A Better Way to Buy & Sell Used Cars – Michael Bor of CarLotz

Michael Bor, the Founder and CEO of CarLotz

Michael Bor, the Founder and CEO of CarLotz, grew his company’s revenue from $2 million in 2014 to $24.7 million in 2017, a 1,107% increase, and to around $35 million in 2018.  

CarLotz is the consignment store for cars, where buyers save money, and sellers can get a cash offer today, or consign for thousands more.  

In this interview with Eversprint‘s Malcolm Lui, Michael shares how he and his team accelerated their high value sales by:  

  • Opening eight stores over the past eight years across the country.  
  • Growing the commercial car sales side of their business.  
  • Reducing staff turnover to well below industry levels.  

Computer generated transcript - CarLotz Interview (transcribed by Sonix)

Download the "Computer generated transcript - CarLotz Interview" audio file directly from here. It was automatically transcribed by Sonix.ai below:

Malcolm Lui: Welcome to the High Value Sales Show of Eversprint.com. I'm Malcolm Lui, the Managing Member of Eversprint, and today we're speaking with Michael Bor, the Founder and CEO of CarLotz, the consignment store for cars where buyers save money, and sellers can get a cash offer today or consign for thousands more. Welcome to the call Michael.

Michael Bor: Thank you very much Malcolm. I appreciate it.

Malcolm Lui: Michael, you grew your company's revenue from $2 million dollars in 2014 to $24.7 million in 2017, a 1,107% increase, and in 2018 you're on track to hit around $35 million. Before we talk about how you grew your company so fast, can you share what your company does beyond my quick intro and also ...

Michael Bor: Sure.

Malcolm Lui: ... discuss how your company differs from the competition?

What they do and how they differ from the competition

Michael Bor: Yes sure. Thank you. And thanks for the opportunity to chat about my business. I appreciate it. We start in car lots back in 2010 and the initial going in concept was that consumers had two ways to sell their vehicles or get rid of their vehicles. They could either traded in or they could deal with it themselves and try to sell themselves on Craigslist or parking it by the side of the road trading it in you get money quickly but you get a low wholesale number by selling it yourself. You get more money but you have to do a lot of work and it's a hassle and time consuming potentially dangerous. And our thesis was there was something in the middle where you could get more money than you're trade in without having to do all the work and the concept was we were going to work for you we would take a fee. And because the spread between wholesale and retail is so great that net of that fee you would still end up with thousands more than you're trading no and you don't have to do any work. So that was we're going in thesis. We raised a little bit of money back in two thousand and eleven and started with a small store in Richmond Virginia. And very quickly we realized it was working. We had you know initially begged and pleaded our friends and families to bring their vehicles to us.

Michael Bor: I think we opened with 13 cars on a lot. And very quickly the first few cars you know folks had a dealer offer or CarMax offer for eight or nine thousand dollars and we sold it within a reasonable time period for thirteen thousand twelve thousand. So they were ending up net of our thousand dollars fee with two three four thousand dollars more than they would have had they taken the deal traded off. So we felt like we were onto something. We grew our store filled up a lot opened a second store about a year later also in Richmond Virginia and it filled up and became a profitable store of the month we opened it. And so we really felt like we were on to something and just stepping back a second but the process is you bring us the car. We evaluate it. We give you a very realistic price for the car. And if you if you agree that that price is what you'd like the listed at we go ahead and get the vehicle inspected by a mechanic professionally cleaned professionally photographed listed where everybody goes to shop for car so auto trader cars background card booze you name it. And then we're a physical brick and mortar location so people can come ninety seven Monday through Saturday. We have 24 hour lead lead management for four interested buyers.

Michael Bor: We're a licensed dealer so we can offer trade ins and financing alternatives and test drives and mechanic checks on warranties. Really anything that makes a vehicle comfortable for a buyer by. And then when a buyer comes by they either make an offer or they buy the car the asking price. And once that happens we deduct our fee and cut your check to the proceeds and you bring in your title and the deal is done. And we're dealers so we can handle all the plate work and titling for the new owner as well. So that's that's the that's the ultimate way we do what we do. And over time we you know we agreed to that second store like I mentioned. Eventually we opened the third store a couple hours away and we learned that it was it was difficult to get new conspires to bring us vehicles in a new market. We have to almost start all over with making sure everybody knew that we existed who we were and what consignment meant and how it all worked and that you can make more money. And so to supplement the consumer business we started calling on companies that had weak vehicles or leased vehicles or their corporate vehicles to sell and these are companies that otherwise either sell to their employee at a reduced price or left it on their parking lot or brought it to an auction and we call those companies and we eventually started getting them to bring us vehicles.

How the commercial side transformed their business.

Michael Bor: And that has really transformed our business in a very big way. We now have the commercial side of our business which is what we call the side of our business where the customer the client is a company that owns a vehicle so that could be either a leasing company a fleet management company a Fortune 500 company or a mom and pop business that has a few vans. Other dealers banks and financial institutions that either have lease turn ins or repos. Really anybody who's trying to get rid of a car and any entity that's trying to get rid of a car that's a company we call that our commercial business. And that's almost 50 percent of our business now. So it started several years in and it's it's the fastest growing part of our business. And so on the backs of that we launched in Charlotte and then Greensboro North Carolina and in 2017 a private equity group invested in us to supercharge our growth. And so in the last year we've opened in Tampa Florida Chicago Illinois San Antonio Texas and we are getting ready to continue that growth there. So it's been a pretty exciting run. We still have a long way to go. There's still a lot we're trying to figure out but we are slowly but surely transforming the way that both people and companies reap market or sell their vehicles that they no longer need.

Michael Bor: And so that's that's ultimately business. Now I've really spoken about it from the seller's perspective. But the way we look at our business is we really have sellers and we have buyers and in most cases they're not the same entity or individual. So from a buyer's perspective we're also trying to change the way people feel about the used car experience. So all of our teammates are noncommissioned salaried sales representatives we call them coaches and our stores are not laid out like a traditional dealership. There are no cars in the showroom there's no finance orcas where you have to go into a separate office to figure out how to pay for the car. It's you know it's one of our coaches will take you through the whole process. All of our pricing is totally transparent and probably the the most important part of what makes Carlisle different from every other used car operation out there is that you know we don't own the cars on our lot except for a certain cars we own because they were traded into us or occasionally we'll buy our matching but vast majority of the cars are not owned by us. And so we are really just trying to set up a deal that's comfortable and fair for the buyer and the seller.

Michael Bor: And that seems to be very comfortable for our accounts. And so when you had asked about competition and I know this is a long answer so tell me to speed up the if you need to. But our competition there are really two types of competition there competition for our buyers and their competition from our sellers. The competition for our buyers is really every other dealership that's out there. So you know anybody who's looking for a used car or a car at all is a potential customer of ours. Our cars range from a couple thousand dollars to over one hundred thousand dollars and everything in between. From consumer looking vehicles to more commercially looking vehicles. And then so you know every other dealership out there is our competitor. And then on the seller side our primary competitors are the other ways that our commercial counsel used to sell their vehicles which are primarily the auction businesses. So Manheim Odessa there are several independent auctions that help companies sell vehicles. And as we grow more and more vehicles end up on our lot. And you know those vehicles previously had been taken to the auction. Now the beauty of the market is that there's 40 million plus of these vehicles being sold every year. So even if we were to grow 100 x we still wouldn't make a dent in this industry it's a very very large industry.

Malcolm Lui: So far on the commercial side. They sell through your platform the same way as a individual would i.e. they could either put it on consignment or you'll get them the cash offer today

Michael Bor: Yeah. Most of and probably all of them come to us because they want the consignment model because it nets them more money. So what they typically do is they'll say I'd like you to sell my car for me. And if it doesn't sell within x days then I'd like for you to make me a wholesale offer. So 10 typically about 45 or 60 days is that when they start getting antsy that the cars and sold the vast majority these cars sell in the first month our average is typically in a 20 day period and then at the end of the remarketing practice if the car hasn't sold then we will buy the vehicle from the account and continue to sell it until it sells

Malcolm Lui: Or you might optionally return the vehicle to them. I guess that might be the third option

How they move slow inventory

Michael Bor: Me. We have we don't do that. I mean once it's deemed to be attractive for retail it's attractive. I mean you know every car sells it just has a price. So if it's not selling for 60 days or 90 days it's probably because it's mispriced. And you know the vast majority of the time we know where a car should be priced for it to be a fair price but occasionally there's something we're missing you know always the car a particular color that's unattractive or is is there a certain option or feature set that's missing that we just missed. And for that reason hasn't sold and so we just have to continue to reduce the price on both sides. But you know like I mentioned the average is in the 20s sometimes 30 days if it's if it's a slow month. And typically these vehicles are being sold at a retail

Malcolm Lui: So if a car is slow it's not selling you just simply reduce the price every week until it sells it regardless of what you paid for the car just to get it off the lot and free up the capital

Michael Bor: Yeah and it is. Yeah. We don't reduce the price every week or reduce the price based on how the market is moving so we have tools that dealers use to show for any given year make model and mileage banned on a vehicle. What is the competitive market pricing in our market. And we do that so occasionally we'll have to mark down vehicles more than once a week. Typically it's it's really more like once every couple weeks. But yeah we will. We will continue to reduce the price occasionally if a mechanical issue pops up or something happens to the vehicle or we deem it to be no longer retail ready we'll go ahead and sell it. So we'll take it to an auction or sell it through some online auction options that have become available recent

Malcolm Lui: Now. I'm familiar with Cabana. That's where I bought my last car used car. Can you share with me how you differ from Karina outside of how Havana is more of an online retailer as opposed to your operation where you have physical locations. He can't tell

Michael Bor: Sharon

Malcolm Lui: How the pricing might different differ between the two

Michael Bor: Yes. So carving a very cool business obviously has grown a ton. Public company so all its financial information is out there to see and really fantastic manager team I've got to know them well they are a traditional dealership in that they buy a car they buy low and sell high. So they buy their cars and they hope to sell them for more than they bargained for. And we call that a merchant model where you're buying low and selling our model as a service model in that we are providing the service to the seller of selling their vehicle for a fee. And we're providing the service to the buyers and getting a vehicle that's comfortable for them in their hands for a fee. So we don't own the vehicle and hope to make money on the sale. We are providing a service to the seller to get their vehicle sold. That's a fundamental difference from a buyer's perspective. You you might see an overlap in the types of vehicles that we sell in a car on our CarMax or Echo Park or any of the really any other dealership. Our prices tend to be the cheapest in the market because our sellers alternative is a wholesale offer. They're not shooting for the standard dealer markup of three or four thousand dollars. What they're shooting for is some number above what they would otherwise get at wholesale. So with the average market price for a 20 15 BMW is twenty two thousand dollars. Ours might be 20 Calvados might be 20 to CarMax it might be twenty three other independent dealers might be twenty one five but we'll typically be the lowest because the alternative for our seller is to take it to the auction and sell it for eighteen thousand

Malcolm Lui: Right. Can you share what the three biggest drivers were of your business over the past few years that took you from two million in 2014 to thirty five million four years later

Their three biggest sales drivers

Michael Bor: I mean it's really volume and volume. So when I say what I mean Volume 1 is new stores. So within a specific store there is a theoretical maximum number of vehicles you can sell out of that store. So when you know our first store for example has about one hundred and twenty five parking spaces on it. Realistically you know I think a best in class or a pretty good dealer would turn their inventory in under 60 days. So if we have let's say one hundred and let's say one hundred and twenty vehicles on the lot in our first store selling 60 a month out of that store would be a good month selling one hundred and twenty out of that store would be fantastic line you can sell your whole inventory a month you're doing here your best in breed. And so theoretically we can't really sell 500 vehicles out of that store a month. So what we have to do is we have opened up more stores and so we we have opened up eight stores in the last eight years and that has been a key benefit to our volumes. And then the other is the other volume is the volume that we're able to get from our commercial accounts. And really when we started with our commercial accounts in I think it was probably 2013 when we really started calling on them and realizing that there was an industry there.

Michael Bor: Everybody was skeptical that we would that we would be able to do what we were telling them that we knew we could do because we had been doing it on the consumer side and our accounts our very first clients were skeptical that what we were doing would work with a more plain jane standard looking fleet vehicle. And very quickly they realized that it impacted work. And so we have several accounts we started with you know one or two units a month and then got to 20 units a month and now hundreds of units a month and you know are shooting for thousands this coming year. So it really you know we're in an industry that really for better for worse is very mistrusted. It's got a reputation that is not enviable. And that's probably a result of decades of questionable business practices in the used car industry. We've come in here we're running a very transparent highly ethically centered business ton of integrity kind of transparency and really a kind of service to the client. And we can say we do that all day long but ultimately our clients have to see us do it to believe it because everybody said you know everybody whether you have high integrity or not you typically will say you have high integrity integrity

Malcolm Lui: Yeah

Michael Bor: So we can say it all day long but ultimately in this market where we have very high value assets and there needs to be a good level of trust. It just takes years for some of these clients to come on board. Now as we've grown and built some credibility in the market it's becoming easier and easier to get these clients up to speed but still we're in an industry where it has taken us a good bit longer than we wanted to really build the trust that we need with our client base.

Malcolm Lui: Now can you share a little bit about your choice of where you open your locations. Because. Yeah I like how you have a San Antonio location which is appears furthest away from all your other locations. What's the thinking behind opening in San Antonio.

Michael Bor: It's funny I really wish I had a very scientific answer to your question but I'll give you answer a couple of ways. One when we first started and we were a consumer business it really made sense for us to open and contiguous markets we could take advantage of marketing cost scalability et cetera. As we grew and specifically grew into the commercial market what we really needed to do is to be able to service national accounts with a national footprint. So our big national accounts have tens of thousands of vehicles that they sell every year. But when we were just in Virginia only a few hundred were in that market and they were telling us we love what you're doing but we really need you to be in Florida and we really need you to be in the Midwest or we really need you to be in Texas or California where we're not. And so we really just circled high volume locations where our clients have a ton of vehicles and then we turned our real estate team on and trying to find a location. Now Tampa seems fairly obvious it's easy to get to from most parts of Florida. We we pull cars into our Tampa store from you know a decent geography pretty much from Georgia South and almost over to Texas Illinois pretty much pulls the entire Midwest Texas pulls all. Texas obviously and so regionally that's how we've kind of picked spots.

Second mover advantage

Michael Bor: But then down much more micro we really just look at where are they're really successful high volume attractive dealerships and that's where we want to be. So it's no it's no mystery that you know one of the highest performing businesses in our market is CarMax and we admire the heck out of that business. It's all very well run company also in Richmond Virginia where we're where we are at. So we not only compete with them but we can admire them from close by. They're a multibillion dollar company and we hope to be one day. And so what we do is we look where they are and we try to get as close as possible. So our first two stores are pretty much oil are our first stores right across the street from the CarMax our second stores of the mile or third source within a couple of miles our campus store is adjacent to a CarMax and so you know we really it's similar to kind of Howard. You know Howard Johnson's and Holiday Inn or some of the gas stations that both put themselves near each other. People tend to shop for cars in certain locations on a roads and on an Auto Row. We prefer to be near closer to the those with the most stellar reputations. And so that's that's kind of how we've angled towards our store locations.

Malcolm Lui: Yeah. Makes sense or I mean CarMax already did the hard work in picking out a prime location. No need for you to do this. Do the

Michael Bor: Right.

Malcolm Lui: Research and build the market

Michael Bor: Right. They have

Malcolm Lui: So

Michael Bor: A very solid team that does just that. So thank you very much.

Malcolm Lui: Yeah. It's the second mover advantage. They're not the first movers to figure

Michael Bor: Exactly.

Malcolm Lui: It all out for you. It's a good strategy. Now can you share a little bit about why the other used car innovation companies have failed. There is a couple that tried to restructure how people buy used cars and they just couldn't make a go of it. What are you doing differently that will lead to success I suppose what the other ones that had closed their shops

Michael Bor: Yes and a couple things. You know one that got a lot of press was a company called BP and BP I think raised several hundred million dollars. They had the backing of blue chip venture capitalists. Had an accomplished team but they're one of the things they were very proud of is that they had nobody from the automotive market. So they were going to rethink the whole industry without really any experience from the industry. And there's something to that. You know there's something to coming into an industry and trying to redefine it might be with some of the legacy maybe bad habits of the industry our pain pains always been that most of that is probably the right way to do it. But there's some very basic blocking and tackling and industry knowledge that I think is very helpful to getting a car business off the ground. And so you know aren't our founding team was three founders and we're still all in the business and is active more active than we've ever been. But two of us were kind of finance and investing backgrounds. And one of us had a very strong automotive operations background. And so you know two of us came to it from hey how does every other industry work and what kind of business do we want to build and what kind of business do we want to be a part of. And then the third of us said OK that's great but let me let me tell you a little bit about reality here about how this thing works.

Michael Bor: And so I think that's that's been one one side of it. Another thing is you know this has taken we're eight years and we still haven't figured it out. And so you know last year we've probably grown faster than we've ever grown in seven years before then. And it's definitely uncomfortable. I mean you know we are working very very hard to get up to speed and scale this business but we haven't kind of overdone it. And I think when you take one hundred million dollars from a venture capitalist you kind of have to go fast. You have to go fast and try to win fast or or get out of the way. And I think we've taken a much slower steadier approach to building this business now ultimately. I don't know. I mean are we are we going too fast right now. I don't know. Are we not growing fast enough. I don't know. You know ultimately the book will be written after the story ends. But you know we are growing at a pace that has always been comfortable maybe is a little slightly uncomfortable but we think that it's a good pace for us. And it doesn't mean you know if we make a mistake it's not a nationwide mistake. It's a store level mistake that we can fix quickly and learn from as we develop future stores.

Malcolm Lui: Right. That's one of the benefits of being a smaller in their organization right. Changes can occur more quickly.

Michael Bor: That's right.

Malcolm Lui: Now in the case of BP I actually checked him out too when I was looking to buy a car. And for me I just didn't find their car selection in the pricing as attractive as carb and hence a bottom part managed. That was a BP failing that the pricing and inventory or was it along the lines of we said before they just grew too fast because if they receive funding

Michael Bor: Yeah I think well I think fundamentally their model is flawed and we're trying to do too many things for too many people. I think you know the simplicity of carbon model is they're just they're just the dealership. They happen to be online only. Not even online only they do have physical locations. But you know you you can only shop for vehicles online and everything else about them is what they've learned from the traditional dealership model and in their case specifically car vendors case specifically you know they learn from Drive Time which is funded the business from the beginning. The CEO of his father is is or was the CEO of drive time. So they definitely have roots in the traditional dealership world. And so they've learned a lot about how to run a successful dealership. And it's it's a lot more than whiz bang tech which they do have. But it's a lot about you know on the ground blocking and tackling. They have massive reconditioning facilities where they're bringing vehicles in and getting rolling up their sleeves and getting dirty and you know fixing the vehicles and making them look pretty and taking pictures and all of that it's very operationally heavy. And so you need really good operators. It's not it's not okay to just have brilliant former or Google technologists. You actually have to have really solid operators. There's another company called shift that I think has learned that over time I haven't kept up with them in the last year or so but you know they started as more like BP. And I think they're evolving to be what like. And in the meantime they brought on senior members of the team that have a lot of operational experience. And so they're they're learning that as they go. So yeah ultimately you know you haven't done a full postmortem on BP and it was never as close to them as some others. I don't know all of history. But my guess is that what they what they had in terms of really impressive technical technology talent they may have lacked in terms of kind of get your getting your hands dirty in past experience

Malcolm Lui: Right. And ultimately delivering a quality car in a with quality buying experience and selling experience as well. So you talk about two drivers of volume of new stores and volume from commercial accounts. Is there a third driver of your success

Michael Bor: Well you know I would say the team is ultimately the driver of the success. I thought your question was about growth. You know in terms of growth it's growth and success aren't necessarily the same thing. But in terms of success business it's if there is a number above 100 percent of the team we we focus a ton on training and culture in order to keep our average tenure as high as possible. We're in an industry that has tremendously high turnover. And so our goal is oh there's so much value in having someone for three years instead of two or even two years instead of one that we do everything we can to keep our people happy and engaged and interested in working here feeling like they're fulfilled and the senior at the senior levels we have zero turnover obviously in the store levels we have turnover. It's always a disappointment when it happens we are what we're always trying to do everything we can to keep our team happy. But ultimately it's the it's the strength of the middle and senior team that has driven the decision making and the strength of their junior team and has driven their experience. We'll be right back.

Malcolm Lui: So what sort of turnover levels are you seeing at the store level and how is that compare to a typical car dealers physical location

Michael Bor: Yeah I mean we you know I think a traditional dealership is probably well over 50 percent and we are probably more in the 20 to 30 percent range which you know seems very hot. You know for many industries is very very high. But I think for the car industry it's terrible retail and you know our industry level is retail retail is difficult. You know my partners and I started this business and you know handling everything. So for about a year we were in go on test drives and screwing on flight frames and doing title work and really doing everything. And coming from an investment banking background where I sat in an office staring at a computer all day parts of it were exhilarating and I loved the interpersonal interactions dealing with people buying vehicles some of whom were law partners and some of them just got out of jail yesterday and you know dealing with all of America. It's awesome. I loved every second of working in the store. But it's grueling. Because. I would have been had I not had I never done what I would have way underestimated how tiring it is to be on your feet for 10 12 hours a day running around a lot talking with people and you know unfortunately in our industry as hard as we try also dealing with some very angry people and in many cases they have every right to be angry something then go write something got screwed up especially early on and we are still trying to figure it all out. So very very tiring work at the store level and I definitely see why turnover is the big deal in this industry

Malcolm Lui: Right now when you say turnover time at the sales staff. Those are guys who are leading it. Are you also think about your operational folks the behind the scenes guys here cleaning up the cars reconditioning them inspecting them

Michael Bor: All of the above. Yeah

Malcolm Lui: On the back of 2019. What are your plans

Their 2019 plans

Michael Bor: Well so we did it a ton of growing at 18. So we have a whole lot of adjusting to do. We've set some very aggressive volume goals with our top accounts on the commercial side. So folks who are gone from several hundred we'll be trying to do several thousand this year in terms of units. We have a bunch of technology that we're trying to build to automate automate and add efficiency to a lot of the processes we do. And then as we did in 18 we're looking at new store locations. So we'd love to be globally on the West Coast. We'd love to be in New England. We'd love to fill in some gaps in the southeast and really just continue the store store growth and buying road

Malcolm Lui: How about in the sales and marketing front. What what sales are marketing initiatives need to be executed well for you to hit your volume goals both the retail and commercial side.

Michael Bor: Yeah. So on the on the marketing side you know we've always done some we've always open the store and been satisfied to grow slowly as we as we kind of learn the market and learned what would make sense in a specific location et cetera. I think with these newer and larger stores that we've opened recently we do really need to to grow faster. So 20 19 from a sales and marketing perspective we'll see a ton more media advertising on both online and traditional like 10x what we've done in recent years so we're dramatically ramping that up to build awareness and brand brand equity in our new markets where people may have not heard of us. So like in Richmond when we opened our first store I would sell our first car to you and I would have you know I'd tell you to tell all your friends and then you'd tell your friends and maybe over the course of that year you're five your friends would come in and buy or sell a car from us. That was great in Newton these new markets where we're opening three four 500 car stores. We kind of need that to happen much faster because the rent factor of the stores is 10x what what they were when we first started. So we definitely need to kind of ramp up the speed of growth in these new stores. And so sales and marketing is absolutely a big piece of that

Malcolm Lui: Okay look whatever marketing campaigns are you thinking about doing on the online and traditional space to get get the new stores sales up and running quickly

Michael Bor: Yeah for online you know. Well all of our vehicles are on all the online shopping sources so they're on auto trader and cars. We do a tremendous amount of good words and and general ICRC and work for General searches. And then we have recently started some some advertising on games and Pandora and things like that. And then we have some more traditional you know banner ads on Web sites and trailing some shoppers and then we'll we have in the past done TV and radio and we'll probably kick that back into gear. Well

Malcolm Lui: So others campaigns that use channels you shared with me. These are all cannot be used in the past and they have all generate positive RSI from them.

How people shop online for cars

Michael Bor: So as you know sometimes it's difficult to do well online. It's a little easier to gauge the are a lie. We in terms of TV and radio very difficult to gauge the return because we're also advertising online and people you know it's very difficult to truly attribute a sale or a dollar of revenue to a specific marketing channel. But in general you know when we advertise TV radio awareness and along with awareness comes volume we've seen that when car shoppers go online which is typically how they start they will initially look for a bill or a price point. And so if they start with a vehicle they'll sort. And they'll end up with those that end up in the price point they like if they start with price point no eventually end up they like.

Malcolm Lui: Hey mike open one second. I think I lost you

Michael Bor: Yeah sorry. The call came and I apologize for that

Malcolm Lui: Okay. No trouble.

Michael Bor: Should I. Where did you lose

Malcolm Lui: Why.

Michael Bor: Me.

Malcolm Lui: The part I heard is you take my car shoppers they start online. It typically look for vehicles in and or price in a store with one or the other and you always end up on the other side. It's our vehicle to find a price at this price to find a vehicle

Michael Bor: Yeah right. And then so once they've gotten comfortable with the price in the vehicle then and the key for us is they have to be comfortable with the dealership that is selling a vehicle. So if when we you know the first week we opened in Chicago if someone saw a car they liked and it said it was for sale. Car lots. Someone said I've never heard a car lot so a decent chance that someone might say I don't know. Let me let me go find another one. As we grow or build awareness in America market and all of sudden people start to build comfort with a specific brand. So as we know the reason we advertise on TV and radio and all these other channels is because we want people to be comfortable with our brand. We want them to come to our site and feel like this is this is going to be a positive experience.

Malcolm Lui: Yeah I totally hear you on the process you describe. I look for a car I look for the model and look for the price and then I see who's selling it. There are times I see a dealer in magic at the dealer and I look at the reviews at the dealer and you know if I if I

Michael Bor: Right.

Malcolm Lui: See you in a handful of bad reviews I'm thinking OK let me look somewhere else.

Michael Bor: Right. Yeah. There is a lot of there are a lot of cars out there. Fewer cars that are well and then fewer even fewer cars that are priced well at a dealership that you feel like you can trust.

Malcolm Lui: Yeah exactly. Now do you have specific customer types that you're looking to target beyond just people wanting to buy a car. I mean there are micro segments that you found are really good ideal customers for car lots

Michael Bor: Well I mean the interesting about the car market is really if you're if you're over 16 and have a drivers license here you're a you're a potential car buyer and for four years most dealers they have a target market. So you could be a high end dealer that only sells cars that are thirty five thousand dollars an hour or fifty thousand dollars and up or you might be a buy here pay here dealer that only sells cars to people with bad credit or you might be a scratch and dent type dealer. What's interesting about our models since we are consignment we don't really control the types of cars we have. So we currently have sixty thousand Land Rovers and we have twenty five hundred dollar sedans pickup trucks. And so really if you are a car buyer we likely have a car in your price point that fits your needs. And so our universe is great

Malcolm Lui: They're not advertising specifically for a type of car buyer. Like this like the the off road car buyers or the luxury

Michael Bor: Now.

Malcolm Lui: Car buyers or the the used car scratch and dent car buyers

Michael Bor: No no. We are we are just looking to promote the vehicles that we have available to us at the time

Malcolm Lui: Right. OK. A quick question for you. Say you have a billboard on a freeway in along one of your locations nearby one of your locations. Typically people have six seconds to read what's on the billboard. If they look at it at all. What would be your six second car lot. Message on the dashboard

Michael Bor: More money for your car more car for your money

Malcolm Lui: Now how to get one. Yeah I can hear that. Definitely. And also less

Michael Bor: Yeah

Malcolm Lui: See so I squeeze in less hassle as well. People would be

Michael Bor: Right.

Malcolm Lui: You would need it all. All the key points there

Michael Bor: Yeah. You can see the challenge. The challenge for us initially was that we really were building a business that needs to appeal to both the seller and the buyer. We're offering a service to both. And so we've we've at times focused on the buy side marketing sell side marketing. But for the most part we want to make sure that people whether they're a buyer or seller they should at least consider Karloff as a potential channel for the

Malcolm Lui: Yes definitely. Next time I look for a car I'm going to check out you guys sue me.

Michael Bor: Calling

Malcolm Lui: You

Michael Bor: Them

Malcolm Lui: Have to have a location in Austin Texas. San Antonio is a bit too

Michael Bor: Close

Malcolm Lui: Far for me to drive there.

Michael Bor: Not for the right deal though.

Malcolm Lui: That's

Michael Bor: I think

Malcolm Lui: True.

Michael Bor: I think we can we can get it. We can get you in the right. What kind of car did you buy from Cabana

Malcolm Lui: I bought a mini SUV a Toyota Enzo

Michael Bor: Oka.

Malcolm Lui: Yeah and it was good for us because you have a family two kids so it's comfortable and a bigger car and here and awesome where we live it's a bit hilly so it's nice having a V six engine in there or six cylinder engine. I mean the gas mileage isn't so great but being able to cruise up a hill when you want to.

Michael Bor: What year was it. Out of curiosity

Malcolm Lui: I think it was a two thousand. Two thousand fourteen model I think that I bought

Michael Bor: And

Malcolm Lui: A

Michael Bor: How

Malcolm Lui: Couple

Michael Bor: Many

Malcolm Lui: Years

Michael Bor: Mile

Malcolm Lui: Back. Oh it was it didn't have that many miles on when but it was still under factory warranty. It only had I don't know eighteen thousand miles on it or something

Michael Bor: Oh

Malcolm Lui: Like that

Michael Bor: Yeah low mileage

Malcolm Lui: Yeah it was a Yeah I was looking for a low mileage car that was that was a couple of years old. Right not more than one ideally two but still under warranty and that was in good shape in Karina had it there and we bought it. So

Michael Bor: On

Malcolm Lui: Actually

Michael Bor: Some

Malcolm Lui: What in our political experience we actually wanted. We tried the hybrid we try the Toyota Prius and had just died on the LSC I just could not handle

Michael Bor: Yeah

Malcolm Lui: The hills. So

Michael Bor: Right.

Malcolm Lui: These elements is dangerous just trying to drive in the car is here because on the freeways here it gets our roads I guess people drive really fast. I mean you're talking roads with speed limits of 60 miles an hour not freeways but roads. We just didn't feel

Michael Bor: Right.

Malcolm Lui: Safe in the free us not being able to hit the speed limit quickly. So yeah. So it was good we returned it to car Vana which is nice that a nice policy there. And then the one on the other extreme and got the vans. That was probably more power than we need. But we've been happy with it

Michael Bor: That's

Malcolm Lui: But

Michael Bor: Right.

Malcolm Lui: For sure and that kind of luck for a car. I will check out. You guys can Two last questions for you. Can you talk about who your ideal customers are on the retail side and perhaps maybe who your ideal sellers are both on retail and commercial side. And the best way for them to reach your t

Their ideal car buyers and car sellers

Michael Bor: Sure. So the ideal sellers on the commercial side are really anybody who has anybody who runs a business or manages the sale of vehicles of a business and has traditionally done with wholesale options and it's trying to get more proceeds from the vehicle. So that's anybody from a small business owner to a fleet manager of a larger business to someone who works in a bank or credit union who has repos or return vehicles or really someone who works at a dealership and they typically take their trade ends to an auction because it doesn't fit their life plan. And they can just contact any store they can ask for me. We have a commercial account seed that we can find on our website a car lots that come if you're a consumer seller you can go to our Web website learn more about how we do what we do and fill out a form and someone will provide you a value for your for your vehicle and you can turn where add to value it's attracted to you. My guess is it will be it will be several thousand dollars more than what dealers would be willing to pay for your vehicle and all that information including our phone number came down on our website. May numbers 8 3 3 2 2 7 5 6 8 9 people per voice or they can do it all online. And then from a buyer's perspective really if you're looking for a vehicle it's priced at 8 to 12 percent and below retail that's been inspected by mechanics and it is being stood behind by a national business that is focused on customer service. Anywhere from two thousand dollar vehicle to one hundred thousand dollar vehicle give it a look and don't be afraid of if our stores aren't close to you we can ship you the car or we can get it to you somehow. You can come to see us or over time maybe we'll have a location that's in your backyard as well.

Malcolm Lui: My spelling out your website domain name because it's about a little bit differently than one

Michael Bor: Sure.

Malcolm Lui: Might expect

Michael Bor: Yeah. W w w that car lots with a Z CCAR L O T easy dot com

Malcolm Lui: Fantastic. I'm definitely take you guys out the next time I like to buy a car.

Michael Bor: Awesome

Malcolm Lui: Thanks so much for joining us today Michael and sharing how you grew your company's business so fast.

Michael Bor: I appreciate it thanks for your time.

Malcolm Lui: We've been speaking with Michael Bor, the Founder and CEO of CarLotz, about his company's rapid growth. For interviews with other fast growing high value sales companies or to learn how we can accelerate your firm's high value sales through automation, visit Eversprint.com.

Sonix is the best audio transcription software in 2019.

The above audio transcript of "Computer generated transcript - CarLotz Interview" was transcribed by the best audio transcription service called Sonix. If you have to convert audio to text in 2019, then you should try Sonix. Transcribing audio files is painful. Sonix makes it fast, easy, and affordable. I love using Sonix to transcribe my audio files.

Listen on Google Play Music
Listen to Stitcher
Share on facebook
Share on google
Share on twitter
Share on linkedin
Scroll to Top