CARY, N.C. -

When you think of Carvana, you probably think of digital retail (and rightly so). 

But the online used-car marketplace made a move last month that “lays the path for us to also be the leading online wholesaler,” says Scott Wood, the company’s senior director of wholesale operations.

In late June, Carvana announced that through a partnership with Manheim Digital, it launched an online wholesale platform, CarvanaACCESS, that allows dealers to buy wholesale vehicles directly from the company.

Carvana locations process consumer trade-ins and other wholesale units, which then go into a timed-bid auction on CarvanaACCESS.com. 

CarvanaACCESS also stretches the company’s tentacles further into the wholesale market, aside from just the sales perspective.

“Beyond its usefulness as a direct wholesale marketplace, one of the finer points of launching CarvanaACCESS is that by utilizing the forum, it allows us to interact with the broad ecosystem of buyers,” Wood said in an emailed Q&A. “We can learn more about collaborating to make wholesale work better for everyone, whether that’s through technology, sale format and pricing plan experiments, transportation or whatever else is important to our buyers.

“In fact, we’ve already used the homepage to invite engagement by allowing users to opt in to a survey to let us know what they’re looking for in a digital marketplace and we’ve already gotten a great response. We hope to continue this kind of engagement and use those insights to drive wholesale innovation that benefits everyone,” he added.

One pain point in the wholesale process is often condition reports. Carvana is working through this by, “owning the report content rather than put a third party in between us and our buyers,” Wood said.

“It’s only fair since we own the cars and operate the marketplace,” he said.

“We exhibit that responsibility by employing Vehicle Condition Associates who go through comprehensive training before deploying technology to create the reports. It’s another area where we’ll stay engaged with buyers to make sure they have everything they need to comfortably buy online,” Wood said.

Auto Remarketing asked Wood what the breakdown would be in terms of Carvana's wholesale inventory going to physical auctions, CarvanaACCESS or other online avenues. The company’s wholesaling process stopped utilizing physical, in-lane sales years ago, Wood said, and is entirely digital, with the focus now centered on CarvanaACCESS.

“We’ve spent time refining our digital remarketing strategy and experimenting with platforms from various providers, each of which has unique features that are valuable to digital remarketers. Right now, we are coalescing around CarvanaACCESS and concentrating our inventory there,” Wood said.

“We stepped away from all physical, in-lane sales a few years ago, so no buyer will be able to access a Carvana unit, upstream or down, in a physical lane,” he said. “We are 100 percent digital via CarvanaACCESS; a natural path for Carvana considering that we’re a leading online auto retailer. CarvanaACCESS lays the path for us to also be the leading online wholesaler.”

As far as the platform itself, CarvanaACCESS is more comparable to an in-house direct-to-dealer online platform that a consignor might have than, say, a dealer-to-dealer platform like an ACV or TradeRev. Wood says more technology and “auction functionality” is on the way for CarvanaACCESS, as well.

“We’ll continue to deploy Carvana technology combined with auction functionality provided through our Manheim partnership, so CarvanaACCESS does act more like the branded stores that Manheim enables for OEMs, captive finance companies and others,” he said.

In terms of all the ancillary pieces required of wholesale transactions — processes like reconditioning, logistics and so forth — Carvana has made investments over the years to be able to take care of those items in house. That can help with efficiency, Wood said.

“Carvana is a vertically integrated business, so all of the investments in the logistics network, inspection and reconditioning centers, and market operations across the country are being leveraged to add efficiencies to our wholesale efforts,” Wood said. “Having those capabilities, while working cross functionally with other teams to keep everything in-house is a benefit other high-volume remarketers would likely appreciate. We certainly do.”

So where will these wholesale cars be processed and sold? Wood said that the company houses its wholesale operations at the Carvana inspection and reconditioning centers along with a few spots dedicated to logistics.

 “Today, that gives us the ability to sell from more than 10 locations, nationwide. This structure meshes well with our digital approach since our team starts the remarketing process as soon as we get the vehicle grounded on any Carvana property,” he said. “By co-locating, we have access to the Carvana transportation network and reconditioning capabilities, both of which enable our wholesale velocity.

 As of December, Carvana had seven inspection/recon centers, with two more on the way in the Richmond, Va., and Charlotte, N.C. areas.

Most of the cars for sale on CarvanaACCESS will be trade-ins or from the company’s consumer car-buying program, Wood said. There will also be some cars that Carvana buys but can’t retail due to its standards, he said.

While the industry has gone increasingly digital and certainly more so during COVID-19, as far as timing for CarvanaACCESS, planning began before the pandemic.

“With our multi-year record of online success as the highest volume seller on Manheim’s OVE, the addition of CarvanaACCESS was a natural next step that had been planned prior to the pandemic,” Wood said. “Of course, the auction’s move to all-digital and dealers’ need to pay even more attention to online sourcing were certainly elements of the successful launch.”