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BREAKING news! Carvana & Vroom is bleeding cash. Is Ecommerce in auto DOA?

Cullen C

Refresher
Sep 9, 2014
100
62
28
Atlanta
First Name
Cullen
Just my opinion ---

This is a company chasing customer/unit growth at the exspense of profit, so they can shell game wallstreet. "Hey guys, look over here... we are growing units sold --- dont worry about all that red stuff on the financial"
Could not disagree more. It is Carvana taking a run at becoming a marketplace. If dealers acquiesce and decide to simply leverage Carvana's reach by listing cars on their site then they can slowly pull back their own inventory bought at auctions, only selling high margin inventory bought directly from customers.
 
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joe.pistell

Uncle Joe
Apr 7, 2009
4,011
1,535
113
New York
First Name
Joe
Sell a cheap printer so ppl will buy their ink....
Carvana shows us where the real money is in selling cars these days... F&I and Trade-ins. IOW, sell the car for zero profit to get the backend and the trade.
 

jscole86

Refresher
Mar 2, 2011
138
100
43
Ohio
First Name
Josh
Sell a cheap printer so ppl will buy their ink....
Carvana shows us where the real money is in selling cars these days... F&I and Trade-ins. IOW, sell the car for zero profit to get the backend and the trade.
Which is why it makes zero business sense for a dealer to partner with them. not to mention, you don't have a customer or relationship, you don't have a very good chance at retention, you don't have any reviews or word of mouth advertising from that customer. I'm sure there are more I'm missing..

all you have is a wholesale unit and *hopefully some* gross.
 
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Cullen C

Refresher
Sep 9, 2014
100
62
28
Atlanta
First Name
Cullen
Sell a cheap printer so ppl will buy their ink....
Carvana shows us where the real money is in selling cars these days... F&I and Trade-ins. IOW, sell the car for zero profit to get the backend and the trade.
I actually think most dealers have moved to a model of accepting lessor and lessor front end grosses over time, moving to a "total gross" model as you describe.

This is a move further down the path, this is Amazon. Manage the customer experience on the front end, manage the seller relationship on the back end, collect massive amounts of data, sell your own product(and most likely promote it) when you source it from customers and can guarantee great returns. Oh and they still haven't cracked the wholesale game yet.
 
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