How to open a profitable auto parts store
In order to properly organize your business and open an auto parts store that will bring good profit, you need to calculate everything in advance and draw up a business plan for the auto parts store.
Of course, there is competition in this market, but it is not so high in many cities yet, and the auto parts market, according to some experts, is now in its development stage. When you conduct marketing research, which is necessarily included in the business plan of an auto parts store, you will be able to determine for yourself which auto parts are in greatest demand in your city, as well as identify the strengths and weaknesses of your future competitors.
There are many ways to gain competitive advantage, for example, selling a wider range of products, better quality of service, lower prices. All these points you should also carefully think over and calculate when drawing up a business plan for an auto parts store.
First of all, you should decide on the format of your business - whether it will be a store for a certain car brand or body parts for all brands, auto parts for tuning cars or another option. After that, you can start planning production and organizational costs, calculating financial indicators, identifying risks that no business plan for an auto parts store can do without.
Next, you need to select the premises for the store, which you can buy or rent. The area of the premises is a purely individual matter (from a small kiosk or pavilion to a large store), and depends on the start-up capital and the range of products offered. It is advisable to choose a place for a store near a car service, a car wash, with a good transport interchange.
If you decide to open an online store of spare parts, then you will still need premises for an office and a warehouse. Although, in practice, a store for online sales of spare parts is opened by those who already have an operating "real" store or several outlets in addition to them.
The entire staff of future employees of the auto parts store can be divided into the following departments: purchasing department, active sales department, warehouse and office (management, accounting).
Your profit will ultimately depend on the choice of a wholesale supplier of spare parts, so carefully analyze the offered terms of delivery, possible discounts and bonuses. Try to work with well-known large suppliers, they will be able to provide you with the most favorable conditions and a wider range of goods.
Investments in starting a business - from 1 million rubles.
The trade margin is usually 20-100%.
Average monthly turnover - 250-300 thousand rubles
The average payback period for an auto parts store is 6-12 months.
There is always a high level of competition in the segment of sales of automotive products, however, despite this, an entrepreneurial project for the sale of auto parts can remain profitable. According to experts, this sector shows an annual growth of more than 10%. That is why we want to bring to your attention a business plan for opening an auto parts store with calculations. Below we will consider the main features of this area, as well as the key important points that an entrepreneur needs to know.
Market Sector Analysis
Why will a store that specializes in auto parts always be profitable? There is a fairly simple explanation for this, which lies in the large age of the vehicles used. According to government statistics, more than 50% of cars owned by Russians are cars over 5 years old. Very often their mileage exceeds the warranty. This rule applies to both domestic cars and foreign cars, especially since foreign cars are often operated for more than 7-10 years.
The number of vehicles on Russian roads is increasing every day. Despite the high quality of the equipment, from time to time it will need repair and replacement of parts: for this reason, the business of selling car parts is called a real "gold mine" for entrepreneurs. However, this will only be valid if managed properly. With the right approach, the investor will have significant success, but for this it is important to unmistakably occupy your niche. What is required for this? First of all, you should study the market in your city and region very carefully. Auto parts attract many investors, so you have to face a high level of competition.
It is important to understand that this line of business is more suitable for men. And even if you yourself have a good driving experience or have previously worked in the field of selling auto parts or car repairs, the field is still worth exploring. What are the first points to consider?
- What kind of parts will you sell? These can be parts for foreign cars or domestic cars, tires, accessories, or expensive parts. To answer this question, you need to consider the proposals of competitors. It will be better if you can offer an exclusive product in your city.
- An estimate of the level of demand helps to answer the question of what exactly to sell. This will help you understand which parts are guaranteed to bring you profit.
- Store format. It is not at all necessary to open a large-scale auto parts store. Recently, most customers have been using the services of online stores, where they can order the desired part. If the initial investment load seems too high for you, you can consider this format with the possibility of further expansion.
- End consumer. It is worth deciding in advance who exactly you will work with. You can work exclusively in retail conditions, or you can serve as an intermediary between suppliers of auto parts and service centers, service stations.
In some cases, investors prefer to open an auto parts store with their own production. It should be understood that when organizing production, you will have a large investment load at the start, however, as in any manufacturing sector, with proper management, you can count on a high level of profit.
As mentioned above, it is very important to assess the level of competition and consider direct and secondary competitors for your business. Consider this point in the next section.
The level of competition in the field and the assessment of competitors
Assessing competition and competitors is the first challenge you face when entering this market segment. You can do this in several ways.
The number of vehicles at the moment is only increasing. During operation, they tend to break down and become unusable, which is why it is impossible to continue using them without performing repair work. In this case, a self-written business plan for an auto parts store will have a priority direction among motorists. Auto parts for a car can be purchased both for self-repair at home and for service centers.
An example of a business plan for an auto parts store with calculations can be used for many purposes: as an informational guide to a novice entrepreneur, to obtain a loan on favorable terms, to attract investment funds from the state, to find a business partner, for clarity, to evaluate whether it is advisable to invest in this type of activity.
A ready-made business plan for an auto parts store can be implemented anywhere, even if the population of the selected city is 120 thousand inhabitants. The presence of a large number of competitors does not make this type of activity less attractive and profitable for start-up entrepreneurs. Every year the demand for goods and services in this area is growing by 20%.
Opening an auto parts store from scratch will have a large assortment of goods. It will feature auto parts not only for domestic cars, but also for foreign ones. All this will be beneficial not only economically, but also socially.
Future Business Indicators
If we consider the detailed business plan of an auto parts store from a social point of view, then we will help reduce the number of unemployment by creating additional jobs. In total, it is planned to hire three employees. In addition, a new business will be registered in the city and new funds will be received from the payment of insurance and tax payments to the budget of the city administration.
If we consider the business plan of an auto parts store from an economic point of view, then you can get a net profit per year of more than 1 million rubles. The full payback of funds invested in opening and developing a business will occur in two years.
To implement the project, you will need to have 2 million 100 thousand rubles. Of this amount, the owner can invest only part of the funds, namely, 400 thousand rubles. Thanks to a sample business plan for an auto parts store, we can get the rest of the funds on credit at a banking institution.
This entire amount will go to the following:
- Purchase of commercial equipment for the store - 400 thousand rubles.
- Creating an assortment for the store - 1 million 700 thousand rubles.
Statistics show that car owners spend more money to maintain existing vehicles than to buy new ones
A future store owner requires knowledge of the specifics of this type of trade. The most promising option is if he himself understands the designs of various vehicles, components for them and, of course, manufacturers. Otherwise, you will either have to trust suppliers or hire specialists. In the first case, this is an additional risk, in the second - additional costs.
Which auto parts are sold to: domestic or foreign cars? What is the best buy? How not to burn out on illiquid stock?
These questions arise primarily when drawing up a business plan for an auto parts store. This means that one cannot do without market analysis.
If there are more foreign cars in big cities, then residents of the districts tend to the domestic auto industry. The choice of goods for your store also depends on this.
The second point that needs clarification is the presence of competitors.
Currently, more and more retail store owners are trying to limit the line of work, offering spare parts for a specific brand. And this is justified. It is better to specialize in one manufacturer than to fill a warehouse with spare parts for different car models, and end up with a bunch of illiquid assets.
Find out what products are already being sold in your city / area, offer what your competitors do not have.
It is best to look for premises near the service station if they do not already have their own suppliers. You can find premises near car washes (car wash business plan with calculations), cooperative garages. Things will go well near a store located in a residential area or near a large market or shopping centers.
The number of car owners is growing every year. The growth of automotive companies suggests that there are more and more cars, and as you know, any equipment needs repair over time. Therefore, the business of selling spare parts for cars is very profitable. You can understand the intricacies of running this business with the help of the Auto Parts Store business plan.
How to start opening a car store?
You need to find out what spare parts competitors are selling, research the market and analyze the goods that are in demand with customers, what parts are most often broken and what brands of cars prevail in your city. For the proper functioning of the business, the "Auto parts store" business plan offers the following:
- You need to register an individual entrepreneur to work legally.
- You should find premises for trade, rent or buy, it all depends on the amount for starting a business. The average area of the room should be 6 * 10 sq. meters, 2/3 should be allocated for the place of sale of the goods, and 1/3 for the warehouse. It is better to locate the store next to a car wash, a Service Station or a highway with good traffic.
- Do not forget that effective advertising plays an important role, a good sign and the media will do their job, you can create a website for your store on the Internet, put up a banner advertising a product at a gas station.
Download a business plan for an auto parts store for 550 rubles, from our partners, with a quality guarantee.
In the video: a special program for the sale of auto parts
This sample auto parts store business plan for good business flow is recommended to purchase:
- hold internet to the store;
- cash register;
- cash registers.
Now we need to decide on the assortment. It is not difficult to find a wholesale supplier, the main thing is to choose a suitable one and find out what terms of delivery he offers. You should find out if he has a system of discounts (after all, the profit directly depends on the price at which the goods are purchased). The main thing is that there is no shortage of goods, otherwise it will entail stagnation of trade and the loss of some customers. Therefore, we need friendly relations and long-term contracts with suppliers and manufacturers, which will minimize the risk.