CARY, N.C. -

George Chamoun sits in a covered office in ACV Auctions’ booth at NADA Show 2020 in Las Vegas, with three vehicles and a buzz of dealer activity in the company’s booth space outside the door.

The ACV chief executive officer recalls his first NADA convention, which happened three years ago and some 1,800 miles away in New Orleans.

“And we didn’t have our own booth,” Chamoun said in an upcoming episode of the Auto Remarketing Podcast.

“A fellow upstate New York company let us share the corner of their 20-by-20 booth,” he said. “We basically put a bar on the corner. And we told dealers we had drinks and to please come see us.

“That was 2017, and from there to now, I’m obviously really proud of what our team put together here, showing dealers what we’re doing both in wholesale and retail and helping dealers on trust and transparency,” Chamoun said. “So, it’s just an unbelievable journey from then to now.”

The company is well capitalized (ACV raised $150 million in its November Series E funding alone) and is among the largest, if not the largest, in the emerging dealer-to-dealer online wholesale space.

It operates coast-to-coast, has transportation (ACV Transportation) and finance (ACV Capital) arms and purchased vehicle accident inspection provider TrueFrame in December, a move that added retail inspections to its offerings.

A big part of that growth comes from its partnership with dealer associations, like the one it has with the California New Car Dealers Association.

Building relationships

Fostering the dealer relationships is a specialty of folks like Stu Zalud, ACV’s director of strategic business development. A former dealer principal, Zalud spent nearly a decade with NADA, mostly on the used-car guidebook side.

He joined ACV around the same time as that 2017 convention.

“Now think about this: Back three years ago, nobody knew who we were. Nobody knew if the idea was any good or not,” Zalud said in a phone interview. “So, basically, we had to prove ourselves — that this idea of selling a car digitally with a third-party inspection was going to work.

“Well, the easiest way to do that was to go out and build association relationships and work with those folks and let them vet us,” he said. “And then they can help promote us and at least say to their members, ‘Hey, you make your own business decision, but we've talked to these folks … it’s a really good idea. It’s the future of wholesale. You ought to at least listen to what they have to say.’”

That’s the approach ACV has taken toward building partnerships with franchised and independent dealers over the past three years.

ACV has approximately 30 partnerships with franchised associations and about 15 with independent associations, Zalud estimated.

Among those is the California group, CNCDA.

The dealer association said in emailed responses to a Q&A that it, “strategically partners with a handful of companies who we see real value in and who we know can provide that value and a level of service to dealer members that will support their business objectives, furthering better service and products they provide to California consumers.”

Asked about how its work with ACV came about, CNCDA said, “Prior to partnering with ACV Auctions, CNCDA did not have a Licensed Vendor who served our dealer members in the vehicle auction space. As we learned more about ACV, it became clear that our overall principles and objectives were well aligned, and the partnership seemed like an appropriate fit.”

Scalability, legislative work & other benefits

Partnering with dealer associations certainly helps ACV with scalability, but in the same vein, it helps the company navigate state laws involving motor vehicle commission and revenue commission entities.

“Both of which are starting to look at and create white papers and that kind of stuff to address online selling,” Zalud said. “There's never been any online selling, so to speak really up until the last five or six years. So, all these statutes are that are out there, most of them don't have a great component in there.

“We can help those discussions along and get something that makes sense from a franchise and an independent dealer side,” he said. “The last thing you want is legislation that’s no good. Poor legislation is worse than no legislation.

“So, I think because we’ve positioned ourselves as a partner with a lot of these states, as their legislatures start to take the task on of, ‘Does this law have to be changed? Does it have to be modified?’ we can be involved in those discussions and be in the room as those discussions are taking place,” Zalud said. “And consequently, I think we could help create the best possible outcome for, for buyers and sellers, for consumers and for dealers.”

While limited at this point, those lawmaker discussions are beginning to “bubble a little bit” in certain areas. Zalud expects to see more in the next five years, particularly as consumers buy more vehicles online on the retail side.

Working with state associations can also help ACV connect with dealers who may have an issue or concern with their customer experience with the company.   

Knowing that a state association is partnered with ACV, the dealer may reach out to the association, who will then get in touch with Zalud.

“That then is a conduit for us, because they'll call me, and we will get the appropriate people involved much faster and we'll correct that user experience to make it what we anticipate it should be,” he said, “and that’s the best in the industry.”

‘Encouraged and confident’

And the partnerships can be helpful for the dealer associations themselves. Asked what makes ACV stand out to them, CNDCA said in the emailed Q&A: “In the online auction marketplace, ACV has demonstrated their principles of trust and transparency through the implementation of advanced mobile technology.

“ACV’s primary goal is to ensure buyers and sellers using the online platform have everything they need to be a well-informed auction participant; they also serve their customers with the highest standards and consistent service CNCDA expects of all its partners,” the dealer association said.

Asked what the partnership entails for members, CNCDA added: “With industry-leading technology and product expertise, we are encouraged and confident that dealers considering ACV Auctions as their resource for wholesale inventory will see the benefits on both the buy and sell sides of their business, further streamlining the wholesale inventory process which eliminates excess cost and wasted time.

“We are excited about this venture and look forward to the value and benefit we hope it provides our dealer members.”