The automobile industry has seen an upsurge since Henry Ford first introduced it in 1896. More than a century has passed by and the advancements are quite clearly visible. There are often a significant number of working parts in a car even after it is sold to the scrap and discarded. It is a great idea to start a used car parts business looking in terms of profit and saving the environment. That’s right! If you are giving a medium to re-use the parts of a car, you are saving the environment by not saving extra metal scrap. Here are a few tips if you are pondering about entering this domain.
- Understand Your Market
No matter what business you are about to start, market research is the first thing you will need to do. When in this business, you need to understand your target demographic, that is, your potential customer. It is quite evident that people who are looking for used car parts to keep their automobiles running do not fall in the financially elite section of the society and are mostly from the section of society with average payouts. Your geographic location should adhere to these understandings and abide by the learnings for better success rates.
- Collaborate with Local Businesses
The aim of this business includes maintaining an organised supply chain. The supply chain would include repositories prior to you too, which is, where you are going to get your used car parts from. Team up with local businesses like garages, junk yards and insurance companies in and around your area to get easy access to used car parts. Maintaining good corporate relations with a few of these businesses might suffice your requirements in the beginning and you can expand as the demand increases. You can buy scrap vehicles or Iveco used trucks and use their parts.
- Identify Demands
There are more than a hundred replaceable parts of a car but you cannot be expected to have each one of them in stock at any given time. It is definitely not a good idea to invest a hefty amount at the beginning buying all the parts that could be potentially asked by someone at some point. Instead, invest in those parts which a customer is likely to buy or which are rather expensive to purchase as new. With adequate market research, you will know what are the parts that are frequently required and the demand is high and invest in those parts. This will make sure you are not wasting your capital right in the start of your business.
- Advertising and Marketing
Any business is incomplete without marketing and you need to be specific about where you advertise your business. While having an online presence is important to create a genuine brand value, this kind of business is fairly field work and you should spend more on advertising in the local neighbourhood than in an online campaign. You don’t have to just buy from local businesses but you can also sell to local businesses like private garages who repair your cars. You could be of mutual benefit to each other. Make sure you mention that you are authorised with all certifications and documents required as safety assurance develops trust.
- Manage Inventory
One of the most important steps in a supply chain management business is monitoring the inventory. You need to keep a track of what is going in and out at regular intervals. You don’t want your business to get a bad name for not having a commonly used car part when a customer arrives. You need to keep your inventory loaded and buy parts before they completely exhaust. Be better than your competitors and you are sure to succeed.
Now, you can have your used car parts business up and running. Make sure you choose an uptight location for your business, where people notice your shop and realise that they do not need to buy new expensive parts and used parts are a considerable option and work as good meeting all standards.