I’ll always root for a company that got it’s start in the car business with the name “ugly duckling”…..
And that’s where on line only used car dealer Carvana began…..
From humble beginnings as Ugly Duckling Rental Car in 1977…..
Through bankruptcy in 1989…..
To the emergence of Drive Time Automotive Group in 2002…..
And it’s introduction of Carvana as an E-commerce used car dealer in 2013 ……
Ernie Garcia Jr., Co-founder and CEO, has two conditions with his goal…..
- “Sell cars and make and make our customers life better by eliminating the pain of car dealer showrooms”
- “Don’t take yourself too seriously” …..
Without conventional dealership and sales force costs, they are able to pass savings of $1100.00/car on to customers…..
Pretty radical and dare I say it- disruptive to the Automotive Industry…..
BUY A CAR FROM YOUR PHONE IN UNDER 10 MINUTES…..
That’s faster than I can take a shower…..
The company works hard to build consumer confidence in it’s unusual process…..
Once the vehicles have bee through inspection and reconditioning – a 150 point process…..
They go through an extensive “turntable” photo session…..
Dozens of shots to tell each car’s “story”…..
Including the flaws…..
Then put up on their site for customers to do a “walk-around”…..
Set up financing if needed…..
Accept the trade in…..
Throw in a 100 day bumper to bumper warranty…..
With a 7 day no questions asked return policy…..
Pick up your coin to put in the vending machine…..
Drive off in your new used car.
Be obsessed or be average
“Wake up every day and know what every car is worth”
When I first started doing research into training for people that wanted to get in the car business…..
It was shocking…..
Grant Cardone has an excellent program for car salespeople and managers…..
Automotive Industry Center for Excellence can teach you what forms you need to get your dealer’s license…..
George Dean of Auto Dealer Academy appears to have a broad comprehensive course…..
With a section devoted to wholesaling…..
National Automobile Dealers Association offers extensive classroom training for large dealerships looking to train staffs…..
Over the course of many months…..
V-Auto has a section dubbed “The Art Of Wholesaling Used Vehicles in Today’s Market”
They seem to have a handle on all the aspects of wholesaling cars…..
Online sales and auction sales as ways to “get rid of” trades and aged units…..
Many good training programs…..
Probably many bad training programs out there as well…..
WHAT DO WE DO?
We want to create a product that can get ANYONE into the BUSINESS of cars…..
Like a profitable business…..
A profitable WHOLESALE business…..
With all the schools of thought out there about:
- should you start as a sales person first
- should you open a little retail lot first
- should you learn from large dealerships
- should you learn from smaller ones
It’s amazing ANYONE goes into the car business…..
I’ve decided to leave all that training alone…..
I’m going to teach the basics…..
The things you should learn to create a PROFITABLE wholesale business…..
That’s all I can do….
That’s all I know…..
If you want to learn how to sell new cars, I can’t help you…..
If you want to learn how to start a retail car lot, I can’t help you…..
If you want to learn how to be a used car manager at a large dealership…..
I can’t help you…..
Although if you are a used car manager already, I can help you with the pain many of you go through each month with your wholesale losses (but that’s for another course)…..
So I will begin by saying that if you want to start a PROFITABLE WHOLESALE CAR BUSINESS, you must realize that you are coming in…..
In the middle….
That everyday you wake up…..
EVERY form of transportation on the road is getting BOUGHT and SOLD…..
Every day you wake up…..
Somebody is making money and somebody is losing money…..
And the market doesn’t care which…..
Every day you wake up…..
You have to know what every car is worth – TO YOU…..
Once you have bought your first vehicle……
And sold it for more than you paid for it…..
You have a successful Auto Wholesale Business…..
Then you repeat it…..
Over and over…..
That’s the AUTO ARBITRAGE FORMULA…..
Care to hear more?
When you make a purchase on your ACV phone app, the 20 minute live online auction site…..
You pay for the cars immediately…..
They then reveal the location of where it is…..
(usually the dealer sign in the back round of the pictures is a clue)…..
Then you go pick it up…..
Or have it shipped to you with their trucking service at an additional cost…..
But you can’t pick up the title…..
They mail it to you…..
Regular U.S. mail…..
So far most of the titles have shown up in a timely fashion…..
Some stores are faster than others……
And if there is going to be a delay, they let you know in the listing when you are bidding…..
But, you can get the car and process it while you’re waiting for the mailman……
And that takes time anyway….
Dent repair or body work if it needs it…..
Pictures for your on line listings…..
Ships to the auction (if you’re like me and wholesale)…..
But proceeding with the processing without SEEING the titles can be a little risky…..
You have to trust that they will be error free when they arrive…..
On our last two purchases…..
One title arrived with a rebuilt brand on the front…..
We already had that one at the auction…..
And ran it with a salvage announcement…..
And sold it…..
For no profit…..
No harm, no foul – its gone.
So now we wait until the titles show up BEFORE we incur any expenses…..
And sure enough …..
The very next title showed up with MORE miles on the front than on the back…..
TMU (True mileage unknown)…..
The staff and arbitration at ACV were great about it…..
We were able to return the vehicle…..
From purchase to reimbursement takes weeks…..
Frustrating part of online buying to say the least…..
So be careful !
Now that we have adjusted to the price drops in November…..
I’m pretty optimistic …..
Consignment is down…..
The numbers of dealers in the lanes buying is steady…..
So we expect to sell cars this month…..
If you are going out to buy…..
Scan the presale listings from top to bottom in every lane…..
Although total views on all our OVE.com listings haven’t improved…..
Actual buyers have…..
We sold something every day throughout the week…..
That’s why I’m optimistic this month
ARE YOU READY TO WAKE UP EVERY DAY AND KNOW WHAT EVERY CAR IS WORTH ?
Of course you are…..
Out for now…..
Barry J Neuman
Member of Manheim’s “superseller” club