If a small dealership has higb fixed costs and they only turn a small profit per car, and don't sell enough volume they are operating at a loss. Sure each car might not be a loss, but if you can't keep the lights on then what's the point?

Carvana is losing money. In one year their losses for q3 increased by 200 million. You can apply all the fancy metrics you want about how much profit each car generates, but you still have a company that shouldn't be able to continue business without huge investor backing.