MBA Startup: Beepi Is the New Online & Mobile Marketplace for Used Cars
Imagine closing $300 million during a massive round of funding for your MBA startup company. According to Fast Company, that’s exactly what Alejandro Resnik and Owen Savir just did for their used-car marketplace, Beepi.
Beepi started a little over three years ago when Resnik—a MBA alum from MIT Sloan School of Management—and Savir—a MBA alum from Stanford Graduate School of Business—decided that they wanted to revolutionize the car buying and selling business online.
And it all started with a single bad experience.
Beepi’s Origin Story
A few years ago, Resnik, the CEO of Beepi, wanted to buy a used car. After hours of research and miles of test-driving, he purchased a certified pre-owned car thinking all was well. Unfortunately, a few days later, it caught fire.
That’s when he met Savir, a fellow MBA grad and a serial entrepreneur. Together, they decided to change the car buying experience. That was the beginning of Beepi. It started in Silicon Valley and quickly expanded its business to 16 markets with delivery to 46 states.
What Is Beepi?
Beepi is an online used car marketplace that helps match used cars with buyers. It competes with firms such as Edmunds, Craigslist, Vroom, and CarMax, but their model is unique. Before a car can be sold on Beepi.com or through their app, it has to pass a comprehensive 240-point inspection and become “Beepi-Certified.” The inspection was developed by a former BMW AG master technician.
Beepi is also unique in that, unlike its competitors such as CarMax, there are no showrooms, salespeople, or car lots to visit. Instead, everything happens online and the car is even delivered to the customer’s door with a no-questions-asked, 10-day return policy.
It might seem strange at first to buy a car just from pictures, but when Resnik talked to Tech Crunch, he revealed that it’s not that radical when you really think about.
“’Every company starts with a group of entrepreneurs who think something is true but disagree with what everyone else thinks,’ he said. ‘My belief was that there was this whole infrastructure of cars sitting on lots for one reason: to do a test drive.’ He found that while most people would not buy a used car without a test drive, they warmed up to the idea if the car was inspected, came with a money-back guarantee and was from a brand they trusted.’”
Buying a car on Beepi is just like buying anything else online. You look at the pictures, read the reports, and find a car that you like at a price that works for you. Then, a Beepi representative goes to the seller, picks up the car, and delivers it to you. Finally, as the buyer, you have 10 days to test-drive the vehicle and see if it works for you. If not, you get your money back without any hassle.
What Makes Beepi So Successful?
The used car market is enormous. It started when Craigslist disrupted the traditional car marketplace and expanded from there. And since Craigslist hasn’t been able to keep up with the online and mobile demand, companies like Beepi are finding their perfect niche.
According to The Wall Street Journal, over 40 million used cars are sold annually and in the past they’ve been dependent on geography. If you wanted a used car, you had to find something in your city, or, at the very least, your state. Beepi changes that.
Beepi isn’t limited by its market. It can sell and deliver cars to 46 states, so that way the right buyer finds the right vehicle for them. And Beepi makes a decent profit margin on each vehicle. After the certification service, delivery, and other overhead costs, Beepi earns between 9% and 10% on each sale. And while the company hasn’t revealed its full sales or profit figures, the CEO told WSJ that the company experienced a 95% increase in demand this year.
Another reason for Beepi’s success in the over-saturated used-car market is the types of cars it sells. Most cars on the website are less than seven years old and typically cost slightly more. For example, a buyer can purchase a 2014 Mercedes-Benz SLK-Class for $36,799 or a 2016 Jeep Wrangler for $34,999. Plus, thanks to a recent deal with Ally Financial, an auto lender, Beepi expects to grow even further; the deal will allow Beepi to offer used-vehicle leases.
Finally, the recent $300 million in funding will go a long way toward ensuring Beepi’s success. Resnik told Fast Company, “the funding would be used to begin operations in one new American city every week, and to scale the company up from 150 to 500 employees. The funding will also be used to ensure regulatory compliance in new markets, and for eventual international expansion.”
About the Author
Kelly Vo
Kelly Vo is a writer who specializes in covering MBA programs, digital marketing, and personal development.
