Do an internet search, look in the local phone book, and pay close attention to advertisements on local television to identify similar businesses in your area. Account for the size and population of your city and compare that to the geographic location of existing used auto parts businesses. Used auto parts businesses are more likely to thrive in lower income areas, as wealthier segments of the society generally don’t buy used auto parts as often.
Your specialty areas may be in imports, exports, motors, or bodywork. Do some research to determine what area can work for your business. A used auto parts business can be particularly lucrative if you provide rare or hard to find parts for more obscure vehicles. [1] X Research source In your business plan, be sure to account for all costs and expenditures related to the business, project realistic sales goals, design a plan to reach new customers, identify potential demographic segments of the community who will utilize your services, and plan for the growth potential of your business. Be sure outline where and how you expect to generate the necessary capital to get your business off the ground and to ensure that you can expand when needed. [2] X Research source
Most states require a license for businesses that buy, restore, recycle, and resell used car parts.
You will need a location that is big enough to house and properly catalog a variety of used parts for all the makes and models of cars you cater to. [5] X Research source Hire employees. If you are looking to open a used auto parts business, chances are that you have at least rudimentary knowledge about cars and how they work. However, you will likely need a licensed mechanic in your business to help refurbish old parts and identify parts that have potential resale value. Posting an add in local newspapers or on job search websites can help you find potential candidates for employment.
Identifying the parts you need and where to find them depends largely on your business plan. Your business may choose to focus on providing parts for rare vehicles not in production anymore, as these will be in high demand among a small segment of the population. Alternatively, you may choose to specialize in providing parts for very common vehicles in an effort to expand your potential sales base. Try finding these parts in junkyards, from cars sold at salvage auctions, or contact insurance agencies to try to purchase “scrapped” cars from them at a discounted price. As a used auto parts business owner, you will need to educate yourself on the mechanics of how a car operates in order to find the right parts. Also, be prepared to test the parts you find to know if they are still operational or can be refurbished to become operational again.
Insurance companies may be willing to sell you parts of a vehicle to recoup some of their money, especially when selling the entire vehicle is not a practical option.
Offer to take the old parts from your customers who purchase their used parts from you. You may be able to salvage car parts, refurbish them for a low cost, and place them back on your shelf. You could also consider offering a discount to customers who bring “trade-in” parts to your business. Consider selling online. When you deal with very specific parts for specific vehicles, you may find that no one in your immediate area will need the parts you are offering. As a result, it is wise to consider listing your inventory online to reach a much wider customer base. If you do choose to sell parts online, you need to account for the cost of packaging, shipping and handling in your prices and business model.
Paying employees and staff (if necessary)[6] X Research source Paying rent or mortgage on your business’ property[7] X Research source Paying bills, like electric, water, and gas, that are necessary to your business’ operations[8] X Research source Paying property taxes and insurance[9] X Research source Advertising costs[10] X Research source
