RumbleOn wants to be the CarMax of the Powersports industry, except 100% online, Founder and Chief Executive Marshall Chesrown told Powersports Finance.
Chesrown founded the online automotive marketplace Vroom back in 2014 and is now taking that same technology and applying it to motorcycles. In January, he acquired NextGen Solutions, which owns the inventory management system CyclePro, and used it to accelerate the software development.
“I started looking for other potential opportunities that could use the same technology, came across powersports and RVs in general, and was surprised about how archaic the processes and technology is,” he said. “[Powersports dealers] don’t seem to be very aggressive on the online side. You do some browsing of websites and some of them don’t even post used bikes online, and the ones that do post ‘call for price.’ Well, ‘call for price’ in the internet world — you might as well not put it up at all.”
The model is similar to Vroom’s, but for motorcycles. Consumers can browse used motorcycles online and purchase or finance the bike with one transparent, haggle-free price. Chesrown wouldn’t disclose all of the platform’s lender partners but said it’s “in the double digits,” and includes Commerce Bank.
“We have multiple lenders and over time you end up with more of a strategic partner, but that has not been determined as of yet,” he said.
The other aspect of RumbleOn’s business is that it buys motorcycles direct from consumers — like CarMax does. While the company will also utilize dealership and auction channels for inventory, direct from the consumer is the most cost efficient, he said.
“If you have a motorcycle and you want to get rid of it you really only have two options, that’s to take it into your own hands [on the private-party market] or trade it in,” he said. “The majority of people need financing and a lot of the people need a trade in. When you do a peer-to-peer transfer you don’t have the ability to do that and if you do it’s very cumbersome.” Additionally, as the website matures it facilitates that all under a single platform, he said.
Correction 5/24: An earlier version of this story noted that MB Financial was a lending partner on RumbleOn, according to Chesrown. However, MB Financial told AFN the two have never partnered, according to Charlie Schaefer, senior vice president and indirect lending manager for the bank.
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