Cars don’t last forever, and the parts that make them fail break down even faster. But that’s to be expected, considering how many moving parts are used. Wear and tear is the biggest reason why auto parts must be replaced on a regular basis. This has created a huge auto parts industry, selling countless auto parts to drivers all over the world.
We’ll look at what it takes to run an auto parts business, the factors you have to consider, and the challenges you should be aware of once you get started. If you’ve been thinking about opening your own auto parts store in your area, this article should help you gain a foothold in the field.
START
If you’ve run any kind of business before then, you should find it a little easier to do that too, because it’s not that different. There are a few important things you have to take care of first to ensure you increase your chances of success. These factors include the following.
MARKET RESEARCH
Demand doesn’t always mean a high chance of success. There are so many auto parts out there that you have to narrow them down to a niche before deciding what to use. This can only be done through market research. You must know what the car owners in your area order the most. This can be determined by the model of car they drive. You can’t start selling tractor lights in a town where everyone owns a classic car.
Another way to gather the data you need most is to look at online sites that sell auto parts. Note the part that seems to receive the most orders and inquiries and use that to build your inventory. Asking around is another way to do market research, which can be done by talking to mechanics and others who know cars.
CREATE MARKET
You can’t sell everything like a mall. It may sound like a good idea to get involved in car spare parts of all types, but it will just overwhelm you and you may end up selling low quality stuff. The best way to solve this problem is to single out the specific properties of auto parts and stock them in large quantities.
Use the market research data above to identify high demand. Naming your store is easier when you create a niche because you’ll be focusing on a specific set of auto parts, and there’s only a short amount of time people will associate your brand with those parts.
For example, you could choose to exclusively sell auto parts for classic cars instead of mixing them with parts for modern cars. Getting classic spare parts can be difficult, and if you can provide it, everyone will know about your shop because they don’t have much choice.
PLAN
- You cannot have a successful business without a plan. No one wakes up every morning and decides to take all their savings and immediately open an auto parts store. It doesn’t matter how proficient you are at running a business; every time you decide to start a business, start by making a plan. So, what exactly does a business plan entail? the following.Business philosophy: Do you want to open an online store or a physical store? You have to decide on the premise of your business as this will affect how much money you will need to get set up.
Budget Estimation: You can’t know how much you’ll spend until you’ve created a plan that shows exactly what you need. You’ll be surprised what jumps through your mind when you start writing down everything your business needs.
Target Market: According to creating your own niche, you have to identify your target market. You can’t serve everyone unless you’re a direct manufacturer. So, in your business plan, clearly outline who your target market is so that you can now focus on finding creative ways to ensure you meet all of their needs.
Source of Funding: Where will you get your money from? Are they from your savings? Are you taking out a loan? Are you borrowing money from a friend? All of these are issues that your business plan must address because in the long run you will end up having to reinvest。
FINE SUPPLIER
- In order to make a profit, you need to find a supplier who provides you with high-quality auto parts at a good price, which will help you make those profane profits without squeezing everything out of your potential customers. For auto parts suppliers, you have to choose between two main sources explained in detail below.OEM: These are auto parts made by the car manufacturer whose parts you sell. These are usually of a higher quality because they are built to the standards of the car that made them. They are expensive to acquire, but you never have to worry about returns because the chances of them catching fire are very low. Another advantage of sourcing parts from OEMs is that you can get volume discounts.
Aftermarket Parts: These are auto parts made by third-party suppliers who reproduce them using the OEM’s blueprints. They are made using cheaper materials and are usually lower quality but usable. You should only choose to do this if you are short on inventory funds or if the demand is high.
REGISTERED
If you want to see it flourish, you must register your business or you will get in trouble with the authorities. Registering your auto parts business is not just a matter of following the rules, once registered and legally recognized, there are several benefits to the business. These include the following.
Registration increases the credibility of your business as it establishes your address and other important details that customers use to gauge your credibility. The legitimacy of your business is what makes people trust you with their money and their problems.
It is easier to obtain funds from banks and other lending institutions if your business is registered. Registration gives life and identity to your business, which becomes an asset in the eyes of the bank. No one will lend money to anyone without any proof of ownership.
It helps you keep your business finances separate from your personal finances, which protects you from losing all your money if your business activities find themselves in debt. This is a trap many promising businesses have fallen into in the past. Register your auto parts store to avoid this kind of thing.
EMPLOYEE
You never understand the importance of finding the right employees until you find yourself fighting for the life of your business despite everything put in. When running a brick-and-mortar store selling auto parts, there needs to be staff around to handle customer inquiries and help process orders. Never assume that anyone you pick from the road can do this.
If you choose to take this path of owning a business, don’t do it halfway. Get the right employees who are qualified in sales and customer service, and you’ll see your business flourish. Cutting corners by hiring cheaper help will only end up costing you.
You also have to think about training your staff to conduct your business the way you want. This is how you can stand out from other competitors. It always pays to be different because that’s what customers always notice first.
COMPETITOR
It is very important to understand the position of those who are in the same line of business as you. You won’t be the only one running an auto parts store in your area. There will also be other stores around to provide consumers with options.
Make sure you stay one step ahead by understanding what your competitors are doing, their pricing, how they package their products, their marketing strategies and everything in between. Once you have all of this data at your fingertips, develop a plan to blow them out of the water and set you apart. Remember, you are also a competitor to others, and they too will be looking for tactics to take your customers away.
INVENTORY
The worst thing that can happen to a customer is that they walk into your store for a specific auto part they’re used to getting from you, only to find out that the stock has run out. Once you have established yourself and established a solid reputation in the market, you have to live up to those expectations.
Manage your inventory on the go to ensure you have enough stock for all the fast-moving auto parts. Once the stock reaches a certain threshold, another order is ready and they are offered before the shelves are empty. Allowing things to run out is the fastest way to lose customers to your competitors.
PROMOTION
Marketing is the backbone of every business. You simply cannot live without it. Marketing is what helps you gain fame and announce to the world that you are finally here. There are many ways you can try to boost your business through marketing, some of the most prominent ones include the following.
Try turning on social media pages and using them heavily to spread the word about your store online. This should link to a website that displays all items such as car engines and other items you may be selling. You could even start an online store to cater to those who might be too far away.
If you have the space, host an auto show and use the opportunity to market your business. You can display your logo on each item. This will greatly increase your brand awareness.
Use flyers and brochures to provide information about your store and the exact types of auto parts you are dealing in. This will be your business card and you can leave them all for someone who might be looking for spare parts for your car.
CHALLENGE
Running an auto parts store has its challenges. Here are some of the things you should be aware of.
An unreliable supply of auto parts can negatively impact your business and even result in lost revenue and customers. This is common, especially when your supplier closes shop or closes to another location. Funding a new one can take you a long time.
High taxes and licensing fees are another stumbling block for many businesses trying to start from scratch. Unless you have sufficient funds, you may find yourself in debt.
Competition from auto parts manufacturers who decide to open shop is another hurdle you will most likely have to deal with at some point. This can be serious as you simply can’t fight the manufacturer since they are the source of everything you want to sell.
Troubled customers don’t know what they want, and instead of asking questions, they turn rude. This is common in most businesses that operate from brick and mortar stores, and you should have the right staff in place to handle some of these issues without escalating the issue.
Refunds and returns are also other challenges that you will have to deal with at some point. It’s very common for people to return potentially broken parts, and sometimes they can come from people who may have done damage to a car part but don’t want to admit it. You should be prepared with the tools to handle this situation.
CONCLUSION
Entrepreneurship is a journey, and if you choose to take this path, you should be well prepared for it. With so many different types of auto parts, finding a niche can be the hardest part, but ultimately, you need to figure out a solution before you break ground. For more information on auto parts and how they are manufactured and supplied visit the website and if you have any questions our team of experts may have answered yours.