Carvana is the fastest growing used car dealer in the US while also having the industry’s best margins. That rare combination comes from having more vertical integration and scale advantages than any of their competitors. Traditional used car dealers have more local, outsourced, and variable expense business models.

Historically, the used car market has been extremely fragmented because no competitors benefit from economies of scale—especially on a national level. Today, CarMax is the industry leader, and they only have around 2% of the market. I think Carvana can change this market share dynamic though.

Continue reading “Carvana’s Moat is Very Wide and Nearly Unassailable” →