Carvana: Post-COVID Challenges
Former Associate Director of Inspection Centers at Carvana
inpractise.com/articles/carvana-ip
Former Associate Director of Inspection Centers at Carvana
The expert started his career at CarMax where he spent 11 years in various operational roles: He managed monthly purchasing and pricing of an average of $15 million in inventory, led the buying departments for the three Dallas locations with a staff of over 30 employees, and created and instituted new purchasing strategies to optimize revenues, staff performance, and to ensure compliance with company directives. He then joined Drivetime for nearly 3 years as the head of the company’s inspection centers before moving to Carvana for the past 8 years. As a Director of inspection and reconditioning centers at Carvana, the expert led all aspects of the facilities from inception to 500+ team members, from zero to 1,000+ weekly production units, multiple shifts and production lines while overseeing construction of a 60+ acre facility.
Interview Transcript
This is a snippet of the transcript, sign up to read more.
What about the logistics of getting cars to the reconditioning centers? Considering the online model, I found it interesting when they acquired ADESA. If you look at their production or reconditioning footprint, a lot of it was in the middle of the country. They had nothing in California and very little in the Northeast, where most of the large population centers are. They bought more cars than they sold from consumers, and they also bought at auctions. There's a lot of retail activity on both the buying and selling side across the country. However, a significant portion of the reconditioning footprint was centralized in the middle of the country. It seems highly inefficient to buy a car in California, take it back to Arizona, and then send it off to Portland. Did you handle the logistics part at all, or were you only involved once the car arrived? There was a whole journey for that car before you even saw it.
Today, Carvana is a massive, robust logistics network that doesn't exist in any other group, including CarMax.
This is a snippet of the transcript, sign up to read more.
Could you please elaborate? I'm interested in understanding what changed. What was achievable before? Did they need ADESA to get there? Or could they have performed better without ADESA?
Leveraging ADESA is how they will grow without adding a ton of operating cost because they already have it. It’s already incurred.
This is a snippet of the transcript, sign up to read more.
Previously, there was no clear distinction between the first and second options, but now the first option is free and the other might be the 17th option with a delivery charge. I understand.
Another significant aspect, which can be overlooked, is how the vehicle is staged and pulled. From an associate's perspective, who is physically doing all the work, they have to sift through 6000 units to pull one, stage it, and get it ready to be on a truck by noon. They don't start pulling those cars until it's funded. This is a change from six to nine months ago, and everything prior to that, when they would start staging a car once the customer had put in their information and showed commitment.
This is a snippet of the transcript, sign up to read more.
Related Content
Carvana Operations: Vehicle Flow through the Network
Former Associate Director of Inspection Centers at Carvana
Carvana: Evolution of the Inspection & Reconditioning Process
Former Associate Director of Inspection Centers at Carvana
Vroom, Carvana, & Optimising Vertical Integration
Cofounder at Vroom
Vroom: Operational Challenges to Scale
Former Senior Director of Business Development at Vroom
Copyright Notice
This document may not be reproduced, distributed, or transmitted in any form or by any means including resale of any part, unauthorised distribution to a third party or other electronic methods, without the prior written permission of IP 1 Ltd.
IP 1 Ltd, trading as In Practise (herein referred to as "IP") is a company registered in England and Wales and is not a registered investment advisor or broker-dealer, and is not licensed nor qualified to provide investment advice.
In Practise reserves all copyright, intellectual and other property rights in the Content. The information published in this transcript (“Content”) is for information purposes only and should not be used as the sole basis for making any investment decision. Information provided by IP is to be used as an educational tool and nothing in this Content shall be construed as an offer, recommendation or solicitation regarding any financial product, service or management of investments or securities. The views of the executive expressed in the Content are those of the expert and they are not endorsed by, nor do they represent the opinion of In Practise. In Practise makes no representations and accepts no liability for the Content or for any errors, omissions, or inaccuracies will in no way be held liable for any potential or actual violations of laws, including without limitation any securities laws, based on Information sent to you by In Practise.
© 2024 IP 1 Ltd. All rights reserved.