Ready-made step-by-step business plan for auto parts store
Do not think that this area is much simpler than other areas of activity - it also has its own unique specifics. In order to feel confident in the chosen industry, the future owner must initially be well versed in cars, their designs, the features of each brand, operational characteristics and component parts. Otherwise, you will have to take the word of suppliers or use the services of specialists, which will bring more risk to your business in the first case, and additional costs in the second case.
Market Review and Analysis
For many years, the growth in the number of cars and, as a consequence, the demand and demand for auto parts has been steadily growing. Opportunities of official dealers are limited, they are unable to fully satisfy consumer demand for auto parts. According to statistics, the annual growth of the spare parts market is at least 20% (and its capacity for 2021 is kept at $ 54 billion).
There is also a permanent stratum of the population, which is focused on budget components: these are mainly drivers of domestically produced cars. Therefore, the owner of a car shop needs to constantly monitor changes in the market and, based on the current state of affairs, form the width and variety of the assortment presented in the store and the pricing policy.
Analysis and market review must be done as thoroughly as possible. You may have a brilliant, at first glance, idea in your head: "There are a lot of Japanese cars on the roads of our city, which means that parts for them are in great demand and will sell well", but the analysis may show that car dealerships specializing in selling Japanese components, in your city there are already six pieces, and there is only one store that sells parts for domestically produced cars.
In preparation for opening a store, you need to study the strengths and weaknesses of all your potential competitors, their pricing policy and assortment.
Types of component stores
Spare parts stores most often work in a specific area of specialization, and it is with this that you have to decide in the process of drawing up a business plan.
Most often, these stores differ from each other in the following characteristics:
- components for foreign cars;
- components for domestic cars;
- mixed supply.
- Focus on trucks or cars. It is very rare to find a car shop in which both types of components are sold simultaneously. Often, specialized stores are engaged in spare parts for trucks, which provide the necessary assortment in full. According to statistical data, the market for components for passenger cars is much wider: the sale of such spare parts makes up about 70% of the total money turnover, while spare parts for trucks account for only 30%. However, if the niche of parts for large-sized vehicles in your city is not occupied by anyone, it makes sense to move in this direction.
- A real trading platform or an online store. With the massive spread of the Internet, online shopping is gaining more and more popularity. This is not surprising, because the reduction in the cost of renting a retail space, warehouse, staff salaries allow us to offer the buyer a more favorable price than ordinary stores. However, it can be argued that the competition on the Internet at the moment is even higher than in the real sector, so if you see a prospect in opening a classic store, it is better to stop at this option.
The last option is often the safest. Having approximately equal division of the assortment, you can, if necessary, increase it in one direction or another, thereby responding to the periodic fluctuations of market demand. In the case of specialization in one thing, you will not achieve such adaptive capabilities at the right time, and during periods of market turbulence, you will have to face a decrease in profits, or even incur losses altogether. According to 2021 data, 42% of the total sales volume in the primary market of spare parts is made up of components for foreign cars, and 58% - parts for cars of the Russian automotive industry.
The demand for spare parts and consumables for motor vehicles in Russia is growing every year. This is due to the annual increase in the number of cars sold in the Russian Federation. Considering that many stores operating in this market segment have already been opened, many are interested in how to correctly draw up a business plan for an auto parts store, how much money will be required at the start and how quickly all costs will pay off.
A car is no longer a luxury item, but a means of transportation. Today, almost every family has at least one vehicle, and their number is steadily growing every year. Moreover, this applies to cars of almost all classes, both imported and domestic production. Statistics show that currently the demand for used cars is still far ahead of the purchase of new cars. This means that the demand for spare parts and components will only increase.
The auto parts business is not particularly affected by the crisis. This is due to a number of factors, firstly, the operation of a vehicle is simply a necessity for many residents. Secondly, in order for the car to work properly, it needs proper maintenance and periodic repair and replacement of defective parts and spare parts. Thirdly, it is still quite problematic to buy a quality part at an affordable price. Fourth, today online stores of various kinds are becoming more and more popular. And this niche is still very poorly occupied.
Those who decide to start their own business in this market segment must consider many factors. And therefore, experienced experts recommend that you think over and calculate everything well and only then make a decision. The best option is to draw up a preliminary business plan for an online auto parts store, which should include all the main points for starting a business:
Step by step instructions - how to open an online auto parts store
When making a business plan for an auto parts store, it is imperative to understand that its opening will take place in several stages.
1) Preparatory. This includes:
2) Organizational. Includes:
3) Production. The beginning of the workflow.
Client search options
In order for an auto parts store to start working effectively from the first days of its existence, it is necessary to take a very responsible approach to choosing your niche and finding customers. This can be done in a variety of ways. For example, through advertising in the media, the Internet, message boards, distribution of flyers, and so on. You can focus on finding key customers. These can be specialized service stations, service centers, ATP, commercial enterprises.
Purchase of equipment and selection of materials and their suppliers
Despite the fact that the auto parts market is considered highly competitive, the demand for parts and components is regular and predictable. And, since the markup for goods in this area ranges from 35 to 110%, it can be assumed that it will be beneficial to open an auto parts store from scratch.
The auto parts store will offer customers parts for the repair of foreign cars. The assortment of the store will change depending on the analysis of customer behavior. The demand for certain groups of goods will tell you which parts are more popular and trade in them will bring more profit. If the assortment is not in demand, then it is worth gradually replacing product groups in order to achieve the interest of the client.
The following product groups will be provided for opening in the store:
- special equipment,
- auto cosmetics,
- carpets, seat covers,
- stickers and tuning products ,
- universal products,
- custom body parts.
The client will be able to order large-sized spare parts according to the supplier's catalog. For the convenience of buyers, it is possible to deliver bulky goods and the ability to order goods by phone, having paid for the order to the courier-driver.
Business is focused on cars of the middle price segment.
- Japanese car owners,
- Korean car owners,
- Chinese car owners.
A dedicated niche will allow you to take a place in the market and concentrate on a narrow area. The advantage will be the richest assortment within the selected car categories.
According to Rosstat, more than 25 million foreign cars are registered in Russia. Every year the share of foreign cars continues to grow, and with it the need for spare parts for cars.
Due to the large number of cars in cities, the business of selling auto parts, like opening a car repair shop, is a great idea for your business.
None of the equipment is durable, so the parts eventually need to be repaired or replaced with similar ones.
Cost of opening a car shop
To open an auto parts store, you will need to invest in several components of the overall business picture. Here's an example of upfront costs:
- Equipment - $ 8,300.
- Purchase of the first batch of goods - from $ 55,000.
- Advertising and design costs - from $ 2,500.
- Maintenance of programs for inventory control - from $ 500 per year.
We get the figure of 66,300 dollars, excluding the rent for the premises. The rental price largely depends on the region, location and the number of square meters of premises, therefore we do not provide rental costs. According to the reviews of the owners of such stores, such a business pays off in 6-12 months.
If you decide to open a car shop, then you need to understand the specifics of this business and draw up a business plan for an auto parts store.
Auto parts store business plan
Here you can download an example of a ready-made business plan for an auto parts store for the Toyota brand. Download a business plan for an auto parts store
Your own business - auto shop
It should be said right away that the auto parts business is quite competitive. This market is constantly growing, and in every city (especially a large one), there are a lot of such shops. Therefore, before starting a business, it is necessary to conduct a thorough market analysis. Pay close attention to which parts and parts your competitors primarily sell. Also investigate which parts of cars break down most often and require replacement.
Auto parts store business plan
Auto parts store financial model
Brief Investment Memorandum
Despite the crisis, the car market shows good growth rates from year to year. This phenomenon applies to both domestically produced cars and foreign cars. Thus, the sales of auto parts are also growing. As a result, opening a business for the sale of auto parts is quite profitable, which translates into a quick payback period - 14 months, as well as a quick break-even point - 3 months.
To start a business, you need to find a room with an area of 140 m2. The premises can be found in the industrial centers of the city, on city highways where there is a large traffic flow every day. It is also necessary to hire 5 employees.
The store will sell about 1,000 items of products every month. These will include the entire product range. Average cost of production is about 1,000 rubles. The markup ranges from 40% to 50%. Considering these parameters, the financial indicators of the project will be as follows:
The amount of initial investment - 1 776 800 rubles
Monthly profit - 150,000 rubles
Payback period - 14 months
Break-even point - 3 months
Return on sales - 11%
Description of business, product or service