Photo Credit: RL GNZLZ/Flickr.com

According to a report by DealerSocket, there are nearly 63,000 used car dealerships in North America, which include 45,000 independent used car dealerships and 18,000 franchise dealerships. The biggest among these dealers holds a 1.6% market share of the US market. Recently listed Carvana (NYSE: CVNA) is trying to become a leading player in the market.

Carvana’s Offerings

Phoenix-based Carvana was founded by Ryan Keeton and Ernie Garcia in January 2013 as an online option for used car sales. Carvana offers a unique and convenient way of buying used cars. Its platform allows users to research and identify a vehicle, use its proprietary 360-degree vehicle imaging technology to inspect the vehicle, arrange for financing and warranty options, and finally purchase the vehicle and schedule delivery or pick-up from its web-page or mobile app. Carvana’s process allows the entire process to be completed in as little as 10 minutes. Other online used car websites act as marketplaces by connecting buyers with sellers, Carvana’s process covers the entire car buying process.

Carvana uses proprietary algorithms to optimize its nationally pooled inventory of more than 7,300 vehicles. It has a network of professionals who inspect and recondition the vehicles based on a 150-point inspection process. Carvana also provides the customers with the option of either getting the cars delivered to their homes or to pick up the vehicle at a proprietary vending machine.

Carvana’s first market in Atlanta was launched in January 2013 and till the end of last year it had purchased, reconditioned, sold, and delivered approximately 27,500 vehicles to its customers. As of December 2016, Carvana’s in-house distribution network was servicing 21 metropolitan markets. It plans to expand to international markets this year. In the last quarter, Carvana expanded its domestic presence to 7 more markets.

Carvana’s Financials