Auto parts are one of the top topics that entrepreneurs are interested in. Why are they so popular? The thing is that these are components that constantly fail and due to this there is a huge demand for this product. The second point is the diversity of trading formats and the fairly large expanse of the niche. Even if there is competition, you can carry parts that are not available in the nearest similar stores.
In this article, we will talk about how to open an auto parts business and in what format to develop it, as well as identify the main pitfalls that you can expect.
Business format and features
What is meant by the vastness of this niche? This is the presence of a huge number of different makes and models of cars. Also increased demand for used parts and other factors. We have identified several basic business formats for the auto parts trade.
- Trade in the automotive market. This is a business with minimal investment, both in terms of rent and advertising costs to attract customers. Great option to get started. In fact, if you manage to rent a stall or a kiosk in the car market, which is really difficult, then the flow of target customers is guaranteed with a competent pricing policy.
- Resale of auto parts. Various dismantlings, successfully work in many cities. The cost of such parts is much lower, which contributes to the growth of the used auto parts trade. Separate showrooms mainly specialize in specific brands of cars, for example, only Renault or Volkswagen. When properly advertised on auto forums, they raise large sums on their business.
- Organize this type of franchise business. Here are just a few options. For Ukraine: Novaton, Admiral-S. For Russia: Auto-Moe, Gearex and others. You get a ready-made solution, implement it in practice and profit as a result. But there are moments that stop, because no one wants to overpay. But it is much easier to start in this format.
- Open a small auto parts store in a rented space. This is the most popular format for starting this business. Usually a small room is found somewhere in the passage places and a retail outlet is opened. The main thing is to correctly assess the competition and find a good place for doing business.
- Internet shop. In the age of modern technology, an online store can become not only an additional source of customers, but also successfully operate as the main business selling auto parts.
- for foreign cars
- for domestic cars
- for trucks
The choice of format depends only on your preferences. You can navigate by the popularity of the car brand in your city, especially if it is a small city, so that in the end there is a constant demand.
Selection of premises and equipment
Now let's discuss a few points regarding where to open an auto parts store and the nuances of choosing a room. If this is a full-fledged store, then there must be 2 conditions:
- convenient entrance with parking;
- high traffic of people or a busy city road where there is a lot of car traffic.
If this is a resale of used spare parts and parts, then you can work directly from the garage. Customers will find you if they need you if you have the parts they need and at a good price.
The size of the premises for a small shop can be about 10 - 20 sq.m. It's great if there is a pantry, or a mini warehouse for storing goods.
The next point is what you need to get started, and here it is important to include equipment. And you need to buy the following:
- racks with shelves;
- hanging showcases;
- counter;
- furniture for the workplace of the seller;
- computer equipment, internet and printer. For the selection of auto parts, especially if you will carry them on order;
- cash machine;
- mobile communication, for receiving and processing orders;
- packaging products.
Rules for the sale of auto parts
As with any type of business, you will need to obtain all necessary documents and permits.
Here is the main list:
- you must be registered as an individual entrepreneur;
- specified OKVED. For Russia, this is 50.30.2. Retail sale of automotive parts, assemblies and accessories. In Ukraine it is 45.32 .
- trade permits must be obtained from the SES and the fire service.
- availability of certificates for the goods.
- decorated corner of the buyer.
It is better to clarify all the details of the taxation of this business with lawyers, especially if you are a novice entrepreneur.
Range
If you are wondering where to start with the selection of an assortment, then you can go through the main positions of suppliers of goods and decide what you will buy and what you will bring to order.
Here are the main product categories in this business:
- engine;
- suspension;
- transmission;
- brakes;
- electrician;
- cooling system;
- exhaust system;
- filters;
- body and optics;
- oils and auto chemicals.
Within each category there are a number of subcategories. Plus, all these are various parts for various makes and models of cars. That is why large suppliers have special catalog programs in which you can find the part code and, using this code, make a specific order for the product that the client needs. It is according to this scheme that small auto parts stores operate, for example, when they open in a provincial town. Delivery is carried out using courier services, or the order is directly transmitted through bus services.
Advertising
In addition to standard advertising solutions in the form of distributing flyers or banners with promotions and a bright sign, you can try to attract customers via the Internet, especially if you work in a big city. There are three directions here:
- an online store with search engine optimization and customized contextual advertising;
- social networks with profile groups;
- automotive forums.
How much money do you need to start?
To open a car parts store, you need to have a certain start-up capital on hand, which will mainly be used at the initial stage to purchase the initial assortment, rent and promote the store. Below we have given the calculations for a small store and indicated how much it costs to start in this direction.
- Room rental - $200 - $250
- Taxes - $150
- Salary to the seller - $ 200
- Initial purchase of goods - $10,000 - $15,000
- Purchase of equipment - $1500 - $2000
- Advertising — $250 (+ advertising on the Internet).
- Shipping costs - $50
- Mobile communication and Internet - $10
How much can you earn?
It is difficult to estimate how much your store will bring in without knowing the whole situation. So, for example, you need to clearly know what spare parts will be purchased domestically or for foreign cars, what price segment, how much the rent for the premises will cost, and much more.
The average margin on auto parts is on average about 30 - 40%.
Up to 100% for accessories and consumables.
We indicate only these figures in our business ideas, they allow us to estimate the required sales volume to cover expenses and get a profit.
Conclusions. The business of selling auto parts is a rather complex and competitive environment in which money is found due to the constant demand for goods. Whether it is worth starting this business or not is up to you. We tried to describe as much as possible all the nuances of this business, but the decision is up to you.
What can you say about this line of business? Is it beneficial or not?
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