![]() Per Figure 2, CarMax’s wholesale revenue comprised 15% of CarMax’s total revenue in 2Q20. ![]() Wholesale Business Maintains Retail Quality Standards and Deepens Market InsightsĬarMax operates the third largest (by total number of vehicles sold) wholesale auction house in the U.S. This large inventory, coupled with the superior distribution network created by its dealerships, enables CarMax customers to enjoy a wider selection of vehicles as well as more pick-up/buying locations. ![]() In fiscal 2020, 34% of CarMax’s vehicles sold were transported at the customer’s request. For reference, Carvana’s inventory is ~20,000 vehicles. At the end of fiscal 2020, CarMax had an inventory of ~80,000 vehicles, which can be transported across the United States to facilitate a sale. The Internet Is the Best Vending Machine – and CarMax Is Fully StockedĬarMax’s large inventory of used vehicles enables it to sell more vehicles no matter the sales channel. Gen Z and young millennials visit 3.8 stores on average before purchasing a vehicle while Generation X and Baby Boomers visit just over 2 dealerships. Furthermore, younger consumers shop more at brick-and-mortar dealerships than older consumers. 89% of the respondents indicated that the test drive was the most influential resource in their decision. A survey conducted by Urban Science and Harris Poll found that 83% of consumers would not buy a vehicle without first test driving it. In many cases, CarMax offers its customers even more (see below).īrick & Mortar Creates Additional AdvantagesĬarMax’s 225 stores are a major advantage over its competition, especially Carvana, whose model of buying a car sight unseen does not work for most consumers in the vehicle market. With no-haggle pricing, contactless delivery, and the option to complete the entire car buying process online, CarMax is offering the same services as Carvana. Carvana’s key differentiator is its fully online, touchless approach to the car buying process, which CarMax is already replicating. Carvana’s first-mover advantage in online sales is slipping away. If this strategy sounds familiar, it should.
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