March: A conversation with Tom Kontos

Managing Editor Jeff Bellant speaks with Tom Kontos, Analytics Advisor for Auto Auction Holdings.

Music is: "Twisted" Kevin MacLeod (incompetech.com)
Licensed under Creative Commons: By Attribution 4.0 License
http://creativecommons.org/licenses/by/4.0/

Transcript

SPEAKER_00 0:13

Welcome to the Used Car News Podcast. And live on this car news.

SPEAKER_01 0:25

Welcome everyone to the Used Car News Podcast. My name is Jeffrey Vellante. I'm man together at Used Car News. And today we actually have a return guest I had forgotten that we interviewed him a while back, and that is Mr. Tom Contos, who is currently um uh analytics uh advisor for auto auction holdings there. Welcome, Tom.

SPEAKER_02 0:47

Thank you, Jeff. So nice to chat with you and to be back uh, you know, talking about uh uh the exciting industry that we're in, the used car industry and uh all the associated businesses.

SPEAKER_01 1:03

Excellent. Now, people are gonna people who haven't been up to date on stuff are gonna be a little confused. Tom Contos, wait a minute. Tom Consos spent forever at this little tiny company called Odessa, and then he retired for about five seconds, and then like got like Michael Corleone, like Michael Corleone, the godfather three, just when he thought he was out, they pulled him back in. What is that? Why did you leave the golf course? Why did you leave the golf course and fishing to go back into business there, Tom?

SPEAKER_02 1:32

Well, first of all, it's such an exciting business. And so I'm not quite like Michael Corleone, where I I wanted to be completely gone from all this. Uh I, you know, I was starting to enjoy the the the you know the retirement lifestyle, I will say, uh, and had some activities uh uh you know to to to keep me feeling fulfilled. But uh the this industry has just always been so exciting for me uh from a personal standpoint, from an intellectual standpoint, and from a you know, a business a business standpoint. So um so it's good to be back and it you know, we could talk more about uh you know, sort of the specifics about what I'm doing now versus what I was doing before. Um let's do that right now. And and how that kind of is what what kind of became a big part of the draw.

SPEAKER_01 2:31

Okay. Yeah, so um so you you uh you were chief economist there at uh for the long time at the end of Adasa. For people, you look at Tom Consos, you don't realize he's been in the business 40 years, you would never guess that by looking at him. But now he's the analytics advisor for auto auction holdings. That's state supported and having like five um auctions in the southeast. So it's a big change. One in the role, but also you go from this huge auction company to this smaller auction group. Um, what was the attraction to this new job in uh how is it different from Odessa or your job at Odessa?

SPEAKER_02 3:05

Well, I yeah, even as I moved uh into retirement, I felt like I still had something in the tank, as people say, you know. Um and and you know, felt like I there was something for me to offer. Um, and when I was approached by Auto Auction Holdings, and specifically working with um a lady by the name of Tammy Swafford, who's very well known in the auction industry, Tammy and I had worked briefly together at Edessa, uh, and both of us had uh, you know, sort of new new pathways we were following. And, you know, to the extent that those pathways could cross with auto auction holding and we could work together again, I saw that as one of the real draws for me because Sammy's, I'd say a kindred spirit in terms of the sense of how important service is for an auction company or really anybody in the used car business. But you know, the auction industry is is one where we're we're providing a service and um and and when that service is performed in a way that uh develops long-term relationships with your customers, uh, so that so that you know it's not just the business, but the joy of doing business with people you enjoy being with. Um and and and and Tammy is certainly a person that's like that, and I felt like to the extent an economist could be like that, I had been like that in my career. And so, so I, you know, I've uh I found that to be a good match. And then as I learned more about AAH on auction holdings, uh and saw that that you know was well positioned here in Florida, near where I now live, Clearwater, Florida. The two auctions are in Orlando and uh near Miami in Lauderdale. Um you know that so there was that fit, geographic fit. Uh the other three auctions are a little farther, but not too much farther, and they're in places that I enjoy um the opportunity to go visit anyway. Uh so um so so that that's the that's what that's a big part of the draw. And then of course, you know, when you do work for a company like Odessa that has 55 auctions and you go to a company that has five auctions, right? You know, the ability to kind of make a difference, I al always felt I was adding value at Odessa and like to think that that that was truly the case. Uh, but but sometimes um you can have even more of an impact in a smaller entity. For sure. And what's also interesting to me is that you know, the smaller independents have always had a reputation for providing really outstanding service and being responsive. And sometimes in corporations that are bigger, the response time takes a little longer because you got to go through a few more layers of management to get a problem. It's understandable. Yeah, it's understandable, but it's a nice change of pace for me to be in something uh that's uh a little quicker, more um right on the ground, um, and um very responsive and very customer service oriented.

SPEAKER_01 6:45

Remind uh reminder listeners, what time is to offer, what's her title over there?

SPEAKER_02 6:51

She's um I you know I I should know the specific title, but she's over the our sales effort on the commercial sales side.

SPEAKER_01 7:00

I know she's on the executive side, yes, for sure. And we're we're I remember her from back in the day, too. So okay, so good. Let me ask you what an tell us what an analytics advisor does there at uh AAH.

SPEAKER_02 7:12

Well, well, the the ask for me was uh Tammy is trying to uh expand on uh AAH's uh uh footprint in the commercial space.

unknown 7:25

Okay.

SPEAKER_02 7:25

I mean, it all those five auctions that we we we'll talk about, uh, you know, music I might as well mention them, Music City in the Nashville area. Um we've got Speedway in the Charlotte, uh North Carolina area, and Georgia Auto Auction in uh Atlanta, along with the other two I've already mentioned. All of those have a great, great presence in dealer consignment.

SPEAKER_00 7:55

For sure.

SPEAKER_02 7:55

Um what the the idea being now is though they they've had some fleet lease sales at all those locations, how can we grow that? And and how could perhaps a a person like myself, who has a reputation for providing analytical support, to help commercial customers uh establish that if they move some of their volume to one of our auctions, it will create an improvement in their in their revenue per car, uh uh and and you know, create a better retention for their for the value of the of the vehicles they're remarketing. You know, to be able to quantify that or to be yeah, and or to be able to evaluate when we do get this business, you know, how are we doing and to to monitor performance and provide regular reporting. One of the things I'm trying to do too is over the years I made great use of the auctionet database that the NAA, the National Auto Auction Association, provides. So it's an it's a w it's a way for me to maybe provide some information that uh clients would not have otherwise gotten from using other benchmarks for calculating retention. So by using AuctionEt, which I've always felt was a very universal tool because it includes so many auctions, um in it, you know, it's they're not specific to any one company. So so with that being the case, you have a very comprehensive database to work from in order to evaluate how your cars did compare to the market. And so being able to build that capability within uh a small company like uh auto auction holdings, or at least small in terms of number of auctions, you know, um uh is uh is a really uh a big plus. And I think it is one of the things that uh the the company sees as being one of the ways I can contribute my experience and capabilities to task.

SPEAKER_01 10:14

You know what's good about that too, Tom, is not just you having all that knowledge, but as chief economists at you and I see each other a million times down the road over the last 20 years, that not just what you have, but you have been you know kind of uh a face in the industry. You've done you are you're always on these you're always on these uh panels of overview of the economy and always on these panels talking about the state of the industry. So you do have when you do have your foreign fighting that, but also um people know who you are. So in in this new role, it's not like you're this guy who has all this information, but they got to get to know you. Uh uh my guess is a lot of these, especially when you talk about uh commercial designers, there are no Tom Contos is, I would assume.

SPEAKER_02 11:01

Well, it it you know, I think that's part of it too. It helps us get um, you know, our foot in the door with with people that might not have otherwise known about this this company. It's you know, and we want to grow this our presence. And so um once they see what we've got, uh and if if I can help make that happen by by uh using the relationships that we've we've developed over the years and and and people sort of acknowledging uh and recognizing me, uh and that helps us get our foot in the door, as I say. That's that's a good way to uh let people know about the rest of the story, which is the excitement that we're we're we're generating in the growth we're trying to uh manifest at the AAH. So it's all good. It's all good.

SPEAKER_01 11:55

Yeah, you know, Tom, that um I've noticed too, like anecdotally we're talking when I talk to auction folks, there are a lot of independents who are growing their commercial side. I always thought that was interesting. I don't know if that has to do with online sales changing stuff, or again, there's always that uh service thing, because obviously the the the major, the giant chains have a lot of scalability and and the the marshaling and all that stuff. But I you know, I know that service is a big deal, but is it is it just me, or is it does seem like that commercials are considering independence a little bit more than they have in the past?

SPEAKER_02 12:34

There's a there are trends that go in both directions. Sometimes, you know, um the is that you know, as some of the bigger commercial players oftentimes do try to consolidate their efforts with only a few vendors, if you will. Um so you have that that you have to battle just a little bit if you're a smaller player, an independent player, and you're trying to break into that environment. And that's where the analytics can help a lot because there is the tendency for the bigs to play only with the bigs, you know what I'm trying to say there. Correct, yeah. And so if you're a little bit smaller, then you have to have something that can overcome that tendency. And maybe again, that's another way I can contribute you know, my my efforts to to uh overcoming that, because that's that that's a tough thing to do. But I think it is true. Others others are very open, other commercial consigners are very open to expanding their footprint and uh and also expanding sort of the family of auctions that they do use. So you have you have a bit of both things happening.

SPEAKER_01 13:54

Okay.

SPEAKER_02 13:55

Uh so we just want to be ready for either instance and and have our way to respond to that.

SPEAKER_01 14:02

Yeah, being uh at this point regional, I don't know what your expansion was, but being regional does help you because there's there, I assume there could be some coordination there on your your guys' part.

SPEAKER_02 14:12

Yes, absolutely.

SPEAKER_01 14:14

So what are you hearing? I mean, now that you obviously you you're still gonna you know, I can't get rid of the economist, Tom Contos, but what are you what are you seeing now that you're back? I mean, you weren't gone that long anyways, but what are you seeing in your new role hearing and hearing in the industry or you know in the wholesale space and the used wholesale space in this kind of uh market and economy we're in?

SPEAKER_02 14:35

Well, I've tried to stay engaged uh even as I kind of uh you know phased out uh from from the chief economist role that I have had. But uh what what's been really interesting for me uh is not only the sort of the old ways that I would generate information uh for myself to analyze, namely, you know, going into uh the data that's you know being being published out there, the reading all the articles, you know, keeping up with news events and and and all those kinds of things. You know, I'll still do those things to to a good extent. But what's been really exciting for me is uh by working specifically with an you know a company that's got five locations and going to those five locations and seeing the action in the lanes. I mean, even today today as we speak, I spent part part of my day at the Orlando auction, and I was in the lanes during the whole sale and watching the action, seeing what the prices are on the units, um uh watching how how you know thirsty, if you will, dealers are for inventory right now.

SPEAKER_00 15:53

Yes.

SPEAKER_02 15:54

And and and and that thirst, you know, turns into pretty strong pricing, pretty high conversion rates. I don't think that's universal at all auctions, but definitely the ones I've been watching with with uh AAH have been like really robust markets. I mean, uh it's just uh and I'm impressed with the volumes too, you know. Uh yeah, definitely cars, you know, four-figure kind of days, uh, you know, in terms of how many cars we're selling, and and that's you know, to make that happen week in, week out is just quite a quite a bit uh quite an impressive uh thing to watch. Even though I've I've seen many auctions over the years, and I've been to many auctions around the country over the years, been fortunate enough to do that. Um these five that I'm looking at now are really exciting to be around, uh just because you know, just like I said, a very robust environment, some of which is being created by the excitement we try to do week to week at the auctions, and some of which is that thirst that dealers have right now for inventory. So the demand is good, and the services that we're trying to provide and the inventory we're trying to provide at the sale are also good. It's a good match, and so you get high conversions and you get you know good pricing, and then the dealer's gonna take that car and still make money on it because the the public needs affordable used used cars. They they need affordable transportation one way or another.

SPEAKER_01 17:31

Exactly.

SPEAKER_02 17:32

The new car markets become almost prohibitively expensive, and and the lack of affordability has really driven a lot of people into the used car market that might have been in the new car market in times that. So the inventory needs are there, dealers are gonna do well, and and and the sellers at the auctions are doing well. It's it's a win-win.

SPEAKER_01 17:55

Yeah, when you have a lot of cars, and okay, even with the high prices, if you end up with a decent conversion rate, wow, that's where everybody's happy. You know, that's where you get the that's where you get the sweet spot.

SPEAKER_02 18:08

Yeah, absolutely. Yeah, because we you know, we're all we don't want to practice. No one wants to practice, they say, you know, when you're running cars, that you don't want to just practice, you want to you want to close that sale and make it happen, yeah, and and and get paid for it as a result, you know, and uh and and have the seller come away happier because they've they've yeah, you know, and they haven't had a lot of those sales.

SPEAKER_01 18:35

So uh people who haven't been to an auction talk about it. Our our boss, Colleen Fitzgerald Publisher, and and I have has always made a point of like if we have an intern working over, always making a point of getting them to a auction on sale day. Now, a lot of times it's not the same in some of these big auctions because of online, everything's going online. When you get like, especially like independent, where you go in their lanes during a sale day and it's hopping. It is it's fun, it's exciting to watch.

SPEAKER_02 19:02

Yes, it is. And you know, I was starting to see the trend, especially, you know, we had the COVID years, yep, and and it seemed like the online the online world was going to sort of replace the inlane world uh over time. And and though there has been a good I think we've reached a good balance between the two, but the excitement in the lanes is as great as I think I've ever seen it.

SPEAKER_01 19:27

That's great. And the thing is, I think that's what the independents really not say by accident, but the independents really helped because of the chains were wanted to go to online. They do have a lot of commercial stuff, so it's a little bit easier for them to do business online. Um and then the independents were the ones who are quickly reopening physically, you know, and getting people in the lanes. And that did give them a little bit of edge post-COVID immediately because people were okay.

SPEAKER_02 19:58

Yeah, thanks for reminding me about that because that really was something we were noting, and I was noting as an economist at the time, was you know, there was a bit of an erosion of market share among the major players because, you know, they had to shut down. Uh and the independence kind of was were either, you know, they did it they returned to business as quickly as possible. In some cases, didn't shut down at all. You know, yeah, it's exactly right. So exactly right. Yeah, with yeah, you know, with so so I do think that that that show uh that display of responsiveness, as I was using that term earlier, uh that display of responsiveness was not lost on consigners, and they remembered that and kind of rewarded it over time with with greater loyalty to independence. So maybe that goes back to what you were asking earlier about, you know, uh do is there a bit more of an openness to using independence than there was years in years past? And that may that may be part of the answer to your question there is yes. Uh at least on that front. Um you know, there has been a return to uh you know to to independence uh as a result of you know their their responsiveness during tough times.

unknown 21:27

Yep.

SPEAKER_01 21:27

Well it does sound like things are going good, and you you've seen a lot of action and and and you're very confident. You think 2026 you're you're liking where we are in 2026?

SPEAKER_02 21:38

Yeah, I'd say, I mean, the supply is still a little tight of used cars, uh but every single one that we can get our hands on, it seems to turn into uh a retailable unit. And uh, you know, the the efficiency of the market is very good right now in getting. So that they can put them in. So I would say that's you know, high pri higher prices for used cars are are good for the seller, not so good for the buyer, you would you could think. But again, when you compare the the the affordability of a used car to a new car, uh even at those higher prices, it it I think it's still a a a net gain for consumers to be able to have access to uh even the if they're a bit higher priced used cars, to be at least have access to these these these a good thing. So and then in terms of the economy and and other aspects, you know, I I'm still pretty bullish about how how the overall you know economy looks right now. There's there's a lot of uncertainty rightly so. There's been mostly from the political and geopolitical but but the fundamentals, you know, job growth, the taming, the gradual taming of inflation.

SPEAKER_01 23:12

Right.

SPEAKER_02 23:13

Um you know, th those are the big things uh that that economists are gonna watch out for. And and uh they're at least in a state that I'd say uh lets me be pretty optimistic about 2026.

SPEAKER_01 23:31

Perfect. Now I gotta tell you, we're gonna end up real quick on a personal level. When Tom and I were speaking the day before we're recording this, we spent like almost an hour talking about nothing, not nothing to do with the car industry. We were talking about Tom did not know that well, I knew it, I had knew it before, but I didn't know to what extent. Tom is a musician, he's a a drummer, and you got into it very young, and you're kind of into the big band uh sound. What are you doing with your uh your drumming now? I mean, you've obviously you had some free time there, and how is it going now?

SPEAKER_02 24:05

Yeah, this is one of the areas I really invested in uh trying to get better in my drumming and getting in into the networks you need to get into if you're gonna be a musician, a working musician. So uh that was part of what I was starting to do uh big time when I when I retired. And I'm still doing part-time um in in in my new capacity. So um so the way it's worked out is you know, I'm in several projects. Many are, as you said, big band uh jazz projects, but also small combos. Um, you know, I'm gonna be playing Saturday night uh for uh for like a just a party at a country club and where that they're gonna eat dinner, so you'll play some dinner music, and then when the dinner is over, you'll play some dance music. So we love those guys, we love those guys. Yeah. And and I've got a bunch of things like that, um, you know, projects. So what you know, once people know you can um keep time and uh be uh be on time for gigs.

SPEAKER_01 25:20

There you go.

SPEAKER_02 25:22

Uh and all those kinds of things that we learn in our professional lives, if you apply them to the uh to the music world, it's it's sometimes a breath of fresh air for some of the people that are planning events to know that everybody's gonna show up on time and you know you're gonna be present yourself in a professional way, and you'll you'll have your your you'll you'll have your uh your game on when you perform. So so that's all working well for me. I'm having a lot of fun with that, I really am. And I love the drums. They are I've I've been playing them since I was a kid, and uh never let my skills uh lie dormant completely. So I've been able to keep my chops up over the years. So it's great to be able to really go into it in a bigger way now and in in my later life. Love it.

SPEAKER_01 26:14

Yeah. Tom tells a good story. Have you ever seen him on the road or at one of the five auctions for auto auction holdings there in uh Florida, uh Tennessee, and Georgia? Um, you'll uh have to ask about the story where he got to meet his uh uh got to watch his heroes at Chick Korea, right?

SPEAKER_02 26:33

Well, the drummer for Chick Korea, Dave Weckle.

SPEAKER_01 26:37

Dave Weckle, that was it, yes.

SPEAKER_02 26:38

He's yeah, Dave Weckle. Yeah, I've gotten actually a chance to meet him not too long ago. What a what a great drummer he is. He's the kind of drummer I aspire to be. Just fantastic. But there have been several others that I've gotten a chance to to see and learn from, and yeah, it's all you know it's really exciting.

SPEAKER_01 27:00

Well, I appreciate it, Tom. Thanks a lot. Uh love again, love talking to you all the time. We you're you're always enjoyable. You always provide really good information and you make it simple for simple people like me to understand. But I'm I'm really excited about your new uh role here, and we'll definitely keep in touch with uh auto auction holdings and the and the sales there because we love to talk over the independence and stuff. And um we wish you luck coming. And you've been here before, and uh hopefully you'll come back to use Carduce Podcast, Tom Canto.

SPEAKER_02 27:27

I I'd love to. I'd love to. Thanks for including me, and it's great to be chatting with you again, Jeff.

SPEAKER_01 27:35

We'll keep it going.

SPEAKER_02 27:36

We'll keep it going.

SPEAKER_01 27:37

Yeah, if you weren't driving right now, hey, you do the little symbol crash and we'll we'll just end it on that.

SPEAKER_02 27:44

All right. I can play a drum roll on my uh steering wheel.

SPEAKER_01 27:48

There we go. Take care, my friends.

SPEAKER_02 27:51

All right. All right, take care. All right, thank you.

SPEAKER_00 27:58

Thanks for listening to Used Car News Podcast. Each month, we'll bring you fast and reliable news that car dealers can rely on for this evolving industry. For free subscription to Used Car News, please go to youthcarnews.com.