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the shelf that day." To help organize the online buying process, he uses the tool Auction Genius. "I'm one of the original pilots of Auction Genius. … As much as I want everyone to know about it, I don't want them to know about it," he quipped. Streamlining the process is essential to productivity. Bassam said, "We look at 1,000 cars. We will mark about 100 cars [to research]. We will bid on 20 cars to get one … That's a lot of work." All that work to buy one car adds up quickly, considering the group buys about 600 vehicles a month at auction. While online buying is how Easterns stays at the top of the food chain, he said, "It is not always the best experi- ence in the world." However, the pros outweigh the cons, and one of the pros is not everyone has committed to online buying like he has. In 2011, only 25 percent of vehicles sold by Manheim were online purchases. Bassam said, "It's just new and un- known, and not everybody around the country is comfortable with it … All in all, for Easterns, it absolutely works. It's given us an edge." Thankfully for him (and other dealers), the online acquisi- tion experience has improved over the years. "When I started [buying online] four years ago, the technology was not one-tenth as good as it is now." One thing Bassam hasn't quite figured out is why the fee structure is different for various online auctions. "[The buyer's fee] varies. Everyone varies. There are sales here on the east coast that rank the highest on fees. I don't know their formula. I wish I knew." He added that fees are on the rise. "It's the worst I've ever seen it … it's a mind-bog- gling fee," and it's something he must consider when buying. "It gets in your head when you're bid- ding. I'll pause a few hundred dollars back of where I want to be because I'm thinking, 'That's plus, plus, plus.'" He recounted, "There's a $50 to $70 online purchasing fee, and there's a PSI (post- sale inspection) fee of anywhere between $70 and $115 … Then, there's your average buy fee that's reaching near $500." Easterns still buys about 15 percent of its vehicles at traditional auctions. The cars purchased at physical auctions aren't your run-of-the-mill used cars. He explained, "There's a certain caliber of cars that you have to see in person." For example, if he's looking to buy a late- model Mercedes S-Class, he wants his buyer to see it. "The description in the condition report says one thing, but he sees it with his professional eye and can make that decision on that car." Another type of car he prefers to buy at auction is one under $10,000. While Bassam acknowledged that acquiring inventory comes with chal- lenges, he said, "That's the fun of it though, isn't it?" Spoken like a true lion. Casting a Wider Net Kevin Nachbar, the vice president of sales and remarketing for the McCarthy Auto Group in Olathe, Kan., acquires inventory for the three-location, six- franchise group. He mainly focuses on the two GM stores, and said, "It's a job to try to keep inventory flowing into them. It's not getting any easier." A couple of years ago, off-lease vehicles made up a significant portion of what he acquired. He recalled getting warnings from Ally (previously GMAC) that the supply of off-lease vehicles was going to drop, but he never anticipated how low it was going to get. "That supply of pre-owned cars that used to come out of the lease market seems to me like it's down 75 to 80 percent, even from last year." To combat the lower supply, Nachbar is casting a wider net in his search for inventory and loosening his buying parameters. He said, "You're having to look at cars with higher miles, cars that have a worse condition, and you're paying more aggressive prices. Then, you're trying to pass that onto the consumer … From a dealer's standpoint, it seems like your margins are continuing to be squeezed." Ideally, he'd like buy model years 2007 to 2010 with fewer than 30,000 miles, but now he's buying down to model year 2006 with up to 50,000 miles (sometimes even reaching 70,000 miles). "I can certify vehicles up to 70,000 miles," he said, "but it's very difficult to buy an expensive vehicle … that has 55,000 to 60,000 miles on it because there aren't that many people that want it." To find the best vehicles for the McCarthy lots, Nachbar doesn't attend traditional auctions. "I don't go to physical auctions at all. I haven't for probably 10 years. I'm one of the guys that embraced the online acquisition process from the beginning." He makes sure to leave no stone unturned online. "I use all the auction platforms to research and find vehicles … Manheim, ADESA, OpenLane, SmartAuction, AuctionPipeline. Those are really the five sources that I try to look at almost every day," he said. To help with the online buying process, he uses a stocking guide from FirstLook (the inventory management tool he uses). "For example, if you want to run a 45-days supply of inventory, then it's going to break out by make and model which of those you need to have in stock and it's going to tell you which years … you need to be stocking." However, he doesn't always find what's on the list. "What you need and what's available are two different things." He explained, "You still have to use your gut and emotions, and sometimes you duplicate vehicles you already have in stock based upon [availability] and … gamble a bit on being overstocked in that particular area." There are other factors he must keep in mind. "I have to look at the freight component on what it takes to get it [here], and then I've got to look at the auction fees and all the reconditioning expenses … and I have to have a reasonable margin to work with. It's really time-consuming." Being in Kansas, centrally located in the contiguous 48 states, provides one advantage—the ability to buy vehicles nationwide with reasonable transport costs and times. He usually has vehicles on the lot within a week and spends an 29