auto spare parts business plan in india

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How to Start Automobile Spare Parts Business – Ultimate Guide

• by Next What Business Research Team
• Auto And Transport , Business Plans
• August 30, 2024

If you want to start a retail business in the automobile industry, you can consider starting an automobile spare parts business. This automobile-related business is highly profitable. In this article, we intend to explore an auto spare parts business project plan for your reference.

Every auto spare part requires frequent change during the entire lifespan of the vehicle. And only this single reason makes the automobile spare parts industry so lucrative and evergreen. The U.S., Canada, Germany, the UK, Russia, China, India, South Korea, Japan, Indonesia, Thailand, Brazil, Mexico, Argentina, and South Africa are the major automotive aftermarket globally.

There are several ways you can start a business depending on your investment capacity. However, never try to start this business part-time. This type of retail business demands constant dedication and effort to be successful.

Table of Contents

10 Steps to Start an Auto Spare Parts Business

1. choose a business idea.

There are four ways you can start an automobile spare parts business. Below are the following:

a) Automobile Spare Parts Retail Store

This is one of the most profitable and traditional ways of starting this business. In this model, you will need to acquire retail space in a good location. And you will sell the spare parts from that retail counter to your customers.

b) Automobile Spare Parts Store with Workshop

This is another profitable opportunity for entrepreneurs. An auto spare parts retail store with a workshop allows customers to buy the parts and fix them. However, it is a cash-intensive business. With substantial capital investment and strategic planning, you can initiate this type of store.

c) Automobile Spare Parts Online Shop

If you don’t want to operate a brick-and-mortar establishment, then you can consider starting an online store. Additionally, you can run and operate this business model from home. You can open an auto spare parts online shop with low startup capital investment. To know how to set up an online store,

d) Automobile Spare Parts Franchise

If you don’t have any prior experience in the automobile industry, then it is better to start the business as a franchise partner. Even, you can consider spare parts distribution and dealerships also.

2. Conduct Market Research

First of all, you must conduct a market feasibility study to get first-hand information about the market condition and opportunities. It will also help you to understand potential competition from the other operators. It enables you to know how to develop winning strategies that will help you get a break within a few months of starting the business.

Additionally, you can identify the most popular spare parts brands in the local market. Additionally, you will need to identify the different models of bikes and cars that have a high population density in the city.

3. Create  a Business Plan

Crafting a specific business plan is a must for starting this business. Apart from creating a blueprint, the business plan helps to identify the goal and the ways of achieving that goal. Additionally, it helps to secure startup capital from investors or banks.

Develop both a business and marketing plan. Your business plan must consist of information about exactly how you are going to run the business. Additionally, mention the specialty areas if any, and how you will open and maintain your business. Where you will get your car parts, and how you will price them to earn a profit.

Your marketing plan should contain information about your target audience and local competition as well as how you intend to draw in your target audience. You can craft the plan yourself otherwise, you can take the help of professional plan writers or business plan software.

4. Location and Space

After getting the plan properly, you must secure a retail location according to your business model. Choose a location that is easily accessible to your target customers and suppliers. Also, set up a spacious and organized warehouse to store and manage your spare parts inventory.

5. Licensing & Registration

Check the registration and licensing issues of your state. Get the licenses for opening the store, selling spare parts, and have the right insurance. In India, apply for MSME Udyog Aadhaar Registration online. In addition to that, you must apply for the license under the Shops & Establishments Act.

It is always advisable to talk with a local small business consultant for the upcoming tax and compliance liabilities. Presently, GST Registration is a must to start a commercial business in India.

6. Cost and Investment

After getting the knowledge and finalizing the business model, you must calculate the requirement of startup capital. Generally, you have to consider the rent of the retail space, store setup costs, and purchasing the spare parts from the wholesaler or manufacturing companies.

Additionally, you must calculate and keep finance for operating expenses. It will help you in calculating the breakeven and expected ROI of your business.

Read:   Best Personal Loan Apps

7. Procure the Spare Parts

After finalizing the store, you will need to procure the spare parts that you want to sell from your store. Identifying the parts you need and where to find them depends largely on your business plan. According to your plan, talk to the companies and deal with the best quote with MOQ (minimum order quantity). It is advisable to have multiple suppliers to mitigate risks and ensure a steady supply of spare parts.

8. Inventory Management

Implement a robust system for cataloguing and tracking your spare parts inventory. Ensure strict quality control measures to guarantee the authenticity and reliability of your products.

9. Setup the Store

You must set up the store properly. An outdoor sign is a must. Additionally, check the electrification, counter space, and shelves properly. You can consult with an interior designer to have the right floor plan. However, you must use every inch of space properly to get the optimum benefits of it.

10. Hire Employees

Hire the right manpower. In any startup business, initial employees play an important role in achieving initial success. Check, whether you need a licensed mechanic or not. Additionally, if you want to open the store with a workshop then consider keeping an automobile engineer too. There are several free job posting sites that you can explore for headhunting.

Finally, it is time to promote your business . In the initial days, it needs tremendous promotion and advertising. Additionally, the success of this type of niche business highly depends on B2B networking. You must contact other businesses in the industry. As an example, automobile workshops buy spare parts in bulk frequently. You can offer a special discount for them.

Consider selling online. In today’s digital era, you can’t ignore internet audiences. You can sell auto spare parts from online marketplaces or your online store.

Frequently Asked Questions

How much does it cost to start a car spare parts business.

Starting a car spare parts business involves various costs, ranging from inventory to legal and operational expenses. The exact amount can vary based on several factors. It includes location, the scale of your business, and the types of spare parts you plan to sell.

The wider the range of spare parts, the higher the initial investment. Estimate costs based on the types and quantity of parts you plan to stock. If you aim to stock well-known and high-quality brands, be prepared for higher procurement costs. On average, the cost of starting a small car auto spare parts business will be in the range of Rs 10 Lacs to Rs. 25 lakhs, excluding the space rent cost.

Is the auto parts store business profitable?

The profitability of an auto parts store business can be significant, given the consistent demand for automotive components. Some of the factors that influence the degree of profitability are as follows:

• Market Demand
• Product Range
• Competitive Pricing
• Location and Accessibility
• Supplier Relationships
• Operational Efficiency
• Competition
• Economic Factors
• Technological Changes

While there are hurdles, the auto parts store business has significant profit potential, especially with good tactics in place. Entrepreneurs who are ready to invest in customer happiness, keep pricing competitive, and react to industry changes have a good chance of running a lucrative auto parts store.

How do I choose the right suppliers for my spare parts business?

Prioritize suppliers with a reputation for delivering genuine and high-quality spare parts. Negotiate pricing and terms that align with your business strategy.

How can I ensure the authenticity of the spare parts I sell?

Source spare parts directly from authorized distributors or the original manufacturers. Implement rigorous quality checks to ensure the authenticity of each part in your inventory.

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Starting Auto Spare Parts Store Business Plan (PDF)

Starting an auto spare parts store business presents an exciting and profitable venture in today’s dynamic market. As the automotive industry continues to flourish, the demand for quality spare parts has skyrocketed, creating a lucrative opportunity for entrepreneurs. This business not only promises substantial profit margins but also offers a steady stream of revenue, thanks to the ever-growing number of vehicles on the road. With cars becoming a necessity for many, the need for maintenance and replacement parts becomes inevitable, positioning auto spare parts stores as a pivotal component of the automotive ecosystem. The allure of this business lies in its resilience and the constant demand. Unlike other industries that might experience seasonal fluctuations, the auto spare parts sector remains relatively stable, driven by the continuous need for vehicle repairs and maintenance. This stability is a significant draw for business owners looking for a dependable and profitable venture.

At least 18 percent of the global population own at least one vehicle. That translates to over 1.4 billion vehicles in the world. That is a staggering number of vehicles and the figure keeps growing. Vehicles constitute several electrical and mechanical aspects. That is why they are always likely to malfunction or get worn out over time. The average vehicle has approximately 30 000 parts. If we are to look at substantially big parts or components, that is roughly 1800 parts. Vehicle ownership has been on the rise and will continue to be; even multiple vehicle ownership. The other notable dynamic is that vehicle owners are generally now keeping their vehicles for longer. As such that increases the likelihood of them needing auto spare parts at some point. That clearly shows you there is money to be made in starting an auto spare parts store business. Despite whatever the state of the economy might be in, the demand for auto spare parts will always be high. This article will outline how to start the auto spare parts store business, and the auto spare parts business plan – PDF, Word and Excel.

Market Research

The need to gather comprehensive up-to-date data.

Market research for auto spare parts business is basically 3-tier i.e. market identification, product research, and consumer research. You can conduct market research by conducting surveys, observations, interviews, and desk research. Desk research involves gathering and analysing information from print and electronic media. The reason why you must conduct market research for motor spares business is to figure out whether or not a market exists. Then if it does you would want to comprehensively know all its characteristics.

Several Variables To Consider

There are numerous different types of vehicles, brands, and makes. The most populated segment is light motor vehicles. However, that might not hold true everywhere. Thus you have to zone in on your intended target market and know its characteristics. All these are examples of variables that call upon you to conduct market research. What are the most sought after auto spare parts and for which types of vehicles?

Figuring Out The Roll Out Plan

You also have to gather enough information to know how to roll out your auto spare parts store business. Do you have to operate from a physical outlet? Should that physical outlet exclusively just focus on auto spare parts? Do you have to marry the auto spare parts element with an already existing business e.g. a fuel station, a garage, or workshop?

Maybe it could be best to consider franchising. How about rolling out the motor spares business exclusively using an online store approach? You have to know where you will score as many customers as possible. Making a decision out of all those options can only be accurate if your market research is thorough.

Make sure you have a comprehensive auto spare parts business plan

The failure to plan is the beginning of business failure. The auto parts business plan must be clear and succinct enough to give your potential partners, clients and investors an overview of what your objectives are. At the same time, it must be detailed enough to explain your business well. Your motor spares business plan should have financial statements which show that your business is viable and profitable.

Location And Premises for an Auto Parts Store

Your choice of location is of critical importance with respect to customer inflows. An appropriate location must take into account places where there are good road networks and high vehicle traffic. Your choice must also be done after being absolutely sure that your target area has people with substantial income levels. It would also be wise to scout your intended location and see whether or not there are other players active in the same trade. Once you get comprehensive details on that it’ll help you setup shop in a way that wards off competition.

As can be noticed from some central business districts, such stores can be located in streets lined up with auto spare parts shops. That can be strategic in that you get easily located due to people’s knowledge of the street. However, considering that you’ll be close to your competitors you’ll have to be very competitive. Deciding to locate yourself as a standalone shop can be expedient but do your homework to ensure customer inflows will be easy to mobilize. In general, the best location is in a central business district, shopping centres, or near places or residential areas that have high vehicle populations. The store must be sufficiently spacious with spare parts stacked neatly on clearly labelled rakes or sections. There must also be ample and secure parking space with even a loading bay where applicable. The auto spare parts store business plan should cater for the costs of purchasing or leasing the premises.

Competitive Analysis

Your auto spare parts store business cannot operate in a vacuum. There are competitors and you must study them closely. What are their business offerings? What is the nature of their customers and where are they from? Generally how are they running their auto spare parts store businesses? You are looking at all these and more to find out loopholes or gaps. The auto spare parts store business is extremely competitive. Your success can only be borne out of having superior differentiators. It will take conducting an in-depth competitive analysis to figure them out. The auto spare parts store business is highly segmented. Most players are not diligent enough in studying and finding out the finer details of their intended target markets. Take time to dig into that and you will discover how to set apart your auto spare parts store business.

Permits/Licenses, Insurance & Business Bank Account

Your business entity i.e. your auto spare parts business must be registered first and foremost. If you are going to be operating using a physical auto spares store, a store license will be needed. The requirements vary depending on your specific location. Mostly you can seek guidance on that from the local authorities of your respective location. There may be special permits or licenses that may be required depending on the nature of your services. It is possible that you might be dealing with auto spare parts, substances, machinery, or processes that require special licensing.

It could also be that some of your personnel may be required to be licensed for their respective trades. You have to see to it that you are not found wanting by operating without proper permits or licensing. Insurance is a no-brainer in running an auto spare parts business. There is an array of possible risks which need to be covered by insurance. As always it is smart to separate yourself from your business in terms of financial management. That is why you must open a business bank account solely for your auto spare parts store business. The costs of insurances and licenses must be included in your motor spares business plan.

Auto Spare Parts Products

Your product range will be hugely based on your targeted market. There auto spare parts market is huge and there several niches which your auto parts business can target. Your motor spares parts can specialize with selling auto parts for only one vehicle make eg Mercedes-Benz, Audi etc. Specialisation can also be according to product lines, eg gearboxes, suspension parts, engines, cooling systems, braking system, tyres etc. Focus can also be made to sell quick replacement auto spare parts eg brake pads, brake shoes, high pressure pumps, filters etc.  Other auto spare parts stores act like one-stop stores which sell a variety of products without specialising in anything.

The types of auto spare parts products you can sell are many and diverse. Some of them are bumpers, radiators, filters, batteries, plugs, fenders, ball joints, shock absorbers, body parts, bearings, plugs, lamps and lights (i.e. headlamps, corner lamps, tail lights and so on), sensors, rims, grills, lubricants, amongst others. It’s important to source your stock from reputable suppliers and at favourable prices so as to subsequently price them competitively at a profit. Your auto parts store business plan should obviously cater for the costs of purchasing the products which your store will be selling. You can source your auto spare parts from local and international suppliers.

Inventory Management

Effective inventory management is pivotal for the success of an auto spare parts store, as it ensures the right parts are available when needed without overstocking or facing shortages. First and foremost, understanding market demand is crucial; you should analyze which auto parts are most needed based on local vehicle types and seasonal trends. Implementing a reliable inventory system, such as real-time tracking software, is essential for monitoring stock levels, forecasting future demands, and identifying sales trends. This system should be complemented by regular inventory audits to verify physical stock against system records, thereby preventing discrepancies and theft. Organizing inventory into easily accessible categories based on part type, vehicle make, or sale frequency is also vital for efficient operation and customer satisfaction. It’s equally important to establish strong supplier relationships for a consistent supply chain, which can also aid in negotiating better prices and terms.

Adopting advanced inventory practices like Just-in-Time (JIT) inventory can further optimize stock levels, minimizing the cost of holding large quantities of inventory. This approach, coupled with offering special orders for less common parts, helps in managing space efficiently and reducing the risk of unsellable stock. Investment in employee training is essential, ensuring that staff members are proficient in using inventory systems and understand the importance of accurate stock keeping. Embracing technological advancements, such as barcode scanners, RFID tags, and cloud-based inventory systems, can significantly streamline inventory processes and improve overall efficiency. Constant monitoring and adjustment of inventory management strategies are imperative to align with evolving market trends, customer needs, and business growth.

Budgeting and Financial Planning

Budgeting and financial planning are integral components when embarking on the journey of starting an auto spare parts store business. To ensure the long-term success of your venture, it is imperative to carefully consider various financial aspects. First and foremost, assess your initial investment requirements, encompassing expenses like leasing or purchasing a suitable retail space, store setup, inventory acquisition, and legal fees. Crafting a comprehensive budget that delineates your startup costs is essential in understanding your financial footing from the outset.

Once your business is up and running, meticulous management of ongoing operating expenses is paramount. This includes accounting for monthly expenditures like rent or mortgage payments, utilities, employee salaries, and marketing costs. Simultaneously, managing your inventory efficiently is critical in this line of business. Implementing robust inventory tracking systems and setting reorder points will help you strike the right balance between having enough stock to meet customer demands without overstocking or risking shortages of essential parts. A well-thought-out pricing strategy, based on factors such as cost of goods, competition, and perceived value, should be developed and regularly reviewed to maintain competitiveness and profit margins.

Moreover, financial forecasting plays a pivotal role in your business’s success. Begin by creating a sales forecast, supported by market research and historical data, enabling you to set realistic revenue goals. To complement this, financial projections spanning the initial years of operation, including income statements, cash flow statements, and balance sheets, should be developed. These projections not only provide insights into your business’s financial health but also facilitate the identification of potential cash flow issues. Additionally, incorporating contingency planning and exploring various financing options, while remaining cautious about overburdening the business with debt, are essential steps. Collaborate with a tax advisor to ensure you are compliant with tax obligations and make the most of industry-specific deductions or credits. Regular financial reviews, comparing performance against your budget and projections, will help refine your strategies and ensure the continued prosperity of your auto spare parts store business.

Staff And Management

This will be depend on the size or scale of your auto parts business operations. At the minimum you need cashiers and store attendants. I can’t overemphasise the importance of having staff that’s well acquainted with auto spare parts and the technical details thereof. Hiring either qualified personnel with the necessary expertise or employees wielding a comprehensive background regarding vehicle repairs and maintenance will be strategic. The staff must also be passionate about engaging with customers, and be good at offering quality customer service and care. Size of management also depends on the size of the business, for small auto spare store businesses, this can just be the business owner. The salaries of all the staff should be budgeted for in the auto spare parts business plan.

Market for Auto Spare Parts Store Business

In the world of auto spare parts retail, recognizing and comprehending your potential customers is an essential aspect of building a thriving business. Consider automotive enthusiasts and do-it-yourself mechanics. These individuals are on the lookout for high-quality parts, accessories, and tools to maintain or enhance their vehicles. Your store’s success can hinge on providing a comprehensive range of products and expert advice tailored to their needs. Professional mechanics and auto repair shops represent another lucrative customer segment. They require a consistent and dependable source of spare parts for their daily operations. By offering competitive pricing, timely delivery, and exceptional customer service, you can establish lasting relationships with this critical demographic. Fleet managers, overseeing businesses with vehicle fleets like delivery services or taxi companies, present an opportunity for bulk purchasing options and tailored service agreements.

Additionally, don’t overlook the potential of car dealerships in need of spare parts for vehicle maintenance and repair. Forge partnerships with local dealerships by offering attractive pricing and efficient order processing. In the digital age, a significant portion of customers prefer online shopping. To capture this market segment, it’s crucial to create a user-friendly e-commerce website with easy navigation, secure payment processing, and efficient shipping options. Vintage car enthusiasts are another specialized group, often seeking rare and hard-to-find parts for their beloved classics. Providing expertise in sourcing and stocking unique components can win the loyalty of this passionate customer base.

Local car owners seeking parts for routine maintenance or minor repairs represent a valuable demographic within your community. Building a strong local presence through advertising and word-of-mouth can effectively reach and engage this group. Off-road and specialty vehicle owners, including motorcycle enthusiasts, require specialized parts and accessories. Tailor your offerings and knowledge base to cater to the distinct needs of these niche areas. For a consistent stream of business, consider pursuing contracts or partnerships with government agencies, municipalities, and public transportation services, as they frequently require spare parts for their vehicle fleets. Businesses in the agricultural and industrial sectors rely on vehicles and machinery that demand spare parts. Targeting these sectors with relevant products and specialized services can unlock additional revenue streams.

Marketing Plan

First things first – press release & official launch.

When starting an auto spare parts store you must do a proper press release. A press release is one of the most tried and tested means to market your business. Marry that with doing a notable official launch of the store.

Digital Marketing Must Be Central

The core of your marketing initiatives, moving on, should be premised on digital marketing. Put up active social media accounts for the auto spare parts store business. One of the trending ways nowadays is to conduct online contests on social media. Your contests must incorporate the use of hashtags and rewarding the highest engagements.

Involving social media influencers can enhance the efficacy of your digital marketing efforts. Though of course you can and must still place ads in print and other electronic media. For example, you can place ads to be aired on radio or TV. Hand out fliers or put up banners, posters, or billboards.

Participation In Strategic Events & Initiatives

Additionally, you must always be on the lookout for strategic events to attend. These can be trade shows, car shows, racing events, expos, and the like. Participate in community development programs to increase visibility of your auto spare parts store business.

Keys To Profitability

Unlocking profitability for your auto spare parts store demands a multifaceted approach. Efficient inventory management takes the top spot. Striking the right balance between having enough high-demand parts to meet customer needs and avoiding overstocking is crucial. Implementing an inventory tracking system will optimize stock levels, ensuring you neither tie up excessive capital nor risk stockouts. Competitive pricing is another pivotal factor. Study your competitors’ pricing strategies and find the equilibrium that allows you to remain competitive while preserving healthy profit margins. Regularly reviewing and adjusting your pricing according to market fluctuations is essential for sustained profitability. Exceptional customer service can make or break your business. Establish strong customer relationships by offering expert advice, timely assistance, and a seamless shopping experience. Happy customers are more likely to return, bolstering your profitability over time.

Nurturing solid supplier relationships can enhance profitability by leading to favorable terms, discounts, and credit arrangements. Maintaining strong connections with your suppliers can result in better pricing and preferential treatment. Effective marketing efforts, encompassing both online and offline channels, should not be overlooked, as they can significantly increase your store’s visibility and drive sales. Managing operating costs effectively is paramount, with regular reviews to identify areas for cost reduction while maintaining quality and service standards. Expanding your product range beyond spare parts, offering related products or services, can diversify revenue streams. Continuous improvement is a constant endeavor, with feedback from customers and employees serving as valuable inputs. Stay abreast of industry trends and leverage technology to remain competitive and profitable. Monitoring your financial performance closely through regular reviews of financial statements, cash flow, and profit margins is essential to identify trends and proactively address any issues. Investing in employee training and motivation is crucial, ensuring knowledgeable staff who provide excellent customer service and remain motivated and productive.

Pre-Written Auto Spare Parts Store Business Plan (PDF, Word And Excel): Comprehensive Version, Short Funding/Bank Loan Version and Automated Financial Statements

For an in-depth analysis of the auto spare parts store business, we encourage you to purchase our well-researched and comprehensive auto spare parts store business plan. We introduced the business plans after discovering that many were venturing into the auto parts business without enough knowledge and understanding of how to run the business, lack of understanding of the financial side of the business, lack of understanding of : the industry, the risks involved , costs and profitability of the business; which often leads to disastrous losses.

The StartupBiz Global auto spare parts business plan will make it easier for you to launch and run your auto spares business successfully, fully knowing what you are going into, and what’s needed to succeed in the business. It will be easier to plan and budget as you will be aware of all the costs involved in setting up and running the auto parts business.

Uses of the Auto Spare Parts Business Plan (PDF, Word And Excel)

The auto spares store business plan can be used for many purposes including:

• Raising capital from investors/friends/relatives
• Applying for a bank loan
• Start-up guide to launch your auto parts store business
• As an auto spare parts store business proposal
• Assessing profitability of the motor spares business
• Finding a business partner
• Assessing the initial start-up costs so that you know how much to save
• Manual for current business owners to help in business and strategy formulation

Contents of the Auto Spare Parts Business Plan (PDF, Word And Excel)

The auto parts business plan include, but not limited to:

• Marketing Strategy
• Financial Statements (monthly cash flow projections, income statements, cash flow statements, balance sheets, break even analysis, payback period analysis, start-up costs, financial graphs, revenue and expenses, Bank Loan Amortization)
• Industry Analysis
• Market Analysis
• Risk Analysis
• SWOT & PEST Analysis
• Operational Requirements
• Operational Strategy
• Why some people in the auto spare parts store business fail, so that you can avoid their mistakes
• Ways to raise capital to start your auto spare parts store business

The auto spare parts business plan package consists of 4 files

• Auto Spare Parts Store Business Plan – PDF file (Comprehensive Version – 68 Pages)
• Auto Spare Parts Store Business Plan – Editable Word File (Comprehensive Version – 68 Pages)
• Auto Spare Parts Store Business Plan Funding/Bank Loan Version- Editable Word File (Short version for applying for a loan/funding – 42 pages)
• Auto Spares Parts Store Business Plan Automated Financial Statements – (Editable Excel File)

The business plan can be used in any country and can be easily edited. The financial statements are automated. This implies that you can change eg the percentage markup, salaries etc, and all the other financial statements will automatically adjust to reflect the change. 

Click below to download the Contents Page of the Auto Spare Parts Business Plan (PDF)

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Get the Auto Spare Parts Store Business Plan (PDF, Word And Excel)

Click Buy Now  below to purchase using Paypal, Credit Card, or Debit Card. After you have purchased, you will immediately see the download link for the business plan package on the screen. You will also immediately get an email with the business plan download link. The Pre-written business plan package (PDF, Word, and Excel) costs $30 only!

If you want to purchase multiple business plans at once then click here: Business Plans Store.

The business plan package is a zipped compressed file containing the PDF, Word and Excel documents. To open the package after downloading it, just right click, and select Extract All. If you have any problems in downloading and opening the files, email us on [email protected] and we will assist you.

We wish you the best in your auto spare parts store business! Check out our collection of business plans  , and more business ideas .

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Auto Spare Parts Shop Business Plan [Sample Template]

By: Author Tony Martins Ajaero

Home » Business ideas » Automotive Industry » Auto Parts Store

Are you about starting an auto spare parts shop? If YES, here is a complete sample auto spare parts shop business plan template & feasibility report you can use for FREE .

Okay, so we have considered all the requirements for starting an auto spare parts shop. We also took it further by analyzing and drafting a sample auto spare parts shop marketing plan template backed up by actionable guerrilla marketing ideas for auto spare parts shops. So let’s proceed to the business planning section .

For as long as people still use automobile on our roads, the need for auto spare parts will continue to be in high  demand. Auto spare parts business is no doubt a profitable business because the replacement of damaged or worn – out auto parts is compulsory if you want your vehicle to continue to be on the road and serve the purpose you bought it for.

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If you are in search for a business to start as an entrepreneur and you know you have a penchant for the automobile industry, then you should consider starting your own auto spare parts sale business.

Even though you don’t need a college degree to establish your own auto spare parts store, but you would need some form of informal training, you might have to work as an apprentice with someone who owns an auto spare parts store. It makes it easier for you to learn the ropes and how to manage your own auto spare parts stores.

It is important to point out that auto spare parts business is one of the businesses that can’t go out of fashion and this is simply because of the role it plays in the auto industry. Depending on the scale you want to start, the startup capital for this type of business can be considered to be moderate.

As a matter of fact, you can start your own auto spare parts store and then grow it big within a short period of time by reinvesting your profits back to the business. Here below is a sample auto spare parts stores business plan template that will help you successfully write yours with little or no stress;

A Sample Auto Spare Parts Shop Business Plan Template

1. industry overview.

The auto parts stores industry includes stores / shops that retail new and used automotive parts and accessories, repair automobiles and install automotive accessories.

Players in this industry can choose to operate a single store in just one location or chains of stores in several locations scattered all across the united states of America. As a matter of fact, auto stores can be found in all parts of the world as long as there are automobiles there.

IBIS World projected that the Auto Parts Stores industry is expected to grow slowly over the five years to 2016. They stated that per capita disposable income and corporate profit boosted the demand for auto parts. Furthermore, favorable car usage trends have led to growth in demand for industry products in the short term.

Nevertheless, advancements in motor vehicle technology have made it increasingly difficult for vehicle owners to repair and maintain vehicles without professional help. Going forward, the revenue generated by operators in the industry is expected to grow at the same pace as the previous period.

As the national level of per capita disposable income continues to rise, some consumers will increase their spending on maintaining and fixing their automobile hence the increase in demand for products and services from the Auto Stores industry

The Auto Parts Stores Industry is indeed a large industry and pretty much active in all the countries of the world. Statistics has it that in the United States of America alone, there are about 43,136 registered and licensed auto spare parts stores scattered all across the United States responsible for directly employing about 376,102 people and the industry rakes in a whooping sum of $56 billion annually.

The industry is projected to grow at 1.9 percent annual growth within 2011 and 2016. It is important to state that Advance Auto Parts, AutoZone Inc., Genuine Parts Company, and O’Reilly Automotive Inc. have the largest chunk of the available market share in the industry.

A close observation of the Auto Parts Stores industry shows that the industry has low barriers to entry. In the United States, the industry is subject to few restrictive regulations, and industry employees typically do not need to be trained formally to be able to carry out their duties.

The truth is that, the start – up capital for opening an auto parts stores especially when it involves establishing a standard auto parts stores with products from various automobile companies. But if you choose to start a spare part store like the average mom and pop business, then you would not have to stress yourself because you will only need minimal start – up capital to launch the business.

The tough part as it relates to start-up costs most likely are the need to establish a supply of auto parts from wholesalers or directly from auto parts manufacturing companies.

This is so because an auto parts business cannot be started without sourcing products for sale. Regardless of low barriers to entry, the competitive nature of the industry make it very difficult for new operators to break even within a short period of time in the industry.

Lastly, the auto spare parts industry is pretty much open for aspiring entrepreneurs to launch their business in the industry. One good thing about auto spare parts stores business is that the business can be opened in any part of the United States and if proper market survey and feasibility studies are conducted, then you can rule out profitability of the business.

2. Executive Summary

Freeway Auto Parts Stores is a standard and registered auto spares parts retail store business that will be located in one of the busiest streets in Charleston – South Carolina.

We have been able to lease a facility that is big enough (a 5 thousand square foot facility) to fit into the design of the kind of standard auto spare parts retail store that we intend launching and the facility is located around the largest residential estate in Charleston – South Carolina.

Freeway Auto Parts Stores will be involved in selling automotive parts and accessories, distributing automotive parts from different manufacturers (brands) from the United States and abroad and repairing automobiles. We are set to services a wide range of clientele in and around Charleston – South Carolina.

We are aware that there are several large and small chains of auto spare parts retail store outlets all around Charleston – South Carolina, which is why we spent time and resources to conduct a thorough feasibility studies and market survey so as to be well positioned to favorably compete with all our competitors.

We have an online – service option for our customers, and our outlet is well secured with various payments of options. Freeway Auto Parts Stores will ensure that all her customers are given first class treatment whenever they visit our auto parts retail store.

We have a CRM software that will enable us manage a one on one relationship with our customers no matter how large the numbers of our customers’ base may grow to.

We will ensure that we get our customers involved in the selection of brands that will be in our store and also when making some business decisions. Freeways Auto Parts Stores will at all-time demonstrate her commitment to sustainability, both individually and as a firm, by actively participating in our communities and integrating sustainable business practices wherever possible.

We will ensure that we hold ourselves accountable to the highest standards by meeting our customers ‘needs precisely and completely whenever they patronize our products. We will cultivate a working environment that provides a human, sustainable approach to earning a living, and living in our world, for our partners, employees and for our customers.

Freeway Auto Parts Stores®, LLC is a family business that is owned by Jerry Herbert Godsons and his immediate family members.

Herbert Godsons has a B.Sc. in Business Administration, with well over 5 years of experience in the Auto Parts Stores industry, working for some of the leading brand in the United States. Although the business is launching out with just one outlet in Charleston – South Carolina, but there is a plan to open other outlets all around major cities in the United States and Canada.

3. Our Products and Services

Freeway Auto Parts Stores is in the auto parts stores industry to service a wide range of clients and of course to make profits, which is why we will ensure we go all the way to make available a wide range of auto parts from top manufacturing brands in the United States and other countries of the world.

We will ensure that we do all that is permitted by the law of the United States to achieve our aim and ambition of starting the business. Our product and services offerings are listed below;

• Selling automotive parts and accessories (critical parts (new), critical parts (used), maintenance parts, accessories and performance parts)
• Distributing automotive parts
• Repairing automobiles and installing automotive accessories

4. Our Mission and Vision Statement

• Our vision is to become one of the leading brands in the auto parts stores industry in South Carolina and to establish a one stop auto parts retail store in Charleston – South Carolina and in other key cities in the United States of America and Canada.
• Our mission is to establish a world – class auto parts retail store business that will make available a wide range of auto parts from top auto parts manufacturing brands at affordable prices to the residence of Charleston – South Carolina and other key cities in the United States of America and Canada where we intend opening of chains of auto parts retail stores and franchise.

Our Business Structure

Freeway Auto Parts Stores does not intend to start an auto parts retail store business like the usual mom and pop business around the street corner; our intention of starting an auto parts retail store business is to build a standard and one stop auto parts retail store outlet in Charleston – South Carolina.

Although our auto parts retail store business might not be as big as Advance Auto Parts, AutoZone Inc., Genuine Parts Company, and O’Reilly Automotive Inc et al, but will ensure that we put the right structure in place that will support the kind of growth that we have in mind while setting up the business.

We will ensure that we hire people that are qualified, honest, customer centric and are ready to work to help us build a prosperous business that will benefit all the stakeholders (the owners, workforce, and customers).

As a matter of fact, profit-sharing arrangement will be made available to all our senior management staff and it will be based on their performance for a period of ten years or more. In view of that, we have decided to hire qualified and competent hands to occupy the following positions;

• Chief Executive Officer (Owner)
• Store Manager
• Human Resources and Admin Manager

Merchandize Manager

Sales and Marketing Manager

Information Technologist

• Accountants / Cashiers
• Sales Agents / Customer Services Executive

5. Job Roles and Responsibilities

Chief Executive Officer – CEO:

• Raises management’s effectiveness by recruiting, selecting, orienting, training, coaching, counseling, and disciplining managers; communicating values, strategies, and objectives.
• Creates, communicates, and implements the organization’s vision, mission, and overall direction – i.e. leading the development and implementation of the overall organization’s strategy.
• Accountable for fixing prices and signing business deals
• In charge of providing direction for the busines
• Responsible for signing checks and documents on behalf of the company
• Appraises the success of the organization
• Reports to the board

Admin and HR Manager

• Responsible for overseeing the smooth running of HR and administrative tasks for the organization
• Maintains office supplies by checking stocks; placing and expediting orders; evaluating new products.
• Ensures operation of equipment by completing preventive maintenance requirements; calling for repairs.
• Informs job knowledge by participating in educational opportunities; reading professional publications; maintaining personal networks; participating in professional organizations.
• Enhances department and organization reputation by accepting ownership for accomplishing new and different requests; exploring opportunities to add value to job accomplishments.
• Explains job positions for recruitment and managing interviewing process
• Carrying out staff induction for new team members
• In authority of working out, evaluation and assessment of employees
• Responsible for arranging travel, meetings and appointments
• Supervises the smooth running of the daily office activities.

Store Manager:

• In control of managing the daily activities in the store
• Guarantees that proper records of auto parts are kept and warehouse does not run out of products
• Ensures that the store facility is in tip top shape and goods are properly arranged and easy to locate
• Interfaces with third – party suppliers (vendors)
• Brings about vendor relations, market visits, and the ongoing education and development of the organizations’ buying teams
• Helps to guarantee consistent quality of auto parts from different manufacturers are purchased and retailed in good price that will ensure we make good profit
• Brings about external research and coordinate all the internal sources of information to retain the organizations’ best customers and attract new ones
• Model demographic information and analyze the volumes of transactional data generated by customer purchases
• Recognizes, arranges, and stretches out to new partners, and business opportunities et al
• Identifies development opportunities; follows up on development leads and contacts; participates in the structuring and financing of projects; assures the completion of development projects.
• Responsible for supervising implementation, advocate for the customer’s needs, and communicate with clients
• Accomplishes the organization website goals
• Handles ecommerce aspect of the business
• Responsible for installing and maintenance of computer software and hardware for the organization
• Manages logistics and supply chain software, Web servers, e-commerce software and POS (point of sale) systems
• Manages the organization’s CCTV
• Handles any other technological and IT related duties.

Accountant / Cashier:

• Accountable for preparing financial reports, budgets, and financial statements for the organization
• Provides managements with financial analyses, development budgets, and accounting reports; analyzes financial feasibility for the most complex proposed projects; conducts market research to forecast trends and business conditions.
• Responsible for financial forecasting and risks analysis.
• Performs cash management, general ledger accounting, and financial reporting
• Responsible for developing and managing financial systems and policies
• Responsible for administering payrolls
• Ensures compliance with taxation legislation
• Handles all financial transactions for the organization
• Serves as internal auditor for the organization

Client Service Executive

• Ensures that all contacts with clients (e-mail, walk-In center, SMS or phone) provides the client with a personalized customer service experience of the highest level
• Through interaction with customers on the phone, uses every opportunity to build client’s interest in the company’s products and services
• Manages administrative duties assigned by the human resources and admin manager in an effective and timely manner
• Consistently stays abreast of any new information on the organizations’ products, promotional campaigns etc. to ensure accurate and helpful information is supplied to customers when they make enquiries (answer customer queries regarding the store and the merchandise)
• Find out the customer’s needs, recommend, select and help locate the right merchandise, describe a product’s features and benefits.
• In control for cleaning all the goods and the store facility at all times
• Ensure that toiletries and supplies don’t run out of stock
• Cleans both the interior and exterior of the store facility
• Handle any other duty as assigned by the store manager.

6. SWOT Analysis

Our intention of starting just one outlet of our auto parts retail store in Charleston – South Carolina is to test run the business for a period of 2 to 5 years to know if we will invest more money, expand the business and then open other outlets all over major towns in South Carolina and key cities in the United States and Canada.

We are quite aware that there are several auto parts retail stores all over Charleston and even in the same location where we intend locating ours, which is why we are following the due process of establishing a business.

We know that if a proper SWOT analysis is conducted for our business, we will be able to position our business to maximize our strength, leverage on the opportunities that will be available to us, mitigate our risks and be welled equipped to confront our threats.

Freeway Auto Parts Stores®, LLC employed the services of an expert HR and Business Analyst with bias in retailing to help us conduct a thorough SWOT analysis and to help us create a Business model that will help us achieve our business goals and objectives. This is the summary of the SWOT analysis that was conducted for Freeway Auto Parts Stores®, LLC;

Our location, the business model we will be operating on both (physical store and online store), varieties of payment options, wide range of auto parts from different manufacturing brands both from the United States and abroad and our excellent customer service culture will definitely count as a strong strength for Freeway Auto Parts Stores®, LLC. So also, our team of highly qualify staff members is also a plus for the business.

A major weakness that may count against us is the fact that we are a new auto parts retail store outlet in Charleston – South Carolina and we don’t have the financial capacity to compete with multi – million dollars’ auto parts retail store outlets like Advance Auto Parts, AutoZone Inc., Genuine Parts Company, O’Reilly Automotive Inc and co when it comes to retailing at a rock bottom prices for all their auto parts.

• Opportunities:

The fact that we are going to be operating our auto parts retail store close to one of the largest residential estates in Charleston – South Carolina provides us with unlimited opportunities to sell our auto parts to a large number of individuals, auto repair, services and maintenance garages and transport companies.

We have been able to conduct thorough feasibility studies and market survey and we know what our potential clients will be looking for when they visit our auto parts store outlets; we are well positioned to take on the opportunities that will come our way.

Just like any other business, one of the major threats that we may face is economic downturn. It is a reality that  economic downturn affects purchasing / spending power. Another threat that may likely confront us is the arrival of a new auto parts retail outlet in same location where ours is located. So also, unfavorable government policies may also pose a threat for businesses such as ours.

7. MARKET ANALYSIS

• Market Trends

If you are conversant with the Auto Parts Stores Industry, you will quite agree that the changes in disposable income, consumer sentiment, and ever changing trends are major growth drivers for sales in this industry. No doubt, a massive rise in consumer confidence has also contributed in helping the industry experience remarkable growth, but uneven performance in these drivers has led to slightly constrained revenue growth for the industry.

So also, the rising demand for parts manufactured by a third-party manufacturing company, as a result of increasing disposable income and consumer sentiment, will result in revenue growth, but profit margins will stagnate as auto retail stores keep prices low to attract more sales amid growing competition.

Lastly, in recent time, the auto parts retail stores landscape has seen tremendous changes in the last 20 years; it has grown from the smaller outlets to a more organized and far reaching venture. The introduction of franchise and online store makes it easier for a retailer to reach out to a larger market far beyond the areas where his physical auto parts retail store is located.

8. Our Target Market

Perhaps it will be safe to submit that the auto parts retail stores industry has one of the largest ranges of customers; almost every automobile owner would have one reason or the other to purchase automobile parts and accessories.

In view of that, we have positioned our auto parts retail store to service the residence of Charleston – South Carolina and every other location where franchise cum outlets of our auto parts retail stores will be located all over key cities in the United States of America and Canada.

We have conducted our market research and feasibility studies and we have ideas of what our target market would be expecting from us. We are in business to retail a wide range of auto parts to the following groups of people and corporate organizations;

• Auto repair, maintenance and servicing garages
• Transport companies
• Haulage companies

Our competitive advantage

A close study of the auto parts retail stores industry reveals that the market has become much more intensely competitive over the last decade. As a matter of fact, you have to be highly creative, customer centric and proactive if you must survive in this industry.

We are aware of the stiffer competition and we are well prepared to compete favorably with other leading auto parts retail stores in Charleston – South Carolina and throughout the United States and Canada.

Freeway Auto Parts Stores®, LLC is launching a standard one stop auto parts retail store that will indeed become the preferred choice of residence / automobile owners of Charleston – South Carolina and every other location where our outlets will be opened.

Our auto parts retail store is located close to the largest residential estate in Charleston – South Carolina We have enough parking spaces that can accommodate well over 30 cars per time.

One thing is certain; we will ensure that we have a wide range of auto parts from leading auto parts manufacturers available in our store at all times. It will be difficult for customers to visit our auto parts retail store and not see the type of auto parts and accessories they are looking for.

One of our business goals is to make Freeway Auto Parts Stores®, LLC a one stop auto parts retail shop for automobile owners, auto repair, maintenance and servicing garages and transport companies. Our excellent customer service culture, online store, various payment options and highly secured facility will serve as a competitive advantage for us.

Lastly, our employees will be well taken care of, and their welfare package will be among the best within our category (startups auto parts retail stores) in the industry meaning that they will be more than willing to build the business with us and help deliver our set goals and achieve all our aims and objectives. We will also give good working conditions and commissions to freelance sales agents that we will recruit from time to time.

9. SALES AND MARKETING STRATEGY

• Sources of Income

Freeway Auto Parts Stores®, LLC is in business to retail a wide range of auto parts to the residence of Charleston – South Carolina. We are in the auto parts retail stores industry to

10. Sales Forecast

One thing is certain when it comes to auto parts retail stores, if your store is well stocked with various types of auto parts and accessories and your store is centrally positioned, you will always attract customers cum sales and that will sure translate to increase in revenue generation for the business.

We are well positioned to take on the available market in Charleston – South Carolina and we are quite optimistic that we will meet our set target of generating enough income / profits from the first six month of operations and grow the business and our clientele base.

We have been able to critically examine the auto parts retail stores industry and we have analyzed our chances in the industry and we have been able to come up with the following sales forecast. The sales projections are based on information gathered on the field and some assumptions that are peculiar to similar startups in Charleston – South Carolina.

Below are the sales projections for Freeway Auto Parts Stores®, LLC it is based on the location of our business and other factors as it relates to auto parts retail stores start – ups in the United States;

• First Fiscal Year-: $250,000
• Second Fiscal Year-: $450,000
• Third Fiscal Year-: $750,000

N.B : This projection is done based on what is obtainable in the industry and with the assumption that there won’t be any major economic meltdown and there won’t be any major competitor retailing same sporting goods brands and customer care services as we do within same location. Please note that the above projection might be lower and at the same time it might be higher.

• Marketing Strategy and Sales Strategy

Before choosing a location for Freeway Auto Parts Stores®, LLC we conduct a thorough market survey and feasibility studies in order for us to be able to be able to penetrate the available market and become the preferred choice for residence of Charleston – South Carolina.

We have detailed information and data that we were able to utilize to structure our business to attract the numbers of customers we want to attract per time.

We hired experts who have good understanding of the auto parts retail stores industry to help us develop marketing strategies that will help us achieve our business goal of winning a larger percentage of the available market in Charleston – South Carolina.

In other to continue to be in business and grow, we must continue to sell the auto parts and accessories that are available in our store which is why we will go all out to empower or sales and marketing team to deliver. In summary, Freeway Auto Parts Stores®, LLC will adopt the following sales and marketing approach to win customers over;

• Open our auto parts retail store in a grand style with a party for all
• Introduce our auto parts retail store by sending introductory letters alongside our brochure to organizations, households, auto repair, maintenance and servicing garages, transport companies and other key stake holders in Charleston – South Carolina
• Ensure that we have a wide range of auto parts and accessories from different brands at all times.
• Make use of attractive handbills to create awareness and also to give direction to our auto parts retail store
• Position our signage / flexi banners at strategic places around Charleston – South Carolina
• Position our greeters to welcome and direct potential customers
• Create a loyalty plan that will enable us reward our regular customers
• Engage on road shows within our neighborhood to create awareness for our auto parts retail store.
• List our business and products on yellow pages ads (local directories)
• Leverage on the internet to promote our business
• Engage in direct marketing and sales
• Encourage the use of Word of mouth marketing (referrals)
• Join local chambers of commerce and industries to network and market our products

11. Publicity and Advertising Strategy

Despite the fact that our auto parts retail store is well located, we will still go ahead to intensify publicity for the business. We are going to explore all available means to promote our auto parts retail store.

Freeway Auto Parts Stores®, LLC has a long-term plan of opening outlets in various locations all around South Carolina and key cities in the United States and Canada which is why we will deliberately build our brand to be well accepted in Charleston before venturing out.

As a matter of fact, our publicity and advertising strategy is not solely for winning customers over but to effectively communicate our brand. Here are the platforms we intend leveraging on to promote and advertise Freeway Auto Parts Stores;

• Place adverts on community based newspapers, radio stations and TV stations.
• Encourage the use of word of mouth publicity from our loyal customers
• Ensure that our we position our banners and billboards in strategic positions all around Charleston – South Carolina
• Distribute our fliers and handbills in target areas in and around our neighborhood
• Contact corporate organizations, households, landlord associations and auto repair, maintenance and servicing garages by calling them up and informing them of Freeway Auto Parts Stores®, LLC and the products we sell
• Advertise our auto parts retail store business in our official website and employ strategies that will help us pull traffic to the site
• Brand all our official cars and trucks and ensure that all our staff members and management staff wears our branded shirt or cap at regular intervals.

12. Our Pricing Strategy

Aside from quality, pricing is one of the key factors that gives leverage to auto parts retail stores, it is normal for consumers to go to places (auto parts retail outlets) where they can get auto parts and accessories at cheaper prices which is why big player in the auto parts stores industry like Advance Auto Parts, AutoZone Inc., Genuine Parts Company, O’Reilly Automotive Inc and co will attract loads of corporate and individual clients.

We know we don’t have the capacity to compete with Advance Auto Parts, AutoZone Inc., Genuine Parts Company, O’Reilly Automotive Inc. and co but we will ensure that the prices and quality of all the auto parts and accessories that are available in our store are competitive with what is obtainable amongst auto parts stores within our level.

• Payment Options

The payment policy adopted by Freeway Auto Parts Store is all inclusive because we are quite aware that different customers prefer different payment options as it suits them but at the same time, we will ensure that we abide by the financial rules and regulation of the United States of America. Here are the payment options that Freeway Auto Parts Stores®, LLC will make available to her clients;

• Payment via bank transfer
• Payment with cash
• Payment via credit cards / Point of Sale Machines (POS Machines)
• Payment via online bank transfer
• Payment via check
• Payment via mobile money transfer
• Payment via bank draft

In view of the above, we have chosen banking platforms that will enable our client make payment for the purchase of auto parts and accessories without any stress on their part. Our bank account numbers will be made available on our website and promotional materials to clients who may want to deposit cash or make online transfer for our products and services.

13. Startup Expenditure (Budget)

In setting up any business, the amount or cost will depend on the approach and scale you want to undertake. If you intend to go big by renting / leasing a big facility, then you would need a good amount of capital as you would need to ensure that your employees are well taken care of, and that your facility is conducive enough for workers to be creative and productive.

This means that the start-up can either be low or high depending on your goals, vision and aspirations for your business. The materials and equipment that will be used are nearly the same cost everywhere, and any difference in prices would be minimal and can be overlooked.

As for the detailed cost analysis for starting an auto parts retail store business; it might differ in other countries due to the value of their money. These are the key areas where we will spend our start – up capital on;

• The total fee for registering the business in the Unites States of America – $750.
• Legal expenses for obtaining licenses and permits as well as the accounting services (software, P.O.S machines and other software) – $3,300.
• Marketing promotion expenses for the grand opening of Freeway Auto Parts Stores®, LLC in the amount of $3,500 and as well as flyer printing (2,000 flyers at $0.04 per copy) for the total amount of $3,580.
• The cost for hiring business consultant – $2,500.
• Insurance (general liability, workers’ compensation and property casualty) coverage at a total premium – $2,400.
• The cost for payment of rent for 12 month at $1.76 per square feet in the total amount of $105,600.
• The cost for shop remodeling (construction of racks and shelves) – $20,000.
• Other start-up expenses including stationery ($500) and phone and utility deposits ( $2,500 ).
• Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $60,000
• The cost for start-up inventory (stocking with a wide range of auto parts and accessories from different manufacturing brands) – $200,000
• The cost for counter area equipment – $9,500
• The cost for store equipment (cash register, security, ventilation, signage) – $13,750
• The cost of purchase and installation of CCTVs: $10,000
• The cost for the purchase of office furniture and gadgets (Computers, Printers, Telephone, TVs, Sound System, tables and chairs et al): $4,000.
• The cost of launching a website: $600
• The cost for our opening party: $7,000
• Miscellaneous: $10,000

We would need an estimate of five hundred thousand dollars ( $500,000 ) to successfully set up our auto parts retail store in Charleston – South Carolina. Please note that this amount includes the salaries of all the staff for the first month of operation.

Generating Funds / Startup Capital for Freeway Auto Parts Stores®, LLC

Freeway Auto Parts Stores®, LLC is a private registered business that is solely owned and financed by Herbert Godsons and his immediate family members. They do not intend to welcome any external business partner which is why he has decided to restrict the sourcing of the start – up capital to 3 major sources. These are the areas we intend generating our start – up capital;

• Generate part of the start – up capital from personal savings
• Source for soft loans from family members and friends
• Apply for loan from my Bank

N.B: We have been able to generate about $150,000 ( Personal savings $100,000 and soft loan from family members $50,000 ) and we are at the final stages of obtaining a loan facility of $350,000 from our bank. All the papers and document have been signed and submitted, the loan has been approved and any moment from now our account will be credited with the amount.

14. Sustainability and Expansion Strategy

The future of a business lies in the numbers of loyal customers that they have, the capacity and competence of the employees, their investment strategy and the business structure. If all of these factors are missing from a business (company), then it won’t be too long before the business close shop.

One of our major goals of starting Freeway Auto Parts Stores®, LLC is to build a business that will survive off its own cash flow without the need for injecting finance from external sources once the business is officially running.

We know that one of the ways of gaining approval and winning customers over is to retail our wide range of quality auto parts and accessories a little bit cheaper than what is obtainable in the market and we are well prepared to survive on lower profit margin for a while.

Freeway Auto Parts Stores®, LLC will make sure that the right foundation, structures and processes are put in place to ensure that our staff welfare are well taken of. Our company’s corporate culture is designed to drive our business to greater heights and training and retraining of our workforce is at the top burner.

As a matter of fact, profit-sharing arrangement will be made available to all our management staff and it will be based on their performance for a period of six years or more. We know that if that is put in place, we will be able to successfully hire and retain the best hands we can get in the industry; they will be more committed to help us build the business of our dreams.

Check List / Milestone

• Business Name Availability Check: Completed
• Business Registration: Completed
• Opening of Corporate Bank Accounts: Completed
• Securing Point of Sales (POS) Machines: Completed
• Opening Mobile Money Accounts: Completed
• Opening Online Payment Platforms: Completed
• Application and Obtaining Tax Payer’s ID: In Progress
• Application for business license and permit: Completed
• Purchase of Insurance for the Business: Completed
• Leasing of facility and remodeling the shop: In Progress
• Conducting Feasibility Studies: Completed
• Generating capital from family members: Completed
• Applications for Loan from the bank: In Progress
• Writing of Business Plan: Completed
• Drafting of Employee’s Handbook: Completed
• Drafting of Contract Documents and other relevant Legal Documents: In Progress
• Design of The Company’s Logo: Completed
• Graphic Designs and Printing of Packaging Marketing / Promotional Materials: In Progress
• Recruitment of employees: In Progress
• Purchase of the needed furniture, racks, shelves, computers, electronic appliances, office appliances and CCTV: In progress
• Creating Official Website for the Company: In Progress
• Creating Awareness for the business both online and around the community: In Progress
• Health and Safety and Fire Safety Arrangement (License): Secured
• Opening party / launching party planning: In Progress
• Compilation of our list of products that will be available in our store: Completed
• Establishing business relationship with vendors – manufacturers and suppliers of auto parts and accessories: In Progress

Expert business plan and financial models

Auto Parts Store Business Plan Template & PDF Example

• September 4, 2024
• Business Plan

Creating a comprehensive business plan is crucial for launching and running a successful auto parts store. This plan serves as your roadmap, detailing your vision, operational strategies, and financial plan. It helps establish your auto parts store’s identity, navigate the competitive market, and secure funding for growth.

This article not only breaks down the critical components of an auto parts store business plan, but also provides an example of a business plan to help you craft your own.

Whether you’re an experienced entrepreneur or new to the retail industry, this guide, complete with a business plan example, lays the groundwork for turning your auto parts store concept into reality. Let’s dive in!

Our auto parts store business plan is structured to cover all essential aspects needed for a comprehensive strategy. It outlines the store’s operations, marketing strategy, market environment, competitors, management team, and financial forecasts.

• Executive Summary : Offers an overview of your auto parts store’s business concept, market analysis , management, and financial strategy.
• Store & Location: Describes the store’s design, amenities, and why its location is appealing to potential clients.
• Supply & Products: Lists the products provided by your auto parts store, including types of auto parts and pricing structure.
• Key Stats: Shares industry size , growth trends, and relevant statistics for the auto parts market.
• Key Trends: Highlights recent trends affecting the auto parts sector.
• Key Competitors: Analyzes main competitors nearby and how your store differs from them.
• SWOT : Strengths, weaknesses, opportunities, and threats analysis.
• Marketing Plan : Strategies for attracting and retaining customers.
• Timeline : Key milestones and objectives from start-up through the first year of operation.
• Management: Information on who manages the auto parts store and their roles.
• Financial Plan: Projects the store’s 5-year financial performance, including revenue, profits, and expected expenses.

Auto Parts Store Business Plan

Fully editable 30+ slides Powerpoint presentation business plan template.

Download an expert-built 30+ slides Powerpoint business plan template

Executive Summary

The Executive Summary introduces your auto parts store’s business plan, offering a concise overview of your store and its services. It should detail your market positioning, the range of auto parts and accessories you offer, its location, size, and an outline of day-to-day operations.

This section should also explore how your auto parts store will integrate into the local market, including the number of direct competitors within the area, identifying who they are, along with your store’s unique selling points that differentiate it from these competitors.

Furthermore, you should include information about the management and co-founding team, detailing their roles and contributions to the store’s success. Additionally, a summary of your financial projections, including revenue and profits over the next five years, should be presented here to provide a clear picture of your store’s financial plan.

Auto Parts Store Business Plan Executive Summary Example

Business Overview 

When detailing the  business overview  in your executive summary, it’s crucial to provide clear and concise information. This includes the name of your store, its location, and an overview of daily operations.

These details not only introduce your business but also set the stage for its unique qualities. Indeed, a  unique selling proposition  ( USP ) is what sets your store apart from the competition. Whether it’s your focus on high-quality replacement parts, performance enhancements, or automotive innovations, your USP should be a focal point of your executive summary. It’s what captures the interest of your audience and showcases the unique value your business brings to the market.

Example: For instance, “Precision Auto Parts,” located in downtown Springfield, operates from a 3,000 sq. ft. space on Main Street. It offers a wide range of products including engine components, car accessories, tools, and maintenance supplies. Their USP is the unique combination of high-quality replacement parts and performance enhancements, ensuring both reliability and innovation for vehicle owners and professionals.

Market Overview 

Understanding and presenting the  market size , growth trends, and industry dynamics are integral parts of the  market analysis . This section should highlight the potential of the U.S. auto parts store industry, backed by relevant data like market value and growth rates. Discussing industry trends, such as the increasing demand for reliable and high-quality auto parts, provides insight into the evolving landscape and where your store fits within it.

Equally important is the competitive landscape. Your executive summary should identify  key competitors  and explain how your store positions itself in this environment. Whether you focus on premium brands, exceptional customer service, or a curated selection of auto parts, this is your opportunity to showcase how your store is poised to stand out in a crowded market.

Example: Consider Precision Auto Parts in the U.S. auto parts store industry, valued at $206 billion with a 4.1% annual growth rate. While competing with local specialized shops and national chains in Springfield, Precision Auto Parts differentiates itself by offering premium brands such as Bosch, Mopar, Ford Genuine Parts, and Continental, catering to both casual consumers and professional mechanics.

Management Team 

The management team’s background and expertise are significant assets to your business. In your executive summary, highlight the key qualifications and experiences of your team members.

This might include your co-founder’s extensive experience in the automotive industry or your head buyer’s expertise in sourcing high-quality auto parts. Demonstrating the team’s expertise not only builds credibility but also assures potential investors and partners of your store’s capability to succeed.

Example: At Precision Auto Parts, co-founders Jane Doe and John Smith lead the team. Jane, with a background in automotive engineering, provides strategic leadership, oversees product selection, and ensures the store offers cutting-edge products and parts that meet customer needs. John, with a background in finance and accounting, manages the company’s finances, including budgeting, financial reporting, and inventory management, ensuring financial stability and growth  opportunities  for the store.

Financial Plan 

The financial plan overview should succinctly summarize your financial goals and projections, including revenue targets and profit margins, to provide a clear picture of your store’s financial trajectory.

Example: Precision Auto Parts aims for $4.5 million in annual revenue by 2028, targeting a 10%  EBITDA  margin. The financial strategy includes initial investments in high-quality store design and inventory, with sales growth driven by effective marketing and community engagement. We project steady growth, positioning Precision Auto Parts as a leading auto parts retailer in the local market.

Business Overview

For an auto parts store, the Business Overview section can be concisely divided into 2 main slides:

Store & Location

Briefly describe the store’s physical environment, emphasizing its layout, organization, and the overall atmosphere that welcomes customers. Mention the store’s location, highlighting its accessibility and the convenience it offers to customers, such as proximity to major highways, shopping centers, or ample parking space. Explain why this location is advantageous in attracting your target clientele.

Supply & Products

Detail the range of auto parts and accessories offered, from essential components like brake pads and filters to specialized parts for various vehicle makes and models. Outline your pricing strategy , ensuring it reflects the quality of products provided and matches the market you’re targeting. Highlight any packages, bulk purchase deals, or loyalty programs that provide added value to your customers, encouraging repeat business and customer loyalty.

Market Overview

Industry Size & Growth

In the Market Overview of your auto parts store business plan, start by examining the size of the auto parts industry and its growth potential. This analysis is crucial for understanding the market’s scope and identifying expansion opportunities.

Key Market Trends

Proceed to discuss recent market trends , such as the increasing demand for high-quality aftermarket parts, the shift towards online sales and digital platforms, and the growing interest in environmentally friendly and fuel-efficient automotive products. For example, highlight the demand for parts that cater to specific vehicle makes and models, alongside the rising popularity of DIY vehicle maintenance and repair.

Competitive Landscape

A  competitive analysis  is not just a tool for gauging the position of your auto parts store in the market and its key competitors; it’s also a fundamental component of your business plan.

This analysis helps in identifying your auto parts store’s unique selling points, essential for differentiating your business in a competitive market.

In addition, competitive analysis is integral in laying a solid foundation for your business plan. By examining various operational aspects of your competitors, you gain valuable information that ensures your business plan is robust, informed, and tailored to succeed in the current market environment.

Identifying Your Competitors in the Auto Parts Industry

The first step in conducting a competitive analysis is to identify your competitors. Begin by listing local auto parts shops and larger retail chains that sell auto parts. If your business specializes in high-performance or aftermarket parts, your direct competitors include other specialty shops as well as online retailers that offer similar products. Also, consider indirect competitors like full-service auto shops that might sell parts as part of their services.

Use tools like Google Maps to visualize where these competitors are located. Review platforms like Yelp and other customer feedback sites can provide insights into the  strengths and weaknesses  of these competitors through customer reviews. For instance, if a competitor is frequently praised for its customer service and extensive inventory, these are significant strengths.

Auto Parts Store Competitors’ Strategies

Analyzing the strategies of these competitors involves several key areas:

• Product Offerings:  Evaluate the range and types of auto parts offered. If “Performance Parts Co.” is known for its wide selection of high-end modifications, this indicates a consumer interest in specialty products.
• Pricing Strategy :  Examine how competitors price their products. Are your prices competitive with discount stores like “Budget Auto Parts,” or do they align more closely with premium providers like “Elite Motors Parts”?
• Marketing Tactics:  Look at how competitors market their products. Do they use online advertising, SEO strategies, or partnerships with auto repair shops and car clubs?
• Customer Service:  Consider the level of service provided. For instance, “Helpful Parts Hub” might be known for its knowledgeable staff and excellent customer support, which can be a major differentiator in the market.
• Technology Use:  Observe if competitors use technology to enhance their sales process, such as online catalogs or e-commerce platforms, like “Auto Parts Online.”
• Operational Efficiency:  Note if competitors use innovative processes to improve logistics and inventory management, such as automated stocking systems or efficient delivery options.

What’s Your Auto Parts Store’s Value Proposition?

Reflect on what sets your auto parts store apart. Maybe you provide a highly specialized selection of vintage car parts, or perhaps you offer same-day delivery services that are unmatched in your area.

Identify market opportunities through customer feedback and industry trends, such as a rising interest in eco-friendly automotive products, which could be a market niche if not extensively covered by competitors.

Consider your location: An auto parts store in an urban area might focus on parts for common commuter vehicles, whereas one in a rural area could cater to farming equipment and off-road vehicles.

First, conduct a SWOT analysis for the auto parts store , highlighting Strengths (such as an extensive inventory of high-quality auto parts and knowledgeable staff), Weaknesses (including high operational costs and strong competition), Opportunities (for example, the growing trend in DIY vehicle maintenance and repair), and Threats (such as economic downturns that may decrease consumer spending on auto parts).

Marketing Plan

Next, develop a marketing strategy that outlines how to attract and retain customers through targeted advertising, promotional discounts, an engaging social media presence, and community involvement.

Marketing Channels

Utilize diverse marketing channels to engage with customers, increase brand awareness, and drive traffic to your store.

Digital Marketing

• Website Optimization:  A user-friendly, informative, and visually appealing website is indispensable for an auto parts store. It should showcase a comprehensive catalog of products, including detailed descriptions and compatibility information. Implement search engine optimization (SEO) strategies to improve online visibility and ranking on search engines.
• Social Media:  Leverage social media platforms such as Instagram, Facebook, and YouTube to showcase products, share informative content, tutorials, and customer testimonials, and engage with the automotive community. Regular posts, interactive content, and community engagement contribute to brand visibility and customer interaction.
• Email Marketing:  Email marketing campaigns can keep customers informed about new arrivals, promotions, discounts, and educational content related to vehicle maintenance and part installations.

Local Advertising

• Local SEO:  Local SEO strategies are essential to ensure your store appears in local search results when customers are seeking auto parts nearby. Register your business on online directories, optimize listings, and use location-specific keywords in your online content to enhance local visibility.
• Collaborations:  Forge partnerships and collaborations with local mechanics, car clubs, or automotive events. Sponsor or host workshops, seminars, or car meets to establish a strong local presence and connect with potential customers.

Promotional Activities

Offering enticing promotions and incentives is an effective way to attract customers to your store.

• Seasonal Promotions:  Seasonal promotions aligned with automotive needs, such as ‘Winter Car Care Packages’ or ‘Summer Performance Upgrades,’ capitalize on changing customer requirements.
• Exclusive Deals:  Implement customer loyalty programs that reward frequent purchases, referrals, or membership subscriptions. Exclusive deals for bulk purchases or for specific professions like mechanics or car enthusiasts can encourage customer retention.

Sales Channels

Implement effective sales strategies to drive revenue and ensure a seamless shopping experience.

In-Store Sales Tactics

• Upselling and Cross-selling:  Train staff to suggest complementary products or services during customer interactions, like recommending fluids with part purchases or maintenance accessories.
• Incentivized Purchases:  Offer discounts or perks for customers who buy specific bundles, encouraging them to purchase related products together.
• Customer Service Excellence:  Ensure knowledgeable and friendly customer service to enhance the shopping experience.

E-commerce and Online Presence

Enhance accessibility and convenience:

• Online Store:  Develop an e-commerce platform where customers can browse and purchase parts online, with options for delivery or in-store pickup.
• Online Support:  Online support through live chat or email assists customers with inquiries, technical assistance, and guidance during the purchasing process, ensuring a smooth online shopping experience.

Membership and Rewards Programs

Encourage loyalty and repeat business:

• Membership Benefits:  Provide exclusive perks for members such as early access to sales, discounted installation services, or extended warranties.
• Rewards System:  Implement a rewards program where customers earn points for purchases, redeemable for discounts, freebies, or future services.

Strategy Timeline

Finally, create a detailed timeline that outlines critical milestones for the auto parts store’s opening, marketing efforts, customer base growth, and expansion objectives, ensuring the business moves forward with clear direction and purpose.

The Management section focuses on the auto parts store’s management and their direct roles in daily operations and strategic direction. This part is crucial for understanding who is responsible for making key decisions and driving the auto parts store toward its financial and operational goals.

For your auto parts store business plan, list the core team members, their specific responsibilities, and how their expertise supports the business.

Financial Plan

The Financial Plan section is a comprehensive analysis of your financial projections for revenue, expenses, and profitability. It lays out your auto parts store’s approach to securing funding, managing cash flow, and achieving breakeven.

This section typically includes detailed forecasts for the first 5 years of operation, highlighting expected revenue, operating costs and capital expenditures.

For your auto parts store business plan, provide a snapshot of your financial statement (profit and loss, balance sheet, cash flow statement), as well as your key assumptions (e.g. number of customers and prices, expenses, etc.).

Make sure to cover here _ Profit and Loss _ Cash Flow Statement _ Balance Sheet _ Use of Funds

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How to Start Automobile Spare Parts Business

“No matter how good a driver you are, you have to have a good car and the right team behind you, in order to succeed”. While this quote is true for life in general, taking it literally, a good driver along with a good car, requires a great team behind it, thus alluding to a spare part and repair shop business for the automotives.

An auto spare parts retail store along with a workshop allows customers to buy the parts and fix it from the same workshop. Given the large number of vehicles the country has, approximately 253 million were accounted for in 2017, there is a good scope of starting the spare parts business and succeeding in it too. 

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How to Start Auto Spare Parts Business in India

• May 8, 2024
• No Comments

Starting an auto spare parts business in India can be a lucrative venture given the country’s growing automotive industry. However, like any business, it requires careful planning and execution. In this guide, we’ll walk you through the essential steps to kickstart your journey in the auto spare parts industry in India.

Market Research: Understanding the Landscape

Before diving into the business, conduct thorough market research to understand the demand for auto spare parts in India. Analyze the current market trends, identify your target audience, and assess your competitors. Look into the types of vehicles prevalent in different regions of India and their corresponding spare part requirements.

Creating a Business Plan: Roadmap to Success

A well-thought-out business plan is crucial for the success of your venture. Define your business goals, strategies for sourcing How to Start Auto Spare Parts Business in India , pricing models, marketing plans, and financial projections. Consider factors such as inventory management, distribution channels, and customer service in your plan.

Legal Formalities: Setting Up the Foundation

Ensure that you comply with all legal requirements to establish your auto spare parts business in India. Register your business, obtain necessary licenses and permits, and adhere to taxation regulations. Familiarize yourself with the Goods and Services Tax (GST) structure applicable to the automotive industry.

Sourcing Quality Spare Parts: Building Trust

The quality of spare parts you offer can significantly impact your business’s reputation. Establish partnerships with reliable suppliers or manufacturers who provide genuine and certified auto spare parts. Conduct quality checks to ensure that the products meet industry standards and customer expectations.

Building a Strong Distribution Network: Reaching Your Customers

Develop an efficient distribution network to reach customers across different regions of India. Explore options such as establishing retail outlets, partnering with auto workshops, or leveraging e-commerce platforms for online sales. Focus on delivering a seamless buying experience to your customers.

Marketing and Promotion: Creating Awareness

Effective marketing is essential to attract customers and build brand awareness. Utilize both traditional and digital marketing channels to reach your target audience. Leverage social media platforms, content marketing, SEO strategies, and email campaigns to promote your auto spare parts business.

Providing Excellent Customer Service: Retaining Loyalty

Exceptional customer service can set your auto spare parts business apart from the competition. Prioritize customer satisfaction by offering prompt assistance, resolving queries, and ensuring hassle-free transactions. Build long-term relationships with your customers to foster loyalty and repeat business.

Adapting to Industry Trends: Staying Ahead

The automotive industry is constantly evolving with technological advancements and changing consumer preferences. Stay updated with industry trends, innovations in auto technology, and emerging market opportunities. Continuously assess and adapt your business strategies to stay ahead in the competitive market.

Start Your Journey

Starting an auto spare parts business in India requires dedication, meticulous planning, and a deep understanding of the market dynamics. By following these steps and staying committed to delivering quality products and services, you can embark on a successful journey in the thriving automotive industry of India.

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How to Start Automobile Spare Parts Business

• Post author: Fargo Auto Electricals
• Post published: July 9, 2022
• Post comments: 0 Comments

The automobile market has a very wide future in our country. If you want to know  how to start an automobile spare parts business ,  then you are right! Selling auto parts is one of the most profitable businesses in the market.

Every vehicle will need to replace different spare parts after some time!

So, whenever the person needs to buy a spare part…why shouldn’t he buy from you? Well, you have a great opportunity here.

Our market has millions of people looking to replace their vehicle’s spare parts .

If you are thinking of building a business, then you are right. Let’s take your plan forward and explore this industry more.

Automobile Industry and India

The relationship between the automobile Industry with India is becoming broader. Due to growth in the economy and technology, this industry is performing well.

Opportunities for many startups and businesses have increased in this field!

The automobile industry has also played important roles in other fields. They remained an important part of the transportation industry. And kept our economy safe.

Jobs are getting created, businesses are becoming popular, and many businessmen are coming forward. Indian vehicle and  auto-electrical parts  manufacturers are the steam of this field.

Starting your own business with this raise will be a great decision!

This field holds many innovations and techs you want to know. Once you enter this field, you will know  How to Start Automobile Spare Parts Business!

How to start an automobile spare parts business in India?

Now that you know the field and market, it’s time to get into it!

Choosing the best idea

The first step is to choose the best idea. List your ideas and then check all aspects, from pros and cons to profitability and risk. Once done, make the best out of them. 

Converting an idea into a plan

The basic difference between an idea and a plan is execution and setting goals. From your best idea, now you need to set up business projects, plans, a team, and secure capital. 

Once these basic things are ready….you can go with the next step.

Research your plan

Before executing your plan, you need to do high market research. Research spare parts, manufacturers, suppliers, target audience, market conditions, competitors, and opportunities.

Calculate total cost

Depending upon the business type, you need to calculate the total cost. And then arrange fixed and working capital for your business. Calculate the rent space, stock cost, and other things.

However, creating an online business will cost comparatively low!

Registration and licensing

A very lengthy yet important step. For the flawless running of your business, register your business and get licenses. You should check regulations and licenses as per your state.

Set up and hire workers

Again depending upon your business type, you must set up your business. You can also hire employees and workers if you are taking your business to a high level.

The more you will add product ranges and customer support…the more your business will grow! 

Pros and Cons of in Automobile Spare Parts Business 

Before investing a high amount in any business, you should know all aspects. This includes the pros and cons of a business. 

Like any other business,  the automobile spare parts business  also has pros and cons. 

• A self-satisfying and growing business in the market. 
• You can build your passion in this field. 
• You can choose manufacturers and suppliers at a relatable price. 
• A great opportunity to provide quality  auto-electrical parts  in India. 
• Being in a local business, you can develop connections with other businesses. 
• A great opportunity to become a trusted automobile spare part seller. 
• Giving right and reliable suggestions to customers will improve your goodwill. 
• The  Automobile Spare Parts Business  highly relies on referrals.
• Connecting to a good and trusted supplier will take time. 
• Also, finding the best deals will always be a wish! 
• Regulating the expenses requires regular checks. 
• The profit margin fluctuates due to too many aspects. 
• Sometimes, the margin becomes very low on products.  
• This business works on a time deadline that needs to be completed. 

Different Automobile Businesses 

While the auto-spare parts market is experiencing some tough competition, there are some other great businesses which you can go with. 

These businesses are directly and indirectly related to the automobile market. 

Service center or ShopShop 

Service centers or service shops for vehicles have a good profit share. This business has a huge market in this field. For opening a center or ShopShop, your investment will be dependent on the range and type of center. 

Those who want to step into this field with low investment read about the car wash business. For opening a car wash center, you will require a low investment compared to other startups. 

Another great business field where you can earn a good profit is Tire shop. To open these types of shops, you will need high mobility. You should contact OEMs before investing in this business. 

Second-hand four-wheeler dealing 

Although the value of cars decreases with time, they will be useful for many! The reselling business of four-wheelers is highly profitable and requires limited investment. So, it’s a nice business option. 

Auto-body Shop 

Starting an automobile  spare parts business  is profitable. But do you know, having an auto-body shop is also a great option! A vehicle, like a car, goes through a lot of wear and tear, like its inner spare parts need to change. 

Similarly, the outer body also needs checkups and restoration. 

Online store 

In 2022, the best way to start and grow your business is to take it online. Today, most of the work is done on the internet. Customers search for auto-spare parts on the internet. And suppliers present on the internet fulfill this requirement. 

Creating an online store will require a comparatively low investment. It is easy to manage and analyze.

You can check one of the best spare parts sellers, FARGO , on the internet!

This was my guide on  ‘How to Start Automobile Spare Parts Business’ .

Starting this business will be highly profitable but includes risk as well. So, I will recommend checking all tabs before the start.

Also, check out FARGO ! A very popular online auto-parts store with millions of happy customers. If you have an idea about an online automobile spare parts store, then you must check this out. You will get reliable guidance on this market for sure!

In conclusion, I hope you have found this useful. Which type of spare part business will you be executing soon? Let us know in the comment section!

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How To Start Automobile Spare Parts Business in India

• May 6, 2024

Starting an automobile spare parts business in India can be a lucrative venture given the country’s burgeoning automotive industry. However, navigating through the complexities of the market requires careful planning and execution. Here’s a comprehensive guide to help you kickstart your journey into this thriving sector.

Understanding the Indian Automobile Spare Parts Market

Before delving into the specifics of setting up your business, it’s essential to grasp the dynamics of the Indian automobile spare parts market. India’s automotive industry is one of the largest in the world, comprising diverse segments such as two-wheelers, four-wheelers, commercial vehicles, and aftermarket sales. The demand for spare parts is perennial, driven by factors like vehicle maintenance, repairs, and replacements. Additionally, the rise of e-commerce platforms has further fueled accessibility to spare parts, presenting both opportunities and challenges for aspiring entrepreneurs.

Market Research and Identifying Niche Opportunities

Conducting thorough market research is paramount to identify potential gaps, trends, and customer preferences. Analyze the demand-supply dynamics, competitive landscape, and consumer behavior to pinpoint lucrative niche opportunities. Consider factors like regional preferences, vehicle models, and emerging technologies to tailor your product offerings accordingly. Leveraging market insights will not only streamline your business strategy but also enhance your competitive edge in the market.

Legal and Regulatory Compliance

Navigating the regulatory framework is crucial for ensuring compliance and avoiding legal hassles. Register your business entity as per the applicable laws and obtain necessary licenses and permits, including GST registration, trade licenses, and environmental clearances. Adhere to quality standards and safety regulations prescribed by regulatory bodies such as the Bureau of Indian Standards (BIS) to maintain product credibility and consumer trust. Establishing a robust legal framework from the outset will safeguard your business interests and foster long-term sustainability.

Setting Up Supply Chain and Inventory Management

Efficient supply chain management is vital for seamless procurement, storage, and distribution of spare parts. Build strategic partnerships with reliable suppliers, manufacturers, and distributors to ensure a steady inflow of quality products at competitive prices. Implement robust inventory management systems to optimize stock levels, minimize wastage, and mitigate inventory holding costs. Embrace technology-driven solutions like inventory tracking software and RFID tagging to enhance visibility and streamline operations across the supply chain.

Marketing and Brand Building

Effective marketing and brand building are indispensable for creating brand awareness, driving customer engagement, and fostering brand loyalty. Develop a cohesive marketing strategy encompassing both online and offline channels such as social media marketing, search engine optimization (SEO), email marketing, and participation in industry events and exhibitions. Leverage digital platforms to showcase your product range, share informative content, and engage with your target audience. Cultivate a strong brand identity by delivering superior quality products, excellent customer service, and consistent brand messaging to differentiate your brand in a competitive market landscape.

Embarking on the journey of starting an automobile spare parts business in India requires meticulous planning, strategic foresight, and unwavering commitment. By understanding the market dynamics, conducting thorough research, adhering to regulatory requirements, optimizing supply chain management, and implementing effective marketing strategies, you can carve a niche for yourself in this dynamic industry landscape. Stay abreast of industry trends, consumer preferences, and technological advancements to stay ahead of the curve and capitalize on emerging opportunities. With the right approach and perseverance, you can build a successful and sustainable business that contributes to the growth and development of India’s automotive ecosystem.

TVS Ahinsha Automobiles

TVS Ahinsha Automobiles is a renowned name in the Indian automotive industry, known for its commitment to quality, innovation, and customer satisfaction. With a legacy spanning decades , TVS Ahinsha Automobiles has established itself as a trusted brand synonymous with reliability and performance. From motorcycles and scooters to commercial vehicles and spare parts, TVS Ahinsha Automobiles offers a comprehensive range of products and services catering to diverse customer needs. With a strong nationwide presence and a robust network of dealerships and service centers, TVS Ahinsha Automobiles continues to set benchmarks in the Indian automotive landscape.

Dublin Auto Spare Parts

Dublin Auto Spare Parts is a leading provider of high-quality automotive spare parts and accessories, catering to the needs of vehicle owners, mechanics, and retailers. With a wide-ranging product portfolio encompassing various makes and models, Dublin Auto Spare Parts ensures compatibility, reliability, and performance. Whether it’s engine components, electrical parts, suspension systems, or body accessories, Dublin Auto Spare Parts offers a comprehensive solution for all your automotive needs. Backed by a team of skilled professionals and a commitment to customer satisfaction, Dublin Auto Spare Parts strives to deliver value-driven solutions and exceptional service experiences.

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How to start a Two-wheeler Spare Parts Business in India?

• by SBH Team
• October 7, 2023

India has the highest number of two-wheeler users in the world. People prefer two-wheelers because of affordable price, easy maintenance, traffic conditions etc.

When there are so many two-wheelers in the country, their spare parts are also in demand.

If you are interested in the two-wheeler vehicle industry you can start a two-wheeler spare parts shop and earn a good income.

This article provides you with complete details related to the bike spare parts business, the investment required, profit margin, spare parts business plan, manpower etc.

In this Post

How to start a bike or two-wheeler spare parts shop

To start a two-wheeler spare parts shop you need good knowledge about all the bike or scooter models as well as their parts and accessories.

Without the proper knowledge, if you start this business by relying only on workers, it is very difficult to succeed.

You may need at least one year to fully understand this business. You can get this experience by working in another shop.

After getting enough knowledge about the business, you can start a spare parts business with a proper business plan.

Having a Mechanic or Garage along with the shop

You can hire a mechanic at your shop or set up a garage and rent it out to a mechanic.

By doing this you can supply the spare parts needed by that mechanic/garage at a slightly discounted price.

This will give your shop regular orders and increase your monthly sales.

Two-wheeler spare parts business plan

Location plays a very important role in the success of any business. You can start a two-wheeler spare parts business at any place but make sure there are enough garages nearby.

Because the main customers in any spare parts shop are mostly mechanics or garage owners.

Supply spare parts to your nearest mechanic or garage on time and at discounted prices.

Shop area required

You can start a two-wheeler spare parts shop with 300 square feet of commercial space.

You may require more space to store large fibre parts.

Depending on the location and size of your shop, you may have to pay a rent of 15 to 20 thousand rupees.

Purchasing inventory for your shop

You can purchase inventory from dealers or wholesalers in your area. Like any other business, there are many fake products in the market so make purchases only from authorized dealers.

Initially, it is not possible to purchase inventory on a credit basis. You have to buy on a ‘cash in hand’ basis.

Once the dealer or wholesaler has developed confidence in your business, you will get a credit period of 15-20 days for the purchase.

Managing stock in the two-wheeler spare parts shop

To avoid dead stock, inventory management is very important in this business. So choose parts type and quantity wisely. 

Note which two-wheeler brand is more famous in your area and invest more in spare parts of that brand.

Decide the quantity according to the two-wheeler density in your location.

For heavy fibre parts, get advance from the customer and order after confirmation. It saves space for storage.

If you have more varieties for each product, it will obviously attract more customers. But it requires a lot of investment.

Manpower required

Depending on the size of your shop you may need 1 to 2 staff to start a two-wheeler shop.

If you run servicing/workshop together with your shop, then you need mechanics too.

Salary can vary from 12 to 18 thousand depending on the experience.

Managing credit in the business

Garage owners charge their customers after the service is done. So they purchase parts from you on credit.

You should set a credit limit for each customer, which will help you manage cash flow.

Two-wheeler spare parts business cost

To start a two-wheeler spare parts business you need an investment of 5 lakhs to 7 lakh rupees.

This is the amount required to start a spare parts shop for a single two-wheeler brand.

If you want to open a multi-brand ( like Hero, TVS, Bajaj ) spare parts shop, you may need an investment of up to 12 to 18 lakhs.

For expensive and large-size fibre items, you can take an advance from the customer and after confirmation, you can purchase the item. It saves your investment amount and storage problem.

You will need investment mainly for the purchase of inventory and interior work of the shop.

The ongoing monthly expenses in this business are inventory purchases, shop rent, employee salary, utility bills etc.

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Profit margin in Two-wheeler spare parts business

You can expect a 15 to 20% profit margin in the two-wheeler spare parts business.

But when you partner with garages you have to give them discounts, so your actual profit margin may drop to 10 to 15%.

Like any other business, the actual profit depends on the volume of your purchase.

If you buy parts in bulk, dealers/wholesalers will give you more discounts.

You should know that branded items offer smaller margins on sales and domestic/local brands offer higher margins.

But in the long run, it is always better to sell branded accessories to gain customer trust.

Related: Car Spare Parts Business in India | Complete Guide Car Washing Business | Complete Details

Licences and registrations required

These are licenses and certificates required to start a bike spare parts business

• Shop and Establishment certificate
• GST Registration
• Sole Proprietorship registration

If you lack capital you can approach banks for business loans with a proper business plan.

What is the best season for this business?

As all we know, two-wheeler spare parts are in all-time demand.

Another good thing about this business is that it is very difficult to sell two-wheeler parts online. So online marketplace companies have no impact on this business.

I hope this article has cleared many of your doubts about the two-wheeler spare parts business in India. If you need more information about any topic you can enter it in the comment box.

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How to Start an Auto Spare Parts Business?

Commercial vehicles need regular repairs and maintenance, and their parts often wear out quickly. Because of this constant need for replacement parts, the automotive parts manufacturing industry is large and growing. This makes starting an Auto spare part business a profitable opportunity with significant growth potential. Dealers may get a 15% to 20% profit margin on the auto spare parts business.

Steps to Start Auto Spare Parts Business

Starting an Auto parts business can be a rewarding venture, especially if you have a passion for cars and a keen understanding of the automotive industry. Here’s a step-by-step guide to help you get started:

Research the Market

Before you dive into the business, it's crucial to understand the market. Research what types of Auto spare parts are in demand in your area. For example, parts like air filters, exhaust systems, clutch kits and brake coils are some auto parts that remain in high demand. Identify your target customers: whether they are individual car owners, repair shops, or car dealerships. Look into your competitors and see what they offer, their pricing strategies and their strengths and weaknesses.

Create a Business Plan

A solid business plan is essential for guiding your business and attracting potential investors and lenders. Your plan should include:

Executive Summary: An overview of your spare part business idea. Market Analysis: Insights from your research on demand and competition. Products and Services: The types of parts you will sell and any additional services you might offer. Marketing Strategy: How you plan to attract and retain customers. Financial Projections: Estimated startup costs, revenue forecasts and profit margins. Operational Plan: Daily business operations, supplier relationships, and inventory management.

Registration And Licences

Choose a business name and register it with the appropriate government authorities. You will also need to select a legal structure for your spare part business, such as a sole proprietorship, partnership, or corporation. This decision will affect your taxes, liability, and other legal aspects. GST registration is also compulsory to set up a commercial spare part business. Get all necessary licenses and permits required to sell Auto parts in your area.

Find Reliable Suppliers

Your suppliers are crucial to your success. Look for reputable suppliers who offer quality parts at competitive prices. Building strong relationships with your suppliers can help you get better deals and ensure a steady supply of inventory. Consider both local and international suppliers to diversify your options.

Set Up Your Location

Decide whether you will operate from a physical store, an online platform, or both. If you choose a physical store, find a location that is accessible to your target market and has adequate space for your inventory. For an online spare part business, invest in a professional website with a user-friendly interface and secure payment options.

Stock Your Inventory

Start by stocking essential and high-demand parts. As your business grows, you can expand your inventory based on customer needs and market trends. Keep track of your inventory levels and reorder parts before they run out to avoid disrupting your spare parts business operations.

Market Your Business

Effective marketing is key to attracting customers. Utilize various marketing strategies, including:

• Online Advertising: Use social media and pay-per-click ads to reach potential customers online.
• Local Advertising: Distribute flyers, place ads in local newspapers and sponsor local events.
• Networking: Build relationships with auto repair shops, car clubs and other local businesses.

Provide Excellent Customer Service

Customer satisfaction can make or break your business. Offer prompt, courteous service and be knowledgeable about the parts you sell. Address any customer concerns or complaints quickly and professionally. Building a reputation for excellent service will help you retain customers and attract new ones through word-of-mouth.

Monitor and Adjust

Regularly review your business performance. Track sales, expenses, and customer feedback to identify areas for improvement. Adjust your strategies as needed to stay competitive and meet your business goals.

Starting an Auto spare parts business requires careful planning and dedication, but with the right approach, it can be a successful and profitable venture. By understanding your market, building strong supplier relationships, and providing top-notch customer service, you can set your business on the path to success.

FAQs on Startup of Auto Spare Parts Business

Do you know that the auto parts business is profitable.

Yes, the auto parts business can be very profitable. It often requires a low investment, has high-profit margins, and offers good potential for growth.

What are the most profitable auto spare parts?

The most profitable auto parts include air filters, exhaust systems, clutch kits and brake coils. These parts are in high demand and can generate good profits

Why might an auto parts business need a loan?

An auto parts business might need a loan to expand its space, buy more inventory, invest in marketing, improve working capital, or cover other expenses.  

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Best Automobile Business Ideas [Profitable Businesses]

Are you interested in starting a new venture in the automobile sector but unaware of the profitable automobile business ideas ? Don't worry, we are here for you.

Expected to touch ₹18.18 trillion by 2026, the automobile industry has flourished lately. So, if you are looking for genuine automobile business ideas to make profit margins with a suitable investment, you are in the right place.

So, let’s dig into the details and discuss the potential automobile business ideas one by one.

1. Automobile spare parts business

This automobile spare parts business is evergreen and highly profitable. Moreover, for entrepreneurs interested in the retail industry in the automobile sector, this can be a perfect idea to go for, given the number of vehicles and repair shops in a city.

An auto spare part retail store carries all sorts of parts and tools required by customers for their vehicles. The finance needed for this business is approximately between ₹30 and 40 lakhs in India. With a proper business plan and strategic investment, this can be a very profitable automobile business idea .

2. Used car dealership

Usually, cars are sold 2 to 3 times in their total life span. This provides car dealers with a vast market to deal with. It has excellent potential with people preferring second-hand cars instead of buying a brand new one.

In this plan, you need to purchase used cars from an owner in exchange for money. However, you need to go through many legal steps to operate the business. As for investment, it generally requires about ₹10 to 15 lakhs to buy used cars from previous owners. This plan includes the cost of servicing and repairing used cars with modest capital investment.  

Also Read: How to start second hand car showroom?

3. Automobile oil change services

Oil changing service refers to changing the used and filtered oil in the automobile's engine. The old oil is replaced with the new and clean oil.

Lubrication oil is as essential as a fuel oil for the proper working of vehicles and automobiles. Therefore, this sector has a vast scope considering the increasing interest of people in owning automobiles.

Also Read: Tyre Manufacturers in India

4. Auto repair and mechanic services

With two- and four-wheelers on the road, it has become a necessity to get repair and mechanic services. This is one of those automobile businesses that will be in demand for years together. So, opening the business in an urban area with spare parts and tools can result in huge profits. However, this automobile business idea requires qualified technicians, an appropriate business location, and high capital investment at the start.

As a business owner, you need to put in about ₹30 to 35 lakhs to launch your service company with facilities, tools, and employees.

Also Read: How to start automobile repair business?

5. Car washing services for automobiles

This business idea is suitable for people who are into a low capital investment with limited risks associated. Managing a car washing business is easy when compared to other automobile business ideas. However, this too requires proper planning with regard to space and technical washing equipment. You would need around ₹15 to 25 lakhs to set up your car washing services in a city in India.

Also Read: How to start car wash business?

6. Automotive paint and branding

Vehicles are simply not used for travelling but are also a symbol of status for many. Therefore, people like to make their cars and bikes stylish with customised services; that's where the automotive paint and branding come into the picture, offering a wide variety of colours and design sprayings. The main intention is to make the vehicle stand out on the road with attractive graphics or auto wraps. Moreover, painting automobiles in a specific style or logo can lead to effective branding.

7. Export of automotive parts and tools

India is one of the leading countries for supplying spare parts internationally. Foreign manufacturers depend on Indian exporters to make their automotive products more efficient. Therefore, the export of automobile spare parts is another idea to consider. It requires an investment ranging from ₹15 to 20 lakhs. However, the investment may differ on setting up different automobile vehicles such as two- and four-wheelers.

Also Read: How to start automobile parts manufacturing business?

8. Starting an electric automobile charging station

Electric automobiles or Electric Vehicles (EV) are a reality in developing countries like India. Moreover, electric vehicles are receiving immense support worldwide as well.

With the rise in petrol and diesel price and environmental concerns, many are opting for E-vehicles. Therefore, establishing electric charging stations is an innovative automotive business idea and can be regarded as highly profitable with strategic planning and investment.

Also Read: Electric vehicle charging stations in India

9. Car and automobile magazine

There is a need to concentrate on an interested audience by providing a complete manual on automobiles. So, publishing magazines related to automobiles can prove to be one of the most effective automobile business ideas . This innovative plan can change the business by providing knowledge and information to the correct editorial and marketing lead.

10. Automobiles review vlogging and blogging

Currently, blogging and vlogging are at the peak of hype on the internet. Often, people tend to do deep research with the help of bloggers and vloggers before purchasing any vehicle. Therefore, this automobile business idea requires low investment and more effort.

11. Establishing a parking lot

This is one of the most uncomplicated business plans to set up in major metropolitan cities. With the increasing number of vehicles every day, there is a problem of space for parking vehicles. Hence, managing a parking lot can be highly effective in generating profit margins with cost-effective investment. This business only requires a proper site in an urban area or city with good operating labour.

12. Food truck service

This concept is well known abroad and in foreign countries. Yet, the business idea of food truck services is new to India. This acts as a unique feature for your restaurant and attracts passers-by and customers. The only capital you require is a well-managed truck, a good cook, and a waiter for a start. This automobile business idea is highly engaging in India. Besides, you can also change the location in case your previous worksite doesn't add up.

Furthermore, you can even rent your food truck to others to earn extra in your non-business hours.

The automobile industry is blossoming and bringing extraordinary opportunities for entrepreneurs and startups. Hence, investing in a compelling automobile business idea can yield you high profits. Now that you have a list of profitable automobile business ideas, choose wisely and invest smartly.

Stay updated with new business ideas & business tips with OkCredit blogs in English, Hindi, Malayalam, Marathi & more! Download OkCredit now & get rid of your bookkeeping hassles. OkCredit is 100% Made in India.

Q. What are the factors to be considered while starting an automobile business?

Ans. The following factors need to be considered:

• Knowledge and expertise
• Appropriate location
• Investment and capital
• Study and research of the market
• Legal instruments and documents
• Quality of labour

Q. Is starting an automobile business industry risky?

Ans. Well, the risk is a fundamental characteristic of any business, and the automobile industry is no exception. But you can indeed lower the risks by planning correctly and employing the right strategies.

Q. Where should I start my automobile business?

Ans. First and foremost, choose an appropriate location in your city or town. Select a place after deep research and analysis and this must meet your requirements.

Q. What are the challenges which are faced by entrepreneurs while starting an automobile business?

Ans. A businessman faces many challenges and difficulties at the start. These difficulties include:

• Coming up with innovative products and services
• Meeting the demand of customers
• Facing a dynamic and competitive market
• At present, dealing with the Covid protocols

However, once you know the game, increasing profit margins is slightly easy in the automobile sector.

Q. What type of automobile business should I select?

Ans. The type you are interested in and passionate about. Also, you should be able to meet financial requirements and have great expertise in that matter.

Q. How much should I invest in my business in the beginning?

Ans. Invest a reasonable amount of money in your new business. Only face the risk of how much you can afford while starting a new automobile business.

Read the best of business ideas, tips for small businesses, the latest update on technology & more by OkCredit.

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Shalooka »»» Business Guide »»» Accelerating Growth-Tips for Starting Automobile Parts Business

Accelerating Growth-Tips for Starting Automobile Parts Business

Are you considering venturing into the automobile parts industry? With the ever-growing demand for automotive components, starting an automobile parts business can be a lucrative opportunity. Whether you have a passion for cars or a keen business sense, this industry offers great potential for success. However, entering the market and achieving rapid growth requires careful planning and strategic execution. In this guide, we will provide you with valuable tips and insights to help you accelerate the growth of your automobile parts business. From identifying your target market and sourcing quality parts to establishing strong supplier relationships and implementing effective marketing strategies, we will equip you with the knowledge and strategies you need to hit the ground running and build a thriving automobile parts business. Let’s dive in and explore the key steps and considerations to set yourself up for success in this dynamic industry.

The automobile spare parts industry is evergreen and holds a promising future for all business entities. It is one of the most profitable and lucrative automobile businesses in the industry. Every vehicle needs spare parts after a certain period. 

Despite the COVID-19 pandemic,  the Indian automotive spare parts market made the business of 16 billion U.S. dollars alone at the end of the 2021 fiscal year  and that was a huge fall for the industry.

If you are also planning to invest in the automobile spare parts business or if you want to learn “how to start an automobile spare parts business” then it is the perfect time to do so. The pandemic has passed and people are moving forward. 

Many people are planning to buy personal vehicles and start repairing or maintaining the existing ones. The automobile industry will see a boom and no time is better than today to learn “how to start an automobile spare parts business”.

What Are The Pros And Cons Of Starting An Automobile Spare Parts Business?

Before you learn how to start an automobile spare parts business and devote all your time, effort, and funds to planning a business. you must gather all the information you can even if you are an experienced mechanic. 

Maintenance of automobiles and managing and running an automobile spare parts business are two separate things. Therefore, you must analyze your advantages and disadvantages beforehand.

• Dealing in the automotive spare parts business can be self-satisfying. You are following your passion and helping the customer to resolve their issue firsthand.
• You have the freedom to choose the supplier and manufacturer of the part and provide the best quality product at reasonable rates instead of going only for the OEM in comparison to low-cost and high-quality after-market spare parts .
• Being a local automotive spare parts supplier, you have the advantage of local connections. People around your area would prefer you to others because you are near to their home and coming to you is more convenient.
• You possess more knowledge than any other dealers in your area because you deal with different makes and models every day. You can give the right suggestion to your customers that will build trust and your business reputation.
• This business relies on referrals even one good work can bring you new customers and expand your target market. 
• Finding a good supplier to collaborate with can be a bit difficult. Despite the plenty of suppliers and manufacturers finding the right one is a trial-and-error process.
• There are very low-profit margins. Thus, keeping the expenses in check can be challenging to maintain the profit ratio.
• You are always on a time deadline. If you are not able to fulfill the needs of the customer on time then you will most likely lose them and your business reputation forever.

What Tools Do You Need to Start an Automobile Spare Parts Business?

There are many kinds of tools you need to start an automobile spare parts business and most of them depend on your niche. There are many types of automobile spare parts businesses such as automobile repair shops and online automobile spare parts suppliers.

Basic aftermarket spare parts tools and dealer’s equipment you will need to start an automobile spare parts business are as follows:

• Cooling system
• Suspension parts
• Braking system
• Ball joints
• Bushes and shock pads
• Clutch and pressure plates etc

Other essentials you should keep in mind are:

• Business license, permits, and registration
• Shop Act registration ( if your shop is located within the Municipal limits)
• GST registration
• Skilled and experienced staff

What Is the Basic Setup Cost for Opening An Automobile Spare Parts Business?

Estimating the basic setup cost for opening an automobile spare parts business can differ from one niche to another. To arrange the finances, you first need to analyze your business model and its size. 

Calculate your basic requirements for the start-up cost such as rent for the shop and inventory, basic tools cost, aftermarket, and OE spare parts cost from manufacturers or suppliers, cost of staff, cost of permits, license and registration, and others.

In our opinion, the basic setup cost could fall between $20,000 and $50,000 for all types of automobile spare parts business models and sizes.

How Do You Prepare for Launching an Automobile Spare Parts Business In 2021?

Now is the time to put your dreams into action. You are now aware of your initial requirements and basic setup cost. It is now time to  write a business plan  to launch your automobile spare parts business model. 

Learn about your local competitors and their services, find out their pay structure, and make connections with your local vendors, suppliers, and manufacturers. Find out your initial expenses and arrange capital funding for your business model. 

Set out your goals for the next 2 years and find the best marketing and advertising tools to promote your business. We know it is too much but if you want to learn “how to start an automobile spare parts business” then you have to write your business plan in detail step-by-step to take the action to make your dream come true. 

Market Research

The first step of your business plan involves market research. Market research plays a crucial role to start any business. It helps you to analyze the nature of your business, and provide information about your competitors, your target market, and the best suppliers and vendors to collaborate with to reduce your initial cost.

Focus your market research on these key areas to make game-changing decisions.

• Make up your mind about the location of your business.
• Decide which products you would like to deal in
• Find your target market.
• Decide the initial size of your business.

Business Name and Logo

Choosing a perfect business name and logo is important. This is your first impression of your customer’s mind. Thus, you want it to be smart, personal, and catchy.

As simple as it seems, we would advise you to search online and find a name that gives hope to your customers and make them feel welcome. Also, make sure that your business name and logo are unique and don’t have any similarities with your competitors.

Niche Selection

When it comes to selecting your niche, you just can’t wing it. Till now you have learned about the market size and returns. You are also aware of your skills and limitations. Now, it is time to select your niche that will help you to fulfill your dream and launch a successful business.

Types of automobile spare parts business models you can start are:

1. Automobile spare parts retail store

2. Automobile spare parts store with workshop

3. Automobile spare parts online shops such as  Trendy

4. Automobile spare parts franchise

Select Your Target Market

The target market for the automobile spare parts industry is quite wide and huge. There are different types of the target market for any automobile spare parts business model to focus on:

• Racing industry
• General automotive or household industry
• Logistics and transportation industry
• Taxi companies
• Auto parts store
• Rental and leasing industry

All these niches are the most profitable and have a great scope of growth in the future. Therefore, this is the right time to start and learn “how to start an automobile spare parts business”.

The target market is spread out evenly across the globe. Thus, you don’t have to relocate to start an automobile spare parts business. You can approach and attract your target market from any place or locally if your marketing and advertising skills are above par.

If you are offering high-quality products and services at competitive prices, you can dominate the industry and become the authority itself.

like the automobile industry, skills required to even think about “how to start an automobile spare parts business” have no limitations. You should be familiar with the skills, working style, and knowledge of an automobile spare parts salesman and manager. Only then you can open and run a successful automobile spare parts business.

Skillset required:

• Customer and personal service
• Mechanical knowledge
• Transportation knowledge
• Developing operation strategy
• Ability to standardize the work order process
• Effective spare parts inventory management
• Calculating risk for every equipment
• Stocking spare parts for new equipment
• Ensuring a smart security system

How To Source Raw Materials to Start An Automobile Spare Parts Business?

The cheapest and most effective way to source above mentioned raw materials is local. You only have to search and contact your local raw materials suppers and manufacturers to start your automobile spare parts business. 

For example,  AutoZone Inc  is the largest auto parts supplier in the United States of America, and Autoparts and Diagnostics Ltd are the largest raw material suppliers of OEM, OES, and aftermarket products in the United Kingdom.

The top 5 automobiles spare parts manufacturers in India are:

1.  Jamna Auto Industries

2. Usha International Ltd

3. Rane Holdings Ltd

4. Minda Industries Ltd

5. Automotive Axis Ltd

There are some other legal requirements to start an automobile spare parts business such as permits, license, and registration. In India, you can apply for  MSME Udyog Aadhar registration  for a small-scale business online. 

You might also need a license and permit for an automotive spare parts shop for that you can visit  the Shops and Establishment Act . we would also advise you to meet with local suppliers and manufacturers to get more information to achieve your targets quickly.

How To Setup Your Price Structure?

Setting up the price structure effectively can turn out to be a milestone to make your business profitable. Implementing a crucial marketing and sales plan is vital for the growth and promotion of the business.

You need to have detailed information about the pay structure and methods of your competitors. We would advise you to offer competitive price rates to your customers. Also, try to offer a variety of services to stand out among your competitors. 

Once you analyze the price structure of your competitors, incurred expenses, and cost of promotion and staffing. You will be able to set up your price structure with good profit margins.

Do You Need an Office?

The location of your business matters a lot. For the success of your automobile spare parts business and to reach your target market. You need to make a physical presence in the area you are about to serve. 

You need to choose a location that is easily accessible for customers, and you can supply spare parts quickly to the area you are going to serve. A few attractive locations that can help you to jump-start your business are as follows:

• Shopping centers and malls
• Industry regions
• Urban territories
• Central location within business development areas

Finance Arrangements

Even if you have all the funding you needed to start the automobile spare parts business. It is always wise to have an external source of finances to maintain a steady cash flow. Once you have estimated the initial start-up cost for the successful launch of the automobile spare parts business.

The next step is to arrange those findings. Try to get the investments for the automobile spare parts business if you can as they come with their perks and can help your business to survive for the long term until you start getting a good return on your investments.

Other sources of financial arrangements are:

1. Loans from banks

2. Loans from private financial institutions

3. Angel funding

Do You Need to Hire?

Well, you can’t run an automobile spare parts business alone. Still, there is no set number of employees you need to hire to start an aftermarket spare parts business. The size of your business model will determine the number of employees you need to hire and for what purpose.

You might need an accountant, shop assistant, skilled mechanic or technician are necessary for both online and offline dealers, manufacturers, and suppliers with workshops, or a security guard. But for the start, we would advise you to hire 2-5 employees to take care of all the departments and then move forward as per your requirement.

What Could Be the Possible Hurdles To Start An Automobile Spare Parts Business In 2021?

There are three possible hurdles to start an automobile spare parts business. If you want to learn “how to start automobile spare parts business” of your own, then you must acknowledge the challenges you might face in the future and find the best methods to overcome them.

• Quality – you cannot compromise with the quality of the product but at the same time, you have to offer a reasonable price for the product to make the sale. Therefore, you have to be very careful about the location and customers you serve.

If you are dealing with expensive vehicles, then you have to deliver the high-quality spare parts and you can charge a good amount for that but if you are dealing with the working class then you have to make sure that you still provide a good quality spare part that can last long at affordable prices.

• Staffing – you must be very careful while making the hiring decisions especially when you are hiring for mechanics. You need to make sure that they have the proper skills, experience, and knowledge. It could give a real sense of peace to your customers and build trust.
• Managing sufficient stocks and inventory – It is one of the difficult challenges you will face while running your own automotive spare parts business. Both lack and excess spare parts can cost you a fortune. You need to maintain a sufficient stock of aftermarket spare parts so that you don’t increase the cost incurred or lose your customer due to the supply chain issues.

Automotive spare parts industry runs on the demand of the customer and arranging a part could take some time which you don’t have. Many factors can affect the supply chain issues such as cost, optimize manufacturing and distribution, and delivery timings.

You also need to make sure to store plenty of stock for the right oil filters that will suit the wide range of domestic and commercial vehicles.

This is a complete guide on “how to start an automobile spare parts business in 2021”. If you implement the right strategies for your automotive business idea, your business will grow rapidly as the industry booms.

First, you need to choose the right business model that can fulfill your passion and complement your skills. You cannot work part-time as the automobile business require full attention and dedication to stand out among your competitors. 

Get your finances in order and do a thorough search. Collaborate with local suppliers and manufacturers to get high-quality products at the lowest prices. Provide your customers with honest opinions and suggestions to build trust and you will soon be an authority in your locality.

1. What is the startup cost for the automobile spare parts business?

The startup cost for an automobile spare parts business for different models is between $20,000- $50,000.

2. What kind of license and registration do you need to run an automobile spare parts business?

License and registration required for automobile spare parts business are the following:

• hop Act registration ( if your shop is located within the Municipal limits)

We would also suggest looking into your state’s legal requirements or contacting the local suppliers to get more information.

3. What are the average profit margins?

There is an average of 43% profit margin according to worldwide automobile statistics.