How To Start Spare Parts In South Africa
What is Spare Parts?
A spare part, spare, service part, repair part, or replacement part, is an interchangeable part that is kept in an inventory and used for the repair or replacement of failed units.
How To Start Spare Parts In South Africa
1.Market Research
It’s important that you carry out market research before you start the motor spares business. Important decisions to make include deciding on the location of your business, the products you will offer, your target market and the size of your business.
Understand your target market, and what kind of products they want. Identify and study your competition. Assess the competition at your proposed location. Through carefully studying your competition and customer trends you will find a gap in the market and also find ways to offer better services. You need all the information you can get to formulate a great customer experience model that won’t be easily contested. You should also have a good motor spares business plan before you venture into this business.
2.Location & Premises For Motor Spares Business
Location is a big factor in determining the success of your auto spare parts business. You should locate your auto parts store business in a place where there are many people with cars. It would be unwise to locate your motor spares store business in a rural area which has few car owners. There are several possible locations: shopping centres & malls, industrial areas, urban areas and in the CBD.
People can always come to your motor spares store because of the quality service and the type of parts you provide. You will need premises which include the auto spares store, back offices, and a warehouse for your products. Your premises should have sufficient parking space for your customers. Your auto spares business plan should cater for the costs of renting or buying premises.
3.Products For Auto Parts Store Business
The kind of auto parts products to sell will depend on your target market and business strategy. There are different niches you can target. Some specialize with spares for one make eg Toyota spare parts. Others may choose to specialize in one product line eg cooling systems, suspension parts, braking system, gearboxes, engines etc. Some motor spare businesses in South Africa focus on quick replacement parts eg. high pressure pumps, brake pads, shocks and shoes.
You can also sell a variety of products without specializing in anything. The products which you can sell in your auto spare parts store include Suspension parts, Body Parts, Ball Joints , Belts , Oil Pumps , Tyres, Fuel Pumps , Clutch Plates , Pressure Plates , Fenders , Bonnets , Radiators , Ignition Plugs , Seat Covers , Mountings, Bushes & Shock Pads , Filters , Bearings, Discs & Hubs , Rubber Boots , Brake Pads & Brake Shoes , CV Joints, Shock Absorbers , Lubricants and Batteries. The products can be sourced from local suppliers and international suppliers.
4.Staff & Management
The number of employees you need will depend on the size of your auto spares store business. The is need for finance/accounting personnel who will be responsible for all the day to day transaction accounting for the motor spares store business. This will include the tracking of all transactions and the management of cash flow, and ensuring there are enough funds available to meet the day to day payments.
Operations & logistics personnel are responsible for coordinating with suppliers and sourcing all the products which will be sold in the auto parts store, and arranging delivery of sold products to customers. They are also responsible for inventory control, ensuring that the shop has all the products in stock and in the right quantities, and determining when to place new orders. You also require cashiers and shop assistants. Your auto spare parts store business plan should cater for the salaries of your employees.
5.Cash Flow And Inventory Management
You should account for all the business cash inflows and cash outflows. Ensure that you have a good inventory management system, so that you don’t run out of products which are needed by clients. When starting your motor spares business, it maybe difficult to stock your store with all products because of limited capital. You can start with quick moving products, and ensure that you reinvest all the money into the business. With time, you will be able to stock a variety of products in your auto spares store. Profits will keep rolling into the business if you offer products which are needed by your target market.
6.Market For Auto Spares Business
There is a huge market for auto parts products in South Africa due to the increasing car ownership. Potential customers for your motor spares business include individuals, companies, organizations, transport companies, panel beating and spray painting companies, insurance companies, garages, mechanics and auto repair companies.
It’s wise to establish a customer base which gives you repeat business. If you offer quality products at good prices, customers will always come back to your motor spares store.
Build customer loyalty by giving discounts to your regular customers. Give quality service. Advertising is also required to attract more people to your auto spare parts store, thus boosting sales. Advertising can be via word of mouth, flyers & brochures, online advertising, social media marketing, print media, and sponsoring the community amongst other ways.
Frequently Asked Questions (FAQs).
How do I start an auto parts business in South Africa?
You will need premises which include the auto spares store, back offices, and a warehouse for your products. Your premises should have sufficient parking space for your customers. Your auto spares business plan should cater for the costs of renting or buying premises.
How much does it cost to start a spare parts business in South Africa?
For one to start the business reasonably, one needs at least R2 million. This money is for renting of a shop and ordering of stock. Also, Having the knowledge of mechanics is a requisite for being a successful motor parts dealer.
Are auto parts stores profitable in South Africa?
First, sales of factory replacement parts are highly profitable: In 2015, General Motors told investors that its aftersales business had profit margins of 30 to 40 percent. Car companies also insist that factory replacement parts ensure better fit and vehicle performance than aftermarket parts.
How do you make a parts department profitable in South Africa?
Reduce or eliminate errors in ordering. Ordering the wrong part and arranging returns and replacements increases costs and reduces margins. Train staff to improve accuracy, and offer incentives to improve performance. Manage inventory to minimize stock on hand.
Can you make money selling car parts in South Africa?
If you’re comfortable under the hood and have a bit of extra time, it may make sense to remove and sell your vehicle’s salvageable parts instead. While this takes both time and knowledge it is possible to make money parting out cars, depending on the condition of its parts.
How much do you get for scrapping a car in South Africa?
How much can I get for scrapping my car? It all depends on how bad the condition of your car is, but as a guide, you can expect to get between 12 and 20% of the current market price.
How much is it to register a car in South Africa?
Complete an application for Registration and Licensing of Motor Vehicle (RLV) and submit to your appropriate registering authority. The cost of the registration fee is R150 only if the registration takes place within 21 days after the date of liability.
Can I buy a car without a license in South Africa?
There is no legislative requirement in South Africa that prevents you from buying a car without a Drivers License. However, you are not permitted to drive a car without a valid Drivers License.
How much is the license disc in South Africa?
In Gauteng, the total annual license fee for a car of 1 000 kilograms is R456. In the Western Cape it will cost you R465, and in KZN the aforementioned car will cost you R552 to license, per year.
Can you finance without license in South Africa?
However, if you are planning on financing the vehicle, you will require a valid driver’s license. This is because lending institutions will require the vehicle to be insured for the entire financing period to ensure that they will be able to get their money back if anything happened to the vehicle.