The auto accessories industry is enormous with annual sales of over $200 billion and growing. Yet the market remains underserved, presenting an ideal opportunity to become a business owner. There are two classes of products – aftermarket accessories and OEM or Original Equipment Manufacturer accessories. Within each group are numerous items that include everything from exhaust systems to floor mats. One of the first decisions a new business owner has to make is the type of car parts and accessories that will be carried in inventory or can be ordered from suppliers to fill customer orders. Some businesses choose to carry accessories for a wide range of vehicle makes and models, while others specialize in particular makes and models or in vehicles that are younger or older than a certain year. In fact, it is also possible to target a specialty market like the classic or vintage vehicle restoration market.
During business planning, the owner has to consider a number of variables that include:
• Whether the business will sell over-the-counter parts and supplies, offer installation services when applicable, or provide delivery services to commercial customers
• The target market which can include consumers, auto dealers, restoration businesses, repair shops, and so on; the type of accessories the business offers for sale is influenced by the customer demographics – young car and truck owners, older luxury car owners, vintage auto restorers, hot rodders, etc.
• The ideal location, taking into consideration the type of customer that will account for most of the sales, i.e. walk-in customers or business customers or both
• Amount of space needed for inventory storage, retail shelving, customer service counter, and parts and accessories installation area
• Whether retail space will be leased or a building purchased; calculate the costs for the option chosen
• Inventory and parts sourcing, including wholesale suppliers, manufacturers, retail stores, etc.
• Marketing plan which includes website, advertising, discounts, promotions, attending trade shows, calling on potential clients, etc.
The car accessories business plan will need to discuss how the business intends on staying current because technology is constantly leading to new parts materials, designs, and styles. It is common for accessory store owners and sales people to regularly attend trade shows and join associations like the Specialty Equipment Market Association (SEMA). The key to success is ensuring the store carries or can order the accessories most desired by the target market. These may include wheels, GPS navigation systems, floor mats, bed liners, car seat covers, mirrors, step and side bars, and so on.
It is important to obtain all required business licenses and to become familiar with the federal, state, and local laws and regulations governing the resale of car and truck accessories. Since the car accessories business requires retail space, inventory, and personnel, many startups need investors or financing. There are many sources of potential funding, including venture capital, angel investors, equity partners, and bank loans.
OGS Capital can help new business owners work through the development of a car accessories business plan and can assist with locating appropriate investors. Completing the online contact form will quickly and easily get the process started.
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