A Junkyard Billionaire
bloomberg.com
bloomberg.com
https://www.youtube.com/watch?v=HGGsYirSZhw
What's interesting is that he ends up making very little on his repaired cars. But he's so fascinating as he repairs them in his suburban driveway that he's making $250,000 a year off YouTube. Talk about failing upward! The key is that he manages to be very entertaining doing it.
Part-out a car. The numbers actually looked pretty good. Not for the hours, but I would learn about every part of a car, outside-in while making money.
I think there’s a sweetspot for parting out though: probably 5 year old cars because they are worth repairing. May 6-8 year old cars for more luxury models.
Copart specializes in online auctions of cars that are too damaged for insurance companies to justify paying the price of repairing them; buyers include scrap yards and companies like LKQ Corp., which dismantles old cars and reconditions their parts to be sold in collision-repair shops. The insurance companies get what’s recovered in the auction, minus fees due to Copart that in some cases will increase proportionally with the value of a vehicle.
“There was a lot of concern that safety technology would reduce accidents and so there’d be less cars for auction -- good for society, bad for Copart,” said Craig Kennison, a senior research analyst at Baird. But that didn’t account for the spread of smartphones, he added. “Cars may be safer, but drivers are more distracted.”
Another article from Bloomberg, with more info - https://www.bloomberg.com/opinion/articles/2019-11-08/junk-c...
... but the remaining working ones retain their value really well in the parts market making the carcass more valuable.
I guess we already churn through a huge amount of cars yearly as it is... I don't see many 1979 Plymouths on the road. They must have been all chopped up at some point, so this is probably a non issue. That said, I can't imagine the transition will be without pain for lots of people...
If we assume the goal is <1% ICE vehicles on the road by 2050, then we need all new cars to be electric by 2033 at the latest, and 2020 to be sure.
I think we should have a system where cars spend their first 5 years in the north or south, and then spend the rest of their life in the other.
5 years of salt won’t kill a car, but 10+ will.
But lately I'm thinking maybe it'll be one of those fast, 2 motor electrics. Probably a lot more reliable, and faster too.
Yeah, but cars that don't buck, snort and belch fire are boring.
Production will slow and ICE will go where they still work well: vehicles that don’t move much, so the savings of E don’t make up their capitalized price.
And cold weather environments. Or where the grid is a recommendation rather than a dependency.
Probably the same reason you use "vehicle" rather than "car".
Europeans would say 'petrol or diesel' car, which is annoying, so ICE it is.
What's the innovation here? He has an online platform? He may be really good at running his junkyards but the article does a terrible job accounting for his success.
I already responded to you in this thread with my anecdotal thoughts, but curiosity got the better of me so I took a look at their wikipedia page. Granted I don't have another point of reference, but it seems that the founder of Copoart was ahead of the curve in his field and saw the benefits of investing in technology/internet presence early in the game. Ebay was only around for 3 years by the time he introduced online auctions. So, maybe not innovative in the grand scheme of things, but certainly for his industry.
From wikipedia:
Willis Johnson began developing Copart's information technology in the 1990s. The first main step in this process was the creation of the Copart Auction System (CAS) in 1997, which was designed to unify and support the growing business as well as allow Copart facilities and sellers to access information, generate reports, and increase operating efficiencies. The next step came in 1998 with Copart's introduction of internet bidding—a departure from the industry standard of local physical auctions. As Internet bidding grew in popularity, Copart developed its online auction platform, VB2, which it implemented in 2003. VB2 technology opened the sales process to registered buyers (members) and sellers worldwide. In fiscal year 2004 in North America and fiscal year 2008 in the U.K., Copart discontinued all live auctions and began remarketing vehicles through VB2. Copart now sells more than one million vehicles each year through VB2 technology.
Copart is the defacto standard for most every mechanics shop and body shop in the country. When a car is being repaired, they can generally lookup available parts and prices using whatever software they use for generating quotes. They can choose from new oem parts, aftermarket parts, or salvage parts. The salvage parts will come from Copart's network.
In other words, when you get you gender bender repaired, there is a good chance that you insurance company is requiring that the shop try to use salvage parts first.
You can call any junkyard and do the same from my experiance. Copart's advantage is a large inventory.
My daily driver is 30 years old. My weekly driver is nearly 50 years old. 15 is a new car!
[1] https://www.aarp.org/auto/trends-lifestyle/info-2018/how-lon...
I actually do very little. I'm pretty easy on my cars. A mechanic once told me he couldn't believe how little wear there was on the clutch for the miles. (I habitually approximate the right engine speed before letting the clutch out.)
Also, most car mechanical failures come from neglecting lubricating things.
This would be a good question to ask someone who runs an automotive restoration/fabrication shop. From what I've seen they have a pretty great bidding system as far as online auctions go, but beyond that I'm just as uncertain as you.
This guy became a billionaire doing the same thing as other guys in 'every town'. I think that's the point
I'm a car nut, I really like this guy's story. Lucky dog.