Episode 61: Digitizing the Wheel: Disrupting the Global Vehicle Trade with Elad Barshan

In this episode of the Mile Marker podcast, Elad Barshan, CEO of SlickChain, shares how his Israeli startup is transforming the global vehicle export market through automation and digital innovation. Leveraging decades of family experience, Barshan explains how SlickChain simplifies complex international logistics, regulations, and pricing to create a real-time marketplace. The result: a seamless export process that turns used and salvage vehicles into revenue opportunities for U.S. dealers worldwide.

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Transcript

Angela Simoes:

Welcome everyone to another episode of the Mile Marker podcast. My name is Angela Samos, your host, and I am here with IAD Barshan, CEO of Slick Chain, which is a Israeli based Israel based company. So welcome Elad.

Elad Barshan:

Great to be here. Great to be here. I came all the way from far away, Israel.

Angela Simoes:

Yeah, you made it.

Elad Barshan:

It's around 23 hours traveling in gross time, including the layover. But I'm very, very happy to be here.

Angela Simoes:

No, and thank you for joining us. So tell us a little bit about your background. I understand that you're kind of a third generation in this industry, and then tell us what slick Chain does because you're a startup.

Elad Barshan:

Yeah, so I always like to say that my profession is one of the oldest profession in the world because ever since there was civilization, there was the guy on behalf of the kingdom of the ruler taking cuts on trading routes. We know about the Silk Road from China, we know about the perfume roads that run through Israel and basically all of the ancient trading routes, they function the same. So I came from a family, like you said, I'm a third generation in my company. My late grandfather established a company in June, 1951. So we are one of the oldest founding families of this industry in Israel. And Slick Chain is basically a spinoff. This is our innovation arm that what we are doing, we are automating the global supply chain and our choice of sector is vehicles. And vehicles is the total market of the vehicles worldwide is approximate 723 billion a year.

Angela Simoes:

Wow.

Elad Barshan:

Everybody sells to everybody. Everybody buys from everybody. But now the majority of these operations are manual, which is kind of crazy. It

Angela Simoes:

Is crazy.

Elad Barshan:

12 20, 25. So the majority of the dealers that are listening to us today, they're handling their marketing through Excel sheets.

Angela Simoes:

Oh my gosh.

Elad Barshan:

So then what happens is that when you sell your Excel sheet with 500, 1000, 10,000 rows, and I need to remember to our audience that Excel sheets usually do not come with pictures, then the prospective clients needs to cherry pick and needs to find out one by one what is the best possible, the best possible bargain for him. And it's something that is very, very hard to do on a manual level.

Angela Simoes:

Yeah, It sounds like it takes a lot of time.

Elad Barshan:

Takes a lot of time. And we have to remember that an inventory is a live creature. Inventory always comes and goes. So you can have a listing right now which is available for sale, and then five minutes after a client comes into the dealer, puts money on the table and takes the car. So this market is inefficient but …

Angela Simoes:

Ripe for innovation and disruption

Elad Barshan:

Of course, because there is no other way. Right. For today, if we're talking about how it's being done, if it is manual, the market cap of the US export of used cars is estimated at 8 billion a year. It's an astounding number by the way. The total number of exports from the US is around $64 billion.

So there is a huge ocean of opportunities. Everybody likes American cars. And I would encourage our listeners to think about export because basically nowadays the saying is money doesn't smell. So if you are getting top dollar or getting the price you want, but the buyer is from Dubai or from Israel or from Nigeria, from Ukraine, doesn't matter. The dollar is the same dollar, they'll transfer you the same money. And the magical thing about export, it is 100% prepaid. No one in export, especially in our sector of exporting vehicles, working without getting fully paid before the vehicle leaves the lot.

Angela Simoes:

That would be an important aspect, but it also makes me think of the transportation costs would be significantly more. Right compared to moving from state to state, but then exporting across the pond. So talk a little bit about, you mentioned the three main markets, UAE, Nigeria, Ukraine before the war. Why is there such a large demand for American cars and what are they being used for? And then we can talk about how that functions and the costs involved and how someone can get started.

Elad Barshan:

Okay, it's a great question. So let's talk about UAE as a great example because UAE is the dual crown of the exports of used vehicles. UAE buys in one year, 110,000 used vehicles, A crazy number.

Angela Simoes:

That is a crazy number,

Elad Barshan:

But they are not buying the majority for domestic use. They are a hub. They have a huge, huge industry of re-export. So what they're doing, they are importing the cars from the US and they are storing it in places called the free zone. This is a zone which is completely cleared from regulation, from taxes, and then just import the car, put it on the lot. And then prospective clients from all over the world, from Central Asia, from Africa are coming and getting the car. Now they're taking everything with four wheels and a steering wheel. They're taking salvage vehicles.

Angela Simoes:

Wow.

Elad Barshan:

They're taking after car accidents and of course everything has a market. Everything has a price. So the thing is that what they're doing, they're taking it into their custody, they are repairing it, and then they resell it into the world market. So UAE is a great example of the power of export because they are in search for demand for inventory all the time. So if I were a dealer from a certain state in the US, I will definitely think about this option. Now it is hard. Why it is hard because in order to make a successful export, you need to find, first of all a client. Need to sell to a client.

Angela Simoes:

Somebody to buy it.

Elad Barshan:

You need somebody to buy it, you need to send them an Excel sheet

Angela Simoes:

And auction or dealers here are not going to put together a spreadsheet.

Elad Barshan:

Yes. So the spreadsheet and then after that you need to, if the buyer is taking charge of the transportation, it is better for you. But if you said I want it in Jabal Ali Seaport near Dubai, then you need to find the forwarder, you need to know what you do in order to export it, what kind of documents, et cetera. So it's a headache. So that's what exactly what we did in Slickchain. What we are doing, basically Slickchain is a huge marketplace. So we have two processes installed in our algorithm. We have a very sophisticated algorithm that takes the raw data of the inventory and then add the shipping layer that taxes layer the after clearance layer, and then convert it all to a bottom line price in the local currency of the designated buyer. So now it's not Excel sheets. You have the option to have an unlimited shelf with millions and millions of vehicles.

So in real time. So a listing can be even five minutes. So that's it. And if on that five minutes the prospective client catches manage to finalize the deal, then go ahead. It cannot happen without technology and it'll happen with selection or without selection. But this is where the world is going. So the first thing is to real time take all of the data and present the bottom line price to the client. And then when the client, the prospective buyer from overseas wants to buy, the only thing he needs to do is transfer money. And then the second we call it magical process, starts to kick in because all of the process is completely transparent, completely automated. And then what happens is our local US partners and Canada partners are coordinating with the dealer. They're taking the car. And of course we have live tracking, we have a map, live map that shows exactly where the car is, all documentation on clouds, no more stories of you sent me, but I didn't get it, but it went to spam and my server rejected it. All of this is a thing of the past. So we are getting a full automation with zero hassle, zero headache, both for the dealer and both for the buyer. So we are streamlining all of this process. What we are doing is not inventing the wheel, we just spin it much, much more better. 

Angela Simoes:

You're digitizing the wheel.

Elad Barshan:

Digitizing the wheel, yes, you are perfectly correct. So that's what exactly what we are doing. And we are always on the lookout for a reliable source of inventory that we can come to our prospective buyers overseas and tell them, if you pay, you will get. So this is something which is very, very important for us because the trustworthiness of our platform is the most important thing. We don't want to let our clients down and we manage our expectations very, very carefully. And of course if there are players, dealers that want to participate in export, then of course we can help them and make it digitized. It's beautiful really. And if there are dealers with current operations, then we can go and spin the wheel better digitize the wheel, as you say.

Angela Simoes:

Right. So this makes so much sense. Are you the first one to apply technology to this process? I mean, it would be surprising that no one has done this yet.

Elad Barshan:

I will tell you a nice story as far as I know, yes. Slic chain is the first in the world that managed to transfer a vehicle from one geographical area to another without the use of telephone, fax, email, WhatsApp, whatever. And there is a nice story. I once had a discussion with the head of Volvo, CVC is the corporate venture fund of Volvo. And he asked me a nice question, he asked me a lot, why are you the first in the world that came to me with this solution? I told them I have a very easy answer because it's hard to understand the small nuances of the trade agreement between US and Israel to understand what is it the declaration of origin declaration, certificate of origin, what is the difference between commercial invoice and proforma invoice? Why do I need a title door sticker? Window sticker? Now, regarding regulation wise…

Angela Simoes:

And you have to do that with every country.

Elad Barshan:

Yes. That's the magic of Slick chain because it pulls the algorithm, all of these small nuances, and it is doing it automatically. For example, steering wheel side. If a vehicle from the UK will not be able to be sold in US and vice versa because they are driving in the wrong way.

For example, homologation, it's a big issue. You have US homologation, you have Canada homologation, you have EU homologation. So cars from the US will not be able to be sold in the EU unless they will be homologated. So it's a process. The entire trade between US and EU regarding vehicle is only 50,000 vehicles a year. It is nothing compared to economy, US economy of 350 million people, and of course the eu with additional 350 million vehicles, you would expect that the mutual trade will be much, much more higher with vehicles. But it is not the case

Angela Simoes:

Just because of all the regulation and paperwork and everything,

Elad Barshan:

Home obligation and

Angela Simoes:

The homologation. Okay.

Elad Barshan:

Yes. So the regulator, the US regulator only allows US homologated vehicles to go on the road.

So it's regulation wise and also the eu. So they have different regulations and each and every region in the world has its own regulation. For example, in the Gulf you have regulations that's called GCC. is another regulation which part of the countries accept and part or not. So you need to understand who accept and who do not accept. For example, a classical regulation limitation is the car age. So in Israel for example, you can only import a vehicle which is up to 12 months for manufacturing instrument. That means one year. So it's very, very limited options. But in UAE, you don't have any limitation whatsoever. And in this business, and there is a saying, once man's trash is another man's treasure.

Angela Simoes:

Treasure, yes.

Elad Barshan:

So in this business, you want to believe the magnitude of the salvage vehicle's business.

Angela Simoes:

That kind of blows my mind. Yeah, I mean you would think that it would cost way too much to repair that vehicle than what you could ever sell it for.

Elad Barshan:

The depreciation of a salvage vehicle is so huge that you can take even a Lamborghini, take it as salvage, repair it. I don't know original parts or not. This is something I don't think so. I don't think so. Also, by the way, I will be so much afraid to have a ride on this kind of vehicle.

Angela Simoes:

Agreed.

Elad Barshan:

But it works. Someone's going to buy it, someone's going to buy it because again, once man's trash is another one treasure, there is an aftermarket, huge aftermarket for salvage vehicles, for example in the UAE because a lot of, for example, central Asia or African countries would like to buy it because of the opportunity with a very, very low price. So you can have bargains. Now here in the US the prices for salvage vehicles are extremely low. And I believe that there is a huge opportunity overseas. So again, what we are doing or what I'm offering just to think outside of the box, is to let our listener try to swim in a bigger pool to widen their range, their audience. So if they will do that, they will not be also only the people that are selling to their neighborhood. If you have 50, 100, 500 cars in your lot doesn't matter. So the thing is to widen your horizons and step out of the docks.

Angela Simoes:

This is the big opportunity. Speaking of salvage vehicles specifically, instead of sending it to a junkyard or compressing it and then you get stuck with waste and maybe it goes into a landfill, maybe some of it's recycled but not a hundred percent. So you could avoid all of that and just sell it overseas, I guess.

Elad Barshan:

Yes. And the thing is that I always say when people ask me what kind of price can I upload to your system? And I say, it's not my call to make. The market always knows best. When you put the prices onto the market, the market will respond accordingly.

If the price is good, they will buy. If the price is not good, they will not buy. So part of the magic of technology is that when you upload the price, you can almost in real time understand if your pricing is good or not good. Because if you priced below market price, then you will have a huge volume. And if you are priced above market price, you'll not get any volume at all. So we can do it almost in real time. And another magic in technology is that the marginal cost per each transaction using Slickchain is close to zero. So that means we win either way because we don't have the traditional importer, the traditional car buyer overhead with interest to carry inventory, and of course manpower huge lots with city tax and we don't have it. So if we don't have it, that means that we win every time because we don't mind of making much less money, but we spin the wheel faster. So we are putting automation to one of the oldest profession in the world, and we are trying our best to bring this into America and to make the fox makes more money out of this dealership.

Angela Simoes:

Yeah, I was even thinking too, I mean car companies and even insurance companies can avoid taking a loss on vehicles that have been in an accident.

Speaker 3:

Of course.

Angela Simoes:

So instead of taking a loss, even if you make, I don't know, a thousand dollars on it or a hundred bucks even, I guess financially, you'd have to figure out what makes more sense if you get the write off, if you do take the loss. But I mean there's just additional revenue opportunity there for

Elad Barshan:

Of course, that's the idea because when you upload to the site, it doesn't take any obligation from you. You just float it. And the thing is that if you put a higher price than what you could expect in auction in Manheim, whatever, then what happens is that if you take the deal, then you earn money. If the pricing that you put on the system is not fitted with market price, then you can still go to the auction.

Angela Simoes:

And can someone make an offer? Let's say you listed something for a thousand dollars, but they offer you 500. Can someone make an offer like that?

Elad Barshan:

Yes. Why not? Why not? Why not? And the thing is that I am not claiming that to go to export will replace all of the traditional marketing channels. It's not what I'm saying. I'm saying that export is yet another marketing tool.

Angela Simoes:

It's another avenue.

Elad Barshan:

It's

Angela Simoes:

Another spoke in the wheel of the digitized wheel

Elad Barshan:

Of course. Because the thing is that the dealer wants to spin off their inventory as fast as possible and to maximize their profit. If there is a buyer that you have two buyers, one of them is buying online overseas and one of them sits in your table and wants to buy from you, it doesn't matter. It's the same money.

Angela Simoes:

Are you able to see what kind of vehicles are in more demand? And specifically I'm thinking of electric vehicles. Are you seeing that in more demand or does it really not matter?

Elad Barshan:

So the thing is, for example, if we go to the UAE example, they don't like electric cars too much. And why is that? Because their gas is subsidized. So they have very, very, very cheap gas prices and that's why they like big American fuel consuming cars,

Angela Simoes:

The tanks, the big SUVs or the suburban assault vehicles as we like to call them here,

Elad Barshan:

Assault vehicles. Yes, correct. So they like it because they have roads, they need very strong air condition because it's very hot over there.

And basically because the gas is subsidized and is so low, they don't care of taking high fuel consumption vehicles. So for them it's okay. But regarding the EV revolution, I think that the third world Africa or centralized, what we have discussed about is always in some kind somewhat a delay. So I believe in a few years the curve demand curve for EV will be much higher over there and it's going tor, it's going to be with the same point as the depreciation in EVs in the US because someone that has a Tesla, which is nine years old, 10 years old, would like to get rid of it, would like to sell it, and its price will be so low because it is after a warranty and there is a problem with the battery, et cetera, then it'll be converged with the demand from the third world. So again, once man's trash is another man, treasure

Angela Simoes:

Does your platform allow for individuals to list a vehicle?

Elad Barshan:

So it'll happen ahead of the roadmap. Now we're working basically with businesses because of the reliability and liability issue that I mentioned earlier. So the thing is that we want to work with people that we can make, we can manage expectation with them, we can resolve issues if necessary, and we can sleep quietly at night when we transfer millions of dollars for transactions. And this is something which is very hard to find. So I think ahead of the roadmap, what we'll do, we'll have some kind of mechanism to inspect the cars, to recondition it, et cetera, and then only then we can offer it to our prospective clients. And the market is so big then for us it doesn't matter right now.

Angela Simoes:

Got it. So there's so much potential here. Where are you at now? I mean as far as I guess volume of vehicles being sold through the platform and then what's next for your company?

Elad Barshan:

So we are an early stage startup. We have early revenues. We are now bootstrapping without any additional funding, and we are happy like that. We have around between 60 to 70,000 vehicles on our platform. Wow. We are operating in Israel and we are now, I think on final stages hopefully of signing up with a local partner in the UAE because we want this market. And again, what we want to do is to have a shelf, which is with millions and millions and millions of cars and the mechanism that we can let our client know that what he pays, what he get, and then we win the game.

Angela Simoes:

It's amazing. Well, it's a fantastic concept and you tackled the hard problem that no one else wanted to. So congratulations and we wish you the best of luck. It sounds like a great opportunity for, as you said, US auction houses or dealers or whoever's looking to offload some vehicles, salvaged or not, but it looks like another great opportunity, another revenue stream. So congratulations.

Elad Barshan:

Thank you very much. And it's a lot of hard work to be entrepreneur. It is not an easy life, but this is how we raised, this is the Israeli style and this is what we do. We tackle the hardest problems and we just keep going. Persistence is the key to every entrepreneur and to go through the hardships. And it's not an easy thing to educate a market and to do something so novel, but I believe this is our job as I'm not that young, I'm going to be 40 this year.

Angela Simoes:

Oh, you're a baby.

Elad Barshan:

Not that young. But this is our role right now compared to our fathers to innovate, to put technology inside and to streamline the business better and to bring added value to the clients.

Angela Simoes:

Yeah. No, I don't know that you're going to have a hard time selling the concept. I think it makes a lot of sense. And if it's proposing the idea to create the system I think is where people would say, as you said, God, that sounds so hard and this is why no one's done it, but you've done the hard work. So best of luck continued success.

Elad Barshan:

Thank you very much, and

Angela Simoes:

Thank you for joining us.

Elad Barshan:

Thank you very much for all of this talk and it was a lot of fun.

Angela Simoes:

Thank you.