Private investment firm Comvest Partners acquires the financially troubled e-retailer, which filed for Chapter 11 bankruptcy protection in March.
Century Motors of South Florida Inc., which averages 2 retail car sales per day on the eBay Motors section of eBay.com, has more than doubled its profit margin from its former traditional wholesale auction business, the company says.
Century Motors of South Florida Inc., which averages 2 car retail sales per day on the eBay Motors section of eBay.com, has more than doubled its profit margin from its former traditional wholesale auction business, owner Frank Fuzy tells InternetRetailer.com. Century Motors also holds the distinction of having recently handled the 2 millionth car sale on eBay Motors.
Century Motors, based in Pompano Beach, FL, served as a car wholesaler through traditional offline voice auctions for 22 years before it switched to eBay Motors three years ago. After the first six months on eBay, Fuzy and his wife and business partner, Gina Fuzy, decided to do 100% of their business through the online marketplace. They’re currently planning to build a new $1 million warehouse to support their eBay business.
“We sell everything from a $3,000 Grand Taurus to a $40,000 Lotus on eBay Motors,” Fuzy says, noting that he has sold four of the latter so far. Overall on eBay Motors, a car is sold every 60 seconds, says eBay Motors senior director Rob Chesney.
Several years ago under the traditional wholesale auctions, Century Motors made a gross profit of about $5,000 overall for every five cars sold, Fuzy says. More recently, however, it had to sell 20 cars to get the same gross margin. “But by the time we paid for shipping and auction fees, there wasn’t much of a profit margin,” Fuzy says, noting that Century might net about $300 per car under the old wholesale auction business after paying a $275 auction fee.
On eBay Motors, Century pays a flat fee of about $120 per car sold, leaving an average net profit of $500-$700, Fuzy says. “They all sell in the first week,” he says.
Century also saves by not having to pay for shipping. He acquires cars through traditional offline markets in Florida. About half of his eBay customers pay to ship their cars home, while the rest fly to Florida to pick up their car and drive home, Fuzy says.
Surprisingly, Fuzy says he would never buy a car online, whether for business or personal reasons. “I follow the rule that you never buy where you sell,” he says. “And I’m very picky, I have to see a car first before I buy it. I don’t even know how to buy a car on eBay.”