Start an Auto- Spare Parts Business

Auto spare parts business is an essential industry for vehicle owners. Every vehicle regardless of its manufacturer at sometime needs replacement parts.

The business is highly competitive and very lucrative. The industry is booming because there are more used cars than new cars worldwide.

Billions of dollars is spent on vehicle maintenance, repairs and servicing. The industry is relatively easy to join however you need deep knowledge of automobile parts.

You also have to narrow your choice of parts to accommodate certain vehicles. Other requirements involve startup funding, sourcing the auto parts and find a good location.

 To establish the business there are a few legal frameworks and permits. You also need to monitor your inventory, control cash flow and establish repeat customers to succeed.

Here are a few ideas on how to establish an auto part parts business.

Start an Auto Spare Parts Business

Write an Auto Spare Parts Business Plan

The first step is to write an auto spare part business plan. The plan should include startup funding, sourcing raw materials, marketing and location.

Others are niche area, target demography, staff wages and future projections. Carry out a feasibility study to understand your competitors, services, prices and marketing strategy.

Conduct a survey to identify the best location for your business. Spare parts dealers sell within certain demography and are mostly regional. Make sure the location has a high density of customers.

Locating the Spare Parts Business

In many countries you need to abide by zoning formula. A good location is close to your customer base with few competitors.

Make sure the store is very visible and close to heavy vehicular and pedestrian traffic.  The store should be large enough to handle huge inventory of parts. The number of staff you hire depends entirely on the size and scope of the business.

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Obtain Necessary Paper Work

Register you company as a limited liability company or sole proprietorship business. Follow zoning requirements and obtain a trade license and tax identification number. Some of your inventory may be subjected to value added tax.

Supply Sources

The type of spare parts you stock depends on your business plan. You might decide to stock only new parts or used spare parts.

We recommend stocking both used and new parts. Make sure your customer know exactly what they are buying and offer full disclosure.

You could present a customer both used and new parts and explain the price differentiation, merits and demerits. Identify a good source for parts such as foreign markets like china for new parts or junkyards for used parts.

Spare part manufacturers are always eager to take on new wholesalers and distributors. Another good source for used parts is purchasing used vehicles and scrapping.

Marketing Your Spare Parts Business

To attract patronage you need an ideal location. A good location is close to auto parts dealers that sell similar items. Although the competition in such locations is fierce you will get regular patronage.

Distinguish your store by selling only quality branded items. Offer better value than competitors, specialized products, quality and efficient delivery service.

Some spare parts are hard to find so stocking specialize products alongside general parts is a good money earner. Try to stock only popular brands that have high reputation and brand depth.

Offer Quality Parts

To grow the business-differentiate your store by offering quality spare parts. Quality parts attract higher premium prices are durable and better alternative to low quality cheap parts.

Branding

You can consider selling your own brand name or label product. Some manufacturers offer major wholesalers white label products.

This enables a wholesalers use their own brand name on the product. Make sure the product is high quality and durable.

This business strategy involves lots of advertisement and marketing. However if the brand name becomes popular and trusted you have huge sales and orders.

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Use Franchising

Big independent spare parts dealers obtain franchise deals. This establishes the store through band awareness, uniqueness and lots of credibility.

Franchise owners expand lots of money on brand awareness effectively reducing your advertisement costs. Reputable brand provides specialization and enchants the image of our establishment.

Target Demography

To succeed in auto parts business you need to target high volume customers. High volume customers include auto repair businesses, vehicle fleet operators and large mechanic workshops.

Use Both Wholesale/Retail

Setup your establishment as a wholesale and retail outfit. The wholesale section attracts bulk purchase from other spare part dealers while the retail section deals with daily customers.

This business template is very effective and profitable.

Supply used Specialty Parts

Used specialty parts are difficult to find and attract premium prices. The downside is that you may stock the parts for extended period before sales. Therefore only stock a few of such items in your store.

Offer Delivery Service

Only a few spare parts dealers offer delivery service.  A good delivery service provides added value and convenience to the customer.

There are a full range of services on offer such as mail order, courier service and box truck delivery.

Build a Website

Use online resources to attract more patronage. Many vehicle owners and mechanics are turning to the internet to find parts.

Make sure you build an optimized website that is easy to navigate and order. Add list of spare parts in your inventory including images and location.

Introduce a shopping cart, help line, about us, contact us and delivery service. Use social medial to drive traffic to your website and target demography.

.Promote High Volume Parts

High volume parts are auto parts that constantly need replacement. Such parts include windscreen wipers, side mirrors, bulbs, spark plugs, antifreeze and filters.

Use newspaper advertisement, television and print media. Hire commission based sales representatives to find new markets for your spare parts.