Car ownership has increased significantly in Zimbabwe. A lot of individuals are purchasing new cars everyday (mostly second hand) and others have existing vehicles which also need maintenance. Imagine such a huge market which needs servicing and maintenance and how much opening a car auto parts business will make you a very successful entrepreneur. Operating an auto spare parts business in Zimbabwe is very profitable.
To add on, you can also help clean up the environment by collecting the older car parts and putting them to use in repairs. The auto parts industry is resilient and although Zimbabwe is going through an economic downturn, this industry enjoys good profits. However this industry is concentrated with tough competitors and before you open your own auto parts business, you need to carry out a thorough market research and have a good auto parts business plan.
What you need
Pick a location
Location will influence the viability of your auto parts business. Assess the number of auto parts retailers in your prospective area. Investigate the size of your target market and their income patterns. However it may be difficult finding a more central location. Use quality marketing and advertising strategies. People can always come and find you because of the quality service and the type of parts you provide. Your location must have enough space to house the different types of parts for the models of cars you cater for. In Harare, you can locate your business along Kaguvi Street. This location is ideal because of high walk in traffic of people who will be looking for motor vehicles spares and parts.
You need to conduct market research and come up with a market entry strategy that will keep you viable. Identify your competition and understand how they do business, what their marketing strategy is and the amount of market influence they have. Most auto parts businesses are operated locally although only a few operate as a national chain. Most importantly identify the competitor’s niche. This will help you in formulating your own marketing strategy. For example if you are in an area where your competitors are selling brand products, you may instead concentrate on selling other brand products they do not have.
Types of Products
You have to make a decision on what kind of products you will see in your auto spare parts shop. There are several vehicle brands, so you can either concentrate on 1 type of brand e.g. your auto parts shop can sell only Toyota spare parts. Alternatively, you can sell spare parts of different brands e.g. Toyota, Nissan, BMW, Ford e.t.c.
There are many different types of auto parts you can sell. The motor spare products you can offer in your shop include
- Suspension parts
- Shock absorbers
- Ball joints & bearings
- Body parts
- Vehicle headlamps, corner lamps, tail lights
- Electronic censors
- Boots and Bonnets
- Motor Oils
You need to know exactly where you will get your auto parts supplies and your pricing strategy. Choose a niche you can work in and that is profitable.
Source of Products
You need to source affordable and quality products for your motor spare parts business. The motor spares and parts to be sold in your shop can be imported from Dubai, Japan, China and South Africa. Dubai has various suppliers of cheap and high quality motor spares and parts for Japanese Vehicles. Most auto parts dealers buy the products online, and the products will then be shipped to Zimbabwe. There are shipping costs if you are importing parts from overseas. Most small auto parts dealers arrange with fellow motor spare parts owners so that they can place orders together so as to cut on shipping costs. The orders for 1 small motor parts business can’t fill 1 container, so you will have to share the container with other dealers.
Alternatively, instead of placing orders online, a group of auto parts dealers can arrange that 1 of them goes to Dubai to place orders, arranges shipping and then flys back to Zimbabwe. The products will then follow later by ship. This has an advantage that it will enable access other suppliers who do not have an online presence, thus a greater variety of products to choose from. The disadvantage is the extra cost of flying to Dubai to place the orders.
If you are to succeed you need to manage your inventory properly. Satisfy all your customer needs and make sure that they find all of the supplies they require.The demand is steady over time such it is better if you keep your store fully stoked all the time. You therefore need a good supplier who delivers the right quality and on time.
At startup, it may be hard to stock your store with all the auto parts you need. However you can cash in fast if you focus on providing parts that are highly demanded. If providing the rare parts that are uncommon and no longer produced, you need to identify the scrap yards, auction floors and insurance companies that can provide you with these parts at a reasonable discounted price. Profits will keep rolling in if you a wide auto parts selection for your customers.
License for your Motor Spares Shop
You need to apply for a shop license from the Local government authority/City council. Your auto spare parts shop should have a licence as this is a requirement by the Zimbabwe Government, otherwise you will have problems in your auto parts business.
Management and employees
Depending on the size of your store, the number of your sales staff and cashiers will vary. You will need employees who understand auto parts and also the technical aspects involved. Employees who have a background in the repairs and maintenance of vehicles can do the job even much better. Good management is a determining factor in the success of the business.
Customers for your Auto parts business
It is important that you establish a reliable customer base who will give you repeat business. Repeat business is possible . Try hook your customers by offering repeat discounts. Your loyal customers can also subscribe for a loyalty card and get bonus points which they earn every time they purchase from your store. It will be good if you secure large customers as you will be guaranteed of repeat business. These customers include short term insurance companies, panel beating and spray painting companies, mechanics and individuals.
Your customers can also be a good source of second hand parts. You may offer to purchase the old parts and refurbish them and stock them in your shop. Other options are offering discounts to customers who bring in these second hand parts. Other clients in need of these rare parts might be difficult to find in your location and thus you may expand by having a website. On the website you may sell parts and at the same time get trade in old parts from your customers.
Capital for Auto Parts Business
The amount of capital you need to start your auto car parts business will depend on the size of your business. Startup costs include rentals, inventory (auto parts), shipping fee, shop licence, shop furniture, marketing costs, salaries etc. You may have to take a loan to set it up if you don’t have sufficient funds to set up the business. For a small auto parts business, you can start the business with at least $10 000.
Cash flow management
Cash can be very difficult to manage in your auto parts business. When it comes to cash flow management, you cannot take chances. Account for all your cash inflows and out flows. In the first few months you may need to put back all the revenue you get back into the business to increase your supplies and grow the business. Costs for the motor spare parts business include salaries of employees, rent, inventory, shipping costs, electricity and water, taxes, insurance and advertising costs. Profits for a small motor spares shop can be $$2000 – $5000 a month.
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