By Richard Greene, AR NewsMagazine Editor
June 05, 2007
WEST FARGO, N.D. - Timing is everything, and Dave Zabel, president of Tri-State Auto Auction, which is set to celebrate its 55th anniversary on June 21, said the timing of getting hooked up with ServNet’s AuctionPipeline could not have been more perfect.
With new-car sales down and therefore the number of trade-ins also tight, used-car managers are scouring the country more intensely for quality low-mileage vehicles. Though many say that wholesale prices are a little high at the moment, used-car managers are taking a second look at vehicles available at the auctions to see if they can stock their inventory from those units.
As a result, Zabel said he couldn’t be more pleased that his auction, located in West Fargo, uses advanced technologies and is a participating member of AuctionPipeline.com, a ServNet Web initiative that provides auction customers with sales and market information as well as live, online bidding.
“Because of our affiliation with the Pipeline, we’re attracting more eyeballs to scan the vehicles that Tri-State has to offer,” Zabel noted.
“I definitely think that dealers are looking harder at more auctions than they ever have before to find the inventory they need,” Zabel explained. “We’ve seen that since being hooked up with ServNet’s Pipeline. We’re having more dealers view our sales and looking at our inventory from states that we haven’t had before.”
As gas prices continue to hit record highs across the nation, more dealers are expressing reluctance to travel farther and to more auctions, Zabel pointed out. As a result, being a part of the Pipeline is a timely proposition for Tri-State.
“I’m very proud to be a member of ServNet. Getting hooked up with the Pipeline could not have come at a better time for our auction and for our group,” said Zabel, who also owns the sale in Sioux Falls, S.D., which is run by his younger brother, Kurt. “We do see increased viewers, and dealers are signing up at a pretty good increase each month.
“We’re glad we’re on it,” he added. “Our Internet operation is a facet of our business that’s going to continue to grow and help us remain competitive in the market.”
Big June 21 Anniversary Sale Planned
Zabel said Tri-State is getting geared up for its big 55th anniversary sale on June 21. Normally, the six-lane auction offers anywhere from 850 to 900 vehicles on factory-sale weeks and around 600 units on off-weeks. In addition to its Thursday consignment sales, Tri-State also conducts bi-weekly General Motors Sponsored Auctions as well as insurance company salvage sales.
He added that 400 to 450 dealers usually attend, coming in primarily from Iowa, Minnesota, Wisconsin, Montana and North and South Dakota.
But Zabel said he anticipates 1,200 to 1,400 cars crossing the auction block for their big anniversary bash. He said featured consignors will include GMAC, Enterprise Rent-A-Car, Triad, GE Capital, PHH, Wheels, ARI and Hertz.
“We’ve got commitments from various dealer groups that will be running large numbers, and local and regional banks and institutions,” he said. “We’re also excited because we should also have in the neighborhood of 400 rental and fleet units that week.”
To help spruce up the special event, Zabel reported that more than $25,000 in prizes will be given away, including a beautifully restored Mustang.
Since May 1, a key has been given away at the end of each weekly sale, and each key-holder will have the opportunity to start the Mustang at the conclusion of the June 21 sale. The dealer with the key that starts the engine takes home the car. Other prizes will include cash, gift cards and apparel, Zabel said.
Tri-State Honored by GM
General Motors recently handed out its inaugural GM Sponsored Auctions Operational Award. Receiving the honor for its success at selling GM vehicles in 2006 was Tri-State Auto Auction. Mark Mathews, director of GM used vehicle activities, presented the award to David Zabel, who accepted the award on behalf of the auction.
“Strong retention is just one benchmark of General Motors and the auction’s success, and the Operational Award, being presented for the first time this year, is designed to recognize GM Sponsored Auctions that perform consistently well in a variety of other measurements,” Mathews explained.
“These metrics include penetration and per-unit profitability of GM FrontLine Ready and GM-Sponsored Plus vehicles, purchasing dealers ratio, throughput and remote online purchases,” he continued.
“Since becoming a GM sponsored auction six years ago, Tri-State Auto Auction has consistently provided a high level of customer service and a quality product for GM dealers,” Mathews added.
Officials said Tri-State AA sold more than 9,000 GM used vehicles at factory and GMAC open auctions last year. That total was second among all GM sponsored auctions, according to executives.
“It’s a great honor to be the first auction to receive this prestigious General Motors award,” Zabel pointed out. “A thank you must go out to our employees for the dedication and effort they put forth to enable us to receive this award. We would also like to thank General Motors and their dealers for their support. As Tri-State celebrates its 55th year in business, we look forward to continued success with General Motors.”
Furthermore, Tri-State AA also noted that it was the 2003 GM Auction of the Year.
Honoring the Past, Planning for the Future
Tri-State Auto Auction was started by H.A. “Red” Johnson, a former Chevrolet dealer, and held its first dealer-only auction in a beef-judging pavilion on the Fargo fairgrounds in 1952. Consignments of about 25 to 50 cars per week were offered that first year, auction officials reported.
In 1961, Kent Zabel, Dave’s father, opened an auto trip shop in space leased at the Tri-State facility. The auction purchased the shop from Zabel in 1972 and named him general manager of the auction’s services.
Tri-State was one of the pioneering sites for Chrysler Leasing sales. Those sales were eventually transferred to the Minneapolis Auto Auction in Plymouth, Minn., which was also founded by Johnson in 1973. Five years later, Johnson chose to devote his time exclusively to Minneapolis Auto Auction. So he sold Tri-State AA and its subsidiary auto supplies wholesaler, DSI Inc., to Kent Zabel and Lyle Plambeck.
In 1984, Tri-State and DSI moved to all-new facilities in the Fargo suburb of West Fargo. Five years later, Plambeck retired and sold his interest to Dave Zabel, Dave Carlson, Curt Hakanson and Mike Thorstad. Tri-State also was a co-founder of the Sioux Falls Auto Auction in Tea, S.D.
“I’ve been here for probably 35 years, coming in with Dad on the weekends when I was younger, then working part-time during college at North Dakota State University before finally going full-time in 1982,” Dave Zabel said. “When Lyle retired, I became involved with a couple of other partners in ownership, along with ownership of our other business, DSI Automotive. My father passed away four years ago.”
Today, according to Zabel, Tri-State’s weekly auctions are conducted on a 35-acre site that houses a state-of-the-art facility, serving the remarketing needs of dealers, fleets, lease and daily rental companies, insurance companies, financial institutions and manufacturers.
“We’re a full-service company with 200 employees in West Fargo and another 100 in Sioux Falls, and we offer reconditioning, mechanical and body repair, title services, marshaling and inspection, plus transportation in addition to our sales,” he noted.
Curt Hakanson has since retired, Zabel said, and Dave Carlson oversees the growth of the auction’s marketing staff, while Mike Thorstad runs all of the sale’s technology initiatives and operations.
“Our spring market in 2007 started off really strong in the first quarter, but we had a little dip in March, but we’ve since strengthened things up and I’m pretty excited now through July 4,” Zabel said. “And typically, our better market is in our third quarter, going into
the fourth.”
Regarding its special anniversary, Zabel remarked, “I’m excited about being an independent auction that has survived 55 years in such a competitive marketplace. We’ve handled all of the changes in our industry and have consistently grown our dealer base and consignment sales, as well as our Internet division. We’re primed for the days ahead.”
