How Carzam turned over £20.5million in eight weeks
More than 1,600 cars have been sold at Carzam since December, as consumer preferences show an increased shift towards buying online.
Founded by automotive investor John Bailey, former president of Cox Automotive, and Peter Waddell, CEO of Big Motoring World, the company is on track to achieve 20,000 vehicle sales within its first year of trading. This would see a turnover of £250 million, as well as further expansion of the 100-strong workforce.
Mr Waddell said: “We are already disrupting the industry by offering a better way to buy a car. Carzam puts the customer at the centre. There is no 'sell' – the customer becomes their own salesperson. They retain full control. That’s how people are used to making a purchase now. There is no reason why the automotive industry shouldn’t keep pace with other parts of the online retail sector.
"The Carzam proposition is transparent, efficient and has been built to deliver value to the customer. What could be more convenient than browsing at home and having your car delivered to your door the next day? It’s as straightforward as making a purchase from Amazon.
"Online sales will claim an increasingly large share of the 8 million used car transactions in the UK each year. We sold 1,000 cars in our first six weeks. That rate has continued to accelerate, and we have plans to quickly scale-up the business and grow our market share."
Carzam customers are able to search a growing inventory of cars with a gallery of 360-degree tours. Each car is safety checked and prepared at the Peterborough preparation centre, before being dispatched.
To date, Carzam’s customers have spent an average of £12,800 on their car and the average age of the vehicles sold is 3.6 years.
Michael Buxton, Chief Financial Officer for Carzam, said: "Carzam was set up in response to the growing evidence of a change in buyer expectations. To ensure we remain competitive on price, we have created a business model which tackles inefficiencies in the wholesale market.
"For some time, we have seen consumers starting to shift to online channels. This situation was accelerated, rather than created, by the Covid-19 pandemic.
"New car sales have faltered with showrooms closed – a reported 40 per cent year-on-year drop in January. Yet the value proposition and convenience of buying a used car online has caught the eye of the consumer."
Two new preparation centres are planned in other cities to increase Carzam's national distribution capacity.