18 January 2024

Ryan Keeton from Carvana: Shaking Up the Used Car Industry with Amazon’s Approach and Car Vending Machine

By Ronald Smith

Let’s face it, buying a car, whether it’s new or used, is not exactly a thrilling experience. We love the idea of having a car, but all the steps it takes to actually get one can be a real hassle. It involves spending a lot of time, negotiating prices, dealing with salespeople, and trying to figure out financing options.

But Carvana saw this frustration and decided to completely change the way people buy used cars. They turned it into an online adventure, where a fifth of their customers can go from selecting a car to signing a contract and choosing a delivery date in just 20 minutes. And if they prefer a more hands-on experience, they can visit one of Carvana’s used car vending machines and pick up their car as easily as grabbing a coke from a vending machine.

I’m Ryan Keeton, the co-founder and Chief Brand Officer of Carvana. Today, I want to share with you how our company was inspired by none other than Amazon. Just like Amazon revolutionized the way people bought books and everything else, we wanted to do the same for used cars. Pretty cool, right?

By the way, if you happen to be in Atlanta next Thursday (March 17), you’re in for a treat. Our co-founder and CEO, Ernie Garcia, will be speaking at ExCom 2016, a fantastic event for small businesses. The focus of the day will be on how technology is shaping the customer experience and commerce. It’s free to attend, so make sure to mark your calendar!

And while you’re there, why not grab a refreshing Coke and take a look at our vending machines? Yes, you heard that right. We have vending machines for used cars! How cool is that? It’s all part of our commitment to making the car-buying experience as convenient and enjoyable as possible.

USamerica.US: Now, let me learn a little bit about your personal background.

Ryan Keeton: I’m Ryan Keeton, and I want to share a bit about my journey with you. I graduated from Harvard and dabbled in private equity, finance, consulting, and operations. But you know what? My heart was always drawn to the exciting world of marketing. The best part? I’ve always had that entrepreneurial spirit, which has allowed me to explore different aspects of the business we were building at Carvana.

USamerica.US: Sounds intriguing, Ryan! Could you please explain what Carvana is all about? And then let’s dive into how you’re revolutionizing the way people purchase cars, especially used ones.

I, Ryan Keeton: When it comes to Carvana, we like to think of ourselves as the Amazon for cars. We offer an alternative to the typical car-buying experience. Nowadays, many people spend a great deal of time surfing the web, searching for information about different cars and trying to find the perfect one for themselves. However, despite all this, they still end up having to go to a dealership to finalize the purchase.

When my team and I considered starting a business, we took into account both the customer’s experience and the economic aspect. We thought about what consumers get when they visit a dealership. They get a big physical location made of bricks and mortar. They have access to a wide variety of vehicles to choose from. They can even take a car for a test drive, although it usually lasts only about 10 minutes and mostly involves right turns. But all of these perks come at a price. According to some financial reports from the bigger car companies, each customer pays an extra $1,500 to $2,000 per transaction just to cover the costs of maintaining the brick and mortar experience. To give you a clearer picture, these costs include things like rent, salaries for the sales staff, and other overhead expenses.

When we talk to people, we hear a common complaint: it takes too long. Many feel uncomfortable and don’t fully trust the process. Going through it is not a pleasant experience. That’s why when we created Carvana, we kept the customer at the forefront of our minds. We knew that in order to make it great, we had to reimagine and enhance every step. By doing so, we aim to provide real value to our customers that they can truly appreciate.

When I first started Carvana, we made sure to approach it just like a regular car dealership. We went through the same process of acquiring cars, testing them, re-conditioning them, and taking professional photographs. We actually own all the vehicles, which is pretty cool. The thing that sets us apart is our technology, which allows you to see the cars from every angle – even the tiniest details! You can check out all the features and even see if there are any imperfections, so there won’t be any surprises.

You know what else we realized? The whole car buying process takes forever when you go to a dealership. It can take up to four hours, and that’s because of all the financing stuff, the behind-the-scenes activity, and trying to sell you extra products. It’s such a time commitment.

I wanted to get rid of the hassle and expense of it all. So I decided to make everything easier and put it online. That’s why I created a website where you can get financing approval in just a few seconds. And the best part? The terms you see are the exact ones you’ll get for any car in our inventory. If you decide to buy a car with financing, you can choose to put down $500 or $1,000. The terms you select will be the same ones on your contract.

Let me break it down for you. You know how when you want to buy a car, you have to go to a dealership and go through a whole process? Well, we do things differently. We make it easy for you by doing it all online.

First, you can find contracts online. You just upload the necessary documents for title, registration, and verification. No need to drive to an office or wait in line.

Then, you decide if you want the car delivered to you or if you want to pick it up yourself. We arrange everything according to your preference.

Now here’s the cool part – every car comes with a 7-day return policy. If you’re not happy with your purchase, you can bring it back, no questions asked. We want to make sure you’re completely satisfied.

The best thing about all this is that we can offer all these services for about $500 per transaction. That’s a pretty good deal, right?

So basically, we give you a complete car buying experience online. And the best part is that we can deliver your car as soon as the next day. No more waiting around for weeks.

Oh, and here’s something you’ll love – on average, our customers save $1,600 compared to Kelley Blue Book prices. Now that’s some serious savings!

Me: So, let me tell you about the used car vending machine we have at Carvana. We’re all about providing an amazing customer experience and being at the forefront of technology. We want to build a brand that people love and talk about. When we first started, we only offered delivery of cars to our customers. Some people were fine with that, but others weren’t. We realized that we needed to challenge the traditional mindset of going to a dealership to buy a car. Even though we offer a 7-day return policy with no questions asked, some people still didn’t feel comfortable having someone deliver the car to their home or office. That’s why we decided to create a pickup option. We wanted it to be completely different from anything else out there, but still stay true to our brand.

So, this is how we came up with our car vending machine. Let me tell you about the one we have in Atlanta and our newest one in Nashville. We refer to them as fulfillment centers. Now, remember how I explained that everything still happens online? Well, it’s the same process here. You as a customer find a car you like, go through the transaction, and choose where you want to pick it up.

Once you’ve made your pick, we’ll provide you with a special code. And in the case of Nashville, you get a cool coin when you arrive. Now, picture this: you type in the code or insert the coin into our vending machine. And guess what? The vending machine springs into action! It goes to the location where your chosen car is stored, retrieves it, and brings it right down to you. Isn’t that something?

Now, the best part is that you can have a go at test driving the car and if, for any reason, you’re not completely satisfied, you can return it within 7 days. So, what do you think? Sounds pretty neat, huh?

I didn’t want this place to feel like a typical car dealership. There aren’t any pushy salespeople here trying to convince you to buy something you don’t really want. Instead, it’s all about making sure you get what you came for. When you walk in, you’ll be greeted by a friendly Carvana advocate who will help you out. You’ll give them the money for your car, and then the real fun begins.

Imagine this – a huge vending machine that holds cars. Yes, you heard me right! You’ll put your money into the machine and watch as it springs into action. It’ll grab your car and bring it right to you. It’s like magic! And once your car is in your hands, you can drive away, ready to hit the road. It’s simple, convenient, and completely hassle-free.

And let me tell you, the response from customers has been incredible. They love the fact that they can choose their car, buy it without any pressure, and then have it delivered right to their doorstep. It’s a game-changer, and we’re proud to be a part of it.

Let me tell you something about customer experience when you buy something online. I’ll use our company, Carvana, as an example. We have received over 1,900 reviews from customers, and they’ve given us an amazing rating of 4.9 stars. Our net promoter score is 95, which is really high compared to other online stores. People are loving what we’re doing!

We recently came up with a cool idea to make things even better for our customers. We built a vending machine where you can pick up your car for free. This vending machine doesn’t cost you any extra money when you buy a car from us. It’s all about making the experience convenient and affordable for you.

Now, let me tell you about our customer service. How does it change when you buy a car from Carvana?

Ryan Keeton: I’m Ryan Keeton, and I want to tell you about Carvana. We’re all about making your car-buying experience easy and convenient, thanks to technology. Now, I know what you’re thinking – Oh, they must be a tech company! Well, that’s partially true. We definitely use technology, but it’s not the main focus. We’re actually in the business of selling cars, but we’re not your typical dealership. Let me explain.

When we started this company, we wanted to think differently about how we can make every step of purchasing a car – online or offline – a breeze for you. So, we took a customer-centric approach and built our business around that idea. And that’s where our amazing team of customer advocates comes in. These folks are dedicated to providing the best service and support to you, every step of the way.

When it comes to the people who assist you, we don’t just call them salespeople or customer service representatives. They are customer advocates, similar to the approach used by Zappos. Even in the USA, these individuals are versatile experts who can assist you with every aspect of your transaction. They are there to lead you, helping you understand our business model and finding the best option for your needs. Their goal is not to convince you to buy something more expensive or switch cars. Their main aim is to support you in finding the car that is the perfect fit for you.

When it comes to all those things, I think about them as a whole, from the moment someone calls in or chats with us to the moment they upload their driver’s license and proof of insurance for verification. Every step of the way, we have one main focus: the customer. It’s pretty amazing because we’re actually asking people to do something online that has never been done before, before we even started.

Buying a car is the second most important purchase I’ll make in my life, right after buying a home. It’s a big decision to trust a new company, but they’re quickly making a name for themselves. And all of their hard work is paying off, as they have received an impressive 4.9-star rating from over 1,900 reviews, and their promoter score is through the roof. I believe this success is a result of their unwavering focus on providing the best customer experience possible. This dedication is evident in every decision they make, especially when it comes to their customer advocate staff.

USamerica.US: Ryan, I have to say this is really fascinating. It’s incredible how much you’ve accomplished in just three years. Can you share some information about how well customers have responded to your approach in terms of revenue?

Ryan Keeton: Let me give you some numbers. We started our business in Atlanta in March 2013. In just a couple of months, we became the second largest seller of late model used cars in the whole state. These are cars from 2011 to 2015. We went from nothing to right behind Carmax, the number one seller, in that short amount of time. This shows how much we’ve grown and achieved, and it also demonstrates how consumers are embracing our model. Right now, we’re making around $275 million in annual revenue. From year one to year two, we saw a rapid growth of hundreds and hundreds of percent.

This interview is part of our series where we talk to influential people. The transcript has been edited for publication. If this was an audio or video interview, you can listen to it using the embedded player above, or you can subscribe on iTunes or Stitcher. More in: Amazon 2 Comments ▼