Auto Parts Business
 

I am looking at buying a local auto parts business. Anyone here been in the business or have any information to share. Looking at a NAPA store in a small town. Thanks. Spencer

I have never been in the business, but I live in a small town that had three fairly vibrant auto parts stores.

Then Auto Zone moved in.

Two of the three are out of business, the third, a Napa store, seems to be creeping along, a bit looply.

In your business plan, make sure you look at the AZ model, what demographics they target, etc., so you're not prey.

I wish you the best...business plans, homework to minute, stupid levels of detail are your best defense.

What info are you looking for???

I have a friend who owned one a long time ago, would you like to hear from him?

My comments will probably not help your business plan but my thoughts on auto parts stores from my experience. It seems to me that Discount Auto,Autozone,Pep Boys cater more towards the ricer/minority crowd and are not very professional in their presentation to the public. In my experience my local NAPA stores have better trained employees, the stores seem to be more professional and they offer services like making hydraulic hoses as an example. Right or wrong I also believe the quality of the parts that NAPA sells is better than the competitors. Sorry if I come off as less than politically correct but my local NAPA everyone speaks English............not so much at other stores.

Thanks for the comments. Looking for any and all information ya'll may have to share. I am just beginning to meet and talk with the Napa folks and I guess I am looking for any info on the pitfalls of doing business with napa. The store I am looking at has traded hands at least 3 time in the past five years. Current guy claims to be giving it up to work the car repair business he has out of the basement. Will be taking a look at the books before I spend any of my money. Lots of talk of me putting up 100K for 500K of stock. Thanks. Spencer

100k for 500k in stock? Is the 500k inventory valued at cost or retail?

Look at the books and the tax returns.

Sent you a PM....might be helpful.

Steve

Fixed it for you.

One other thing, what is your market, are there dealers that are currently served, car lots, ect??? What over parts stores are near?? Does he have an established clients list?? One of the things that made NAPA so popular is the fact that they deliever & maintain stock in car lots, & garages, still supply parts to dealerships as well. Own or lease the building, how many employees, any sales reps???? I worked for a parts supplier for years, learned many aspects of the business, NAPA was a compeditor, and I would be happy to help.
A very good friend was a NAPA rep for years until Continental Tires made him an offer he couldn't refuse.. PM me any questions and I'll pass them along to him..

byron has brought up very good points

what is your intended area of influence? How many shops can you supply to , that are thriving ? no need to take on dead beats ! Talk to those shop owners to see how business is doing, not as a new parts store owner. You would get two different answers. What does the local public economy look like? Lots of for lease signs? not good ! Do the cars circulating in your area meet the range of parts sales that are most common ?
3 different owners in 5 years would give me a pause for concern! And the current owner looking at REPAIR being more profitable? hmmm....

Lots of good stuff. Thanks. There are no dealers here and no car lots. There are about 3 small car repair places with another 12 miles south. The area is not thriving and the economy here is fair to poor. I do not know yet if the 100K is cost or retail. I am thinking retail. The biggest customer is the county shop. Spencer

I'd be sure that the employees are going to stay. You'll want to retain the talent so you're not scrambling to find decent people when you take over.

Additionally I'd speak with the local auto repair places and get their opinion of the place. They might end up being your best customers.

overall there could be worse things to do. NAPA is a strong buyer (i sell exhaust to them) and has some good stuff. They have alot of benefits to them, but there is also a strict buying program. they don't like when you buy stuff from outside places and they will be marking up stuff 25% or more to you from manufacturer prices.
One of the bad things(for me) is that they pay labor claims ...so that can be good or bad for you. The stores will eat this sometimes. The quality of the staff has enormous effect on the $ you make, In Rural GA are you gonna be sticking to domestic only or a mix of import/domestic? you need to study the market there, go talk to some of their customers.
Be prepared to hear "i can get it for less on the internet"...allot.:rolleyes:

I think spencer answered his own questions with his assessment of the area.

As they always say in real estate : Location, location, location

best wishes

exactly

put that money to work in stocks or something

Thanks everyone. I am going to meet them Friday morning for a breakfast meeting. They must be thinking they have a guppy on the hook. Not going to be me. As far as the stocks go, I have been putting my money into things like utilities that pay a good dividend. There's no interest being paid around here. I will follow up on Friday. Spencer

I believe the (auto) parts business is on a plateau and starting to slide downward based on all the chit chat I hear .........................I'm on the repair side

What is your plan to combat the growing online business? I buy more than 80% of my parts online... Only reason I go deal with the morons at Oriellys is in an emergency... And then they usually don't have what I want....

When I have a car job coming up and can plan a weekend for it, then yes, I order all my stuff online way ahead of time. But when I realize the wife's brake pads are paper thin and I know any local car shop has them in stock for about the same price as anyone online (sales tax and shipping being roughly equal), I run to the local shop. There's a small chain called Fairfax Auto Parts in VA and they are AWESOME. I'd always go to them over the big players. They stocked ATE brake fluid, Pentosin and Dextron ps and atf fluid, had all kinds of oddball metric stuff I needed and were just a great shop. You can differentiate yourself from the big stores with quality products and service.

Sidney J., Good point. I currently have a 6.5 turbo diesel sitting on a stand replacing heads. Only thing I got local was bottom hose and they had to order that. Ebay has hurt the parts store business as well. I am going friday to listen. Pauls (Seahawk) comment about a Auto Zone moving into his area could easily happen here. Might not be a Auto Zone but same deal with a O'Reilys. The more I look into it the more I think I would need a signing bonus. Spencer

I mean one way to combat that would be to try to have lots of stock... There is a small time store in town that I would buy more parts from if they had anything in stock... but the dont... Oh and they aren't open very late...


Oh ya plan on being open past 5 on Saturday....

I'm surprised this thread hasn't been deleted!

Like I said, I do have a bit of experience in this area, including working in the small town part( we covered, from central FL, though SC. including many small towns in rural GA) and you need to know if it is a protected terrortory, how far you can sell, how close the next town is, repair shops there, any car lots, other City contracts (You have one, that can be very good as well, we had City & school in a few towns) what debt you are buying, who owes money that you will have to collect. You will need to learn about cores for brake shoes, water pumps ect. Do you have any back ground in the parts biz?? Even in a small town there is room to build and more people will be fixing instead of replacing cars. If you were close enough I would gladly meet with you & see if I could help you.. PM me for my number if you have any questions on Fri that I might be able to help you with...

We still need some back ground info on the store, like is that $100K of parts paid for..

how did the meeting go????

I had a good meeting with two of the napa guys. Lots of store should do this, or store could do x. Nothing about what the existing store has done for the past year or past two years. Current location will not be available for a new store. They really didn't have much to say when I mentioned several of the things the pelican brain trust came up with. If I were to get involved I would need a couple of partners, not because of the money but the time required to run the thing. The best fit for this location is to be a addition to an existing napa jobber. I will update at it goes along. Thanks pelicans.

sounds like they are trying to hook a fish