sellers are willing to absolutely guarantee. But how does Buy Confident actually work, from a legalistic point of view?
"Buy Confident is just a very straight set of terms," David explained. "There’s a condition validator, there are these conditions that are going to be validated, and you can bet your bottom dollar that those conditions are going to be right because if they’re not, you don’t have to buy it."
Trying To Solve A Clear And Obvious Problem
Buy Confident tries to solve the obvious problem that buying a car from afar necessarily entails, reducing risk by bringing the buying and selling parties together in a mutual agreement before any money changes hands. The increasing frequency of online listings, which open up a larger market to sellers, simultaneously enlarges the number of transactions that result in disappointed parties upset at the end of a deal.
"It can go a couple of different ways," Tommy said. "They buy it, and it shows up and they’re unhappy with it. After you’ve paid for two different kinds of condition reports, still unhappy with the quality, so you’re out the money for those reports. And then the third, kind of unlikely scenario, the sale actually goes through and everybody’s happy with the process of buying something sight-unseen."
On top of by-now ubiquitous (and sometimes disruptive or derailing) comments sections, enormous photo galleries, cold-start, and driving videos, or expensive PPI reports, Buy Confident gives the buyer a chance to back out if a mutually agreed-upon Condition Validator finds any single one of the items on the list incorrect, missing, or damaged. Think of it as akin to a home inspection when a house is in escrow.
"The more that you disclose," David added, "And the more of those variances that you apply, the better set the expectations are. And you actually don’t end up in as many of those situations that are way out of left field."
Clearing Up Confusion About Custom Cars
The process requires a number of steps, though. Throughout an auction or for a classified listing on Awesome Joe, the specific items on the list can be proposed, agreed upon, and modified by the buyer and seller. They also agree upon a third-party condition validator to verify each and every item on the list after the auction closes (or when the classified listing receives an offer). At that time, a specific amount of money, usually a bit more than the cost of the validation process, goes into an escrow account while the car goes to the validator (at the moment, the seller typically proposes a specific shop they'd like to do the inspection, though the buyer can request somewhere else if they so desire). Hopefully, all goes well, the condition validator confirms every last detail, and the sale moves forward.
If so, the seller hasn't paid for the listing and only pays for the validation report after being linked with a locked-in buyer (barring bad news from the Condition Validator).
"The seller pays for nothing," David said. "Not listing it and, if they don’t sell it, then they don’t pay anything. They only pay, in the event that it’s sold, the condition validator. And if they pay the condition validator and for any reason, that buyer backs out, that escrow money is going to the seller to take care of them for the condition validation."
"It’s a beautiful thing, that seller is so protected. And the buyer is protected, too."
Part of the Atadan's plan is to provide a list of recommended shops nationwide who can participate on Awesome Joe.
"Those condition validators come from a network that we are building and curating," Tommy said. "We’re working on the ability to not only validate them as a business but give them representation on the site, so that people can do their due diligence on the platform."
"There’s no liability on the validators," David added "Because if there was, they wouldn’t want to do this. But they do get rated based on are those conditions accurate or not."
What If The Cars Fails Validation?
But what about cars that fail the validation process? And if buyer still wants to purchase, despite the report? Can the buyer and seller try to work out an arrangement? Well, there are a number of ways the process can go from there.
"Our site operates primarily as a marketplace where you’ll find that connection," Tommy explained. "We’re not the seller of the actual vehicle... Really what we’re doing is doing the marketing of getting it listed, getting them into an agreement where they’re having conditions validated, and then getting them into an agreement to either break or complete the sale."
The buyer and seller can work out a potential deal involving costs to fix any issues or hammer out a lower price that takes into consideration what the condition validator discovered. Otherwise, the seller can also return to Awesome Joe and relist the car with the additional disclosures added to their listing.
"A lot of times," Tommy said, "What we’ll do is work with them and relist it and notify the other qualified buyers that this is what happened, this is the state of the condition report, and it’s back up for bidding. And we’ll reopen that in the case that someone wants to take that condition report for a final bid on it."
Even New-ish Cars Deserve A Condition Report
Each and every potential car buyer needs to weigh the inherent risk of finding a car online if they can't make the time to visit a potential purchase in person. But even trying to mitigate that risk presents new challenges—to me, the main one that Awesome Joe faces with the Buy Confident process is complexity.
In an ideal world, the Buy Confident agreement creates a sense of reassurance, helping to overcome the shortcomings presented by remote viewing of photos, videos, or documents. The agreement that David and Tommy get both buyer and seller to sign sounds like a great idea.
Anything that takes more than a few sentences to clearly describe often needs further refinement, though, and the Buy Confident process sounds like it could tack on more negotiations and the end of the process, after the negotiations already seem complete. And Awesome Joe looks to be banking on the potential for the process to instill more confidence than any set of highly detailed pics and vids ever could, since the site's listings often include as few as 12 low-res photos with no ability to zoom in.
But meanwhile, other sites eschew the conditions report and look set to double down on even more photos, more documentation, and more videos—putting the onus on the buyer to essentially trust their own judgment of a car's condition (or the comments community) and make their own educated gamble. Bonhams, for example, plans to debut an American version of the UK-based site The Market in January 2022 with a minimum of 200 photos per car, plus videos and service records. So in the spirit of "if it ain't broke..." then why would the Atadans add this next level of complexity that might, potentially, discourage sellers.
In response, Tommy explained that he believes in Buy Confident so much that he wants it to cover every single thing he buys online.
"I own a lot of guitars," he said, "And after designing this process myself, I was like, 'I’m never buying another Martin unless I can go to the guy at the shop and he has a look at it.'"
The Atadans predict that once the online automotive industry witnesses the Buy Confident format, its proliferation will become inevitable. And they're getting ready for that day.
"We also have all kinds of patent-pending technology that’s going to apply to this in the future," David told me. "This patent’s, I think, going to be a pretty big deal, not just in this space but in other spaces."
Managing The Excitement Factor
A final question that popped up for me after watching the in-person auction action at Mecum Monterey this summer involved the addictive fun that such proceedings—whether live or online—bring out in the enthusiast community. In fact, Hagerty's VP of Valuation Brian Rabold even told me that when his team tracks BaT cars to see how much they sell for at later dates, the Bring a Trailer bump typically counts for about 20% (and that's not even taking into consideration the 5% buyer's premium up to $5,000).
Tommy recognized the fact that Wild West-style auctions deliver the juice but he still believes Buy Confident will lead to more actual sales because more buyers will bid if they know they can opt out in the case of a misrepresented car, unknown damage, or full-on fraud.
"When you start talking to people behind the scenes," he said, "And start seeing the number of auctions that fail to convert because of the anxiety that’s preventing a purchase, you start to see that by alleviating some of that excitement—there’s nobody yelling at you at an in-person auction trying to get that next bid in—but what’s actually happening is that you’re increasing that market cap of people at the table that are actually buying. And it leads to, in my opinion, more consistency for conversions."
In the end, a larger market cap should theoretically help to establish and find more accurate values online, whether for track toys, daily drivers, or priceless collectibles. Amid today's booming auction industry, the only question remaining in my mind is whether the car-buying public running amok on sites like Bring a Trailer will appreciate—or even take the time to recognize—the risk mitigation offered by Awesome Joe Auctions and the Buy Confident process.
Sources: awesomejoeauctions.com, bringatrailer.com, andylallyalive.com, and themarket.co.uk.