The K500 interview: Edward Lovett of Collecting Cars
Starting with 40-50 cars offered in May 2019, the UK-based online timed auction site Collecting Cars has grown exponentially over the past two years. Only recently it announced that gross sales since start-up have totalled more than £100m, now closing in on the £125m mark. We spoke to the founder of the ‘British Bring a Trailer’, Edward Lovett.
His background is the English West Country family that runs high-end dealerships under the Dick Lovett brand. Edward Lovett has sold new Ferraris and in more recent times operated as an independent dealer with an emphasis on high-performance, more modern cars. Did this help or hinder starting Collecting Cars (‘CC’)?
“I don’t think it affected the direction of the business one way or another. I worked at the Dick Lovett group for 20 years, so that gave me a good grounding in the motor trade. It would also be fair to say that some buyers and sellers on the platform are people that I have known personally for years; so it was a factor, certainly, but not the only reason CC has done well.”
So how did CC come about? Was there really a gap in the UK market?
“What motivates me is the momentum in the market, and the level of transactions. As an independent dealer I was selling perhaps 10 cars a month at most, almost on an occasional basis – CC is a much bigger business. When a market is slow, as it was back in 2018, you see the same cars advertised for months – sometimes years – on end. What CC has done is inject momentum into the market, getting cars bought and sold, and showing real-world prices. Bring a Trailer in the States began to be seriously noticed around 2016, though it had already been running auctions for two years at that point. By 2018 it was everywhere. I saw a gap in the market in the UK to emulate that kind of growth and market momentum, and went for it.”
What was your biggest challenge? Building the IT platform or persuading people to put cars up for auction?
“Good questions, but I simply did not see it as a ‘challenge’: I knew the business model was going to work, and that the opportunity was there. I don’t come from an auction background, so had no pre-conceived ideas, which meant we started with a genuinely fresh approach. To get started we were making calls to introduce the business and, as listing is free, the cars came in. Most sellers realised they had nothing to lose by giving it a go. Chris Harris [the BBC TV Top Gear presenter, racing driver and high-profile road tester] is a friend, and when he came on board to host our podcast it raised our profile. We started with a few dozen cars in May 2019, and it just took off, slowly at first then accelerating.
“As far as the IT is concerned, Version 1 was a £150k investment. We are now on Version 6, managed by seven full-time developers and designers. We also have with us the founder of the Pistonheads.com forum, David Edmonston, who joined in December 2019.”
What is the ideal ‘CC car’? You are known for more modern limited-edition Porsche 911s, particularly thanks to Chris Harris.
“Speaking today, two years in, cars that have a wide appeal will sell. The 1970s 911s bring eyes to the site and have an attraction for those who might subsequently want something older or more modern. Porsche is comfortably the biggest-selling brand on CC – we’ve sold more than 450 since launch, of which 350 cars span every generation of the 911. We have also done well with Ferraris and Aston Martins; the latter from DB5s to the recent Zagatos. We see strong bidding across the board.
“You asked me about the older pre-War cars. Why not? It’s not a sector we are known for, but the platform is there to introduce buyers to sellers. If both have an interest in older cars they will connect. Within the last six months we’ve sold a 1920 Dodge and an Austin 7 Fabric Saloon.”
What is the average age of CC buyers and sellers?
“Another good question! We need to find out, though I think we’d be fairly confident saying it’s mid-40s.”
And the sweet spot of pricing?
“The average sales price is £47,000.”
You now have CC operations in mainland Europe, Australia and the US as well as the UK. Are these markets much different?
“They are relatively new, with Australia starting in January 2021 and the others more recent, so it’s still early days. I can say that the take-up in Australia is better, with strong demand for the home-grown classics, and with a mentality that is perhaps more open-minded to a new way of buying and selling. Continental Europe is harder; there is definitely a more stubborn attitude when it comes to values. However, the traditional salerooms have had to wrestle with this old-fashioned approach over the years. It’s nothing new and not unique to CC.
“Brexit has impacted on the UK-European market, which has not helped, but on the other hand we’ve seen some fantastic results for cross-border sales outside of the EU. We sold the ex-Roger Daltrey VW Beetle 1303 LS Cabriolet from Malaysia to the UK, a Honda NSX Type R from Hong Kong to the US, and two Lamborghini Countachs to New Zealand.”
Where are you taking business from? The bricks and mortar auction houses, the dealers, or ads in specialist magazines?
“All of the above, but it’s not a deliberate policy – CC is a listing site for everyone. Lots of our sellers are using an auction process for the first time.”
A frequent claim by your peers is that ‘the commission is so small he’s not making any money and purely doing it to sell the business’. Comments? Bring a Trailer (‘BaT’) was sold to the Hearst publishing group for an undisclosed amount in June 2020.
“It’s simply not true that we aren’t making money. We will make several £100ks profit this month. For anyone else considering entering the market there’s a very big investment in IT and brand awareness to be made. We have done all that and are now very much in the black.
“We operate in a similar fashion to BaT, which is a very successful business. Hearst has developed and enhanced BaT since buying it.”
How many sales fall through once the price has been agreed? The contract is between the buyer and seller, not your company.
“Out of, say the 3,000 cars we have sold, we might have two or three per cent cancellations. They fall through for various reasons, but we often get them sorted out by arranging a swift sale to an underbidder.”
You have a comments section, and that was key to Bring a Trailer’s rise to fame. How do you monitor it for biased – one way or the other – posts?
“Bring a Trailer started as a community forum that discussed classic cars and grew into an auction site. The comments from experts giving their knowledge for free and past owners’ experiences is a USP of that business and ours. At CC you have to be registered to post, and we do monitor things quite closely. We would investigate anything suspicious, but I can honestly say it has not been much of an issue.”
Do you have a sold-by-number percentage?
“We are very happy with our 83% sell-through rate. We don’t really publicise it, but we are not ashamed to have a few cars that don’t sell. It’s what happens when you are running the volume of auctions that CC is.”
How have you affected prices in the market?
“The market is the market. We only bring transparency to it. As I said earlier, we have injected momentum to the market, but I don’t see us affecting values one way or another.”
So where’s it all heading?
“Things are very buoyant today, with some strong prices, particularly in the US. We can only serve the market in the best way possible and cope with events as they come along, including the shift away from ICE cars as a form of everyday transport.”
There seems to be a new entrant to this market almost weekly. It’s either the established firms getting their act together online, or new players complete with a house ‘influencer’. In which direction are we heading and does this concern you?
“There are plenty of people having a go, and you know what they say about imitation... Whether they are serious about it or just building a site for the sake of it remains to be seen. We have already made the investment and we have a business model that is profitable right now.”
How about the big ‘event sales’, such as Monterey Week, Goodwood and Rétromobile?
“I love going to these events and there’s no denying the theatre of a packed saleroom. My interest is purely in transactional data – how do they perform, what do buyers and sellers get out of it all? I have no strong opinion on it one way or another. Our job is to show people why CC is capable of handling sales at all levels.”
So what next after cars and now watches? What drives you?
“We have an experienced tech team and a reliable, infinitely scalable platform that is constantly being refined. So, we’re not ruling anything out. But our main priority today is to focus on our strengths in existing markets, those of transparency and giving buyers every opportunity to buy.
“Zero to £100m in two years is the sort of performance figure I like.”
Photo by Collecting Cars