As an entrepreneur, Shift chief executive officer George Arison has often been a “builder” when it comes to tech-enabled platforms.

In addition to co-founding Shift, Arison was co-founder of Taxi Magic, which is now Curb

In his leadership of Shift, he has long envisioned a dealer listings marketplace for the company, but realized that it would have taken at least two years to build such a platform itself, given the work Shift already has to do in its core business.

So, instead, Arison and Shift became “buyers.”

They announced a deal Tuesday to acquire Fair’s dealer listing marketplace technology and team for $15 million in cash and 2.5% equity, a deal fully funded by a $20 million debt facility from SoftBank Group.

Now, Arison and team anticipate Shift will be able to launch an alpha version of the dealer-listings marketplace towards the end of the second quarter — something that would likely not have happened until 2024 had Shift built the platform itself.

“This was very opportunistic in terms of how this all developed. I've known the CEO of Fair for a little while now and he came to us, telling me what they had done,” Arison said during an investors call Tuesday, referring to Fair’s Brad Stewart.

“And it was extremely impressive. They had spent 18 months building really great technology, which was very complimentary with what we do and how we build things, without any disruption in having to run a day-to-day business, because of how Fair has developed,” he said. “You don't often have a situation where a bunch of great engineers and a bunch of great product people get to work on a product without having disruption and can build everything end-to-end in a really great way.

“So, as we learned more about the technology, we became really excited about it and found the opportunity to be super interesting for us. And the benefit is that it's going to allow us to accelerate the marketplace by at least two years.”

Fair, which launched as vehicle subscription platform years ago, announced in August that it was shifting away from that model and relaunching with an end-to-end ecommerce marketplace. The cars for consumers to buy would come from a network of dealer partners, with a focus on local inventory.

So, in addition to the platform Fair has spent 18 months building, the deal would also bring aboard the Fair team — which helps in relationship development and retention with dealers.

"One of the things we're excited about with Fair is that team actually has really strong relationships with the dealer community. They had hundreds of dealers selling through Fair in the first incarnation of Fair, which is not the marketplace business,” Arison said. “It was a different business, but nonetheless those relationships are really helpful. And to have a team internally that has worked with these dealers for a long time, so that's really valuable to us. Because we don't have to build that ourselves. Now we can rely on that team to help us bring that forth. 

"They've already actually signed up a lot of customers on the dealer side to be in the alpha test, and that will be super helpful to us, as well." 

Shift is looking for 10% to 20% of its listings to be dealer marketplace listings, as part of strategy to “start slow, and then over time, grow it,” Arison said.

He gives the examples of Amazon and Walmart, where marketplace has a high penetration of their respective sales, but that footrpint has been gradually ramped up over time.

So, while there is significant competition in the dealer listings space, it’s not necessary to have every dealer in a market list their inventory.

Arison gives the example of Shift’s presence in Northern California, where it currently has 2,500 vehicles listed in its core business. 

Getting the dealer listing business to a 20% share of that would require adding about 500 dealer vehicle listings, which would take about 10-20 dealers — a fraction of the dealer population in that region.

“This is an opportunity where we think dealers will have an exclusive opportunity … to work with us,” Arison said. “It will be hard to get in to be a partner, and we'll be able to get really good cars as a result, because i think demand will be higher than the amount of room that we can offer in the early days to dealers to list.”

A differentiator for Shift could be a wider range in age of vehicles listed — which could help draw more independent dealers to the platform.

“We are unique (among) the ecommerce sites in that we sell a much older range of cars, in terms of age, than our peers do,” Arison said. “So, there's a whole segment of kind of independent dealers out there that mostly sell cars that are 6-plus years old, and other online platforms don't really touch 8-plus year-old cars.

“And so, for that cohort of dealerships, Shift is one of the few places where they can list (those cars). The reason being that that's much more of a local, regional approach versus shipping nationally,” he said, adding that it “doesn't make sense” financially to transport a $10,000-15,000 vehicle nationally. 

“And so, our model is unique in that regard in that (it) will be an advantage for that more independent dealer cohort to be listing with Shift.”