CarMax Retail mode to enter the second-hand car trading market

CarMax is currently the largest second-hand retail car chain in the United States. Founder Austin Ligon in 1991, the creation of Wal-Mart and other retail shopping malls into the field of second-hand cars, in the United States opened the first second-hand car shop. By 2006 Austin retired, CarMax in the United States has developed to have more than 100 chain stores, single store average inventory of more than 400 used cars. Austin also known as the "Godfather" of the second-hand car industry.

CarMax's earlier apprentice in China was "handsome car", the former Volvo Global vice-president Garry Wu and former Volvo vice president of China Zhaopeng in 2008. Handsome car from the inception of the Austin escort, he is not only handsome car angel investors, also in handsome car for three years as a consultant. The following two years, the handsome car gradually ushered in a glorious moment, peak time in the country a single month of water can reach more than 300 units. But when the handsome car coo Zhaopeng said, handsome car in ushered in a small peak, the team began to produce some "wild desires." In the 2010, the whole business model of handsome car is not stable, the handsome car began to try to dabble in the real estate business. And out of the company's future development direction of the Zhaopeng, in May 2010 formally from the handsome car departure. Then he found the serial entrepreneur Jinsong started another Chinese version of CarMax's entrepreneurial journey, which is now the best way.

Overall, the good way is still a staunch follower of CarMax. Zhaopeng in the practice of the CarMax model in the past few years, that the model mainly has the following essence:

The first is to solve the inventory problem brought by the retail model through financial means. The so-called consumer retail mode, means that the platform must first from the owner's hand to buy the car, and then put on their own flat table to sell. Compared to the consignment model of a car search (Consumer-to-consumer), it appears to be a heavy asset model. But the actual CarMax in the car after buying, will be the car as an asset, take the bank to do the mortgage, so that the funds are invigorated, and the next batch of inventory has fallen. On the other hand, through efficient operation, CarMax can achieve high inventory turnover. In this way, the interest paid on the mortgage is less than 5% per cent of the CarMax platform's margin.

The second is, with large stores small profits but quick turnover to improve inventory turnover. The last paragraph can be seen, CarMax if you want to ensure that the capital chain does not break, you must sell the car as soon as possible. This is used to Wal-Mart and other supermarkets, small profits and quick turnover model. In other words, CarMax will generally be higher than the market price of 5%-15% of the price from the C-end owner that overcharging, to ensure that the platform supply; At the same time to the market price of 5%-15% of the price guarantee car can be sold as soon as possible. Profits at both ends of the sale were squeezed, and platform profits were diluted, but the turnover rate increased markedly. In addition, similar to retail sales of the "one price" model on the one hand to increase customer trust on the platform, on the other hand, also reduce the cost of communication links.

Finally, the pricing power is delegated to the purchasing staff to enhance the vitality of the platform. In CarMax, the platform should be at what price to buy a second-hand car, and at what price to sell it, not the boss, the right in charge of the procurement personnel responsible for this car. Pricing and time are two dimensions. The higher the price, the longer the turnaround time, the lower the price, the quicker the sale, but the less money. This is because of the vagaries of the second-hand market, often able to find the best interests of the middle point is not the boss, but in the actual experience of the market procurement staff.

Because there is a second-hand car godfather Austin three years of precept and deeds, in the handsome vehicle three years operation experience, Zhaopeng to the excellent way is very adept. Holding 7.5 million Yuan Angel and 10 million yuan shareholder capital, excellent way in 2011 officially opened the first satellite store in Beijing. Through more than two years of model optimization, the mini shop, which can accommodate more than 20 cars, has been able to buy and sell more than 70 vehicles a month, with the average turnaround time of each vehicle at 7-10 days, and an average of 5000 dollars of profit for a car.

In addition to doing a second-hand car shop, you also opened a fast repair shop, not only for its sales of second-hand cars to provide quality assurance, but also to do other cars fast repair. In fact, the good way is currently in the planning of the market after the product also includes extension, insurance, installment and other services. It's also a lesson from CarMax, Zhaopeng said. The second-hand car market not only stays in the trade link, it also is the post market service flow entrance, but CarMax each year from through the integration third party after the market product obtains the profit to occupy the platform total profit 40%.

Of course, there are problems. The biggest problem is that China's financial environment is more conservative than the United States, the process of making car loans from banks is relatively complex, and collateral must be regulated by the Banks ' third party (the car is not in the store and how to sell it). Of course, there are solutions. The current excellent way is with Huaxia Bank in the discussion of the simplification of loan procedures, as well as through the introduction of Third-party guarantee Company to do on-site supervision. And domestic banks, due to the recent years of housing loans, car loans shrinking, some of the active "wolf" commercial banks are also looking for exports through similar innovation.

There is a sweetness to trying to do the retail retailing model. Compared to the consignment model, the retail model seems to be more attractive to the C-end owner (the future of the second-hand car market is to get the C-end owner of the world, see April 8 "I Got it!"). For those who want to replace the C-terminal owner, the platform's acquisition price is higher, and can be the first time to get money (at present, 40% of the vehicle source from the C-terminal owner). The most important thing is that, given the policy of restriction, C-terminal owners can get back the index in the first time. And for the C-terminal buyers, big store-style small profits but quick turnover also can make its start price is lower, "take a price" mode can let car more worry.

On the online side, because the service coverage is too narrow, the advantages of the line before the basic not too much input, function is mainly used for information display. However, along with the expansion of the excellent way, online products will usher in a major revision in the second half of this year, positioning is the line, including the detection of the condition, pricing, services, payment and other aspects of the transparent to the line, improve customer trust.

Overall, China's second-hand car industry is in a very critical transition phase, the next 3-5 years will be a major change in capital, policy, holdings and other factors driven, will bring many changes in the industry. such as Cheiling, excellent letter such as electronic auction platform, such as fair price, the number of cars such a platform, such as large search car, Zho Jie such a consignment platform, as well as the Chinese version of the carmax-, such as the retail platform, are in different perspectives, different modes of verification, Trying to occupy a place in China's future second-hand car market.