Doug DeMuro on Cars and Bids' success - diversifying away from YouTube
Nearly nine months and over 1,500 auctions later Cars and Bids has been a massive hit. I spoke with Doug DeMuro on the site's success, diversifying away from YouTube, and where he goes from here.
"I truly did not expect it to be working this well; it's insane." a giddy Doug DeMuro tells me, half-laughing.
It's been almost nine months since YouTube's best-known automotive creator decided to go at it alone, starting a car auction website. And it's safe to say that even the man behind it all is astonished at the site's success.
Yet, despite Cars and Bids' triumph, it seems somewhat surprising that a YouTuber with Doug's notoriety would want to branch out into another field.
"When YouTube is your income, you're just a nervous person," says Doug DeMuro. "If you're relying solely on an algorithm that you don't fully understand to give you your life and your income, then you're kind of anxious all the time, like what's going to come out of this?" "I quickly realized that I probably wanted to diversify and not just have everything be in YouTube's control." "And so, the idea of doing something else was born early on."
This is hardly a unique sentiment amongst YouTubers; the online streaming service is often described as a "casino" of sorts by some of the site's biggest names. And we've seen other notable creators such as The Smoking Tire's Matt Farah branching out into businesses such as collector car storage.
But when I asked Doug why he chose an auction site, he remarked that "Matt Farah is a great example of why I wanted to do something like this, an auction site."
"Farah's business is great but requires an enormous amount of upfront capital. To build a building like his, you have to buy land and get all sorts of permits. And so I wanted something that wasn't as insane when it came to cost upfront." "I didn't come from a lot of money, I don't have a lot of ability to do something like that, you know. And so it's a little bit more challenging." "And it seemed like there was an opening for a website like this [Cars and Bids], a place that car enthusiasts, from the modern era, who don't necessarily want a really crazy vintage car can go to."
And by early 2020, the site was much more than just an idea. Around March 1st of last year, Doug was getting ready to launch Cars and Bids. Staff were hired, a website had been built, and money had been spent.
But then, Covid.
"Initially, we were intending to launch March 1st." Says Doug, "And, you know, that was the week, basically when COVID hit. And it was clear to us that maybe it wasn't the best time to launch a business that requires people to spend money; it was just not a good idea."
"But it became clear within a couple of months that, actually, car buying had not really slowed down all that much. And we could probably get away with launching this. And the truth is, we didn't have much of a choice, because by then we had already hired staff whose salaries we were paying. And so we pretty much needed to, you know, we had to launch at some point like we couldn't just let these people continue to sit there and not do much while we were just waiting."
But finally, on June 8th. Doug publishes a video on his main channel entitled, "I'm Launching a Car Auction Website!" That was it, a nine-minute video, a quick explainer, and a link to the new website. In an attempt to drum up excitement, Doug promised the site's first fifty sellers a "bonus" of $1,000, and $500, to the next fifty. In addition, he offered up his own E63 AMG station wagon on a no reserve auction. But in reality, these were all just shows of good faith; nobody knew what was going to happen.
"The first week was insane," says Doug. "We had no idea what to expect. And I was terrified that the site was just going to break."
"And I assumed it would be a disaster. Well, what actually happened was, it never broke at any point. Everything worked flawlessly; there may have been little things that I don't even remember, and we got inundated that first week with submissions. We got almost 900 submissions of cars the first week, we had to immediately start bringing on people to try to help us go through them. And we hired and hired and hired like crazy to get writers who could write the listings and that sort of thing."
"So it was a huge first week. Obviously, it slowed down a little bit after that, but it's been relatively consistent."
In the nearly nine months since its launch, Cars and Bids has become a resounding success. And while popular competitors, such as Bring a Trailer, cover the high-end ultra-collectible market, they end up attracting customers not dissimilar to those found at an RM-Sothebys auction. But by offering a service targeted to the more "casual" collector/enthusiast, Doug has managed to capture a far-broader audience.
Indeed, over 1,500 auctions later, Cars and Bids continues to pull strong numbers, surprising even Doug himself.
"I never expected it." Says Doug, "But eight months in that, we'd be selling 60 cars a week, which is basically the volume we're doing right now; I never expected our sale rate to be so high. We're selling something like 90% of the cars that go on the site. I think we've had like three or four perfect days in a row, where we sold every car."
"And I never anticipated the sale-rate to be so high. And you know, the amount of cars that we'd be running. And that the site would perform well, and then flawlessly, and people would use it so much. That all has surpassed my expectations for sure."
YouTube + Cars and Bids
But with all this success and excitement, it's easy to forget that Doug runs one of the biggest automotive channels on YouTube. And as mentioned before, that infamous "algorithm" isn't exactly forgiving.
The result is, as best I can understand it, a delicate balancing act. There's no doubt that Cars and Bids' success is due largely to Doug's sizable YouTube following, and to jeopardize his channel would be detrimental to both sides of his business.
But if there's one thing I've realized about Doug, it's that he's not afraid to put in the hours. Running two businesses cannot be easy, but Doug certainly makes it seem as though it's a walk in the park.
Freely admitting, however, that "It's been harder than expected."
"But it's very rewarding," says Doug. "And the really important thing is that these are two businesses I love. I love the car business, and I love filming videos and finding all the quirky features."
"So it's like, I think if it were any other two businesses, it would be too much. But I can sit up at eight o'clock, nine o'clock, whatever. And, you know, most people would kind of be turning off and browsing the internet or watching TV; I can kind of do a little work."
The pandemic left a lot of people bored, sitting at home on their laptops. And while the expectation was that most people would take it easy on spending. Just a few months in, it turned out to be quite the opposite.
Car enthusiasts stuck inside took to the internet, and over the past year, we've seen massive spikes in the sales of collector cars.
This environment played well to Cars and Bids' success, but as COVID begins to wind-down, many people wonder where this will leave the collector car market.
"I truly don't know," says Doug. "I don't know if anybody knows."
"My presumption is that the car business has been a little bit inflated over the last year because interest rates have been very low. And people who have money have not been able to travel or buy traditional things like meals out or whatever. And they've been concentrating on stuff like cars and other consumer goods. So maybe it'll slow down a little bit. But short of an economic recession, I think this is still a strong business, even if the craziness kind of slows down a little bit in terms of car buying."
However, regardless of where the car-market goes, Cars and Bids is a great story to tell. And Doug's highly-analytical approach speaks to his successes. In talking to him, I realized how attuned he was to his eventual 'obsolescence' as a YouTuber. Saying that "People generally get tired of entertainers, journalists, whatever, after a while."
"And so it became clear to me that I should do something at some point, to kind of take my following off YouTube and try to get them [viewers] with me for maybe a longer time and give them something that perhaps is more long-lasting, than I figure my channel will be."
But, crucially, Doug hopes to grow Cars and Bids far beyond his YouTube following. And this, quite frankly, surprised me. Doug's channel is a veritable force in the automotive world, and I found it hard to believe that there was a car enthusiast on the planet that hadn't heard of him.
Interestingly, Doug mentioned that "Occasionally we get people who are reading through the whole 'Doug's Take' on the website, and they say 'Who the hell is Doug?' like why do I care about him?"
"The thing is, there are more people in the world than there are Doug fans. And so my goal is to make sure that everyone is aware of us even if they're not a fan of my channel."
"And there's actually a lot of car people who don't want to watch recorded content. And we still need to reach them because the more, the merrier."