Over 500 000 cars are sold in South Africa each year, these cars depreciate in value over time largely to wear and tear. This creates a huge market for a motor spares business in South Africa. This is a guide on how to start a motor spares business in South Africa.
Overview
Almost everyone with a car will need spare auto parts at some point, these parts can be very expensive. Others are just too rare to find and need to be imported, it’s frustrating to not find the spares that you are looking for as a car owner.
This creates a market whereby entrepreneurs can source and sell motor spares; motor spares are usually expensive. This makes it easier to make a significant amount of money even if the margins are low.
The barriers to entry for this business are mid-high, they get a lot higher when you want to repair the vehicles as well. The barriers are not that high when you just want to source and sell car parts but you need to put in a lot of work to make it work.
Choose the right location
It is very important that this business be situated in the right location but the requirements aren’t as strict as they’re for restaurants. You just need to make sure that you are in an area that is very visible to the public, there must be a lot of foot and vehicle traffic.
This doesn’t have to be a fancy location and definitely doesn’t need to be in the town CBD. However, it’s best that you choose a location that is closer to town. This will make it easier for people who are going to town for other reasons to pass by your store.
You can even situate this business in a township, as long as it is a township with a lot of potential and ticks the above boxes. Being located in a rural area is probably not the best idea unless the rural area is very close to town or attracts a large number of people.
Get operating premises
This is the tricky part, what exactly are the operating premises of a motor spares business. It depends on how you choose to conduct the business. You have to source the spares from somewhere, this is something you can do yourself or pay other people to do it for you.
This will determine the type of operating premises you have, if you have to personally go to a scrap yard to buy damaged cars and source from them then you will need to operate from a very huge space. This will allow you to have enough storage where you will store the vehicles before there are stripped for motor spares.
You can also just pay other people to do this for you and only focus on selling to the customers. In this case you don’t need all the extra space for storage, a simple storefront will be just enough to get started.
You have two options when it comes to getting operating premises, you can either lease or buy the premises. We don’t advise buying the premises outright, start by leasing, the money you save can be put towards making your business successful.
Register your business
You have to register your business as a private company, this costs R125 in South Africa. It only takes a couple of days and you will have a fully registered company; which will make you seem more professional. You should also check into other licenses that are governing the automotive sector.
Source your motor spares
You can buy your motor spares from other people or you can strip cars yourself in order to get them. This is something that you have to decide yourself, stripping the cars yourself or hiring people to strip them for you is usually cheaper than buying from other stores.
Market your business
Marketing this business is generally not difficult, that’s if you are in a good location. You will definitely find clients without even spending a cent on marketing. However, you can boost your brand awareness by advertising in the local newspaper. You can also advertise on billboards to create awareness about your business.
Conclusion
This was a guide on how to start a motor spares business in South Africa. Do you have any thoughts or questions? Comment below.
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