If you decide to start an automotive spare parts business, the chances of success will be stacked in your favour. This is because auto parts require frequent changes during the life-span of any vehicle. Hence, this business is quite lucrative and ever-green. Globally, the major automobile aftermarkets are in China, India, the USA, Canada, Germany, the UK, Japan, Indonesia, Thailand, Brazil, Mexico and Argentina.
There are several ways that you can choose to start the business depending on your investment capacity. Here are a few tips to help you be a success in the automotive spare parts industry.
Decide on the business model
There are several business models that you can follow to start off.
- Retail counter – This is the traditional business model. You will have to set up a retail counter in a good location and sell the spare parts from there.
- Attached to a workshop – A spare parts shop attached to a workshop helps customers and the mechanics buy spare parts from there when a vehicle is brought in for repairs or servicing. The turnover here is significant, and hence your investment will be more too as you have to maintain substantial stocks.
- Spare parts franchise – Without any prior experience in the auto industry, this should be your option. As a franchise partner, you can go for spare parts distribution and dealership.
- Online shop – You can open an online store if you are on limited capital as you will not have to invest in setting up a brick-and-mortar store. You can even run and operate it from your home.
Create a business plan
Creating a business plan is essential for starting. It will be a blueprint to identify your future approach to the business and will contain financial inputs, marketing strategies, sourcing the spare parts and pricing. Other essentials of a business plan are fixing target customers, knowing about the competition and detailed information about the industry. A business plan is a very complex document on which your business will be founded and hence, it is advisable that you hire professionals to structure one for you.
Licence and registration
Check the licensing and registration requirements of your State and follow them meticulously. Browse the website of your local Council and know what is required of you. Start your business only after these are in place to avoid unwarranted litigation later. If necessary, take the help of small business consultants.
Procure the spare parts
Once you have decided on the business model and have set up your store, you have to procure the spare parts. Your business plan will have details of the parts to stock, from where to acquire them and the purchase price that will give you an adequate margin in profits. Talk to a few wholesale distributors and get the best quote along with MOQ (Minimum Order Quote).
In any start-up, hiring the right employees is crucial to its success. If you are opening a retail store, hire a mechanic, if it is attached to a workshop, employ an automobile engineer. Check whether you need a licensed mechanic as per the regulations of the State.
These are some of the steps you may follow to make a success of your automobile spare parts business.