How To Start An Auto Parts Business

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A Clutch and Pressure Plate Displayed on wall

A Quick Overview Of The Auto Parts Business:

To be successful in an auto parts business, you need to be able to provide the quality parts to dealers and customers.

With this type of business, you have a vast variety of parts in the market for all the different vehicles available.

Unless you have a franchise, you may want to specialize in a niche — for example, you could cut down the variety by only dealing in imports and you may even to minimize the variety by only offering parts for a manufacturer or two. If you are in the European market, you may choose Mercedes and BMW.

This will allow you to carry more stock and ensure you have most of the parts when needed. Another issue is for parts that you don’t keep in stock — you need to find parts manufacturers that can overnight parts to you.

Your success depends on getting the right parts to your customers as soon as possible.

Skill Set and Traits:
Employee & Job Consideration During The Start-Up Phase or In The Future:
Approximate Daily Hours Needed:

Usually, the hours of a parts store are 9-5, but there may be more exceptions if service shops in the area have longer hours. This depends on the service shops.

Equipment and supplies during start-up phase or in the future:
  • Shelving
  • POS system
  • Warehouse
  • Storefront
  • Inventory system
Monthly Expenses and Operating Costs To Consider:

In addition to our list of common business expenses, your auto parts store will require a budget for the ongoing cost of acquiring and maintaining your inventory.

Licenses:
Auto Parts Business Marketing Ideas:
  • Offer something like “delivered in a half hour or it’s free.” When a garage is waiting on parts, it’s costing them downtime — because the vehicle is usually on the hoist — that they could be using to finish another job.
  • You could offer a “test it” price. For example, often, mechanics try a part, but that doesn’t solve the problem. So, instead of charging the customer the could return the new part, and only pay a restocking fee and you could sell the part less the restocking fee. Then, everyone is happy.
  • You could keep stock numbers for your customers so you can keep track of warranties for your repair shops. Often, the mechanic doesn’t have warrant records and the customer doesn’t either.
Pros and Cons:

Pros

  • If you’re an auto enthusiast, this is a clean way to stay connected in the industry
  • Auto parts are like food — people need to buy them in any economy

Cons

  • There are hundreds of thousands of different parts keeping sufficient stock can challenging and expensive
  • With a vast amount of parts your product knowledge can be challenging
Profitability and Revenue Considerations:

Your profit and revenue depend on your location, your marketing, and your service. If you make 100% profit and you have no sales, then that’s not a good business model. Also, if you get a loan for $500,000, that means in addition to monthly expenses you also have high loan payments which can make your profitability even tougher.

To have a profitable car spare parts business, you need to make sure you have a suitable location, have excellent cash flow, keep your costs to a minimum and ensure your marketing is effective, you provide excellent customer service, and you genuinely care for your customers well being.

Auto Parts Business Start-up Cost Considerations:

Your start-up cost for an auto parts store depends on many factors. It depends on the following.

Your store location:

Leasing or buying a storefront in a high traffic area will cost a lot more compared to a less than prime area. This being said, you can locate in a less than prime area, because you will need to offer delivery services to local repair shops. But, you will miss out on walk-in traffic.

The amount of stock you keep:

Imagine having thousands of parts in stock and paying on average of $50 per part. You would be talking about thousands and thousands of dollars sitting on your shelves.

Your inventory will be one of your biggest start-up costs to consider. On the other hand, if you keep your parts on consignment, your profit margin may be lower, but your start-up cost will be greatly reduced.

The Number of Employees You Hire:

If you are going to do all the work yourself versus if you hire employees will make a big difference in your weekly expenses. Keep in mind you will need at least one person to make deliveries and one to be in the store at all times.

Full-Time or Part-Time Business:
  • This type of business needs to be full-time.
Home-Based Business:
  • This type of business is not suited to a home-based business.

Resources

Business Plans:

Auto Parts Store Business Plan Sample – Executive Summary | Bplans

Free Car Parts Store Business Plan | The Finance Resource.com

Auto Parts Business Plan | Masterplans.com

A Day In The Life of An Auto Parts Business Owner:

A Day in the Life of an Auto Parts Consultant | Auto Training Centre

NAPA AUTO PARTS Store Manager | Smart Recruiters

Auto Parts Business Owners Interviews:

Executive Interview: Al Wheeler | Shop Owner Mag.com

Executive Interview: John Washbish | Shop Owner Mag.com

Aftermarket News Executive Interview With Automotive Parts Services Group | Counterman.com

Dan Freeman, Industry Veteran of 50 Years, Takes A Look Back And A Look Ahead | Shop Owner Mag.com

Auto Parts Business Market Research And Trends:

Auto Parts Stores in the US Market Research | IBISWorld

Auto Parts: Online Sales to Break $6 Billion in 2015 | Hedges & Company Blog

Auto Parts Stores – Industry Data, Trends, and Analysis | Valuation Resources.com

Market Trends & Analysis | Search Autoparts.com

Automotive After Market Business Overview & Trends – SBA SBDC Info

Automotive Parts Aftermarket Market in US 2014-2018: | Business Wire

Future of Automotive Aftermarket And Car Servicing | Forbes

Opening an Auto Parts Business – Startup Tips:

How to Open an Auto Parts and Accessories Store | Startupbizhub.com

How to Start an Auto Parts Store | Chron.com

How to Start an Auto Parts Store | eHow

How to Start an Auto Parts Warehouses Business – Gaebler

Auto Parts Business Article Mix:

What auto parts stores do free diagnostic testing? | Reference.com

How To Buy Auto Parts Without Getting Screwed | Roadandtrack.com

Auto Parts Business Insurance:

Auto Parts Store Business Insurance | Nationwide

Federated Insurance | Auto Parts Stores

Essential Business Insurance for Auto Parts | Insureon.com

Auto Parts Store Insurance | Bolt Insurance

Established Auto Parts Business Sites and Business:

NAPA

Auto Zone

Auto Parts Warehouse

JC Whitney

Auto Anything

Pepboys

Buy Auto Parts

Parts Geek

Carquest

Auto Parts Business News, Industry Publications & Popular Sites:

Search Auto parts

Aftermarket News

Shop Owner

Counter Man

Auto Parts Business Books:

How To Build An Auto Parts Dealership Business

Make Thousands of Dollars Monthly With eBay’s Untapped Niche

Auto Parts Business Glossaries:

Alphabetical Glossary of Automotive Terms | Edmunds.com

Glossary of Aftermarket Terms | Tomorrows Technician.com

Auto Parts Associations:

APS Association

Automotive Aftermarket Suppliers Association

Automotive Parts Remanufactures Association

CAPA Certified Auto Parts

National PRONTO Association

Auto Parts Business Franchise Opportunities:

NAPA AUTO PARTS Store Ownership| MyNAPA.com

Mighty Auto Parts

Automotive Parts, Tools and Equipment Franchise Opportunities | The Franchise Mall.com

Auto Parts Business Businesses For Sale:

Auto Parts Retail and Distribution Businesses for Sale | BizQuest

The Latest Auto Parts Business Related Videos:

Auto Parts Business

Auto Parts Store

Search Auto parts

Auto Parts Business on Social Media:
Facebook

POSTS

Posts About Auto Parts

GROUPS

Auto Parts Business Groups

PAGES

Auto Parts Business Facebook Pages

Videos

Auto Parts Business Facebook Videos

Twitter

Auto Parts Tweets

LinkedIn

Auto Parts Linkedin Groups

Pinterest

Auto Parts Business