BUFFALO, N.Y. (WBEN) – Winners of 43 North’s annual competition can take a page out of ACV Auctions playbook in an effort to find their own success.
The company, which just recently hired its 1,000th employee, is headquartered along Ellicott Street and won the 43 North competition in 2015. ACV Auctions acts a liaison for the dealers to buy a car.
“When consumers trade in their vehicle at a local dealership, they don’t keep all their vehicles that are traded in,” ACV Auctions CEO George Chamoun said. “They auction off the vehicles to other dealers. In addition, rental car companies, off-lease companies also auction off their vehicles to dealers.”
Chamoun said there are 20 million wholesale cars per year that are sold to dealers. ACV Auctions has 130 territory managers across the country that work with local dealers. In Buffalo, clients of theirs include Northtowne Auto, Basil Ford, and nearly 60 others.
“The dealer may be using ACV to do one of two things,” he said. “One to auction the cars that are already wholesale to dealers. Two, Basil is spotlighting a live appraisal day where consumers can go in and do a 20 minute auction of their car to see what they get. There’s no obligation of the consumer to sell their car.”
That appraisal day will be held this Saturday.
Since winning the 43 North competition four years ago, the auto marketplace has grown massively. Reuters reported that they intend to raise $150 million to push their valuation to over $1 billion.
The company has close to 400 employees in Buffalo alone and has dozens of other locations across the country. It’s not bad for a company that began only a few years ago.
The company started from an idea by Joseph Neiman, who went to school at the University at Buffalo. A former used car dealer who owned his own lot, Neiman pitched the idea of ACV Auctions to Dan Magnuszewski who owned an incubator, Z80 labs, which is where the company is currently located. The two then brought in Jack Greco to handle the company’s finances.
Chamoun had no comment for the reports of a $1 billion valuation, though he said the company is selling roughly 25,000 vehicles a month to dealerships across the country.
“The average vehicle price is $7,500,” he said. “Multiple that by 25,000. That’s a lot of vehicles every month and we’re only a four-year-old company.”
Part of the reason for their success is the service they provide for dealers.
“We spend 20 minutes inspecting these cars,” he said. “We use a tire depth, a paint meter, we’re working really hard. Our inspectors across the country are in snow and in rain and cold and heat and are inspecting these cars. The dealers are bidding on them and bidding with confidence. Yes we’re going to be large and very successful…but more important is that we’re providing an important service for these dealers across the country.”
The company recently added a program known as “virtual lift” to examine the undercarriage of a car so that dealers can get even more information about a car they purchase.
And it doesn’t look the company is going anywhere soon.