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

Cullen C

Boss
Sep 9, 2014
100
62
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
4,012
1,537
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

Boss
Mar 2, 2011
139
102
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

Boss
Sep 9, 2014
100
62
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.
 

Rick Buffkin

Sausage King of Chicago
Oct 29, 2009
638
657
First Name
Rick
Well this is interesting! Curious what the angle is here?

“Wholesale has been an important part of our business from the beginning, and much like consumer interest in The New Way to Buy a Car™ has quickly grown over time, so has interest in what we offer to industry customers with our wholesale inventory,” said Scott Wood, senior director of wholesale operations at Carvana. “This direct purchase platform unlocks the full potential of Carvana’s capabilities matched with technology modules from Manheim Digital, creating a whole new way to buy wholesale, directly from Carvana. We look forward to working with even more wholesale customers to provide them with our incredibly diverse inventory and national network.”


 

craigh

Super Moderator
May 19, 2011
1,685
1,117
First Name
Craig
The login page goes straight into Manheim. I'm not up to speed enough on the situation to know the significance of that.
Maybe they just need to physically move more metal to get more data, etc to keep investors happy?
 
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Rick Buffkin

Sausage King of Chicago
Oct 29, 2009
638
657
First Name
Rick
They have been marketing and running a massive Trade-In program for the better part of this year. From what I hear though, they over pay for vehicles at the auctions. Maybe you're right @craigh. Maybe they just need to keep circulating and moving metal.
 
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