Carvana’s margins aren’t magic... Ernie Garcia, Founder and CEO of @gocarvana, explains it's the result of stacking strategic advantages. In-house financing, wholesale sales, and a vast logistics network all feed into $7,427 gross profit per unit. Here's the breakdown of how they keep pushing margins higher. ➤ Stream the latest episode of the Car Dealership Guy Podcast now on your favorite platform—brought to you by @privateauto.com, Effectv, and CDG Recruiting

What's up with this margin thing? Your most recent quarter, $7,427 a car. Can you break down the gross profit per unit for us? The reason we've built a finance company is because most customers, when they buy a car, they need financing. And most finance companies are not structured in a way where they can rapidly give customers answers across many different cars to provide a high quality e-commerce experience. So we felt like we had to build that. But in building that, we also have access now to the finance profit pool. So you can think about how much does a finance company earn per loan that they originate? And that ends up being big money. Most of the cars we sell retail, we bought from customers. And then we're also selling many more cars at wholesale that we bought from customers. And then I think some of the wholesale business is basically built into the combination of our large inventory and logistics and having a large inventory lending itself to being able to get higher margins while still giving customers the same or better price. So I think you start adding all those pieces up and you can start to tie it out pretty quick.