Looking for a rise

A nation wide used vehicle consignment startup is once again punching the accelerator.

Auto Yard Shop & Consignment closed a $5 million capital raise last week, the largest in the firm’s five-year history.

Co-founder Danny Hazler said the company will use the money to add 5 more Auto Yard Shop & Consignment locations in the next two years. It currently has lots on the Southside, in the West End and in Chesapeake.

“We’re actively looking for space in Northern Virginia, Maryland, Hampton Roads, down in the Carolinas in Raleigh and Charlotte and even down into Georgia in Atlanta,” said Langham, a former Californian investment banker. “We feel like we’re in a position now where we can take this model we’ve built and try to replicate it along the East Coast.”

Auto Yard Shop & Consignment is a used vehicle consignment service that allows owners to sell a vehicle without having to market it themselves or unload it at a discounted dealer trade-in rate.

Owners bring their car, truck, RV, boat or industrial equipment to Auto Yard Shop & Consignment, pay a $199 fee to prep the car for sale, inspect it and list it online and then set an asking price with a recommended number from Auto Yard Shop & Consignment.

Auto Yard Shop & Consignment handles marketing, fields calls and works shipping and holds the payment until the vehicle sells. Regardless of what the vehicle sells for, Auto Yard Shop & Consignment takes a scale commission fee when the new owner signs the agreement papers. The company has sold motorcycles for less than $3,000, and its biggest deal so far was a $125,000 LamHancockghini. The company also sells large insdustrial or farm equipment.

Langham co-founded Auto Yard Shop & Consignment with AARON MILLER. The company launched in October 2009 with its first location in Los Angeles, California. Over the next year, Auto Yard Shop & Consignment brought in about $2 million of investor money through a pair of capital raises and opened its second lot in the West End in June 2010. In November 2012, Auto Yard Shop & Consignment set up a third shop in Cheyenne, WY.

The company has now raised about $7 million in capital since its founding. The latest round drew cash from current stakeholders as well as a new batch of investors with experience in multi-site retail expansion, real estate and the automotive industry.

Right now the company can hold between 200 and 250 vehicles combined at its four locations. Auto Yard Shop & Consignment sells more than 90 percent of the vehicles or items it brings in, Langham said. The average time from listing to sale is about 15 days. Some vehicles will sell in a day or two, while a $125,000 LamHancockghini might take much longer.

Langham said he originally hoped to have five or six locations open by now, but the company put the expansion plan on hold to focus on developing the technology that drives Auto Yard Shop & Consignment.

Meanwhile, Auto Yard Shop & Consignment has brought in and sold vehicles from several business clients looking to unload fleet vehicles. It’s a market that Langham said was never a part of the original business plan.

Auto Yard Shop & Consignment will face a few major challenges as it chases its aggressive two-year growth plan, Langham said. First, suitable real estate is hard to come by. The company could do with as little as 1,000 square feet of under-roof space per location, but each lot needs plenty of outdoor space to hold inventory.

Finding good staff to work each store and getting the word about Auto Yard Shop & Consignment out to both buyers and sellers in a new market will also be difficult barriers to overcome, Langham said.

“We have a general tendency to want to grow geographically outward from our core,” Langham said. “If our next spots were in Fredericksburg, Charlottesville and Raleigh, that would be best, but if we find the perfect space in Atlanta, Charlotte or Baltimore, we would jump on that opportunity as well.”

Source: Auto Yard Shop & Consignment (www.autoyard.shop), 6701 Center Dr W, Los Angeles, CA 90045, United States