Carvana, Amazon-like Dealer, Enters Market

Retail

BY JACOB OGLES SRQ DAILY MONDAY BUSINESS EDITION MONDAY DEC 18, 2017

An online car dealer announced last week it would enter the Sarasota market. Carvana, a company billing itself as the Amazon of automobile transactions, announced an entry into Southwest Florida and will do business now from Sarasota to Naples.

Ryan Keeton, co-founder and chief brand officer for Carvana, says this is the fifth Florida market that the company has entered, after Jacksonville, Miami, Orlando and Tampa. That also makes this the first mid-sized market in the state. “We also own the logistics to connect markets and distribution centers,” Keeton says. 

The company allows consumers to search through an inventory of more than 8,000 vehicles, including inspecting vehicles using parented 360-degree viewing technology. The service also allows customers when they express interest in a vehicle to have it delivered for a seven-day test period when they can still return it for a full refund.

The business works by keeping large distribution centers around the country, including in Atlanta, Philadelphia, Dallas and Phoenix. Opening each market means setting up an office with just about five to 10 employees, in a non-public-facing location. “We’ve replaced overhead with technology,” Keeton says. “We don’t have the same costs a brick-and-mortar dealership does.”

Keeton says on average, customers can save an average of $1430 against Kelly Blue Book suggested retail value. The decision to enter the Southwest Florida market, the company’s 43rd market nationwide, came because of interest in Carvana’s website from consumers in the region. 

Carvana made its Florida debut less than two years ago and in that short time we’ve seen more people across the state welcoming the new way to buy a car,” said Ernie Garcia, Carvana founder and CEO, in a statement.

What’s the entry of Carvana into this market mean for traditional dealerships? Keeton made clear that disrupting other dealers in the market isn’t the goal of Carvana. “The automatic retail industry is very large,” he says. “We believe there is plenty of opportunity for an alternative.”

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